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Budget troubles may end KC-46 contract

By Ryan Maass
Budget troubles may end KC-46 contract
A Boeing KC-46A tanker aircraft depicted in aerial refueling. Photo courtesy Boeing

NATIONAL HARBOR, Md., Sept. 16 (UPI) -- As the budget deadline for fiscal year 2016 quickly approaches for U.S. lawmakers, the Pentagon reports operations under a continuing resolution may force the Air Force to end its contract with Boeing for the KC-46 tanker.

Under the current contract, Boeing supplements the cost for engineering and manufacturing for the tanker program, capped by the Air Force at $4.9 billion. Thus far, technical issues over the past 18 months have had Boeing paying $1.2 billion in tax overages. Should a continuing resolution continue, further services will require a waiver from Congress.

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Top U.S. military officials have expressed concern over the potential end of the KC-46 contract.

Brig. Gen. Duke Richardson has been passionately defending the program, telling an audience at the Air Force Association's annual Air & Space Conference and Technology Exposition that more CR would create a "very large problem".

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The Air Force Association is one of five powerful defense industry entities that have joined forces to pressure lawmakers to reach a budget agreement, and avoid more CR that they say weakens their ability to deliver on national security interests.

U.S. Defense Secretary Ash Carter echoed these sentiments in an address Wednesday at the National Harbor.

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"Even as we need to innovate, to continue to attract the best people, to develop the next generation of capabilities and to meet a current generation of threats, yet again we face the real risk that political gridlock will hold us back," Secretary Carter said.

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Budget concerns come as the Department of Defense is keeping a watchful eye on Russia and China's notable improvements in military capabilities, in addition to security threats like the Islamic State, which is also identified as Daesh and by the acronyms ISIS and ISIL.

"The Department of Defense has done its best to manage through budget uncertainty in recent years," Secretary Carter continued, "But as I have discussed today, over that time Russia and China have advanced their capabilities. New imperatives, such as ensuring a lasting defeat of ISIL, have emerged."

Congress has until the end of September to reach a budget agreement. A continuing resolution would keep funding at 2015 levels, which would be about $496 billion for the Defense Department, well short of President Barack Obama's 2016 request for $534 billion.

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