March 21 (UPI) -- Boeing has been awarded $4 billion to make 78 F/A-18 Super Hornets for the U.S. Navy fleet over three years.
The Pentagon announced the three-year deal on Wednesday, which covers production and delivery of the 78 F/A 18 Block III Super Hornets on Wednesday.
The $4 billion contract modifies a previously awarded advanced acquisition contract to a "fixed-price-incentive-firm-target multi-year contract," the Pentagon announcement said. "The modification provides for the full-rate production and delivery of 78 F/A-18 aircraft, specifically 61 F/A-18E and 17 F/A-18F aircraft for fiscal years 2018 through 2021."
The new Super Hornets will include Block III upgrades aimed at updating the cockpit and communications systems, as well as extending the life of the aircraft from 6,000 hours to 10,000 hours.
Production will take place mostly in California with some work also done in Minnesota, Ohio, Florida, Michigan, Virginia, Texas, New York and Canada. Fiscal 2018 and 2019 Navy aircraft procurement funds have been obligated to Boeing for $1.56 billion at the time of the award, none of which will expire at the end of the current fiscal year.
Navy officials estimate the multi-year model saves at least $395 million compared to the previously awarded contract by allowing both to schedule future production, Boeing said in a press release.
"This multiyear contract will provide significant savings for taxpayers and the U.S. Navy while providing the capacity it needs to help improve readiness," said Dan Gillian, vice president of F/A-18 and EA-18G programs. "A multiyear contract helps the F/A-18 team seek out suppliers with a guaranteed three years of production, instead of negotiating year to year. It helps both sides with planning, and we applaud the U.S. Navy on taking the appropriate steps needed to help solve its readiness challenges."
While the new F/A-18s will include Block III capabilities, Boeing said it will also begin to update older aircraft from Block II to Block III early in the next decade.
The Block III configuration is part of modernizing the U.S. Navy's fleet of Super Hornets with "upgrades that include enhanced network capability, longer range, reduced radar signature, an advanced cockpit system and an enhanced communication system."