Breaking Bad

The Pentagon’s just-released list of additional pain the services will endure if sequester persists past Fiscal 2015 forecasts $66 billion more will be cut from modernization accounts through 2019. For the Air Force, that includes 15 fewer F-35 strike fighters and five aircraft—$1.1 billion—out of the KC-46 tanker program. Maj. Gen. Wendy Masiello, USAF’s deputy assistant secretary for contracting, told reporters Wednesday that further sequester means potentially “breaking” the fixed-price contract on the KC-46, and thus “exposing” the Air Force “to additional risk.” The KC-46, “right now, … is moving exactly as we want it to,” hitting cost and schedule marks, but Masiello said “it’s a possibility” that, if forced to reopen the deal, the Air Force could be on the hook for Boeing’s true development costs, which are higher than the contract amount. Masiello spoke to reporters after a speech to an AFA-sponsored, Air Force breakfast event in Arlington, Va., on Wednesday.