Continuing Resolution May Delay KC-X Award

Boeing and EADS North America on Thursday turned in their final proposal revisions for the KC-X tanker, and the Pentagon is hoping to award the tanker contract next month. However, the continuing resolution—the stopgap measure funding the Pentagon in lieu of an enacted Fiscal 2011 defense appropriations bill—forces the Defense Department to continue operating at Fiscal 2010 levels. That means there may not be enough funding to actually award the full KC-X contract. “If there is no money to be appropriated, you can’t award a contract,” said Stan Collender, a budget expert with Qorvis, while addressing this topic during a defense budget panel discussion hosted Thursday by the Center for Strategic and Budgetary Assessments in Washington, D.C. The Fiscal 2010 spending level for KC-X is less than half—roughly $300 million—of the $863 million that USAF needs to move ahead with the new tanker’s development. For reasons beyond just the tanker, the DOD leadership has been urging Congress to complete a defense spending bill for Fiscal 2011—already in its fifth month—and not extend the CR, which expires on March 4. The Air Force did not respond to our query on the subject by press time. (See Boeing release and EADS NA release) (Read also CSBA’s budget report summary)