The Air Force accepted the first delivery of planes despite outstanding issues with the aircraft. Boeing has agreed to foot the bill for software and hardware upgrades for the camera system used in refueling operations, and the Air Force will finance the redesign of the tankers’ boom, which is used to deliver fuel to an aircraft.
The Air Force will also withhold 20 percent of its payment to Boeing until progress is made on aircraft deficiencies.
“Well, there’s always technical issues when you take a new weapons system like this, and actually there are fewer technical issues than there are on most major procurements that we do,” U.S. Air Force Secretary Heather Wilson told CNBC on Thursday in an exclusive interview.
“But Boeing has a fixed-price contract that they have been working to and they have agreed with the Air Force to fix the items that we have found that are problematic,” she added. “So, we are ready to take the next step, which is operational test and evaluation, and get these aircraft in the hands of our airmen.”
Boeing, which is the world’s second-largest defense firm, bagged a significant number of Pentagon contracts in 2018.
The defense giant is scheduled to release its fourth-quarter and 2018 financial results before the market opens Jan. 30.