Boeing Pursues Crew Exploration, EELV, Other Space Contracts

The Boeing Co. [BA] has an ambitious list of space-related contracts that it hopes to seize, according to James Albaugh, president and chief executive of the Integrated Defense Systems unit in Boeing.

Those new contracts would add to a substantial list of programs that Boeing already holds, including its role in the Ground-based Midcourse Defense missile shield system, the Space Shuttle program, and the International Space Station.

Boeing also is involved currently in the Delta II, Delta IV and the Evolved Expendable Launch Vehicle (EELV) Buy III, along with military and commercial satellites. EELV is a launch system designed to cut launch costs by using modular components and other efficiencies. The program involves the Boeing Delta IV and the Lockheed Atlas V lifters.

Albaugh said Boeing now is targeting the Crew Exploration Vehicle, where Boeing is teamed with Northrop Grumman Corp. [NOC]. This future replacement for the Space Shuttle would provide a means of transporting humans to the Space Station, the moon and beyond. But to win this contract, the Northrop/Boeing team would have to defeat a rival team led by Lockheed Martin Corp. [LMT] that includes European Aeronautic Defence and Space Co. (EADS).

And, Albaugh said, Boeing is seeking commercial satellite opportunities as they arise.

Other defense contracts that Boeing hopes to snare include the Air Force aerial refueling tanker plane contract, Albaugh noted.

Boeing almost had this program nailed down a few years ago. An Air Force plan to lease/buy 100 of the Boeing KC-767 tankers for $23.5 billion passed three out of four congressional committees with jurisdiction. But then problems arose, centering on Sen. John McCain (R-Ariz.), a member of the Senate Armed Services Committee.

First, McCain brought out that leasing the planes first, instead of buying them outright, would cost perhaps $5 billion extra. However, some members of Congress and the Air Force pursued the leasing option instead of an outright purchase, because leasing would involve less money up front, a key point when the federal government runs gigantic budget deficits.

Then McCain criticized a revelation by Boeing that the company engaged in talks to hire Darleen Druyun while she was a senior Air Force procurement policymaker handling negotiations for the tanker lease deal. Druyun later said in federal court that she thought the lease price was too high, but she wished to curry favor with her future employer.

For its part, Boeing said it disclosed the problem, cooperated fully with authorities, fired Druyun and the person who hired her (Boeing CFO Mike Sears), and instituted sweeping ethical reforms to guard against a recurrence of such problems.

In another space-related development, Boeing also lost $1 billion worth of launch business when it was discovered that the company came into possession of bid-sensitive documents of rival Lockheed, although Boeing itself had nothing to do with the documents becoming available.

Another contract that Boeing hopes to snare would be for unmanned combat aerial vehicle capabilities (UCAV). Unmanned aerial vehicles typically provide long endurance, and often can serve as nodes in a network, in place of satellites receiving and retransmitting signals.

The company long has been active in UCAV programs, such as the DARPA/Air Force/Boeing X-45A technology demonstration aircraft that completed its first flight in 2002. However, this year the X-45A part of the Joint Unmanned Combat Air Systems program was canceled.

As well, Boeing is aiming for the next-generation fighter-bomber program. This would produce a new bomber sometime in the next decade.

Finally, Albaugh noted that Boeing is competing for the Air Force Combat Search and Rescue (CSAR-X) helicopter program, formerly called the Personnel Recovery Vehicle, a contract that may be awarded soon.

Here, Sikorsky Aircraft, a unit of United Technologies Corp. [UTX], offers its H-92 new-design helicopter, while Boeing offers the HH-47 helo, and Lockheed Martin offers a European aircraft, a variant of the EH101 military helicopter by AgustaWestland, an Italian-U.K. firm.

At a time when some members of Congress are criticizing rising costs of some weapons programs, terming them unaffordable, Albaugh detailed, point by point, how Boeing has cut weapons procurement program costs, saving taxpayers’ money.

For example, with the Joint Direct Attack Munition (JDAM), unit labor costs were cut from more than eight hours to less than two hours of work. The program realized a 50 percent reduction in total production costs, a 67 percent reduction in scrap waste, and a 75 percent reduction in rework hours.

Or, take the F/A-18E/F Super Hornet carrier-based strike fighter aircraft that Boeing produces for the Navy. Over the life of the program, the company has scored an 80 percent cut in unit costs, a 20 percent increase in production capacity and rate while reducing the footprint, and a 90 percent reduction in the defect rate.

The Super Hornet has come through development, into full-rate production and is operational. Meanwhile, the other two fighter aircraft programs continue to face problems. The F-22 A Raptor by Lockheed has seen corrosion and other problems, although software glitches and tailfin vibrations have been resolved. And the F-35 Joint Strike Fighter suffers huge cost growth. Awarded in 2001 as a $200 billion multi-service, multi-national program that was the most expensive defense acquisition in history, a recent estimate pegs its cost around $276 billion. Lockheed also leads this program.

With the Army AH-64A/D Apache attack helicopter, Boeing oversaw an 85 percent reduction in hours for aircraft in final assembly, and a 90 percent reduction in defect rates.

Then there’s the imperiled C-17 Globemaster transport aircraft, which might be cut off at production of 180 or so planes, rather than 220 or more that some studies say would be required to meet logistics and transport requirements.

Here, Boeing scored a 45 percent reduction in final assembly hours, and a 75 percent reduction in the defect rate.