Difficult adjustments to the E-7 complicate negotiations between the US Air Force and Boeing

DENVER, Colo. — The Air Force’s desired adjustments to Boeing’s E-7A battlefield management aircraft prove more difficult than expected and complicating price negotiations, top agency officials said Tuesday.

“We are struggling [the E-7 program], getting a price deal with Boeing,” Air Force Secretary Frank Kendall told reporters at a roundtable at the Air Force Association’s Air Warfare Symposium here. “We are still in negotiations with them and that has not been finalized yet.”

The Air Force plans to buy 26 E-7s from Boeing through 2032 to replace its aging fleet of E-3 Sentry airborne warning and control aircraft. The agency awarded Boeing a $1.2 billion contract in February 2023 to begin work on the aircraft.

The agency plans to buy two E-7 rapid prototypes first, with the first expected to enter service in 2027 and a production decision for the rest of the fleet in 2025.

Australia already flies the E-7, which is referred to as the Wedgetail, and Boeing also builds the aircraft for other countries such as the United Kingdom. The Air Force version of the E-7 will have a modified design to meet U.S. satellite communications, military GPS, and cybersecurity and program protection requirements.

“We are partnering with the US Air Force to deliver this critical capability and are working diligently to reach an agreement,” Boeing said in a statement to Defense News.

Andrew Hunter, assistant secretary of the Air Force for acquisition, technology and logistics, told another roundtable the focus of negotiations on the first two E-7 prototype aircraft.

The level of engineering work required to adapt the E-7 to Air Force specifications was “above and beyond what we expected,” Hunter said.

“The big surprise was an unexpected amount and degree of non-repetitive engineering required to meet the requirement set by the Air Force, which we thought was very close to what the UK is getting from Boeing,” Hunter said. “These conversations were challenging.”

Hunter said the Air Force is trying to better understand Boeing’s proposal and determine which elements are necessary and which are unnecessary or could be postponed. The agency has whittled down those troublesome issues to a smaller list, Hunter said, but declined to elaborate.

Hunter said he would prefer the process move faster. But he acknowledged that it’s no surprise that Boeing is being extra cautious as it negotiates this program, and that the Air Force and Boeing are working together on these challenges.

“They’ve done some contracts in the past where it’s obvious that as they offered them, there was key information that they were missing,” Hunter said. “At some level, it’s not surprising that they’re trying hard to do their homework and not deliver things and not understand the full scope of the work they’re expected to perform when they prepare their proposal.”