A $5 billion effort to build two new Air Force One jetliners is facing delays following problems with a key supplier and workforce issues related to the COVID-19 pandemic, according to U.S. Air Force and company officials.
Boeing on Wednesday reported a $318 million loss building two new presidential planes, which the Air Force calls the VC-25B. The losses come as Boeing is in a legal battle with GDC Technics, a former supplier that was hired to build the custom interiors on the new presidential aircraft, but had fallen a year behind on its work.
“Boeing has recently recommended a new VC-25B schedule to the Air Force,” Ann Stefanek, an Air Force spokeswoman, said in an emailed statement. “The Air Force is analyzing this schedule before taking any formal contractual or program actions.”
Boeing is supposed to deliver the first new Air Force One by 2024. Boeing is transforming the two 747-8 aircraft into flying White Houses in San Antonio, Texas.
In a legal filing earlier this month, Boeing said it canceled its contract with Texas-based GDC Technics on April 7 after the company fell a year behind schedule in its building the interiors for the new Air Force One.
Boeing claims GDC “missed numerous deadlines and delivery dates, caused myriad disruptions to the VC-25B program, and made insufficient progress on the aircraft interior work that it was required to perform.” Boeing says the delays have cost the company “millions of dollars in costs that it would not have otherwise incurred.”
GDC, in a countersuit, blamed Boeing for the delays.
“It is Boeing’s project mismanagement, not GDC, that has caused the delivery of the two Air Force One Aircraft to be delayed beyond the expected completion date,” GDC said in an April 16 court filing.
Boeing is evaluating whether to hire a new company to do the work originally assigned to GDC or do the interior work itself.
“Boeing is working to mitigate any impact to these programs as well as to any of the sub-tier suppliers,” Deborah VanNierop, a Boeing spokeswoman, said in an emailed statement. “We have been working with several small businesses that are key sub-tier suppliers to GDC Technics, and plan to engage with all 52 small business sub tiers that contribute to these Boeing programs, in the immediate future. Additionally, we are coordinating closely with our customers.”
Boeing officials also said the COVID pandemic had put work on the planes behind schedule.
“We…continue to manage the COVID-19 disruption on our programs, including impacts to the VC-25B program, where employee clearance constraints impedes our ability to exchange mechanics when quarantines are required,” Boeing CEO Dave Calhoun said Wednesday on the company’s quarterly earnings call.
All employees working on the new Air Force One require top secret security clearances. Last year, Boeing blamed pandemic-related problems for a $168 million loss on the project. The Air Force One contract requires Boeing, not taxpayers, to pay for cost overruns.
Despite the delays, Boeing said it continues “to make steady progress on this program and are working closely with the U.S. Air Force on updating the schedule.” The company declined to provide details about the revised schedule it proposed to the Air Force.
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