When people want an example of how broken the military-procurement system really is, most usually point to the F-35 Joint Strike Fighter. That program has become a textbook example of how to cost taxpayers money and get very little in return.

But believe it or not, the U.S. Air Force has another program that gives the F-35 a run for its money in terms of wasting taxpayer dollars with very little return on investment. The Boeing KC-46 Pegasus is the Air Force’s next-generation tanker, designed to replace both the KC-135, which first entered service in 1957, and the newer and larger KC-10 tanker. The KC-10 is slated for early retirement to free up money for the KC-46. All three planes are based on commercial airliners.

The KC-46 is based on the Boeing 767 commercial airliner. In fact, Boeing already makes an air-tanker version of the 767, the KC-767, which already is in service in four countries. In 2002, Boeing even offered the KC-767 to the U.S. Air Force, but the contract was canceled after corruption allegations in 2006.

The KC-767 was revived as part of the KC-X program and in 2011, it was given the designation KC-46. The project has been plagued with cost overruns and delays. In light of this, Hot Air’s Allan Bourdius took a look at the KC-46 to see if taxpayers were getting a bargain. He found they most definitely were not.

Comparing the inflation-adjusted cost of the KC-46 to the KC-135 and the KC-10, Bourdius found the KC-46 was 325 percent of the cost of a KC-135.

boyd1 Source: HotAir.com

OK, so the KC-46 must be much better plane than the KC-135, right? Bourdius then compared the fuel capacity of the three tankers. He found the KC-46 carried only 6 percent more fuel than a KC-135.

boyd2Source: HotAir.com

He also measured the amount of fuel burned by the KC-46 vs the KC-135. The KC-46 burned 6 percent more fuel.

boyd3Source: HotAir.com

Finally, he measured how much cargo the tankers could carry and found the KC-46 carried 22 percent less cargo than the KC-135.

boyd4Source: HotAir.com

Bourdius then ran the long-term maintenance costs of the KC-135, which is supposed to fly until the 2040s, to see if the KC-46 would provide long-term savings. Here’s what he found:

In 2003, the Air Force spent (corrected to 2015 dollars) $4.79 million per KC-135 in maintenance. Assuming that amount is valid today, and it would increase by five percent per year, in 2037 the cumulative ongoing maintenance costs of a KC-135 for 22 years would be $184.4 million in today’s dollars – $3.8 million less than the cost of a new KC-46, which we’ve established is hardly a performance improvement. Shouldn’t the Air Force just bank the money it will spend on new planes for maintenance on what they’ve got? Seems way more cost-effective to me.

In 2037, the youngest KC-135 will be 72 years old. To get the same purchase value out of a KC-46 that enters service in 2017, that plane will have to fly until the year 2,251 – 234 years. Who wants to take that bet?

Unfortunately in defense procurement, there are plenty of other examples of programs that cost more than expected and do not perform as expected. Both our national defense and the taxpayers deserve better.

Congress and the Department of Defense need to put more emphasis on reforming the broken procurement process. The recently passed NDAA contains some steps in the right direction. The Pentagon has begun to measure the performance of its contractors. What’s needed is to get new suppliers, particularly from Silicon Valley, involved in the process. Also, the Pentagon needs to find new ways to adapt commercial technology for military use.

In an era of tight defense budgets and limited fiscal options, the Defense Department owes it to taxpayers to be good stewards of the money they are appropriated from Congress.

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