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Boom time for contractors?

With the KC-X tanker years away from arriving on flight lines, the Air Force is looking at hiring private companies to fly aerial refueling missions.

While the idea is new to the Air Force, the Navy and Marine Corps began using a contractor to refuel fighters during training missions in 2001. The British, Canadian and Australian militaries also have used private tankers for non-combat missions.

Details of how the Air Force would use contract refueling are still in development.

Air Force acquisition officials declined to talk with Air Force Times. In a written statement from the Air Staff’s acquisition directorate, officials said the service anticipates using the private tankers at first to refuel jets on missions within the U.S. and later expand to international operations, but not combat zones. The initial program would last five years, giving the service time to learn how contract refueling fits into the Air Force scheme. There is no assurance the program would go beyond five years.

The Air Force sits down with potential contractors Dec. 16 at Wright-Patterson Air Force Base, Ohio, for what the service calls an “industry day” — a time for company and Air Force officials to talk without making formal commitments.

A request for bids from the contractors should be made in 2009, the Air Force statement said.

It remains unclear how much money the Air Force could save by outsourcing aerial refueling. A Senate report estimated the savings at up to 50 percent, but contractors are still waiting for details of the Air Force requirements before calculating their rates.

The Air Force’s approximately 560 tankers are among the service’s oldest aircraft. The Air Force bought its last jet tanker — a KC-10 Extender — 20 years ago. The average age of a KC-135 Stratotanker is 46 years, and the planes are showing it. During fiscal 2008, only 65 percent of KC-135Rs were available each day for missions. The daily availability rate for KC-135Es, the oldest of the Stratotankers, was 22 percent — about one of every five.

One official from a company likely to bid on the contract, who asked not to be named, predicted there could be a squadron or more of private tankers if the Air Force makes a long-term commitment and provides enough work.

A primary question is the length of the contract, the official said. If the Air Force guarantees only the five-year test, then companies might be reluctant to spend millions of dollars buying new jets and equipping them with booms. Instead, contractors might steer toward using old jets and refueling booms from retired KC-135s.

If companies know the program will go beyond five years, giving them more time to pay off their multimillion-dollar investments, that opens the door to buying new jets and the latest remote-controlled booms.

Potential new tankers include versions of the jets Boeing and Northrop Grumman/EADS may offer in the next round of the KC-X competition. In theory, the jets would be less expensive than the KC-X because they would not need all the military defensive and communications systems of that aircraft, the official said.

Another issue is whether contractors could use the tankers for missions other than refueling. For example, would the Air Force permit a jet to fly commercial cargo on days it wasn’t needed for refueling?

Drogue approach

One company already has a track record refueling Navy and Marine Corps jets — Omega Aerial Refueling Services, headquartered in Alexandria, Va.

Omega got into the refueling business after U.S. Transportation Command issued a report in 1999 that concluded it was technically and financially feasible for contract aircraft to use drogues to refuel aircraft. Drogues are refueling connectors towed at the end of a hose.

Starting with one tanker, a Boeing 707 that had flown as a Pan Am Airlines passenger jet and been converted into a tanker, Omega began to fly naval refueling sorties in 2001, said the company’s president, John Sanders. Today, Omega flies three tankers — two B-707s and a DC-10, all certified by the Navy.

The refueling service is part of a larger company, Omega Air, headquartered in Ireland. The parent company specializes in the military use of B-707s and DC-10s, as well as operating worldwide aircraft repair facilities.

Omega’s pilots and flight engineers are typically former U.S. military aviators with 3,000-plus hours of experience in military versions of B-707s and DC-10s, Sanders said. Mechanics certified by the Federal Aviation Administration travel with the planes and have many of the same duties as military crew chiefs.

Since 2001, Omega tankers have flown more than 2,600 military missions, pumping 15 million gallons of fuel into Navy and Marine planes, Sanders said. All the missions have involved training in the U.S. or abroad, including Japan and Guam, as well as refueling jets on long-distance missions such as crossing the U.S. from coast to coast.

By comparison, Air Force tankers offload about the same amount of fuel into planes flying over Iraq and Afghanistan during one month, according to Air Forces Central figures.

Omega expects to compete for the Air Force contract, Sanders said. If it wins, the company would likely convert two DC-10s into boom-equipped tankers and have the planes flying missions within two years of the contract award.

The typical Omega mission supporting the Navy and Marine Corps involves units preparing for a deployment or carrier tour, Sanders said. During those exercises, military commanders have operational control of the Omega tankers and the tankers fly out of Navy or Marine installations.

Unlike the Air Force, the Navy lacks its own large tankers. Instead, the service uses small aircraft able to operate from carriers to refuel its planes. For major exercises, the Navy prefers to have a large tanker available.

While Air Force tankers continue to refuel Navy and Marine jets during the final stages of deployment training, Omega is often used at earlier periods or when Air Force jets are not available, Sanders said. In addition to training flights, Omega supports groups of fighters on cross-country ferry trips.

For 2008, the Navy contract with Omega calls for spending up to $30.8 million for refueling flights, according to the Defense Department. The money doesn’t include the cost of the fuel, which the Navy funds directly.

Omega charges the Navy $7,500 per hour for the K-707 and $12,500 per hour for the KDC-10, Sanders said. Those fees cover all of Omega’s expenses except for some crew travel costs.

The Air Force’s hourly flying cost is $9,750 for a KC-135 and $13,910 for a KC-10, according to Air Mobility Command. The cost covers the plane’s operations and maintenance costs, but not the cost of the crew and other support functions.

Capitol Hill idea

The Air Force did not start down the road to private refueling on its own; it was pushed by Congress.

In 2004, reports by the Defense Science Board and the Government Accountability Office examining tanker requirements suggested the Air Force take a look at using contractors to handle domestic missions, but the Air Force focused on buying the new KC-X tanker. The GAO pointed out that using private refuelers would free the Air Force from maintaining its worst-performing KC-135s.

In 2007, Sen. John McCain, R-Ariz., led the effort to include a provision in the 2008 defense budget requiring the Air Force to try contractor refueling for at least five years. McCain had been critical of the Air Force’s efforts to replace its aging KC-135 fleet with leased tankers from Boeing.

The Senate Armed Services Committee, of which McCain is ranking Republican, was concerned that the KC-X tanker would not arrive on time to cover tanker shortages if KC-135 Stratotankers were retired ahead of schedule and said the Air Force had shown little interest in private tanker services.

“At a time of historically low readiness levels, the Air Force cannot afford further degradation of air refueling capability,” a Senate report backing the provision said.

The Senate’s decision came several months before the Air Force canceled the controversial decision to award the KC-X contract to Northrop Grumman/EADS. The second try at selecting a tanker isn’t expected to start until 2009, putting the effort to buy 179 new tankers more than a year behind schedule.