Boeing wins a $5.3bn US Navy contract

City A.M. Reporter
BOEING has finalised a $5.3bn (£3.4bn) four-year agreement with the US Navy to build 124 F/A-18 fighter jets and electronic attack planes, a deal creatin savings of over $600m.

The deal, announced yesterday by Boeing and the Pentagon, calls for the company to deliver 66 F/A-18 “Super Hornet” fighters and 58 EA-18G airframes designed for electronic attack to the Navy from 2012 through 2015.

The Pentagon said the multiyear agreement was on fixed-price terms, with an incentive fee – terms that will limit the government's liability in the event of any cost overruns.

Boeing also won a $249m contract for logistics support for the F/A-18 fighters, which operate worldwide from the decks of 11 Navy aircraft carriers --- including ongoing missions in Afghanistan.

Boeing said the agreement would generate more than $600m in savings by allowing Boeing and its suppliers to plan further ahead and buy materials in bulk, making production more efficient than under a single-year contract.

The contract is based on a price of about $42.7m per airplane, excluding their engines and other government-furnished equipment.