The MoD’s attempt to reduce contract costs appear to be driven by the fact that they have jumped nearly 50% in just 15 months, from $1.98 billion in March 2019 to £2.1 billion ($2.68 billion at today’s exchange rate).
Britain is set to slash its order of early-warning radar jets, redrawing a controversial contract awarded without competition in bid to save money— Lucy Fisher (@LOS_Fisher) September 22, 2020
MoD has drawn up plans to revise order for E-7 Wedgetail jets from five to three, I'm told
US figures unhappy with move
The original contract was announced on March 22, 2019, and was awarded without competition despite the existence of credible European alternatives, including Airbus Defence and Space and Saab.
In an attempt to save money, MoD approached Boeing during the summer to reduce the number of aircraft from five to three, The Times’ defense correspondent Lucy Fisher reported in a series of Tweets posted this morning.
“MoD is thought to believe reducing (but not scrapping) Wedgetail order could save hundreds of millions of pounds over 10 years, while maintaining several hundred skilled jobs,” Fisher tweeted.
She added that “US figures [are] unhappy, after Boeing invested in initiatives to boost UK industry,” and quoted one source as saying “The Americans are pretty angry about it. It's bad for Boeing [and] the UK has welched on its pre-agreed commitments when the US have been pretty accommodating in trying to help them plug a gap."
Wedgetail is intended to replace the Royal Air Force’s fleet of six Boeing E-3D AWACS aircraft, two of which are virtually retired and considered “long-term unserviceable assets” by the RAF.
According to Britain’s 2015 Strategic Defense and Security Review, the E-3D Sentrys were planned to remain operational through 2035, but this depended on a proposed £2 billion upgrade which was later abandoned in order to achieve savings and generate RAF near-term efficiencies.
According to the 2019 contract, the first RAF Wedgetail is due to be in service in 2023. The aircraft is currently in service with Australia, South Korea and Turkey.
“Compromise could yet be struck in which UK only reduces order by one, taking total to four jets,” Fisher added.
An MoD spokesman said “We regularly discuss equipment programs with our partners, particularly when it comes to making savings and cutting costs, where appropriate,” Fisher added, while a Boeing spokesman added that “We don’t comment on commercial matters,” after having claimed that “Wedgetail is the world’s most advanced, capable and reliable command-and-control aircraft [and] will provide the RAF with a combat-proven capability that is low risk and unmatched.”
At the time the contract was announced, the acquisition of Wedgetail was also criticized because it added another aircraft to the RAF inventory that cannot be refueled by its own Voyager aerial tankers, which lack the required centerline refueling booms.
Other RAF aircraft that cannot be refueled by RAF tankers include the C-17 Globemaster, P-8A Poseidon, RC-135W Airseeker and E-3D AWACS.