Fred Timson

Responds to Senate's concerns that further consolidation in the military-aircraft industry from its current three prime contractors would pose risks to innovation and cost through limited or no competition in contracting for military aircraft and related weapon systems for the Defence Department. Describes that industry, evaluates what is required to maintain the industry at a high level of innovation, assesses industry's prospects for innovation and competition, and identifies policy options open to the DoD.

The Air Force is considering upgrades to the KC-10 in several areas: avionics, command and control, multipoint refueling, defensive systems, and compatibility with night-vision systems. An assessment of options to upgrade the KC-10 weighed the costs and potential benefits of the upgrades against demands in homeland defense, theater employment, deployment, and air bridge operations and KC-10 roles (refueling only, airlift only, or dual-role).

Without modernization, the U.S. Air Force's KC-10 air refueling fleet will not be in compliance with upcoming air traffic mandates regulating the minimum communication, navigation, and surveillance capabilities of aircraft flying in certain regions and altitudes. A detailed analysis of the cost-effectiveness of KC-10 modernization showed that, overall, the required upgrades would result in net cost avoidance over the life of the fleet.