Boeing Tanker Costs ‘Completely Unacceptable,’ McCain Says

Boeing Co.’s projected cost growth on its aerial tanker contract, which may force it to absorb $700 million and U.S. taxpayers $600 million, is “completely unacceptable,” Senator John McCain told the Pentagon in a letter today.

Under the terms of the $4.9 billion fixed-price contract ceiling that calls for a sharing of cost increases, the Air Force and Boeing split 60/40 any increase between the target cost of $3.9 billion to the contract ceiling -- a $600 million share for the service and $400 million for Boeing.

Boeing also faces absorbing another $300 million because it is projected to exceed the $4.9 billion ceiling by that amount, McCain wrote. Boeing alerted the Air Force in April it would exceed the ceiling by $300 million.

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