$4 billion is one hefty price tag
Tuesday, President-elect Trump tweeted costs for plans to build a new Air Force One were “out of control” and that the order should be cancelled.
Boeing is building a brand new 747 Air Force One for future presidents, but costs are out of control, more than $4 billion. Cancel order!
— Donald J. Trump (@realDonaldTrump) December 6, 2016
Later, Trump elaborated:
“The plane is totally out of control. It’s going to be over $4 billion for Air Force One program and I think it’s ridiculous,” Trump elaborated in brief comments to reporters at Trump Tower. “I think Boeing is doing a little bit of a number. We want Boeing to make a lot of money, but not that much money.”
To his credit though, many government contracts are chock-full of waste and often pay substantially more than private-sector rates. The concern for keeping costs down is a welcomed change.
The president-elect’s most recent financial disclosure form, filed in May and detailing his 2015 holdings, showed that the Manhattan billionaire owned between $50,001 and $100,000 worth of stock in Boeing, a purchase he announced on Twitter in 2013. Jason Miller, a spokesman for Trump, said Tuesday morning that had Trump sold all of his stocks last June.
Miller added that the exact details of Trump’s desire to cancel the Boeing order would be dealt with after he is inaugurated next month. But Trump’s comments, Miller said, “really speaks to the president-elect’s focus on keeping costs down across the board.”
Boeing later responded saying their current contract to specifically determine Air Force One capabilities had a $170 million price tag, but didn’t elaborate:
Boeing says it only has a $170MIL contract with the US Air Force— nothing about a $4BIL deal that Trump tweeted. pic.twitter.com/gsgaEnme07
— Kyle Griffin (@kylegriffin1) December 6, 2016
So who’s right? Point goes to Trump in this match. Factoring in upgrades recommended by security experts, the GAO estimates the final product will come in just under $4 billion:
“The planning work that we have done on behalf of future presidents is something that the next administration will have to decide whether or not to carry forward,” Earnest said.
The budgeted costs for the replacement program are $2.87 billion for the fiscal years 2015 through 2021, just on research and development, testing and evaluation, according to budget documents seen by Reuters.
The current Air Force plan envisions extensive modifications to a Boeing 747-8 plane, adding military avionics and advanced communications to a self-defense system.
“Of course it’s not like buying a vanilla Boeing jumbo jet,” said defense consultant Loren Thompson, who has close ties to Boeing and other companies.
A March 2016 report from the Government Accountability Office, the investigative arm of Congress, estimated the cost of the overall program at $3.21 billion, including the purchase of two aircraft.
But the GAO estimated the costs for research and development would be would be lower, at just under $2 billion. If the GAO report used the same Air Force estimate for research and development, then its estimate would be around $4 billion.
$4 billion is one seriously hefty price tag.
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