Boeing has received a contract modification worth $4bn from the US Navy to manufacture and deliver 78 F/A-18 Block III Super Hornets.
The modification converts a previously awarded advanced acquisition contract to a fixed-price-incentive-firm-target multi-year contract, according to the US Department of Defense.
The three-year contract award involves the full-rate production and delivery of 61 F/A-18E and 17 F/A-18F aircraft for fiscal years 2018 to 2021.
According to US Navy officials, the multi-year deal is estimated to deliver savings of at least $395m.
Boeing F/A-18 and EA-18G programmes vice-president Dan Gillian said: “This multi-year contract will provide significant savings for taxpayers and the US Navy while providing the capacity it needs to help improve readiness.
“A multiyear contract helps the F/A-18 team seek out suppliers with a guaranteed three years of production, instead of negotiating year to year. It helps both sides with planning, and we applaud the US Navy on taking the appropriate steps needed to help solve its readiness challenges.”
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The Block III configuration of the aircraft features advanced network capability, longer range, reduced radar cross-section, an advanced cockpit system, and an improved communication system.
It also increases the fighter jet’s life span from 6,000 hours to 10,000 hours.
Boeing plans to start the conversion of the existing Block II Super Hornets to Block III early in the next decade.
US Tactical Aircraft Programs programme executive officer rear admiral Shane Gahagan said: “This multi-year purchase is a great illustration of employing team effort to drive out cost and maximise efficiency in government procurement.
“This acquisition strategy secures cost savings to the navy, and the contract provisions limit navy liability while incentivising the cost to the contractor.
“The programme office was able to achieve significant savings while equipping our warfighters with the best capability on an accelerated timeline.”
The US Navy release stated that six more aircraft could be procured in fiscal 2020 and 2021 at the prices negotiated in the multi-year contract.
Pursuant to the contract terms, any project cost overrun or underrun will be shared by the Navy and its industry partners following the completion of production.
Boeing will perform the majority of the work in El Segundo, California. The contract work is anticipated to be completed in April 2024.
The Super Hornet is designed to offer next-generation multi-role strike fighter capability that can tackle current and emerging threats.
The single-seat E model and the two-seat F model of the Super Hornet can perform a range of missions including air superiority, day / night strike with precision-guided weapons, fighter escort, close air support, and suppression of enemy air defences.
They can also be deployed in support of maritime strike, reconnaissance, forward air control and tanker missions.