Super Hornet Multi-Year Procurement Approved

Submitted by the F/A-18 Public Affairs Office

The F/A18E/F Program received good news October 25 when it was notified that President Clinton had signed the fiscal 2000 Defense Appropriations Bill. Included in the Bill is approval for a multi-year procurement of 222 F/A-18E/F Super Hornets over the next five years.

Purchasing the aircraft through a multi-year contract will save U.S. taxpayers more than $700 million, and provide great stability to the flow of Super Hornets to the fleet. The savings associated with the multiyear come from the investment of the Economic Ordering Quantity (EOQ) funding in FY00/01 and the continuity of production. This avoids many of the recurring costs associated with an annual production contract.

Although the United States customarily purchases most of its defense systems for only one year at a time, Congress authorizes exceptions when committing to longer-term buys makes good economic sense. In a multiyear environment, savings are captured by eliminating annual nonrecurring start up costs including proposal preparation, negotiation, subcontracts, tooling set-up and production planning. The multiyear environments allows the contractor to better plan the production flow and facility utilization which reduces the recurring production cost and sustaining engineering. The contractor will be given the opportunity to capture long term return on investment which benefits the government in the form of cost savings throughout the program life cycle.

The Appropriation and Authorization Bills authorization of the procurement of 222 F/A-18E/F Super Hornets over a five year period is contingent upon successful completion of the currently ongoing F/A-18E/F Operational Evaluation (OPEVAL).