Air Force brought in hard-nosed negotiator to close E-7 deal with Boeing

RAF FAIRFORD, England—The U.S. Air Force has reached a deal with Boeing for the new E-7 Wedgetail radar plane, more than a year into negotiations. But they had to bring in a former Pentagon official known for driving hard bargains to do it.

“We have reached agreement with them. We haven’t quite definitized a contract with them, but we expect to do that in August. What we did was we brought back a former colleague of mine ….to negotiate with Boeing and to drive to closure on the program: Mr. Shay Assad,” Air Force Secretary Frank Kendall told reporters at the Royal International Air Tattoo on Saturday. 

Assad served as the Pentagon’s top weapon buying negotiator in the 2010s, and is credited with saving taxpayers hundreds of millions of dollars in deals he reached with the CEOs of Boeing and Lockheed. 

Earlier this year, Air Force officials admitted that they were having a “hard time” reaching an agreement with Boeing on the E-7 program. Officials said there was an unexpected amount of “nonrecurring engineering”—that is, one-off costs to develop a new platform—in the company’s proposal. And this isn’t the first time the Air Force has struggled to negotiate a contract with Boeing.

The E-7 deal is for two test aircraft in the “rapid prototyping program.” They were ordered last year, and will provide an “affordable basis” for future production, Andrew Hunter, the service’s acquisition chief, told reporters.  

“First of all, I just want to say thanks to Shay for the work that he did. But also, credit here for Boeing and its suppliers, and they did really buckle down and get their pencils out and sharpen them and do their job to bring the cost of the rapid prototyping program down,” Hunter said. 

He said Boeing was motivated because there’s an “extensive market” for the E-7 with NATO and other partners, Hunter said. Boeing’s Wedgetail won the NATO competition last year to replace the alliance’s fleet of E-3 Sentry AWACS-carrying radar planes.

“That's a big market for industry, and they went after it in a way that was I think beneficial for us as well as for them,” Hunter said.“So I think that's a good case of being able to leverage the overall demand and the marketplace to get the right outcome on our rapid prototyping program.”

As the Air Force begins retiring its E-3s, the service says it needs a new, more survivable radar plane to handle airborne domain awareness in the Indo-Pacific region. The service plans to buy a total of 26 E-7s.