Multiyear contract is a big boon to Boeing

Tuesday - 5/18/2010, 9:40am EDT

Jacques Gansler, former undersecretary of Defense for Acquisition, Technology and Logistics, Dept of Defense

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The Navy told Congress it will save $590 million dollars by entering a multiyear agreement to buy some expensive products, namely 124 new F-18 jets. The multiyear deal is saving 10 percent over conventional, year-by-year contracting. The multiyear contract marks a triumph for Boeing and its F/A-18 Super Hornets, and reportedly, a setback for the Navy's next fighter jet, Lockheed's F-35C Lightning II, which has faced heavy criticism for cost overruns and scheduling delays. So how good a deal is this? For analysis we ask Dr. Jacques Gansler, former undersecretary of Defense for Acquisition, Technology and Logistics, now at the University of Maryland.