C-17s for IndiaJan 24, 2013 12:38 UTC by Defense Industry Daily staff
In November 2009, reports surfaced that India was negotiating to buy 10 C-17A Globemaster III heavy transports for its air force. A Defense News article added that:
“The C-17′s advantages include its easier handling (compared with the IL-76) and ability to operate from short and rough airstrips, added the sources… The Indian military needs to do three things: augment its ability to quickly lift larger numbers of troops as it views possible threats on its border with China; strengthen its presence on the Pakistani border; and fight terrorism and low-intensity warfare, said a senior Defence Ministry official. India needs to triple its lift capacity, said the official.”
New jets with 77.5 tonnes of lift capacity, instead of the IL-76′s 50 tonnes, will help India get there. The government was serious enough to file a formal DSCA request in April 2010, worth up to $5.8 billion. Now, that has taken the next steps, and become the largest-ever foreign sale of C-17s – with the potential to grow further.
Contracts and Key Events
Jan 22/13: Boeing delivers India’s 1st C-17. “Delivers” isn’t like buying a car and driving it off the lot. In cases like this, where it’s a new type of plane for a customer, it usually means that the plane goes to flight testing. The IAF’s C-17 will be flight tested at Edwards AFB, CA. Once testing is done to India’s satisfaction, the Indian government can hold a formal acceptance ceremony for the aircraft. This may or may not be timed to coincide with the plane’s arrival in India.
Boeing will deliver 5 C-17As per year to India: 4 more in 2013, then the final 5 in 2014. Boeing.
2011 – 2012
Cabinet approval; program budget; Boeing contract.
Sept 24/12: Infrastructure. Boeing in Huntington Beach, CA receives a $21.7 million firm-fixed-price contract to build C-17 bed-down infrastructure in India, with an estimated completion date of Dec 31/14. The plane isn’t likely to fit into facilities for smaller aircraft.
One bid was solicited, with one bid received. The US Army Corps of Engineers at Elmendorf AFB, AK manages the contract on behalf of its Foreign Military Sale client in India (W911KB-12-C-0010).
July 31/12: 1st major join. Boeing workers in Long Beach join the forward, center and aft fuselages, and the wing assembly, of India’s first C-17 Globemaster III. The “major join” ceremony is a minor program milestone, complete with ceremonial rivets. Boeing.
Feb 2/12: Contract. Boeing in Long Beach, CA receives a $1.78 billion firm-fixed-price contract for 10 C-17s, as a Foreign Military Sales requirement for the Indian Air Force. Work will be performed in Long Beach, CA, and is expected to be complete by July 28/14. The ASC/WLMK at Wright-Patterson AFB, OH acts as India’s FMS agent (FA8614-06-D-2006, DO 0009).
The wide difference between Antony’s Dec 12/11 statement and this contract is a good reminder that the purchase contract doesn’t cover everything. As one example, India can expect to pay another $380 million or so for the 40 F117 engines that will equip these planes. They will be installed under this contract, but are not bought under it. Other “Government Furnished Equipment” from both India and the USA also factors into the total program cost, as do initial support contracts in many cases. Based on USAF total costs, Antony’s $4+ billion figure also includes support contracts – a Sept 27/11 C-17 support contract totaled up to $469 million, for an undisclosed period.
Dec 12/11: Budget. Indian defense minister Antony answers a Parliamentary question, and confirms key details about India’s first 10 C-17s:
“Letters of Offer and Acceptance (LOA) have been signed with the Government of the United States (USG) for the procurement of ten C-17 Globemaster aircraft as well as six C-130J aircraft along with associated equipment for the Indian Air Force (IAF) The estimated cost of the procurement of the C-17 aircraft is US $ 4.116 billion… The cost at which the aircraft is being supplied to India is commensurate with the cost at which C-17 aircraft is supplied to the United States Air Force and its allies. All ten C-17 aircraft and their associated equipment are expected to be delivered to the IAF between June 2013 and June 2015.”
Dec 8/11: Engines. A $37.8 million fixed-price with economic price adjustment, indefinite-delivery/ indefinite-quantity contract for 4 F117-PW-100 FMS install engines, and associated data for the C-17 aircraft.
FMS means a Foreign Military Sale airlifter, and potential contracts for 1 more C-17A currently exist with Australia and Kuwait. Australia’s DSCA request was published on Nov 15/11, and it’s in the group (with NATO, Japan & New Zealand) for a reduced 15-day DSCA notification period, so it could be them. At the same time, Pratt & Whitney’s Dec 19/11 release describes a contract to “produce the first four F117-PW-100 engines that will power the Boeing C-17 Globemaster III for the Indian Air Force. The engines will be delivered in second quarter of 2012.”
Note the consistent figure of around $37-38 million “extra” for engines, above and beyond the contract price to Boeing for each plane. Work will be performed in East Hartford, CT, and is expected to be complete by June 4/12 (FA8626-07-D-2073, no DO given).
Sept 27/11: A not-to-exceed $469 million firm-fixed-price, cost-plus-fixed-fee contract modification, covering India’s initial entry into the C-17 Globemaster III Sustainment Partnership Program’s “virtual fleet” (FA8614-04-C-2004, PO 0436).
June 15/11: Deal signed. Boeing and India sign the deal for 10 C-17s, to be delivered during 2013-2014. India will also join the Globemaster Sustainment Partnership. On Boeing’s part, it will invest 30% of the $4.1 billion contract in Indian civilian and military industries. The Letter of Offer and Acceptance is reported to specifically include the build-out of a high-altitude engine test facility and trisonic wind tunnel facility at India’s DRDO. Rumors place those projects’ cost at $500 million, but the long-term value to Indian research may be higher.
Reports continue to circulate, complete with high-level quotes, that India’s eventual order may reach 16-18 C-17As. Boeing release | Boeing India page || Deccan Herald | domain-b | India’s Economic Times | Times of India | Seattle Post-Intelligencer || Flight International | Oman Tribune.
10 C-17s + GSP support
June 7/11: India’s Cabinet Committee on Security has reportedly approved a $4.1 billion buy of 10 C-17As. Details regarding possible options clauses remain sketchy, and this is not a contract yet, but it is an important milestone. A Letter of Acceptance to the US government is expected to be issued this month, after which a final date for the signing of the contract will be set. Deliveries of the aircraft are expected to start 24 months after that official signing. Boeing Military Aircraft President Chris Chadwick is quoted as saying that:
“The [$1+ billion] offsets package relating to the deal has already been approved. Plus, the IAF has to go through numerous government gateways before a final seal of approval can be given. Defence deals of this magnitude do take some time to close, and I expect them to take a decision by mid-2011.”
May 18/11: 15-17 planes? In “India’s consolation prize to US,” The Times of India reports that India may be moving toward a larger C-17 order faster than previously planned, as a partial effort to offset the fallout from having American fighters shut out of the M-MRCA competition. A larger buy would also give Indian regular and special forces a lot more mobility, in an era where trends are pushing India to find become more involved in conflicts beyond its near borders. Reports are consistent with November 2010 dispatches, speaking of another 5-7 C-17s on top of the 10 being negotiated. That could push the total deal value from around $4.1 billion to almost $7 billion.
The pending orders for C-17s and M777 ultra-light howitzers would be pursued as government-to-government Foreign Military Sales, in part because that helps the Indian government sidestep its own unworkable procurement processes. The Times of India reports that:
“Work on increasing the C-17 order is already underway. Among the security agencies set to acquire the massive military aircraft is Aviation Research Centre, the external intelligence agency RAW’s aviation arm. Given its capability to airdrop over 100 commandos, C-17s would also be acquired for improving Special Forces capabilities outside of the military, sources said.”
April 13/11: IANS reports on the current state of the C-17 pursuit, following an interview with Boeing Military Aircraft president Christopher M. Chadwick:
“Chadwick also dismissed rumours about India being upset with the $5.8 billion that the US has cited for the 10 C-17 Globemaster heavylift cargo planes for its air force… “There has been no direct request to us about the pricing (of C-17s). I think what we offered is very fair and allows us to meet the requirement of airplane capability and lifecycle costs. So we are waiting to see what they (Indian government) have to say. I think we are pretty close to signing the contract,” Chadwick said. He said their price for the 10 C-17s was “fair and transparent” and noted that the company’s offset commitment plan had been approved already.”
Nov 9/10: More? India Defence cites Indian media reports quoting IAF chief Air Chief Marshal P.V. Naik:
“After we have evaluated the performance of the 10 C-17s, we will take a decision on whether to order another six.”
Nov 6/10: During Obama’s trip to India, an initial agreement is signed for 10 C-17s, with further details to be worked out. A White house statement says that:
“The Boeing Company and the Indian Air Force have reached preliminary agreement on the purchase of 10 C-17 Globemaster III military transport aircraft, and are now in the process of finalizing the details of the sale. Once all have been delivered, the Indian Air Force will be the owner and operator of the largest fleet of C-17s outside of the United States. Boeing, headquartered in Chicago, Illinois, is the aircraft manufacturer. Boeing reports that each C-17 supports 650 suppliers across 44 U.S. states and that this order will support Boeing’s C-17 production facility in Long Beach, California, for an entire year. This transaction is valued at approximately $4.1 billion, all of which is U.S. export content, supporting an estimated 22,160 jobs.”
Boeing emphasizes that it has not yet sealed the order with a legal contract. See: Bloomberg | UK Financial Times Beyond BRICs blog | Hindu Business Line | Indo-Asian News Service (IANS) | NDTV | Sify | WSJ India Real Time blog.
Oct 19/10: Competing reports surface regarding India’s C-17 buy. India’s Economic Times says a $5+ billion deal for C-17s will be signed in advance of Barrack Obama’s visit to India in November 2010. The second layer of speculation has to do with electronics, since India hasn’t signed the USA’s Communications Interoperability and Security Memorandum of Agreement (CISMOA), or the Basic Exchange and Co-operation Agreement for geo-spatial co-operation – and reportedly doesn’t intend to.
The alternative would be to create a C-17i with avionics and communications systems from Israel instead, or from France’s Thales. The latter could even be borrowed from commercial aircraft systems, but any substitution will incur both equipment integration and testing costs, and international civil/military certification testing and costs. Economic Times of India | “An EUM Bellwether? India/US Arms Deals Face Crunch Over Conditions.”
April 26/10: The US DSCA announces [PDF] India’s official request to buy 10 C-17A strategic transport aircraft, along with 45 (40 installed and 5 spare) F117-PW-100 engines, 10 of ATK’s AN/AAR-47 Missile Warning Systems, 10 of BAE systems’ AN/ALE-47 Counter-Measures Dispensing Systems, along with pyrotechnics, flares, and other explosives; plus spare and repairs parts, any modifications desired by India, repair and return services, warranty, aircraft ferry and refueling for delivery, crew armor, mission planning system software, communication equipment and support, personnel training and training equipment, publications and technical data, and other forms of U.S. Government and contractor support.
Implementation of this proposed sale will require up to 20 U.S. Government and 20 contractor representatives for annual program management and technical reviews in India or the U.S. for 1 week per review, over approximately 6 years. The estimated cost is $5.8 billion, a far more reasonable figure than earlier estimates, and in line with past sales to Australia and Canada. The US Embassy in New Delhi reminds onlookers that, as always:
“…this [DSCA figure] represents the highest possible estimate for the sale, and includes all potential services offered. The actual cost will be based on Indian Air Force requirements and has yet to be negotiated.”
The principal contractors will be The Boeing Company in Long Beach, CA, and Pratt & Whitney Military Engines in East Hartford, CT. Additional subcontractors may be involved, depending on the contract. At this time, there are no known offset agreements proposed in connection with this potential sale – an unusual circumstance in India, though Boeing’s in-country work is growing of its own accord. U.S. Ambassador to India Timothy J. Roemer said that the sale “will likely include significant job creation in both countries.” See also US Embassy, New Delhi | India’s Financial Express | India Today.
March 10/10: Indian Minister of Defence A.K. Antony confirms to Parliament that India plans to buy C-17 Globemaster III transports on a government-to-government basis:
“The proposal to procure C-17 Globemaster II aircraft from the US Government to meet the strategic airlift requirement of Indian Air Force was approved by the Defence Acquisition Council on October 19, 2009. The Letter of Request was issued to the United States Government on January 01, 2010.”
Jan 7/10: Boeing announces that the U.S. government has received a Letter of Request from India’s Ministry of Defence (MOD) and the Indian Air Force regarding the potential acquisition of 10 C-17 Globemaster IIIs. The C-17 has been to India, and conducted demonstration flights in February 2009 at Aero India in Bangalore.
If the buy proceeds as a Foreign Military Sale, the next step is a US State Department approval and announcement of the sale via the DSCA, complete with estimated costs. Some countries, like Qatar and Canada, have chosen to buy their C-17s as a less public, and less restrictive, Direct Commercial Sale instead, reserving the FMS request and DSCA announcements for the aircraft’s defensive systems and Global Sustainment Partnership support arrangements.
Nov 5/09: Defense News reports that India is negotiating to buy 10 C-17A Globemaster III heavy transports for its air force, and claims that a $1.7 billion deal is likely to be finalized “by early 2010.” The problem is, a $1.7 billion budget might buy India 5 operational C-17s, but it’s very difficult to see how it could buy 10.
The article correctly notes that C-17 costs would be about 300% of the Russian IL-76, which India already operates as transport, aerial refueling (IL-78), and AWACS (IL-76/A-50 Phalcon) aircraft. Purchases by countries like Jordan indicate that a stretched IL-76MF with westernized avionics would sell in the $50-75 million range, and the aircraft does have some rough field capability. In contrast, the C-17′s price tends to hover near a modern 747′s, at around $200-250 million.
Australia spent about $1.4 billion, and Canada about $1.6 billion, to buy and induct 4 C-17As into their respective air forces; the USA, who does not have the extra expenses that accompany any new fleet aircraft type, is set to spend $2.5 billion for 10 C-17s in the Senate’s FY 2010 defense budget.
- DID – The Global C-17 Sustainment Partnership. Performance-based support contract guaranteeing levels of readiness. India will become a member.
- DID – An EUM Bellwether? India/US Arms Deals Face Crunch Over Conditions
- DID – India Buys 6-12 C-130J-30 Hercules for Special Forces. That contract could also expand. Their 20t capacity is far below the C-17′s, but in category terms, they’re just a step below.
- DID – MRTA: HAL and Irkut’s Joint Tactical Transport Project. Will be a twin-jet C-130J competitor, but the C-130J is carving out a strong special forces niche, and India needs planes now.
- DID – India Refurbishing its AN-32 Transport Fleet. Light tactical transports, one level below the C-130J-30s.
- DID – India’s Light Transport Competition: Follow Avros to Exit. India could have chosen lighter aircraft, but seems determined to field counterparts to the AN-32 fleet.