Welcome to the world of government contracting. What happens when refrigerators approaching thirty years of use begin to fail? Most of us would count ourselves fortunate for having gotten that much use out of them, hop in the car, and make financial arrangements to spend between $500 and $1500 to buy a commercial model at our local appliance store.
Most of us don’t have to fly our houses around the world, comply with FCC and Air Force testing, and require the capacity to store 3,000 meals at a time, however. If we did, we’d need to make even bigger financial arrangements than we’d imagine:
Air Force One needs new refrigerators, an upgrade that will cost taxpayers nearly $24 million.
Their high cost is the latest example of just how expensive it is to build the heavily modified 747 jumbo jets that fly the president of the United States. Experts say the reason isn’t price gouging by Boeing, which makes the jets and handles the presidential modifications, but instead the result of bespoke equipment requirements put in place by the White House Military Office and the Air Force.
“It’s not a contractor issue, it is a requirements issue,” said Richard Aboulafia, vice president of analysis at the Teal Group consulting firm. “It’s not getting people rich.”
They aren’t your average iceboxes, either:
The new refrigerators aren’t your kitchen Frigidaires, or even a typical jetliner’s cabin-feeding coolboxes. The requirement for Air Force One is the ability to feed passengers and crew for weeks without resupplying. That means storing about 3,000 meals in massive refrigerators and freezers below the passenger cabin. Five “chillers” cool a total of 26 climate-controlled compartments, according to the Air Force.
Former Barack Obama aide Eric Schultz scoffed:
we would have been impeached https://t.co/KdF82dEseH
— Eric Schultz (@EricSchultz) January 26, 2018
There’s no small amount of irony in this response. The Obama administration ordered the Air Force to replace both AF1 planes near the end of Obama’s term, as the existing Boeing aircraft are nearly at the end of their normal lifespan. That project had an initial projected total cost of $1.67 billion but wound up getting bloated out to $4 billion by the time Donald Trump heard about the contract. He threatened to cancel it over the rapidly expanding costs, forcing Boeing and the Air Force to sharpen their pencils and agree to some cost reductions.
We’ll get back to that in a moment, but first, let’s look at the factors that go into the expense of these components and anything else that goes on the two AF1 planes, for that matter. For one, it’s all customized, even refrigerators, because of the specialized mission. The military doesn’t go to Home Depot to buy fridges for Air Force One. They offer a contract to companies to build a specialty system to meet military specifications, which may or may not improve on UL’s consumer standards but are still different from them. Next, all of this has to get designed and tooled for two items instead of, say, 200,000 or more as would normally be the case for consumer products. All of the design, materials, tooling, and labor costs get attached to just the two units produced. That plus the mission — to carry weeks of provisions without restocking — make the scope of the project unique and not amenable to off-the-shelf solutions either.
Once it gets past the manufacturing, it has to get tested to make sure it meets those specs. Guess who pays for that?
Due to the fact that Air Force One is a one-of-a-kind aircraft, many of its components require unique testing by the Federal Aviation Administration and the cost of the testing is included in the price of the component, in this case refrigerators. The $24 million contract will cover the costs of engineering support services for the new chillers — including prototype design, manufacturing and installation, according to the DOD contract.
“The units and associated aircraft structural modifications are being specially designed to provide nearly 70 cubic feet of temperature-controlled (refrigeration/freezer) storage to support on-board personnel for an extended period of time, without having to restock while abroad,” Stefanek told CNN.
“The engineering required to design, manufacture, conduct environmental testing and obtain Federal Aviation Administration certification are included in the cost,” she said.
Again, if Delta Airlines needed to replace its refrigeration units across its entire fleet, it would be costly even on a per-unit basis — but a lot of these costs would get stretched out over hundreds of planes, too, making that per-unit cost much less expensive than one custom installation.
So yes, on a superficial level, it’s very satisfying to say, “Twenty-four million dollars for a refrigerator is ridiculous!” However, the real question in this story isn’t the cost for the refrigerators, which is easily explainable, but the decision to replace them at all. Remember that renegotiation over the AF1 contract? It got settled last August — and the planes have already been built because the Air Force bought those off the shelf:
The US Air Force announced Friday that it has finalized a deal to purchase two already-built aircraft from Boeing to serve as the next generation of Air Force One, flying future presidents around the world for decades to come.
A Boeing spokesperson told CNN the two aircraft in question were originally destined for a now bankrupt Russian airline.
“The Air Force awarded a contract modification to Boeing on Aug. 4, 2017, to purchase two commercial 747-8 aircraft for future modification to replace the two aging VC-25A Presidential support aircraft,” Air Force spokesperson Ann Stefanek said in a statement, using the military’s official name for the Air Force One 747 aircraft. …
“This award is a significant step towards ensuring an overall affordable program,” Darlene Costello, the principal deputy assistant secretary of the Air Force for acquisition, said in the statement accompanying the announcement.
It’s a real win for the White House, and one that speaks against the suggestion of profligacy by Schultz, who should know better. However, it raises the question as to why we’re spending $24 million to replace two refrigerators for the old aircraft when we’ll get two new ones by 2024, presumably complete with their own refrigerators. Perhaps it’s not possible to repair these units long enough to hold out that long, but it’s an awfully short period of time to amortize $24 million, even for the presidential missions the serve. Maybe it’s time to rethink the mission parameters and stock meals for shorter periods of time over the next few years.