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 Boeing, the Pentagon's No. 2 supplier, said the contract was worth
$2.4 billion in total, including funds awarded earlier for materials
that take longer to procure. The order was approved as part of the
Navy's budget for fiscal 2014.
The deal marks the first full-rate production contract for Boeing
for the new planes, and follows a decision by Australia last week to
buy eight P-8A planes for A$4 billion ($3.6 billion).
The aircraft, based on Boeing's 737-800 commercial airplane, will
replace the U.S. Navy's P-3 spy planes, which have been in service
for more than 40 years.
The Navy uses the new P-8A planes for anti-submarine, anti-surface
warfare and surveillance work. Overall, the Navy plans to purchase
117 P-8As to replace its P-3 fleet.
Navy P-8A program manager Captain Scott Dillon said the new contract
would help ensure continued "cost-effective procurement" of the
maritime spy planes.
Rick Heerdt, Boeing vice president and P-8 program manager, said the
company delivered eight aircraft on or ahead of schedule in 2013.
"We intend to keep that streak going in 2014," he said.
The new order, to be completed by April 2017, will bring the number
of aircraft ordered by the Navy to 53.
Boeing has delivered 13 P-8As to the Navy, which deployed its first
patrol squadron to Kadena, Japan in December 2013 and has been
conducting missions since then.
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Boeing assembles the P-8A aircraft in the same facility where it
builds all its 737 aircraft, modifying the planes while they are
still in production, instead of taking a completed airliner and
tearing it apart to make the military modifications.
Boeing officials say that strategy has helped them reduce the cost
of the aircraft and keep the program on or ahead of schedule.
Other big contractors on the program include CFM International, a
joint venture of General Electric <GE.N> and Snecma, a division of
France's Safran <SAF.PA>, Northrop Grumman Corp <NOC.N>, Raytheon Co
<RTN.N>, Spirit AeroSystems Holdings <SPR.N>, BAE Systems <BAES.L>
and GE.
(Reporting by Andrea Shalal; editing by
Andre Grenon, Jonathan Oatis and Bernard Orr)
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