Royal Australian Air Force Leading aircraftman Peter Ellis gives the thumbs up that the E-7A Wedgetail airborne early warning and control aircraft is ready for a sortie during Red Flag-Alaska 19-3 at Joint Base Elmendorf-Richardson, Alaska, Aug. 9, 2019. (U.S. Air Force photo by 2nd Lt. Mark Goss)

WASHINGTON — After a lengthy, plodding negotiation, the US Air Force and Boeing have officially closed a deal for the service’s first two E-7 Wedgetails at an eyepopping $2.6 billion.

The agreement, announced Friday, would see the Air Force contract Boeing to develop and build the pair of rapid prototype radar planes, which are expected to be delivered in fiscal 2028, according to a service press release. A Boeing release noted the deal covers “lifecycle development, training and support for the Air Force’s E-7A fleet.”

“This agreement is a significant win for our warfighters, paving the way for ensuring the Air Force’s ability to provide advanced airborne moving target indication in the coming years,” Air Force acquisition chief Andrew Hunter said in the service’s release. “It is also an exemplar of our ability to leverage and support the expertise and investments of our partners and allies to support our common security objectives.” 

In the Boeing release Vice President and E-7 Program Manager Stu Voboril said, “Global operators are proving that the E-7 AEW&C [Airborne Early Warning & Control] is a critical node for air superiority in the modern battlespace. In our partnership with the U.S. Air Force, we’re focused on stable, predictable execution to deliver crucial mission-ready capabilities today. This will put us on the path for the long-term growth of the aircraft and mission.”

A militarized version of Boeing’s 737 Next Generation commercial jet, the E-7 is set to replace the Air Force’s aging E-3 AWACS to become the service’s newest eye in the sky. With tools like its distinctive “top hat” radar manufactured by Northrop Grumman, the Wedgetail can scan the battlespace to actively track targets and serve other roles like command and control. The Air Force is keen to use space assets for some of those tracking missions, officials have said, but the E-7 will provide many of those capabilities in the meantime.

After awarding Boeing an undefinitized contract action (UCA) in February 2023 to kickstart Wedgetail work, the Air Force struggled to reach an agreement on price with the aerospace giant, citing surprising costs needed to integrate US-specific requirements that differed from allies like the United Kingdom who already operate the Wedgetail. (The UK is paying about the same cost, $2.5 billion, for three planes and five radars, according to a scathing report from British lawmakers last year.)

Air Force Secretary Frank Kendall revealed that his service and Boeing had reached a deal at the Royal International Air Tattoo (RIAT) in July, though details like price had not yet been finalized.

During the course of negotiations, the Air Force’s requirements evolved to include US-specific features including open mission systems architecture, improved satellite communications and enhanced GPS, which will become part of the baseline Wedgetail going forward, Boeing’s Vice President of Mobility, Surveillance and Bombers Dan Gillian told reporters at RIAT. 

The agreement announced Friday ties up the protracted talks, though only after the Air Force had to call in contracting heavyweight Shay Assad to push the deal forward. The $2.6 billion award is more than double the $1.2 billion February 2023 UCA, and the agreement pushes out delivery of the first plane one year from FY27 — when the Air Force originally aimed to get the first aircraft delivered — to FY28, when the second rapid prototype is expected to arrive. (The Pentagon’s contract award notice says work technically will be complete by Aug. 28, 2029.)

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A Boeing spokesperson declined to provide additional information on the negotiated price. Air Force spokesperson Ann Stefanek declined to provide more detail about what exactly the $2.6 billion is buying, beyond the airframes, saying, “Price information is not publicly releasable as it constitutes non-technical proprietary information.”

At RIAT, Hunter explained that there was a “business case” incentivizing Boeing to “buckle down” and arrest the program’s rising costs, considering an “extensive market” for the Wedgetail going forward. 

“There is credit here for Boeing and the suppliers” who did “a good job to bring the cost of the rapid prototyping program down,” Hunter said. “That’s what we asked. And that’s what they did.”

The Air Force eventually expects to field a fleet of 26 aircraft, and the service press release announcing the deal noted that the prototyping program will “inform a planned production decision in FY26.” Other customers like NATO have also signed on for more orders.

Pointing to burgeoning international interest, Gillian at RIAT forecast total sales of about 50 to 70 Wedgetails, with Voboril separately telling Breaking Defense last year that the company was aiming to ramp up to an annual output of six planes to meet global demand.

Valerie Insinna contributed to this report.