How Sierra Nevada Corp. Is Starting To Build The Next Doomsday Fleet

Less than one month after winning its biggest contract, Sierra Nevada Corp. has delivered the first round of required designs and is preparing for the arrival of its first 747-8i to be modified as part of the U.S. Air Force’s Survivable Airborne Operations Center program.

SNC in late April received an engineering and manufacturing development contract worth up to $13 billion to replace the service’s aging E-4B Nightwatch fleet. SNC has purchased five 747-8is from Korean Air Lines to start building the fleet, and the first is expected to arrive in Dayton, Ohio, within weeks.

The award was a major coup for the Sparks, Nevada-based company that for decades has focused on smaller commercial-derivative aircraft modification programs. The company beat the OEM, Boeing, for SAOC in a proposal that the company says is indicative of a change in how derivative programs will be approached.

“The most important part of SAOC is not what you see, it’s more than just a rehosted E-4B, more than just new iron,” says Brady Hauboldt, the company’s vice president of aviation strategic plans and programs. “Our modular open system architecture brings a new approach to commercial-derivative aircraft modification. Fundamentally, it’s going to change how the DOD views commercial-derivative aircraft modifications, no longer beholden to the OEM.”

SNC announced May 22 it is teaming with Collins Aerospace, FSI Defense, GE Aerospace, Greenpoint Technologies, Lockheed Martin Skunk Works and Rolls-Royce for SAOC. The team includes some already on the E-4B program and other similar programs, Hauboldt says.

“They bring their domain expertise that they’ve provided to not just the [E-4B] community, but other like platforms and mission systems,” Hauboldt tells Aerospace DAILY in the company’s first interview since winning SAOC. “So we’ve leveraged them, the best of breed, if you will. It’s an overused term, but we really tried to find those that bring the best experience, expertise and capability for SAOC.”

Korean Airlines announced in a filing earlier this month that it was selling five 747-8is to Sierra Nevada at a cost of $675 million. Hauboldt says this sale was long in the works, starting when the company analyzed Air Force requirements and determined 747-8is were the best choice.

“We evaluated all of the owner-operators, the fleets that are out there and made a selection based on availability and very high maintenance standards from the current fleet operator,” he says. “We’ve been in negotiations for a long time to order those aircraft, and it was no surprise to me that we were able to execute so quickly after the prime contractor was awarded.”

The final fleet size is not set, though indications have been of 8 to ten aircraft. SNC is “prepared to support the objective fleet size when ready,” he says.

The bulk of the work will occur at the company’s new Dayton, Ohio, complex. SNC plans to expand the location to include four MRO facilities and the country’s largest emissions-free paint complex. Additionally, the company will perform SAOC work in the Dallas-Fort Worth and Denver areas. There are hiring events planned for all three in the coming weeks as part of the company’s growth plans.

The SAOC award was slightly delayed for a few months, allowing the company to prepare a communications plan along with hiring and facility growth plans. While there were reports that Boeing had pulled out of the competition months before award, Hauboldt says it was competitive until award.

Unlike prior fixed-price commercial derivative programs such as the KC-46 tanker and VC-25B presidential aircraft replacement, the SAOC award was cost-plus. The fixed-price approach has caused delays along with large overruns for the OEM. Additionally, with the matured plan for SAOC the program will begin later in the development cycle compared to a new start.

“I honestly do think that the contract structure is appropriate for the risk level on this program, the entrance at engineering and manufacturing development is appropriate for this type of program,” Hauboldt says. “But it’s been pretty clear in our early discussion with the U.S. Air Force that we both agree that open, transparent communications is essential. We both are taking a focus on early risk mitigation and opportunity management, and that’s what makes for a healthy program in the long run, because there’ll be challenges ahead.”

Another sticking point in the competition was data rights, as Boeing is the OEM for the 747 while SNC’s plan is to provide as much of the data it can to the Air Force. The company’s plan for modifications would provide a “buffer, if you will, between what has to remain proprietary and what could be government-owned data rights.”

“All of the work that SNC does under contract funded by the government belongs to the government, in accordance with [the Federal Acquisition Regulation], which is how it should be,” he says.

Since Boeing is the OEM, the FAA requires flight manuals and instructions for continued airworthiness to be maintained to the type certificate. Beyond that, SNC is flexible on rights for all other modifications.

“My input to the Air Force, the DOD, has always been to let the OEMs do what they do best, which is build great aircraft, but let the best of innovation in industry compete for those commercial-derivative aircraft modifications,” he says. “That’s really how SNC has invested and scaled itself over the last couple decades, to be in a position to do something like this on virtually any aircraft, whether it’s a 747 or something much smaller.”