COLORADO SPRINGS — The Department of the Air Force is seeking lawmakers’ blessing to award multi-year deals for aircraft and satellites, according to Secretary Troy Meink, expanding the Pentagon’s push to ramp up production for key weapons systems.
Speaking Wednesday during a briefing with reporters at the Space Symposium conference here, Meink said Pentagon officials are “working with the Hill to help get that authority [for multi-year procurement] across the board, not only with munitions, but actually with the production of aircraft, with the production of spacecraft. And I think we’ve gotten really good support from the Hill on this.”
Particularly when it comes to spacecraft, “you can buy the first two [development satellites], then you buy them kind of one year at a time. That approach just doesn’t work at all with what we’re doing now,” he said.
The secretary did not say specifically what systems are under consideration, though officials have long discussed the possibility of a multi-year deal for the F-35.
“I would say in general, pretty much all the systems we’re looking at going forward have significant production runs. So how you structure those multi-year procurement becomes extremely effective in doing that,” Meink said.
In contrast to standard contracts that are negotiated and awarded annually, multi-year deals issue dollars up front to cover several years of production. Pentagon officials argue the approach can save on unit costs by leveraging greater economies of scale, and industry often welcomes the arrangement since it can provide more predictable planning for the supply chain.
“I mean, we’re demanding that the contractors do a lot of the facilization, the upfront [non-recurring engineering] on their own dime, right? The only way that works is that they have some sort of long-term commitment from a production perspective,” Meink said.
Multi-year deals are a leading feature of the Trump administration’s record $1.5 trillion defense budget for fiscal 2027, which is seeking steep increases for munitions like PAC-3 interceptors for air defense and Tomahawk cruise missiles. The Pentagon has already issued framework deals for some of those weapons, which call for contractors to invest their own money to expand manufacturing capacity in exchange for larger orders.
“For the industrial base to double and triple capabilities, and build more facilities — not just add shifts — it requires multi-year agreements to purchase into the future,” White House Office of Management and Budget Director Ross Vought said while testifying before lawmakers on Wednesday. “That cost has to be booked in the first year.”
Estimates have shown savings reaped from multi-year deals could range from roughly five to 15 percent, according to the Congressional Research Service, which noted that actual savings compared to standard contracting are difficult to accurately measure.
