Boeing Awarded $895 Million to Upgrade C-17s

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On Friday, the U.S. Department of Defense announced it has awarded Boeing (NYSE: BA ) an $895 million "cost-plus-incentive-fee, cost-plus-fixed-fee, firm-fixed-price, fixed-price incentive-fee, and cost-reimbursement" contract to overhaul and upgrade the Air Force's C-17 Globemaster III transport fleet.

As of February 2011 the U.S. Air Force had 213 C-17s in service, with an ultimate goal of building the fleet to 224 planes. As such, the approximate value of the new contract, which runs through the end of 2022, is $4 million per plane. The flyaway cost of a brand-new C-17, according to fiscal 2012 budget estimates: $201 million.

Shares of Boeing dropped ahead of the DoD announcement, falling 1.5% to close at $74.69.

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