On Thursday, Boeing spokeswoman Melissa Stewart signalled the company’s readiness to continue working with all NATO members to offer the best options and upgrades in order to “keep their AWACS fleet operational for years to come.”

Reuters has cited unnamed sources as saying that the US company Boeing may not be awarded a contract worth $ 1 billion for the modernisation of 14 Boeing E-3A surveillance aircraft used by NATO due to disputes surrounding the financing of the project.

The topic is expected to be high on the agenda of the extraordinary meeting of NATO scheduled for September 12, which is due to be attended by 16 member nations which were earlier invited to take part in the Airborne Warning & Control System, or AWACS, programme.

“It’s disappointing that a one-sided interpretation of the rules is putting this much-needed upgrade program at risk,” one of the sources said, referring to previous plans to award Boeing with the contract during a NATO summit in London scheduled for 3-4 December.

A second source argued said even though the spat is “not expected to kill the upgrade programme outright,” it may “push a contract award to Boeing off until next year.”

Norway’s Stance on Final Life Extension Program

The sources explained that NAPMA, the NATO agency that manages the AWACS fleet, planned to finalise the contract by December, but that Norway demanded that the US, Germany, Italy and the Netherlands, the largest participants in the project, deposit the bulk of the funds at the initial stage, something that contradicts the budgetary rules of these countries.

Spokeswoman for the Norwegian Defence Ministry Ann-Kristin Salbuvik confirmed Oslo’s adherence to the AWACS Final Life Extension Program and its readiness to finance its own share of the program in the immediate future.

At the same time, she insisted that launching the programme should be approved by all member states, and that the Boeing proposal should be “compliant, affordable and feasible.”

Boeing spokeswoman Melissa Stewart, who declined to comment on the matter, earlier indicated Boeing’s drive to continue cooperation with NATO members “to assess needs and present the best options and upgrades that will keep their AWACS fleet operational for years to come”.

NATO Spokesperson Upbeat on Boeing Contract

Reuters also quoted an unnamed NATO official as saying that despite risks to the Final Life Extension Program, “preparations are on track” and the hope is that “the plan remains to award the contract in December."

The $750 million contract stipulates extending the life of AWACS aircraft through 2035, with $250 million more allocated for the planes’ design, spare parts and testing.

The modernisation will help NATO continue to use the 1979/1980-era planes to carry out a spate of missions related to air policing, evacuations and anti-terror operations.

The contract-related developments come as the Boeing 737 MAX 8 remains grounded across the world until further notice, following two tragic crashes involving the troubled aircraft, which killed 346 people in Indonesia and Ethiopia.