WASHINGTON, Feb 2 (Reuters) - The U.S. Air Force's fiscal 2016 budget released on Monday delayed a long-awaited competition for a new air-ground surveillance aircraft to replace the E-8C Joint Surveillance Target Attack Radar System (JSTARS).
The budget plan said it had restructured the program's acquisition strategy to allow more time for technology development and reduce risk, which delayed the target date for initial combat use by one year to fiscal 2023.
The JSTARS program has been delayed repeatedly, although potential bidders had been heartened by statements from Air Force officials in recent months, as they began to talk about the program as a key priority.
Northrop Grumman Corp built the current JSTARS based on a Boeing 707 commercial airliner, and is keen to bid to build a replacement. Boeing Co, Bombardier Inc, and General Dynamics Corp's Gulfstream unit are also expected to bid for the work.
To fund the new program, the Air Force said it would divest its E-8C test capability, and had drafted a plan to retire all E-8C between fiscal 2025 and 2026.
It also said it would delay the retirement of five E-3 Airborne Warning and Control System (AWACS) to fiscal 2019 from fiscal 2016 to help meet the needs of military commanders. (Reporting by Andrea Shalal. Editing by Andre Grenon)