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Sikorsky Is Sole Bidder in Helo Contest

Dec. 18, 2012 - 07:36AM   |  
By AARON MEHTA   |   Comments
EADS North America, Boeing and Northrop Grumman will not submit designs for the U.S. Air Force's new combat rescue helicopter contract. This leaves a clear path for Sikorsky to win the contract. Above, a Sikorsky S-92 helicopter.
EADS North America, Boeing and Northrop Grumman will not submit designs for the U.S. Air Force's new combat rescue helicopter contract. This leaves a clear path for Sikorsky to win the contract. Above, a Sikorsky S-92 helicopter. (Sikorsky.com)
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Sikorsky appears to be the last company standing in the contest to build the U.S. Air Force’s new combat rescue helicopters (CRHs) after a trio of competitors declined to participate in the program.

EADS North America, Boeing and Northrop Grumman will not submit designs for the contract because they believe they cannot deliver bids under the Air Force’s price cap. This leaves a clear path for Sikorsky to win the contract, expected to be awarded next year.

Although Connecticut-based Sikorsky has not said which design it will submit for the CRH program, Richard Aboulafia, an analyst with the Teal Group, expects the company to move forward with a modified version of its S-92 civil helicopter.

The S-92 “has never won a U.S. military competition,” Aboulafia said, and “this would be a golden opportunity.”

Sikorsky teamed with Lockheed Martin on its bid. Unless an unknown competitor steps up before the Jan. 3 deadline, Sikorsky will land its second military helicopter program in as many months. On Dec. 6, the company announced an agreement with Denmark for nine MH-60R Seahawk helicopters, a deal worth $686 million.

The CRH program is the Defense Department’s second attempt in the past decade to replace its heavily used Sikorsky HH-60 Pave Hawks, some of which have been performing military and civil rescue operations since 1982. The Air Force plans to buy 112 of the new helicopters.

In 2007, the Air Force awarded Boeing a contract expected to be worth $15 billion under the Combat Search and Rescue-X (CSAR-X) program. But after the Government Accountability Office upheld a protest from competitors Sikorsky and Lockheed Martin over how the contract was handled, the deal was canceled in 2009. It took nearly 3½ years to relaunch CRH following the CSAR-X cancellation.

There may be more delays in the program’s future.

“It’s a tough budget environment to start an entirely new program,” Aboulafia said.

He noted that the CRH is competing for funds against high-profile projects such as the F-35 Joint Strike Fighter, KC-46 tanker and new long-range bomber, all of which have been named as priorities by new Air Force Chief of Staff Gen. Mark Welsh.

“No new program is safe in this budget environment,” Aboulafia said, and “enablers always take a back seat to shooters.”

Acquisition officials have capped the CRH program at $6.8 billion, meaning any bid above that figure would be automatically disqualified.

The Air Force declined to go into details on the future of CRH.

“The Air Force is committed to a fair, open and transparent process to select a new combat search-and-rescue helicopter that meets the established war-fighter requirements at an affordable price for the taxpayer,” wrote Air Force spokesman Ed Gulick in an email. “To ensure this occurs, we are prohibited from releasing information while in the request for proposal and selection processes. Once we select and announce the final contractor, we will be able to openly discuss the details of the CRH program.”

The decision by Sikorsky’s competition to not bid on CRH came as a surprise. Interest in the program had been high as the Air Force prepared to issue a request for proposal. Representatives from Agusta-Westland, Boeing, EADS, Lockheed, Northrop, L-3 Communications and Sikorsky attended an industry day in September.

Now, less than a month before proposals are due, Sikorsky stands alone.

A senior defense official, speaking on condition of anonymity, defended the acquisition process.

Alerting companies to monetary requirements helps them make intelligent choices about their bids, the official said. Companies can decide if they truly want to be involved in the competition before spending heavily on a proposal that would not be able to come in under the cost cap.

When asked if the requirements were written with Sikorsky in mind, the official responded that was “absolutely not the case, period. Absolutely not.”

“I don’t want to have pretend competitions,” the official said. “I want to have real competitions.”

Sikorsky spokesman Frans Jurgens confirmed the company still plans to submit a design for the program, although he declined to go into specifics.

“Sikorsky intends to continue with its proposal to offer the Air Force a proven, affordable combat rescue helicopter system to perform the critical mission of saving war fighters’ lives,” Jurgens wrote in a statement.

A Boeing spokesman said the company’s offerings were not a good fit with the specifications for the CRH.

“Boeing and the Bell Boeing Joint Program Office have told the U.S. Air Force that they will not compete the Boeing CH-47 Chinook or the Bell Boeing V-22 Osprey in the Air Force’s Combat Rescue Helicopter competition,” Boeing spokesman Andrew Lee wrote in a statement.

The company said its two helicopters “exceed the parameters” of the request for proposal issued in October. Lee added that Boeing informed the Air Force of its decision “in the last week or two.”

An EADS spokesman did not go into details as to why his company did not submit a bid.

“After carefully evaluating the [request for proposals], we have elected not to submit a bid,” EADS spokesman James Darcy said.

A statement from Northrop was similar.

“Northrop Grumman has determined that it will not submit a bid to the U.S. Air Force for the Combat Rescue Helicopter program,” Margaret Mitchell-Jones, Northrop spokeswoman, wrote in an email. “We’ve reached this conclusion based on an extensive evaluation of customer requirements under the current [request for proposals]. This decision was made jointly with our teammate AgustaWestland and will have no effect on the team’s pursuit of the U.S. Navy presidential helicopter program.”

The contract is expected to be awarded in the fourth quarter of fiscal 2013.

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