Thursday, May 08, 2014

Navy Awards New Contract for Presidential Helicopter; $1.24 Billion Contract Covers an Initial Six Test Helicopters

The Wall Street Journal 
 By Doug Cameron
May 7, 2014 6:00 p.m. ET

The U.S. Navy on Wednesday launched a second effort to replace the presidential helicopter fleet, five years after abandoning a plan dogged by cost-overruns and technical squabbles that left taxpayers nursing a $3 billion bill.

Sikorsky Aircraft and Lockheed Martin Corp. have been hired to build the first six of a planned fleet of 23 helicopters for the Marine Corps to transport the president, vice president, cabinet members and other dignitaries. They are slated to make their first landing on the White House lawn in 2020.

The $1.24 billion contract covers six test helicopters, with an option to build another 17 rotorcraft expected in 2019.

For the winning firms, the prestige of building the famous "Marine One"—so designated when the president is on board—is tempered by the intense scrutiny expected to face the two companies over the next six years following the botched effort to replace the existing fleet of 19 helicopters, some of which are nearing 40 years old.

Sikorsky is offering a heavily modified version of its S-92 helicopter, a workhorse used by oil and gas companies to service offshore facilities. A unit of United Technologies Corp., Sikorsky lost out in 2005 to a Lockheed-led team offering a modified commercial helicopter built by Anglo-Italian company AgustaWestland.

The Pentagon killed the project in 2009 after estimated costs doubled to $13 billion. The White House, the Secret Service and others kept adding capabilities such as high-tech defense systems and even an onboard kitchen that quickly gained notoriety.

"It would let me cook a meal while under nuclear attack," said President Barack Obama in a 2009 speech. "If the United States is under nuclear attack, the last thing on my mind will be whipping up a snack."

The nine prototypes produced were unusable and later were sold to Canada for spare parts.

While some analysts have questioned why the White House needs a fleet of 23 helicopters—more than other heads of state—they expect the executive branch and the Pentagon to have learned lessons. "If they're just looking for a helicopter, it'll go fine," said James Hasik, a senior fellow at the Atlantic Council, a Washington-based think tank. "If they decide to try and stick Air Force One into a [helicopter body] it'll go badly."

Sikorsky built the existing presidential fleet and was the only bidder with partner Lockheed for the new contract. That is a contrast from 2005, when rivals placed full-page ads in Washington newspapers touting their Marine One offerings.

This time round, AgustaWestland, Boeing Co. and the Bell Helicopter unit of Textron Inc. stayed away when the Navy made a new request for proposals last May, saying they couldn't match contract specifications seen as favorable to the Sikorsky offering.

"We are honored by this news and the vote of confidence in the Sikorsky team and the proven S-92 platform," Sikorsky President Mick Maurer said.

"Lockheed Martin has the knowledge and expertise necessary to provide the mature advanced technologies needed by the president and other government leaders while aboard the aircraft," said Lockheed Executive Vice President Dale Bennett.

The new contract also comes at a sensitive time for Sikorsky and other helicopter makers as regulators wrestle with lingering safety concerns and an accident rate that remains higher than that for airliners, prompting proposals for design changes, such as larger windows to ease escape and new breathing devices for passengers in case of a water landing.

Separately, the U.S. Air Force last year launched the first step in replacing the aging presidential fleet of Boeing 747-200 jets, requesting information from potential bidders with a view to introducing the aircraft starting in 2023.