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Lockheed, Sikorsky to team up for new presidential helicopter bid
4/20/2010
OWEGO -- Lockheed Martin is working with Sikorsky
Aircraft to bid on a new contract to develop a fleet of
presidential helicopters, the companies announced
Monday.
By My-Ly Nguyen •mnguyen@gannett.com • April
19, 2010, 7:50 pm
OWEGO -- Lockheed Martin is working with Sikorsky
Aircraft to bid on a new contract to develop a fleet of
presidential helicopters, the companies announced
Monday.
The former rivals on the VH-71 presidential
helicopter program, which Lockheed won in 2005,
are now working on what's being called the VXX
presidential helicopter program for the U.S. Navy.
Lockheed and Sikorsky also agreed to explore
business opportunities involving other Sikorsky
programs, the companies said.
Meanwhile, Lockheed is still working out the details
regarding the end of VH-71, which "was terminated
in 2009 at the convenience of the government," the
company said. It could be a year or two before
Lockheed reaches a termination settlement with the
Navy because of the complexity of the program.
Cost overruns and delays contributed to the end of
the VH-71 program, valued at $13 billion. The
program had delivered nine test and pilot
production aircraft, with Lockheed as the primary
contractor and systems integrator of a team that
included AgustaWestland for aircraft design and Bell
Helicopter Textron for aircraft production.
Now, Sikorsky would be the prime contractor
offering its H-92 medium-lift helicopter, with
Lockheed as the major subsystems supplier. The
offering is being billed by the companies as low risk
and attractive from a cost perspective.
Dan Spoor, aviation systems vice president at
Lockheed in Owego, said he expects the Navy to
award the contract in late 2011 or in 2012.
Scott Starrett, president of Sikorsky military systems,
said the program could call for 23 to 28 aircraft.
Neither Starrett nor Spoor would provide an estimate
on how much the program could be worth, though a
published report indicated it could be valued at $7
billion to $10 billion.
A Navy spokeswoman did not immediately return a
call for comment.
"The government is still organizing itself for a new
round of competition, and it hasn't decided which of
the original performance requirements it will still
insist on," said Loren Thompson, defense analyst
and chief operating officer of the Lexington Institute
think-tank in Arlington, Va.
He added that the government is likely to be less
demanding than it was with VH-71, which had "too
many performance requirements" that contributed to
the delays and increased costs.
Why partner now?
"We just had competing strategies at that time," said
Starrett about Sikorsky and Lockheed being rivals on
VH-71. "That was then, and this is now. Sikorsky
was always interested in recapturing the presidential
helicopter program should the government make a
change."
A few months ago, Sikorsky approached Lockheed
about working together on VXX, Starrett and Spoor
said.
Spoor added that the Navy customer had expressed
a preference to have the helicopter provider be the
prime contractor, explaining why Lockheed is
switching to a subcontractor role for VXX.
At this stage of the process, little job creation
related to the program will occur, Spoor said.
The team of Lockheed employees who worked on
VH-71 have been transferred to other company
programs in Owego or possibly laid off as part of
job cuts last year.
Lockheed has about 3,000 employees at its Owego
facility.
The company announced in January that it would
provide specifics this month concerning 1,200 job
cuts across its newly formed Mission Systems &
Sensors unit, which includes the local operation
and other facilities in 16 states.
If the Sikorsky-Lockheed team wins the VXX
contract, Lockheed would "build a nucleus of people w
ho have prior experience on the program ... and
we'll hire additional people," said Spoor, adding that
it's too early to say how many.
Sikorsky designed and built the VH-3D and VH-60N
aircraft designated as Marine One when the
president is on board. The aircraft have transported
the president and select others since the 1960s.
"Clearly, what Lockheed has decided is that it has an
unbeatable team if it gets together with the company
that has supported this mission," Thompson said.
Lockheed's move is logical because Sikorsky has
"superior experience" and understands the mission,
and Lockheed has "the best technology," Thompson
said.
"Lockheed's original interest in the presidential
helicopter was driven in part by a belief that there
would be a much bigger search-and-rescue
helicopter to follow," he said about the CSAR-X
program that Lockheed also had bid. "The future of
that program is now up in the air, so moving to
subcontract status just enables Lockheed to
leverage a lot of the work they've already done."
The competition
Lockheed and Sikorsky have partnered before, for
instance, to deliver and support MH-60R/S maritime
helicopters to the Navy over the past four decades,
the companies said.
Sikorsky is based in Stratford, Conn.; Lockheed is
based in Bethesda, Md.
"The most obvious potential bidders are Boeing and
Textron, potentially as a team with the V-22 tilt-
rotor, and AgustaWestland, which builds the
helicopter that Lockheed bid in the first round of
competition," Thompson said.
Starrett agreed that Finmeccanica's AgustaWestland
could be interested in competing for the program,
and Boeing also appears to be interested.
Finmeccanica told Aviation Week last month that the
program could be worth $7 billion to $10 billion,
an estimate that Thompson said seems likely.
As next steps, the Navy must review the
submissions provided in response to its request for
information, put together an acquisition plan and
seek out formal proposals, Thompson said.
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