Washington – Boeing Co., the second-largest U.S. defense contractor, won a bid to replace the fleet of helicopters that rescue downed U.S. pilots, beating Lockheed Martin Corp. and incumbent United Technologies Corp.’s Sikorsky unit for a program that may be worth as much as $13 billion.
The Air Force, which plans to buy 141 helicopters through 2019, said in a statement Thursday that the initial contract is valued at $712 million. The winning Boeing HH-47 is a variant of the twin-rotor Chinook family of helicopters flown by the Army.
Boeing may have convinced Pentagon officials they could eliminate development risk, streamline logistics and lower overhead costs by picking an aircraft already deployed by the U.S., said Loren Thompson, a defense analyst with the Arlington, Va.-based Lexington Institute. The Air Force preferred the Lockheed aircraft, which better met its requirements, he said.
“It appears the HH-47 is the inspiration of the office of the secretary of defense, where there is a push to avoid adding new airframes to the fleet unless it’s absolutely necessary,” Thompson said before the award was announced. He had projected Lockheed would win because of strong support within the Air Force.
The Pave Hawk, made by Sikorsky since 1982, reached the end of its service life after helping retrieve 722 U.S. and allied personnel in Iraq and Afghanistan in the past five years, according to the Air Force.
The shortfalls of the Pave Hawk, also called the HH-60G, include altitude and cabin-space limitations that the new airframe must overcome, Maj. Brenda Campbell, an Air Force spokeswoman, said in an e-mail.
Of the almost 500 mission performance requirements the Air Force set for the new helicopter, Boeing’s aircraft met them all and exceeded close to 100 of them, said Van Horn, 61, who lead Boeing’s team.
“As far as risk goes, with 800 previous Chinooks flying, our risk on production and pricing is, we feel, very low,” Horn said last week.
“This is the best value solution.”
Boeing also may have benefited from political issues, including a desire for a U.S. manufacturer, said Merrill Lynch analyst Celine Fornaro, the only analyst surveyed before the announcement to pick Boeing as the likely winner.
Lockheed had teamed with the AgustaWestland unit of Italy’s Finmeccanica SpA for the airframe, while Lockheed planned to install cockpit electronics, computers and communications systems.
That foreign partnership may have been a liability to Lockheed’s bid, said Cai Von Rumohr, a Boston-based analyst with Cowen & Co.
