By Ann Roosevelt
Modifications and procurement changes account for a program cost increase of more than 11 percent for the Army’s new Light Utility Helicopter (LUH), produced by the European Aeronautic Defence and Space Co. (EADS), officials said.
The most recent Defense Department Selected Acquisition Report released April 7 reported the LUH “[p]rogram costs increased $208.4 million (+11.1 percent) from $1,881.8 million to $2,090.2 million.”
Last year, Defense Department testers at Ft. Irwin, Calif., found air conditioning and medical evacuation configuration issues during operational test and evaluation (Defense Daily, Sept. 11).
“The Army decided it wanted modifications–some enhancements,” Bill Stedman, EADS North America director of Rotorcraft Business Development, told Defense Daily April 9.
The SAR said LUH cost increases were “due primarily to a quantity increase of 23 aircraft from 322 to 345 aircraft for (+$139.3 million). There was an additional cost increase for modifications to address issues identified during the Initial Operational Test (+$171.1 million). These modifications included ARC-231 secure radios and cabin ventilation kits for all 345 aircraft, engine inlet (air) filters for 66 aircraft, and medical evacuation kits for 84 aircraft.”
Last month the Government Accountability Office noted the funding reprogramming in a March 31 report on Defense Acquisitions, GAO-08-467SP. Auditors said due to the reprogramming of funding in FY 2007, “Some of the aircraft buys have been moved to later in the program.” This action and the modifications resulted in the procurement increase.
“The unit cost is up $5 million to $5.2 million. I think that growth is attributable to two things: the modifications the Army’s putting on, and they’re buying at reduced quantities earlier than they planned, so the price goes up,” Randy Hutcherson, vice president of rotorcraft for EADS North America, said.
The UH-72A Lakota is a commercial-off-the-shelf product based on the EADS Eurocopter 145. It is a Federal Aviation Administration certified aircraft that is in commercial use. The LUH will not fly combat missions or be deployed into combat areas, and EADS will provide total logistics support.
The SAR reports on major defense acquisition program cost, schedule, and performance changes since the September 2007 reporting period. The information is based on the SARs submitted to Congress for the December 2007 reporting period.