By Ann Roosevelt

FORT WORTH, Texas–The next generation of the Army’s multi-mission AH-64D Apache helicopter, the Block III, is progressing as expected, officials from the government and prime contractor Boeing [BA] said.

“The next gen Block III is going on or ahead of schedule,” Col. Shane Openshaw, Army Apache project manager, said at the Army Aviation Association of America annual conference here last week.

There is one issue to be resolved, however, a Nunn-McCurdy critical breach, in which the program acquisition unit cost increased by 25.5 percent and the average procurement unit cost increased by 31.2 percent to the acquisition program baseline.

“This is not an indication the program is in trouble,” Openshaw said. “It is healthy and executing.”

Openshaw said the cost increases came because of a procurement quantity increase of 56 newly built aircraft (raising the program from 634 to 690) in the fiscal year 2011 president’s budget.

The 634 remanufactured aircraft, the baseline program, cost much less than the recently added 56 aircraft that will be newly built.

“That artificially skews costs we are tracking,” he said.

The additional 56 aircraft are to create a new Combat Aviation Brigade as called for in the Quadrennial Defense Review to help meet the global demand for the high demand aircraft that have proven to be key enablers of tactical and operational success.

The program office has done its paperwork, and expects the program to be recertified to continue.

“It is the intent of the leadership of the Army, and OSD (Office of the Secretary of Defense), to get this done so not to impact award later this year of low-rate initial production for Block III,” Openshaw said.

As the Apache program moves forward, every aircraft is inspected and has been passed by the Defense Contract Management Agency after Boeing builds it, said Al Winn, vice president Apache Programs, Boeing Defense, Space & Security.

Reaching new milestones, Winn said working with the government the program has “successfully, demonstrated a 50 percent reduction in repair turnaround.”

Not only that, under the Apache Performance Based Logistics contract, the metrics at Redstone Arsenal found “zero red items,” Winn said. “That means we’re delivering everything to the soldier on time.”

As well, no critical items are being delivered behind schedule.

The newest Apache, Block III, is “on plan, on cost and on schedule, meeting all performance parameters and demonstrating [key performance parameters] KPPs, with margin,” he said.

Today, officials said, everything on the program has been developed, demonstrated, and now the program is collecting data from demonstrations to qualify the platform.

The program has separate Apaches to test different things. For example, the avionics helicopter flew in June, ahead of schedule, Winn said. A structures airframe with a new rotor and new split face gear has demonstrated the entire flight envelope.

“The only issue on that is that it is flying too fast–exceeding our expectations at forward flight speed,” Winn said. “This aircraft has significantly better performance.”

The Block III program faces a Milestone C production decision this spring, and the paperwork is complete, he said. A long-lead production contract was signed last July, so that procurement has been going on for almost a year with hardware deliveries expected later in the year.

After the Milestone C review is completed, a low-rate initial production contract is expected to be set by September.