The Navy awarded BAE Systems $45 million for its fourth full-rate production (FRP) contract of the Advanced Precision Kill Weapon System (APKWS), which for now will be used to add guided missile capabilities to Navy and Marine Corps helicopters but could soon enter the Army inventory.
The Dec. 29, 2014, award covered 1,601 units, which puts the contract about on par with previous contracts in terms of quantity and unit price, David Harrold, director of precision guidance solutions for BAE, told Defense Daily on Thursday. “This is basically a sustaining contract to continue to fill that inventory that the Marine Corps needs. What’s not included in this contract, I would tell you, is anything of significance that might happen with the U.S. Army or any significant foreign military sales opportunities.”
Several of those opportunities could come to fruition in 2015, he said.
Chiefly, “we’re really excited about the potential in 2015 for the Army to come to the table, and we continue to work closely with the U.S. Army, and I know that the Army works closely with the Navy as it considers its options for bringing APKWS to the Apache fleet. We feel very positive in 2015 that that’s going to happen.”
Last year the program achieved air worthiness release on the Apache through company-funded testing. Reaching full qualification and entering the Army’s weapons inventory would be huge for BAE because so many international customers use the Apache and may at that point move from casually talking to BAE about the APKWS to seriously negotiating a contract.
Currently, the Army budget includes a line item for a guidance system for the Hydra rocket, and since APKWS is the only program of record in the whole Defense Department to do that, BAE is “having significant conversations with the Army about what that means,” Harrold said. The company could also see funding through the Army’s Joint Attack Munition Systems program office, which “published APKWS by name as their Phase 1 for their laser-guided rocket plan, so that’s very positive for us.”
Aside from the Apache qualification opening up new international markets, work BAE is doing with the Australian army could also go a long way in encouraging foreign military sales.
Last summer, the Australian army reached out to BAE to discuss funding APKWS testing on its own rockets and helicopters (Defense Daily, Oct. 15, 2014). Harrold said the first phase of testing was a “very successful ground test where we were perfect in the ground testing there.” Over the past few months, the company conducted flight tests, and though the details of the testing have not been approved for public release yet, Harrold said, “it was extremely successful as well. In fact, I would say that we accomplished everything that we were hoping to accomplish, and I would say that we were perfect in what we were hoping to do there.”
The significance of the Australian testing is twofold. First, the rockets were fired from the Airbus Helicopters Tiger armed reconnaissance helicopter, which opens up Australia, Germany, Spain and France as potential APKWS customers. And second, “even more exciting to me is that APKWS has always been a Hydra-based system, where we take an existing Hydra rocket motor and a Hydra warhead, unscrew those, put APKWS in the middle, screw it back together and that’s what turns an unguided rocket into a guided rocket.” In the Australian testing, they used the Forges de Zeebrugge (FZ) rockets–a primary alternative to Hydra–so any country using FZ rockets may choose to add the APKWS system to turn their unguided munitions into a guided missile system.
The Australian navy, which recently began purchasing MH-60 helicopters–the Sierra variant with APKWS reached early operational capability last year and should hit initial operational capability soon, with the Romeo variant following soon after–has been closely monitoring the testing, Harrold said, and ideally they would join the Australian army for a joint purchase to serve multiple platforms.
“I think 2015 is going to be a great year for taking things to the next level with the Australian customer,” Harrold said.
In addition to setting up one-on-one talks with international customers, BAE has also been working with original equipment manufacturers (OEM) such as Bell Helicopter [TXT], Boeing [BA] and Sikorsky [UTX] to figure out when it makes sense for BAE to tag along with the OEMs on in-country demonstrations to potential foreign customers. Partnering with the helicopter manufacturers gives BAE more exposure to foreign militaries, and the plug-and-play APKWS makes the helicopters look even more attractive for mission sets such as those in Iraq and Syria today, Harrold said.
Ultimately, Harrold said he hopes to see higher volumes of APKWS purchases in the Navy and Marine Corps’ fiscal year 2016 budget, set to come out next month, but the real key to driving down unit cost for the program will be the Army signing on and foreign sales coming in.