By Geoff Fein and Emelie Rutherford
Just days after the Navy officially ended Lockheed Martin‘s [LMT] VH-71 helicopter program, one lawmaker is hoping to salvage the effort with a proposal to build 14 of the Increment I aircraft under a fixed-price contract.
Additionally, there is now a question as to whether Defense Secretary Robert Gates had the power to terminate the presidential helicopter effort, said Rep. Roscoe Bartlett (R- Md.).
Bartlett, a member of the House Armed Services Committee (HASC), told reporters yesterday during a conference call that the team of Lockheed Martin, AgustaWestland and Bell Helicopter Textron [TXT] have assured him they can meet the original cost for the presidential helicopter.
“I was assured by the manufacture of the helicopter that they can do their part of it well within the $6.8 billion original forecast for what the presidential fleet would cost,” he said.
The proposal, Bartlett said, would include the nine Increment I helicopters either completed, or in various stages of production, and increase the total buy to 14 aircraft.
No increment II aircraft would be built under the plan, he added.
The original proposal for VH-71 had nine Increment I helicopters, five of which would go to the president to replace the current fleet of VH-3 and VH-60 helicopters. The Navy would then begin building Increment II, which would provide longer range and have greater payload capacity.
Roughly $3.3 billion has been spent to date on the presidential helicopter effort. In recent years, the program has seen a significant increase in cost for the total Increment I and II program, rising up to $13 billion, as well as growth in the schedule of the helicopter. Gates cited those reasons for terminating the program in early April.
On June 1, Lockheed Martin received notification from the Navy that the program was officially terminated. The company said it would immediately comply with the termination directive, and bring the program to an orderly close.
The same day the Navy said in a statement: “The Naval Air Systems Command Contracting Office directed termination, for the convenience of the government, of all activities associated with VH-71 Systems Design and Demonstration requirements; with the exception of the necessary steps to retain those technologies currently undergoing development and evaluation as part of the VH-71 program that present potential benefit to other programs, and options for the disposition of program assets.”
On May 15, Pentagon acquisition chief Ashton Carter signed off on documents ending the VH-71 program. “The decision resulted from cost growth in the VH-71 program that breached critical Nunn-McCurdy thresholds and from a comprehensive program review that occurred during development of the President’s FY ’10 budget submission,” the Navy said.
“As directed by Dr. Carter, the Navy will begin to develop options for a Presidential Helicopter Replacement program and present these to the Office of the Under Secretary of Defense for Acquisition, Technology and Logistics,” the Navy added in its statement.
Bartlett said he doesn’t see any merit in what the administration has proposed.
“I think what has been done is very unfortunate. I’m not even sure, either morally or even legally, they even should have done it or could have done it,” he said. “Congress asked the Pentagon to build this helicopter. Now they decided they are not going to build it. I would think that would have to be a decision that is made by the Congress.”
Bartlett added that lawmakers appreciate very much the counsel and advice of the Defense Secretary. “But I think he has acted outside of his prerogatives in simply canceling this program with no consultation of Congress.”
Loren Thompson, chief operating officer of the Lexington Institute, sponsor of the conference call, said it was likely the contractors stood more to gain by shutting down the program.
“At this point the program has been such a roller coaster for the prime contractor and the suppliers they may very well make more money from termination fees than they would from going forward,” he noted.
In addition to the $3.3 billion already spent on the nine Increment I helicopters, Thompson noted the government would have to pay out roughly $500 million in termination fees and then spend another $4 billion just to keep the current presidential helicopter fleet flying.
“I haven’t even mentioned the cost of coming up with an alternative to VH-71, which will be an additional cost,” he said. “So, in effect, what we are doing here is wasting enough money to buy an aircraft carrier for no good reason.”
Fiscally, this is really a dumb decision, Bartlett added.
“It ends up costing us a lot of money. We have almost nothing to show for it. The last 14 [helicopters] will be produced,” he said. “The contractor says they can produce them they believe for $100 million each. That’s an enormous bargain in today’s world, and the president will then have a new fleet of 19 helicopters for the $6.8 billion…the original projection for the cost of the program.”
In addition to cost, many lawmakers are concerned that the president will be flying in a helicopter that is several decades old.
“The present helicopter is not adequate to meet the needs of the president in an emergency [like 9/11],” Bartlett said. “This new helicopter is very adequate. It provides almost all of the new communications capability they need. It is just a bit short on lift and range and altitude compared to Increment II, but very, very much better than the present helicopter.”
House Appropriations Defense subcommittee (HAC-D) Chairman John Murtha (D-Pa.) told reporters on Wednesday he is trying to “figure out a way to (use) some of the $3.2 billion (already spent) to build the one version that’s cheaper.”
“But I don’t know that we can do that,” he acknowledged, speaking after a Navy budget hearing.
Murtha unsuccessfully lobbied the White House to continue VH-71’s increment 1.
During the Wednesday hearing Murtha, HAC-D Vice Chairman Norm Dicks (D-Wash.), and member Rep. Maurice Hinchey (D-N.Y.) quizzed Navy officials about the costs tied to canceling VH-71 and extending the life of the legacy fleet. Murtha said it is “unacceptable that we can spend so much money and get nothing out of it,” referring to $3.2 billion already spent on VH-71.
Murtha said he doesn’t believe estimates that the five increment 1 helicopters already built only have five years of life in them.
Hinchey, whose district includes Lockheed Martin’s VH-71 production facility in Owego, N.Y., called the program’s cancelation “one of the most controversial and…increasingly criticized aspects” of the Pentagon’s FY ’10 budget proposal.
Hinchey highlighted the 2,000 lost jobs tied to the program, money already invested, and age of the legacy fleet.
The three HAC-D members also made their case to Defense Secretary Robert Gates during a May 20 budget hearing, during which Gates floated the idea of developing two versions of a replacement aircraft (Defense Daily, May 21).