Analysis: Marine One choice went against the oddsmakers

 - February 19, 2007, 6:44 AM

The long-anticipated decision as to which helicopter would next carry the U.S. President was always going to leave one contender reaping the spoils and the other licking its wounds. In the end, it came down to a decision to go with the Lockheed Martin US101, a helicopter largely of British and Italian design. The choice surprised many, who apparently assumed Connecticut-based Sikorsky had the inside track, if for no other reason than that the company has supplied Marine One helicopters for as long as there has been a presidential helicopter fleet.

The level of direct American involvement in the US101, the focus of much argument during the year-long competition, turned out to matter less to the U.S. Navy than expertise in integrating airframe and mission systems into a coherent package–a skill for which Lockheed Martin has recent experience on this particular airframe (in the form of the British Navy Merlin variant of the EH101).

As it is, 200 suppliers in 41 states will still contribute to the two-thirds proportion of the US101 to be built in the U.S. The first third of the work will be split between AgustaWestland plants in the UK (primary fuselage and main rotor blades) and Italy (dynamic components including most of the gearboxes). All 23 helicopters will then be assembled at a new, secure facility alongside recently completed Bell premises in Amarillo, Texas. An integration center will be built at Lockheed Martin, Owega, N.Y., to prepare the aircraft for customer delivery.

More than half of the $6.1 billion contract–$3.5 billion–will be spent on R&D and building test and preproduction aircraft. Three test aircraft will be followed by five Increment One copies costing $75 million each. Two Increment Two copies will cost $87 million and three copies of the increased performance final version–ordered as a low-rate initial procurement contract–will cost $110 million each. The final 10 will cost $110 million apiece, as well.

U.S. Navy assistant secretary for research, development and acquisition John Young said, “Increment One of the order responds to an urgent need to get a more capable helicopter into the hands of the president in 2009. That helicopter will have about a 250-mile range; the current VH-3D has a range of about 100 miles.  While it was designed to carry 16 people, additional payload requirements have, over time, reduced this capacity to 10.

“The Increment Two helicopters push the range further–up to 350 nautical miles,” Young said.  “The VH-3 is about a 114-knot helicopter but this one will be a 140-knot aircraft, carrying 14 passengers plus four crew.  So in every area, we expand the capability for the President to meet his mission and [enable him to] work while he’s doing that.”

What other factors contributed to the decision? Young has said that the extra size of the US101 was one. However, as in most of these deals, politics also had a role: the acknowledged personal intervention of British prime minister Tony Blair and his Italian counterpart, Silvio Berlusconi, surely had some bearing on the final decision. The European leaders are two of the President’s strongest supporters in his War on Terror and stand on Iraq.

As for Sikorsky, in a statement released after the announcement, president Stephen Finger said the company and its “all-American supplier team are disappointed with this outcome.” However, he said he remains confident in the future of the S-92. “We are focused on doubling our business by 2008, with a portfolio of products and aftermarket services for military and commercial customers worldwide,” he said. “We anticipate achieving this goal even absent winning the presidential helicopter fleet contract.”

Company spokesman Ed Steadham told HAI Convention News that, while Sikorsky employees were “saddened and disappointed by the Navy’s decision,” no layoffs were expected as a result.

The bad news came less than a year after the U.S. Army pulled the plug on Boeing/Sikorsky’s Comanche armed scout program. Steadham said that Sikorsky lost about 175 of the 700 people it hired to work on the Comanche but had been able to transition most of the others to other projects, including the presidential helicopter program. As for lessons learned, he said Sikorsky is “still assessing the Navy’s evaluation.”

Richard Aboulafia, vice president of analysis for the Teal Group, an aerospace and defense research group based in Fairfax, Va., told HAI Convention News that Sikorsky may have overemphasized the importance of the Marine One contract to its overall business plan.

“You could see this coming,” Aboulafia said. “Sikorsky painted themselves into a corner by making this bigger than it really is. In reality, the situation is not that bad.”

Aboulafia said he agrees that one of the factors that enabled the Lockheed team to prevail was its expertise in military aerospace systems integration. “It’s less about the helicopter and more about the ‘system of systems’,” he said.