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Wednesday, April 1, 2009

Rotorcraft Report: VH-71 Project in Doubt

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The VH-71 presidential helicopter project is in serious jeopardy, now that President Obama and Senator Senator John McCain have publicly denounced the project’s massive cost overruns. "After I heard the president describe the VH-71 as ‘an example of the procurement process gone amok,’ my first instinct was that this is it; this program is going nowhere," said Michel Merluzeau, president of the market analysis firm G2 Solutions.

The president’s statement could not come at a worse time for the VH-71 project and its main contractor00, Lockheed Martin. Because this $6.1 billion project has ballooned to $11.2 billion — the result of overambitious demands on the VH-71 airframe by the White House and Pentagon — Congress can legally kill the project under the Nunn-McCurdy Amendment to the Defense Authorization Act. The only way to forestall this cancellation, under Nunn-McCurdy, is for Defense Secretary Robert Gates to convince Congress that the VH-71 is critical to national security. This seems unlikely considering that President Obama told the media, "The helicopter I have now [the VH-3D Marine-1] seems perfectly adequate to me."

Assuming that the VH-71 is allowed to die a much-publicized death, the question is, what next? Option one is to cancel the program, and try to work with what has been built to date. Currently, five basic Increment One VH-71s are nearing completion, while the 23 Increment Two VH-71s that require tremendous upgrades have yet to be fully designed, much less built. "Five VH-71s are not worth flying as some kind of presidential ‘micro-fleet’," Merluzeau said. "Such a small fleet would cost too much, on a per-aircraft basis, for spares and service."

"Perhaps the Queen of England needs a few new helicopters," he joked. "After all, the VH-71 is based on the AgustaWestland EH101 platform!"

Option two would be a "massive restructuring of the VH-71 program," said Richard Aboulafia, VP of analysis with the Teal Group. It is not entirely clear how such a restructuring would work: "They could reduce the capabilities of the VH-71 to fit within the Increment One platform, but the military mindset driving the VH-71 procurement has a very poor record of staying within the limits of any off-the-shelf product," he told Rotor & Wing. Another solution would be to reduce the size of the VH-71 presidential fleet below the current planned 28, but that would cause the spares/servicing problems outlined by Merluzeau, and make it difficult to provide the president with helicopter transport on a reliable global basis.

Option three would be to upgrade the current VH-3D helicopter platform, which is "a perfectly fine helicopter that is superbly maintained," Merluzeau said. "You could modernize the VH3D’s ECM and communications systems; perhaps replace its analog cockpits with cutting-edge digital models." This said, "Let’s not forget that its systems architecture has limitations, and this might be a serious issue as to how far in the future it can continue to operate."

Too true. Remember that the VH-71 was conceived to address perceived shortcomings in the VH-3D platform in the wake of September 11. To turn around eight years later and proclaim a new-and-improved VH-3D as the best solution for presidential safety would be a hard sell, at least in the Pentagon.

While the VH-71’s fate hangs in the balance, Lockheed Martin ends up taking the heat for cost overruns caused by the client’s demands, rather than any glaring errors on its part.

"Sadly, the VH-71 project may be heading for the last two stages of any failed defense contract," Aboulafia said. "The second to last stage is what I term ‘persecution of the innocent,’ namely the defense contractors who get blamed for government-driven cost overruns. After all, that’s what they get paid for. The last stage is the ‘destruction of any useful documentation generated by the program,’ so that the next presidential helicopter project gets to start afresh without any lessons learned."

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