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Thursday, October 1, 2009

Marine One: The End Game

By Robert Moorman

While the U.S. Department of Defense (DoD) cancelled the VH-71 Presidential Helicopter Program for significant cost overruns, all may not be lost for proponents of a replacement rotorcraft fleet for the President of the United States.

DOD has held numerous meetings on how to replace the fleet of aging Sikorsky VH-3Ds since the VH-71 program was cancelled, Rotor & Wing has learned.

The meetings did not include the Lockheed Martin-led US101 team that won the initial $1.7-billion contract in January 2005. Nevertheless, the team, which includes AgustaWestland and Bell Helicopter, seem a bit more optimistic these days about the possible resurrection of a portion of the VH-71 program, or the adoption of an alternative plan to replace the USMC Marine One Presidential transport fleet. The team had offered a variant of the AgustaWestland EH101.

At present, the Marine Helicopter Squadron One (HMX1) operates 11 VH-3Ds and 8 VH-60 Blackhawks. The OEMs and Naval Air Systems Command (NAVAIR), which have oversight responsibility for the VH-71 program, declined to be interviewed for this story, but gave the following statement that puts the future of the program in the hands of Congress:

"Since the VH-71 termination, the focus of day-to-day activities has shifted to the termination of one program and the prompt development of an FY11 follow-on program... Work in the near-term will focus on supporting development of these options as supported by the President’s budget submitted to Congress. The Navy continues to explore all options for retaining government equities from our investment in the VH-71."

Lockheed Martin was equally cryptic: "The role of Congress in the annual budget process is well defined. We will not know the ultimate outcome until later this year, when Congress approves a budget bill and the President signs it," said the team leader. "In the meantime, we are required to comply with program termination as directed."

The ultimate fate of the VH-71 will most likely be determined by congressional funding in the FY2010 Defense Appropriations bill.

The U.S. Navy formally terminated the VH-71 system development and demonstration (SDD) contract on June 1, 2009, although the decision to scrap the program was made months earlier.

The two-phase program, which called for a total of 28 helicopters, had doubled to nearly $13 billion, according to DoD. So the axe fell with the blessing of cost-conscious Secretary of Defense Robert Gates, who has been on a tear of late dumping inefficient, outdated and costly military programs. But even Gates said when recommending termination of the VH-71 program in April that a new fleet of aircraft for the Presidential fleet was necessary to replace the Vietnam era H-3s.

The VH-71 program was red flagged some time ago. Even if DoD hadn’t acted, the program was already in violation of the so-called Nunn-McCurdy provision, which requires DoD to notify Congress whenever a major defense program exceeds a 10 percent cost overrun threshold. The VH-71 program had busted that threshold, and then some. Programs that violate Nunn-McCurdy face cancellation unless certified for continuation by the DoD secretary.

For the most part, Gates and the White House are getting high marks for eliminating wasteful programs. But terminating the VH-71 program created an unwanted and somewhat unexpected political firestorm for President Barack Obama, who stated in February 2009 that the VH-71 Program was an example of the "procurement process gone amok." He also said — presumably to Sen. John McCain (R-AZ) on the White House lawn — that his 40-year-old plus helicopter "seems perfectly adequate." It was an embarrassing incident, particularly for the makers of the VH-71.

More than $3 billion has been spent on the program, which includes research and development and production costs of the first phase, Interim 1.

"Now we find ourselves in a position where the [Obama] administration has no plan, but we have these [nine] aircraft that are considerably better than what is in the fleet," said Loren Thompson, of the Lexington Institute, a conservative think tank. "What remains to be seen is the disposition of these aircraft."

All nine aircraft required in Interim 1 have flown; five were to have been production vehicles, while four were for testing. Initial operating capability (IOC) for the Interim 1 aircraft was scheduled for April 2011.

There is no shortage of opinions on the VH-71 program. Shutting it down would cost around $555 million in termination and liability costs, according to the non-partisan Citizens Against Government Waste (CAGW), citing Navy figures. Then there are the billions of dollars in direct operating costs to maintain the current fleet of H-3s for another decade.

"In light of these facts, said CAGW President Tom Schatz, "starting a do-over program from scratch would be even more costly than completing the current program, leaving the taxpayer to foot the bill twice rather than maximizing the current investment."

Rep. John Murtha (D-PA), the chairman of the House Subcommittee on Defense, told Rotor & Wing that it is "unacceptable" for DoD to spend more than $3 billion on a replacement helicopter program and not get anything out of it in the end. "That is not good government," Murtha said.

Salvage Job

The US101 team submitted alternatives to the full-blown program to both NAVAIR and Congress before Gates announced the cancellation in April, according to one high level official at Lockheed Martin. But so far, no official response to those suggestions, the most plausible of which is to dump the more expensive Increment 2 from the program, has been received. Yet, behind the scenes, work continues, according to several sources.

On Capitol Hill, politicians are busy. Murtha’s subcommittee included the $485.2 million in the Defense bill, which passed the full House in late July. Although tagged as research and development funding, the money would be used to "operationalize" the previously purchased five VH-71A presidential helicopters.

To date, the Navy hasn’t provided a plan for the disposition of the five aircraft that were to provide interim service in the Presidential helicopter fleet, said Murtha, who is expected to lobby strenuously to salvage some portion of the original program.

In the Senate, Sen. Charles E. Schumer is leading the fight to save the program, as well as the hundreds of jobs at the Lockheed Martin Systems Integration (Owego) facility in upstate New York. The cost to complete Increment 1 and to replace the entire fleet of 19 aircraft with VH-71As is approximately $3.8 billion, Schumer estimates.

Another reason to restore Increment 1, Schumer said, is that the current fleet of H-3s used by the president, vice president, cabinet officers and visiting dignitaries do not possess the "safety and survivability capabilities" of the new aircraft.

The Senate is likely to pass its own version of the Defense bill, which could contain the $485.2 million to keep the VH-71 program alive when Congress reconvenes in early September.

The Senate Committee on Appropriations, whose chair is Sen. Daniel K. Inouye (D-HI), is tentatively scheduled to mark up the Defense bill during the second week of September. It then has to pass the full Senate. Assuming the bill passes, House and Senate conferees will then work out differences between the two bills.

There are three possible outcomes. The Senate could adopt the House provision earmarking the $485.2 billion in its bill. It could add more money to the program, which the program’s observers think is highly unlikely. Or the Senate could kill the funding entirely.

"The fact that the funding is included in the House bill means that some action is required in conference unless the Senate has identical language [regarding continued funding for the VH-71 program] in its bill," said one Senate staffer. "It is also possible for a senator to offer an amendment on the floor to strip out the money before it even passes the Senate."

Such a scenario occurred in late July when Reps. Maurice Hinchey (D-NY) and Michael A. Arcuri (D-NY) were successful in stopping an amendment from being offered in the Defense bill to cut $200 million to continue development of the new presidential helicopter fleet.

The combined Defense bill has to pass each chamber individually before going to President Obama for signature or veto. In a perfect world, the Defense bill would be passed before the end of fiscal year, on Sept. 30, 2009. But if the White House has problems with the final bill, a continuing resolution would be passed. Many on Capitol Hill believe this could happen. There is definite possibility that passage of the Defense bill could take months and leave the future of the VH-71 in limbo. There is also the possibility that the plan of resurrecting a portion of the VH-71 program would be tabled for a year.

One of the biggest wildcards in the process will be the reaction by Gates, who is considered by many political observers to be one of the more powerful DoD chiefs in recent years.

Meanwhile, layoffs continue. As of this writing, Lockheed Martin had terminated the jobs of around 600 people at its Owego facility, while AgustaWestland and Bell let go 40 and 70 workers, respectively. Those layoffs are expected to accelerate in coming weeks unless some budgetary reprieve is forthcoming.

Should some portion of the program be reconstituted, Congress and DoD might want to carefully consider the findings of the Defense Science Board (DSB) Task Force on Integration Commercial Systems into the DoD before proceeding. In its report released in February, the Task Force concluded why the initial program, which had a very aggressive and high-risk delivery schedule, failed: "Poor communication among White House, Navy, Marines, the prime contractor, and the helicopter designer/manufacturer did not provide the alignment needed for successfully executing a high-risk schedule."

The schedule, driven by "post-9/11 global war on terror urgency," also had a number of engineering changes, which added to the delays and costs of the program, said the report.

Adding to the confusion was the removal of two appendices of technical requirements from the request for proposal (RFP), "apparently to ensure a fair competition," the report stated. These requirements were reinserted post award, "leading to communication breakdowns and eventual reengineering of entire subsystems and structures."

When one reads the required capabilities for the new presidential helicopter, it isn’t surprising that the VH-71 program was billions of dollars over budget, noted several observers. Somehow, in the development process, the VH-71 went from being an aerial taxi, with short-range capability, to the rotorcraft equivalent of Air Force One and cost about the same, some argued.

According to the DSB report, the VH-71 must be "capable of operating day or night; in adverse weather worldwide; in climates including, but not limited to, arctic, desert, mountainous, littoral and tropical; and in a variety of threat spectrums, including chemical, biological, radiological and nuclear."

The increasing requirements "added substantially to the empty weight of the aircraft, and would have required substantial redesign of the rotor and tail," said Lexington Institute’s Thompson. "Most of the cost increases were associated with those modifications in Increment 2," he clarified.

Lockheed Martin declined to discuss the mission equipment that was to have been onboard the aircraft. Nor would it or any of the team provide basic performance statistics of the VH-71, saying the program was classified.

A Real Need

From the beginning, the White House was the impetus behind the development of a new presidential helicopter fleet. In the early days of the George W. Bush Administration, then-Chief of Staff Andrew Card told the Secret Service he was very concerned about how old and ill-equipped was the existing fleet of Sikorsky H-3s.

That concern led to DoD issuing an RFP in December 2003 for 23 helicopters to replace the aging units in operation with HMX-1. The Lockheed Martin-led US101 team offered a variant of the AgustaWestland EH101. Sikorsky Aircraft offered a variant of its S-92 known as the VH-92 (See sidebar page 34).

The VH-71A, part of Increment 1, was to have been operational sometime in 2010, while the VH-71B, Increment 2, was to have entered service in 2017, according to the DSB. Average unit cost of the VH-71 was nearly $480 million, which is a dramatic figure when compared to the $57 million unit cost of the EH101. The EH101, which first flew in 1987, is in service for military units in Great Britain and several other countries.

Despite the myriad of problems with the initial program, there remains a real need for a new presidential helicopter fleet. The VH-71, powered by three GE CT7-8E turboshaft engines, is the only aircraft that can fill the bill, according to one former Marine One pilot. [GE’s CT7-8C-1 was to have powered the Interim 2 helicopter.]

"The White House is basically flying the same helicopter when I was there," noted retired Marine Corps Lt. Col. Richard Peasley, a former commander of the HMX-1 Squadron that flew under President Ronald Reagan. "The aircraft is hindered significantly by its lack of performance," he added.

The H-3, which was designed to carry 16 passengers, only carries around 10 people now, said Peasley. Because of its lack of hot and high performance capability, the H-3 could not be used to ferry President Obama during a recent trip to Colorado.

Those problems wouldn’t occur with the VH-71, which offers "tremendous growth capability," said Peasley.

Perhaps, but why did the program veer way off course? "The White House and the Navy, particularly, got carried away with uncontrolled requirement creep," observed Peasley, who until recently worked for Bell Helicopter. Over the last two years, Peasley worked on the VH-71 program. He is now retired.

Since the VH-71 was based on an Anglo-Italian design, the Navy added "so many requirements to the airframe that it became very expensive," said Peasley. "And no one from the White House or DoD ever said no."

Despite the cost overruns and program delays, Peasley believes the VH-71 should be the next presidential helicopter. The three GE engines, three independent hydraulic systems, enhanced navigation and surveillance capability, including a traffic collision avoidance system (TCAS) provide a significant safety enhancement for presidential operations, according to summaries on the VH-71 program used in DoD briefings. Equally impressive is the "specific modifications" made to provide enhanced protection against electromagnetic fields and electro magnetic pulse (EMP).

All of these upgrades are part of Increment 1, which Peasley feels was all the White House ever needed. While the Increment 1 VH-71A was designed to be a short-term solution, the service life could be increased beyond 10 years through life extension programs. On this point there is some confusion. Early on, DoD said these Interim 1 aircraft were to only last between 5 – 10 years, but the useful life of the aircraft was actually 30 years or beyond, according to the OEMs.

The Increment 2 aircraft, VH-71B, would have cost too much for a small gain in performance, said Peasley. To satisfy the requirements of Increment 2, the team would have had to build an entirely new aircraft with new engines, new gearboxes, new tail, bigger tail rotor and a bigger rotor, said the Marine One pilot.

For now, interested parties must wait to see whether Congress allocates continued funding for the VH-71 Increment I program and, if so, what DoD and the White House’s next move will be.

A Second Chance?

For Sikorsky Aircraft, it is all about hope. And the hope is that its enhanced VH-92 will be seriously considered if Congress resurrects some portion of the presidential helicopter replacement program. Based on the S-92 platform, the twin-engine VH-92 is expected to be more robust than the demonstrator offered for the initial competition against the Lockheed Martin-led team, which offered the VH-71.

"I think we are clearly back in the running," said Joe Haddick, vice president of U.S. government business for Sikorsky. "The Defense Department is holding weekly meetings on alternatives to the original program."

Losing the initial competition to a competitor offering a helicopter of Anglo-Italian design was a bitter pill to swallow for Sikorsky, which has held the presidential mission for 40 years.

Sikorsky lost the competition because the S-92 couldn’t satisfy the White House’s basic performance requirements for range and payload, according to DoD sources.

When the contract was awarded in January 2005, John Young, the Navy’s acquisition executive, said that the Lockheed Martin team won because the EH-101 "was deemed more likely to meet the program’s operational requirements on time and at a lower cost," according to the Congressional Research Service. But that did not happen.

If the VH-92 were given a second chance — and that is a big if — this variant would have fly-by-wire technology, which was not offered in the previous competition. The VH-92 also would have higher gross weight based on increased rotor diameter, improved gearbox, and strengthened landing gear, all of which were developed for the Canadian Maritime Helicopter program.

In addition, there would be improved cabin ergonomics enabled by relocation of avionics and exit ways. Also expected are improvements in ballistic tolerance and crashworthiness.

When word went out months ago that the VH-71 program would be scrapped, Sikorsky President Jeffrey Pino sent a letter to DoD reoffering it’s all-American made VH-92. In a surprising gesture, Sikorsky also offered to team up with rival Lockheed Martin by installing its secret-mission equipment on the VH-92. This would be a far more cost-effective alternative than starting the bidding process for a new presidential helicopter, Sikorsky noted.

DoD thanked Sikorsky for the letter, but there has not been any further formal communication between the parties, Haddick remembered with some humor. The VH-92, powered by two CT7-8E engines, would include an advanced cockpit designed to reduce workload and provide advanced situational awareness.

For the initial competition, Sikorsky increased the VH-92 cabin size by nearly five feet through an internal re-configuration of aircraft components. This redesign allowed for a rear air stair door to the H-92 along with additional storage space.

The VH-92 demonstrator included a fully integrated enhanced ground proximity warning system (EGPWS), traffic collision avoidance system (TCAS), weather radar and a closed circuit television system that enabled pilots to see underneath the aircraft to help with pinpoint landings. All of the upgrades on the earlier demonstrator would be offered if the VH-92 were chosen.

At present, there are approximately 100 S-92s operating worldwide that collectively have flown 170,000 hours. The S-92 was certified in 2002. — By Robert W. Moorman

Despite problems with the initial program, there remains a real need for a new presidential helicopter fleet.

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