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Wednesday, September 1, 2010

Vertical Lift Consortium 

The Pentagon invited industry to form the Vertical Lift Consortium last fall. It is seen as an important step toward reviving government and private sector investment in rotorcraft science and technology.

By Richard Whittle

"Back to the Future" would have been an apt theme when Pentagon and U.S. rotorcraft industry and academic representatives convened in Huntsville, Ala., May 5-6 for a workshop on a nascent organization called the Vertical Lift Consortium.

The meeting at the Army’s Redstone Arsenal was part of a Defense Department quest to ensure the future of the U.S. vertical lift industry by trying to get it back to the status it enjoyed two decades ago—world leader in rotorcraft innovation.

“In 1991, there was no question the U.S. industry led the world in terms of vertical flight technology,” said Rhett Flater, executive director of the American Helicopter Society International. “Today, I would tell you the Europeans are every bit as good as we are. I don’t want to say they’re ahead of us, but they’re not behind us.”

The Pentagon invited industry to form the Vertical Lift Consortium last fall as a mechanism to promote research on cutting-edge rotorcraft technologies—an area neither industry nor the military has invested in heavily since the boom years of the Reagan military buildup of the 1980s.

“For the past 20 years, this industry has pretty well survived on SLEPs and remans—service lift extension programs and remanufacturing programs,” Flater said. “There have been relatively few new starts.”

Moreover, the new-start rotorcraft the Pentagon has begun over those two decades have suffered cost overruns, schedule delays, contract award protests or other problems that caused those programs to either crash or suffer a hard landing.

The list of new starts killed outright since 2004 include Sikorsky Aircraft Corp.’s RAH-66 Comanche attack helicopter, Bell Helicopter Textron Inc.’s ARH-70A armed reconnaissance helicopter, Lockheed Martin/AgustaWestland’s VH-71 presidential helicopter and Boeing’s CSAR-X combat search and rescue helicopter. The Bell-Boeing V-22 Osprey tiltrotor, which went into service in 2007, is the only new U.S. rotorcraft to make it that far since Boeing’s AH-64A Apache gunship debuted in 1986—and the V-22 barely survived its quarter century in development.

The Vertical Lift Consortium isn’t expected to reverse that problem, whose causes stem as much or more from flaws in the U.S. defense acquisition system as they do from industry shortcomings and aren’t confined to rotorcraft. A Government Accountability Office (GAO) study last year documented $295 billion in cost overruns and an average delay of nearly two years in 95 major defense programs.

The new consortium’s Pentagon and industry organizers, though, see it as an important step toward reviving government and private sector investment in rotorcraft science and technology, which has suffered benign neglect by both sides since the post-Cold War “peace dividend” days of the 1990s.

The consortium is a sort of industry club whose membership spans the gamut from large original equipment manufacturers (OEMs) to small vertical lift research and development shops, as well as U.S. subsidiaries of foreign rotorcraft makers, such as AgustaWestland North America and EADS North America. Membership is also open to academia, other associations and small-scale “non-traditional” contractors, meaning companies that over the previous 12 months haven’t had a government contract worth more than $1 million.

Members who submit science and technology or research and development proposals to the Pentagon through the consortium have a chance to win contracts awarded outside the conventional thicket of Federal Acquisition Regulations, which include mandatory competitive bidding. In exchange, members give up their right to protest if their bid is rejected.

The legal mechanism for this red tape-cutting is called Other Transaction Authority. Federal law restricts OTA contracts to basic, applied and advanced research and development contracts or prototype projects directly related to weapons or weapon systems the Defense Department is interested in developing. The usual regulations still apply for major procurements.

In another wrinkle, the Defense Department will fund 100 percent of the cost of VLC member projects it selects that are proposed by large companies teamed with non-traditional contractors, but only two-thirds of the cost of projects lacking a non-traditional partner. That rule was included to encourage more innovative thinking about how to get rotorcraft beyond their existing speed, range, payload, survivability, safety and other limitations, said a defense industry executive involved in the VLC, speaking on condition of anonymity.

“DOD felt the manufacturers were not getting small, smart folks involved” in coming up with technology advances, this executive said. “They felt they were getting the same kind of answers—big picture answers—from all of the OEMs in all fields that were not as creative as they could be and did not use small entities with bright ideas.”

The Defense Department has offered the same mechanism previously to other segments of the defense industry, such as companies that specialize in robotics, ordnance, or intelligence, surveillance and reconnaissance technology. The move to create the VLC began Oct. 26, 2009, when the undersecretary of defense for acquisition, technology and logistics, Ashton Carter, signed a memorandum establishing the initiative and assigning his office’s director of land warfare and munitions to run it.

Carter’s memo said the VLC was to “build upon” the Future Vertical Lift Capabilities Based Assessment, a study Congress ordered in 2008 to determine what new and better rotary wing and other vertical lift aircraft the armed services need beyond what they have in their inventories or in development. The results of the Capabilities Based Assessment, as well as a Strategic Plan and a Science and Technology Plan for future vertical lift aircraft, are due to Congress by July 15.

The law that created the Capabilities Based Assessment also requires the Defense Department to give Congress a “detailed plan to establish a Joint Vertical Lift Aircraft/Rotorcraft office” modeled on the Joint Advanced Strike Technology office of the 1990s, which led to the F-35 Joint Strike Fighter program.

The VLC was officially formed earlier this year by members of the 14-year-old Center for Rotorcraft Innovation near Philadelphia, which changed its name, amended its bylaws to admit foreign-owned subsidiaries and expanded its board from six to 15 members. More than 100 companies responded to an invitation to join the VLC, said the consortium’s executive director, Rande Vause, and there were 85 members as this issue of Rotor & Wing went to press.

Some in industry were a touch wary of the initiative early on, according to several people involved, because it was being run by the Pentagon’s land warfare and munitions office, whose decisions on what projects to fund are to be final.

“There is no competitive bidding, and there is no right to protest, which makes the selection process vitally important,” noted AHS’s Flater. “We want to know that those who are making the decisions understand physics, and that they have a very solid understanding of vertical flight technology.”

Flater said his concerns were eased after the VLC negotiated an agreement with Pentagon lawyers providing that the Other Transactions Authority the group signed will terminate Dec. 31 unless both the consortium and the Pentagon agree to renew it for seven years. The original agreement left renewal entirely up to the Pentagon.

“Most of us believe that the 10 or 11 months this affords us will facilitate an exchange of information and a good working relationship,” Flater said. “If anything needs to be changed, we can amend the OTA and the VLC bylaws as a condition of renewing the agreement.”

The Pentagon called the May 5-6 workshop with consortium members to discuss what rotorcraft capabilities and technologies it wants industry to focus on. The closed meeting at Redstone Arsenal was the first time Pentagon officials had discussed with VLC members what its priorities are.

Mike Walsh, the land warfare office official coordinating with the VLC for the Pentagon, said 170 people attended the workshop, including 140 from industry or academia. “We had a vigorous two-day discussion,” Walsh said. “We’ve asked the consortium to provide us formal feedback.”

Those attending represented all the major rotorcraft OEMs, all the major engine suppliers, 15 to 20 “non-traditional” contractors, an equal number of small research and development firms and 10 academic organizations, Walsh said.

Walsh declined to discuss what specific technologies the Defense Department is most interested in, but he said the still-unreleased Capabilities Based Assessment signals “a desire for increased performance in terms of range, speed, payload, survivability, reliability.”

How the Pentagon will work with the VLC to find solutions to those challenges is still being considered, Walsh said, but “I think after working together for two days, we all see the opportunity. I suspect industry will want to continue that.”

Still unclear is how much money the Defense Department is actually willing to devote to getting rotorcraft beyond their existing capabilities, which with the exception of the tiltrotor V-22 haven’t changed much since military and industry investment in vertical lift technology began its decline. The figures are fairly dramatic.

In 1984, Flater said, the Pentagon spent $251 million on basic rotorcraft science and technology projects and $7.9 billion on rotorcraft research and development. By 2004, those numbers had plummeted to $115 million for science and technology and $2.3 billion for research and development. In 2010, the Defense Department’s budget for rotorcraft science and technology—mostly spent by Army vertical lift laboratories—was $5 million less than it was six years earlier.

It’s too late to add funding to the Pentagon’s budget for rotorcraft research in fiscal 2010, which ends Sept. 30, but Walsh said his office had asked the armed services to consider funding increases in the upcoming fiscal 2011 budget. “We’ll propose some changes for the ’12 budget and see if they’re accepted,” he added.

The investment decline began after the Cold War ended, moving Congress and the Clinton administration to cut defense spending. Unable to afford new rotorcraft, the military focused on upgrading the helicopters it had instead. In turn, the major helicopter makers cut their investment in advanced concepts and their payroll for engineers who do that kind of work.

“You began seeing a phenomenon of early retirements at Bell, Boeing and Sikorsky,” Flater said. “If you don’t need advanced design engineers out there crafting entirely new aircraft, what you do is get rid of them.”

Whether increased collaboration through the VLC will inspire government and industry to add significantly to their investment in basic vertical lift research is hard to predict. Defense Secretary Robert Gates, recognizing the key role played by rotorcraft in the insurgent wars the U.S. military has been fighting since 2001, has boosted spending to buy the services more helicopters and upgrade many of the roughly 5,000 in their inventory. At the same time, with the federal deficit at historic highs, the Pentagon is under rising pressure to curb its spending, and the competition within and between the services for funding is fierce.

The good news for the rotorcraft industry is that the government clearly sees the need—especially after a Rotorcraft Survivability Study done for the Pentagon last year. That report found that between Oct. 1, 2001, and Sept. 30, 2009, the U.S. military suffered 496 fatalities in 375 helicopters it lost in Iraq, Afghanistan and elsewhere—and that only 18 percent of those aircraft were brought down by enemy fire.

“There’s an accident rate that’s troublesome,” Walsh said. “The avoidable loss of life and equipment bothers us.” Coming up with technologies that can bring that accident rate down was a major impetus for forming the VLC on the government side.

Industry also has a major incentive to work more closely with the Pentagon, Walsh noted, because existing rotorcraft production runs are generally scheduled to end within six years. If the VLC works as hoped, it could foster the technological progress necessary to create new vertical lift aircraft programs.

“I think everyone resonates with the idea that we’re creating a single voice for the industry that puts together a compelling story on the need for investment and the value that can come from it,” said Chris Van Buiten, director of Sikorsky Innovations and a member of the steering committee that organized the VLC. “It has a lot of potential.”

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