quote:

"A request for proposals was issued in July 2005 on the Light Utility Helicopter," said Gass. "The first equipment is expected on the ground in fiscal year 2007." The LUH will conduct light general support in permissive environments and Homeland Defense, and will replace the legacy UH-1 Huey.

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MD Helicopter protests contract
By Ed Taylor, Tribune
July 18, 2006

MD Helicopters, a Mesabased producer of light helicopters, has filed an official protest with the U.S. Army over the awarding of a $1.5 billion contract for a next-generation utility helicopter to a rival bidder.

MDHI, which is located at Falcon Field, was one of four companies competing for the work. The winning bid was submitted by American Eurocopter, a unit of European Aeronautic Defense and Space Co., a French-German consortium.

The Army announced on June 30 that it planned to order 322 of Eurocopter’s UH-145 aircraft for light troop transport and other utility duties, replacing some machines that date back to the Vietnam War era.

Although the company is foreign-owned, American Eurocopter said the aircraft would be built at a plant in Mississippi.

MDHI had proposed a modified version of its twin-engine Explorer for the Army’s use and would have assembled the aircraft in Mesa. If the local company had won, it would have provided a big boost to East Valley helicopter production and employment.

In a statement released last week, MDHI acting Chief Executive Lynn Tilton blasted the Army’s action as an”outrageous decision completely at odds with supporting American industry . . . The United States is struggling to stay competitive with its global neighbors, and our own taxpayer money is being poured into the coffers of foreign companies when that money could be going to rebuild this industry in our country.”

In an interview following the announcement, Tilton said MD’s bid may have been hurt by problems the company had under its previous ownership by RDM, a Dutch defense contractor. The company, which is a legacy of the former McDonnell Douglas Corp., was bought last year by Patriarch Partners LLC, a $5 billion New York-based private investment firm founded by Tilton. Patriarch has injected capital into the business and ramped up production of the company’s light helicopters in a comeback effort.

Tilton said the Army had not fully considered the company’s turnaround.

“There is absolutely no question in my mind that the MDHI bid offered the best overall product and value,” she said.

Kimberly Henry, spokeswoman for the U.S. Army’s Aviation and Missile Command in Alabama, declined to comment on the specifics of MDHI’s complaint, saying “we need to let this play out.”

She said neither of the other two losing bidders, Bell Helicopter or AgustaWestland, has filed a protest so far.

A spokesman for EADS North America could not be reached Monday.

Under the Army’s contract procedures, protests are reviewed by a designated official who ranks above the contracting officers and who was not involved in the decision. The policy of the service is to decide the issue within 35 days, during which activity on the contract is suspended.

Contact Ed Taylor by email, or phone (480) 898-6537

quote:

Sorry to scoop you on this one, Schlappy. More whining from MDHI, but then, they should've taken a lesson from Howard Hughes and used "booze, broads, and bribes"! It worked for Hughes.

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Farnborough: MD's ‘sham’ claims stall work on EADS UH-145 LUH helicopter contract, as US congress investigates deal
By Paul Derby in Farnborough, Flight Daily News
July 21, 2006

The US Army’s Light Utility Helicopter (LUH) contract, awarded to EADS North America last month, has been suspended while the country's contract investigation body examines a formal protest by losing MD Helicopters that brands the army’s pricing analysis “a total sham”.

The US Government Accountability Office (formerly the General Accounting Office, GAO), is the investigative arm of Congress charged with examining government contracts. It has imposed a 90-day freeze, which is a legal requirement under the procurement process and means that EADS will face increasing production pressures, with eight EC-145-based UH–145 twin engined helicopters due to be delivered by the end of 2006. The US Army wants to increase that number to 16 via supplemental funding.

The decision poses a difficult problem for EADS North America because if it does start work on the UH-145s before the GAO reports in October it would be at its own risk.

MDHI filed a scathing protest, obtained by Flight Daily News, about the way the army conducted the procurement process following a decision to award the 322–aircraft, $3 billion contract to what it describes as “a foreign conglomerate”. It also challenges EADS North America’s standing as a ‘low risk’ supplier. The protest document alleges that the decision has “far reaching and serious unexamined risk issues”.

The protest document also reveals that in May the US Army suggested to MDHI that it should raise the price of its bid, based on the MD Explorer, because it was potentially unprofitable and might jeopardise the viability of the business. A mechanism has been built into military procurement in the USA to avoid unrealistic contract pricing.

MDHI reserves its most stinging criticism for the pricing analysis element of the bid process, saying: “The army’s pricing analysis was arbitrary and capricious at best, a total sham at worst.”

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Delays dog US Army contracts
Flight Daily News
August 6, 2006

The US Army is working to recover a three-month delay in the Bell ARH-70A Armed Reconnaissance Helicopter (ARH) programme, while procurement of the Light Utility Helicopter (LUH) is on hold following protests from AgustaWestland and MD Helicopters.

Brig Gen Bill Phillips, deputy programme executive officer, aviation, says the delay in the ARH's first flight, accomplished on 20 July, was caused by "paperwork issues" at Bell, including the late release of drawings. The army plans to conduct a limited user test of the ARH-70 in the first quarter of 2007, he says. Citing the delay, US Congress has moved to cut funding for the 368-aircraft programme.

US Government Accountability Office investigation of the LUH protests is to be completed by 1 November, but plans to acquire an initial eight Eurocopter UH-72A helicopters this year are now in jeopardy.

AgustaWestland and MD Helicopters have objected to the selection of Eurocopter's EC145 over their respective AW139 and MD Explorer for the 322-aircraft LUH programme (Flight International, 11-17 July).

quote:

MDHI filed a scathing protest, obtained by Flight Daily News, about the way the army conducted the procurement process following a decision to award the 322–aircraft, $3 billion contract to what it describes as “a foreign conglomerate”. It also challenges EADS North America’s standing as a ‘low risk’ supplier. The protest document alleges that the decision has “far reaching and serious unexamined risk issues”.

quote:

R&W: The fuselages you're going to build yourself?

TILTON: The 902 fuselages are being built by Tusas [Aerospace Industries] right now in Turkey, and we have a long-term agreement with Tusas . . . Now eventually we will also run a second production line on the tooling for the 902. We are also in the process of building a second set of tools for both the single-engine as well as the twin engine fuselage and component parts. We are in the process of negotiating the purchase of an aviation facility in China, where we plan to FAA-certify both the single-engine and the twin-engine, and we will have a second set of tooling there as back-up to support our own production. It is my intent over the next 18 months to bring about 80 percent of MD's manufacturing, whether primary or secondary, under our own global roof.
Link

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Editor’s Notebook
James T. McKenna

A Three-Horse Race for LUH?

Is LUH a three-horse race now?

After MD Helicopters' presentations at Heli-Expo, I have to believe so. The head of the company essentially said that her supply chain is in a shambles, with suppliers trying to hoodwink her on prices without committing to parts volumes or delivery schedules that she needs to satisfy customers. She went on to say that she will find suppliers who will work with her on her terms or else she'll build the needed supply capability herself.

Now Lynn Tilton, MD's new owner and the one calling the shots at the company, is an impressive businesswoman. It is safe to say that anyone who has seen her or heard her would tell you that. She says she's going to rebuild MD's supply chain, and she might just be the person to pull it off. She certainly owns the stable of industrial might she'd need and appears to have pockets deep enough to pay for such drastic changes.

But her commitment and capability aren't in question when it comes to MD's standing in the U.S. Army's competition to provide 322 Light Utility Helicopters. What is in question is whether field-grade Army officers and civilians of similar position are going to bet their careers on a recommendation that she can actually deliver those aircraft in sufficient quantity and quality and on time. I don't think there is the slightest chance of that. If I'm right, MD is out of the running. That leaves Bell's 412EP, AgustaWestland's AW139 and EADS's bid based on Eurocopter's EC145 (on which Ron Bower presents a pilot report this month starting on page 33). If I'm wrong, I'll eat this page--this one, that I'm holding.

Now in the weeks since Heli-Expo, I've discussed this with knowledgeable people, most of who have looked at me askance and asked, "Yeah, and this surprises you why?" Their point is that MD has been in a deep, deep hole for years, so why would I ever think it had a chance in the LUH race. There are a few reasons.

First, my cynical mind could imagine a political argument that says, "Bell got the Armed Reconnaissance Helicopter award. AgustaWestland won VXX. Eurocopter won the U.S. Border Patrol "sign-cutter" contract and the U.S. Coast Guard re-engining work. So now it's MD's turn."

Yes, I know, federal acquisition procedures ensure an unbiased, non-political assessment of the best values for meeting the requirements in question. And I'm sure that's the case--right up until the paperwork gets passed above the colonel/GS-15 level.

Consider having that debate--give a $2-billion-plus Army contract to an ailing U.S. company or competitors that include two European-controlled firms--in a town that just set a wartime U.S. president back on his heels over a deal to sell to an Arab company port facilities that no U.S. company wanted. It might get a little heated.

Again, humor my cynicism: if that debate got really hot, it would leave Bell and MD in the mix. Bell got ARH.

Another reason I thought until late February that MD stood a chance was that, while there were very big concerns and questions about the company's abilities, some colonel or lieutenant colonel or major would have to raise them. Sure, customers were very unhappy and commercial and government ones were walking away from MD. But MD had a plan. It was on the road to recovery. It was flush with funds and making suppliers and customers happy again. So some hapless officer would have to stand up before a general, who in turn would have to stand up before--among others--the powerful aide of a certain powerful Republican senator from Arizona, and say essentially, "We don't buy it."

That was the case until about 1 p.m. Central Daylight Savings Time on Feb. 27. That's when Lynn Tilton stood up at Heli-Expo in Dallas, opened her kimono (as they say in the military) and took that hapless officer--whoever he or she might have turned out to be--right off the hook. No need to say, "We don't buy it." The head of the company handled that.

Now Lynn Tilton would take issue with my assessment. I know, because I asked her about it. She says she has filled in Army officials completely about the situation at MD and her plan for rectifying it. I'd be surprised if she hadn't, because candor certainly seems to be one of her things. But LUH is a risk-averse program. At a time when every federal dollar is needed for combat operations or deficit reductions, they know that any big problem, any delay in the program could cost them some or all of their funding. MD obviously still has big problems that are hard to buy your way out of fast.

The irony is that Tilton could end up the big winner by losing LUH. Remember, Boeing leveraged its loss in the U.S. Air Force's C-5 competition into one of the best selling commercial airliners ever, the 747.

A loss would strip MD of the cash flow from a fat military contract. It would force Tilton to focus on the commercial business. She's already blasted customer service in the helicopter industry as a farce and vowed to transform it. If she actually pulled that off, by virtue of having her money and attention honed in on that task, she could set a gold standard of customer service. Her erstwhile competitors might not know what hit them.

But first, she needs to get those parts in the door in Mesa.
--Source

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GAO denies five protests of EADS helicopter contract
Wednesday, October 25, 2006
By K.A. TURNER
Business Editor

The Government Accountability Office has denied two losing contractors' protests of the Army's decision to award a $2.2 billion helicopter contract to EADS North America Defense, the Army said in a statement Tuesday. The decision opens the way for EADS to pursue its first major U.S. military work as a prime contractor.

The Army on June 30 chose an EADS-led team for the work of building 322 light-utility helicopters. Following the award, two competitors -- Mesa, Ariz.-based MD Helicopters Inc. and AgustaWestland, a unit of Italy's Finmeccanica SpA -- filed a total of five protests, said Sharon Larkin, senior attorney for the GAO, the government's financial watchdog.

"We looked at all of the issues and resolved all five of the protests in our decision that went out yesterday," Larkin said Tuesday.

The helicopter deal is the first major U.S. defense contract for EADS, which is pushing to expand its share of the American military market. Mobile plays a key role in EADS' ambitions. EADS and Northrop Grumman Corp. are bidding to build refueling tankers for the Air Force at the Brookley Field Industrial Complex.

Also, EADS has joined with Raytheon Corp. on a bid to build cargo planes for the Army and Air Force, with that production slated for a site at the Mobile Regional Airport.

A spokesman for EADS North America said the company could not comment about the GAO ruling regarding the helicopter contracts.

The GAO said in a Tuesday statement that its finding "included a detailed discussion of numerous specific issues raised by AWI and MDHI under the various evaluation factors and subfactors in a decision that was 50 single-spaced pages."

The statement continued, "GAO decided that the Army's evaluation of the proposals under the various evaluation factors and subfactors was reasonable."

Larkin said the GAO decision was issued under an order that allows attorneys for the companies involved to propose redactions that would hide "proprietary information" in the text of the decision.

EADS has said it would assemble the helicopters in Columbus, Miss., at a plant operated by its American Eurocopter subsidiary. The 92,000-square-foot plant employs about 125 workers, but EADS has said it planned to triple the plant's size and work force because of the contract award.

The contract included an initial $43.1 million to acquire eight helicopters, and EADS is believed to be on track to deliver the first of the UH-145s by year's end.

Larkin said the protesting contractors have two remaining options -- requesting reconsideration from the GAO or filing a protest in the U.S. Court of Federal Claims.

The GAO has "a particular standard" that the contractors would have to demonstrate before the agency reconsidered a protest, she said. A request for reconsideration must be filed within 10 days of the GAO decision.

There is no time limit on the action at the Court of Federal Claims.
--Link

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GAO gives green light to Eurocopter helicopter contract
10/25/2006, 7:59 a.m. CT
The Associated Press

COLUMBUS, Miss (AP) — It appears the American Eurocopter's plant in Columbus, Mississippi, will build U.S. Army helicopters after the Government Accounting Office denied protests from two companies.

Officials at Mississippi U.S. Rep. Roger Wicker's office say the protests by two challengers against the two-point-two (b) billion-dollar helicopter contract had been turned back. In June, the contract was awarded to the European Aeronautic Defense and Space Company which is the parent company of American Eurocopter.

The action clears the way for expansion of Eurocopter's Columbus plant and means more than 250 jobs are expected to be added at the American Eurocopter facility at Golden Triangle Regional Airport.

EADS North America beat out three other companies to win the 10-year contract to build a fleet of military helicopters, with the majority of the work to be done at the local plant.

Still, it may be six years or more before all the helicopters are completely manufactured in Columbus, which is located near the Alabama line.
--Link

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U.S. Army orders more EADS helicopters
PARIS, Nov 9 (Reuters) - European aerospace group EADS said on Thursday the U.S. Army had ordered 34 extra UH-145 light utility helicopters, bringing the total purchased to 42.

The U.S. army announced in June it had chosen EADS helicopter unit Eurocopter to provide up to 322 helicopters in a deal expected to be worth up to $3 billion over the longer term.

The latest tranche is worth $170 million, EADS said in a statement.

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Elbit Helmet Display for US Army's LUH

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Army unveils Light Utility Helicopter UH-72A Lakota

Dec 11, 2006
BY Lt. Col. Martin Downie
Kim Henry

COLUMBUS, Miss. (Army News Service, Dec. 11, 2006) - Gen. Richard A. Cody, Vice Chief of Staff of the Army, and Joe RedCloud, a chief of the Oglala Sioux Tribe, Lakota Nation, accepted the Army's first Lakota Light Utility Helicopter, UH-72A, in a ceremony here today.

"The Light Utility Helicopter - from concept development to material fielding to rapid deployment - is not only serving as a catalyst for change across the Army, it is also accelerating the speed of Army aviation modernization and integration with other services and government agencies," said Cody.

The Army has a long-standing tradition of using American Indian names, such as terms, tribes and chiefs for its helicopters. In the case of the Lakota aircraft, the linkage is between the Lakota legacy as stalwart defenders of their homeland and the nature of the aircraft's intended domestic missions.

"We're pleased that you honor our tribe by naming this helicopter Lakota. You are not only honoring our past, you are recognizing that we are still here, joint partners in the heritage of the promise of America." RedCloud told the audience.

The fielding of the LUH is part of an ongoing Army-level effort to transform its aviation capability through the deliberate reinvestment of funds from the canceled 2004 Comanche program.

The Army National Guard will receive the majority of the 322 new aircraft. Initial aircraft will be sent to the National Training Center, Fort Irwin, Calif. for medical evacuation missions in January 2007. The UH-72A Lakotas will replace UH-60 Black Hawks, which will be transferred to the National Guard for operational missions.

"The Lakota heralds a new beginning for our Army and for our communities across every state," said Cody. "It is our nation's responsibility and the Army's duty to provide our National Guard Soldiers with the tools they need to respond fully and rapidly to homeland security missions and national disasters.

"This exceptional platform will fly for years to come in America's skies. It is an aircraft we needed and we are proud to see it take flight," he said.

The UH-72A is a commercial aircraft designed to conduct light general support tasks in permissive, non-combat environments. Those tasks include civil search and rescue, personnel recovery, evacuation, counter-drug and limited civil command and control operations in the conduct of Homeland Security.

(Downie serves with the Office of the Chief Army Public Affairs, Henry with Army Aviation and Missile Command.)