The Navy is considering an unprecedented contract cancellation for 29 sub-hunting helicopters. Citing budget cutbacks, Navy also wants to retire an aircraft carrier. Reasoning: One less carrier means less need for helicopters; although production has been underway since 2012. Sometimes “savings” cost as much as spending. The Defense Department signed the $1.05 billion deal with Sikorsky Aircraft and Lockheed Martin in 2012 with funding coming between FYs 2012-16. The agreement also included Army orders for Black Hawks. Contract termination fees would be at least $250 million; and the Navy would “get nothing in return,” said Sen. Carl Levin (D-Mich.), and result in higher costs to the Army. Altering this pact would be unprecedented in the history of DOD contracting, Sikorsky VP Scott Starrett claimed. Pentagon acquisitioners are looking into their options. The cost to finish the work, Lockheed CFO Bruce Tanner said given production is underway, would be about the same. Upon completion, and if the services didn’t want the helos, they could always be sold to American allies. (Source: The Fiscal Times, 04/25/14)
Central Mississippi Note: Airbus-Columbus builds UH-72A military helicopters for the U.S. Army.)
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