Army Wants To Make ARH Program Work

Defense Daily, March 26, 2007

By Ann Roosevelt

The Army requirement for a new Armed Reconnaissance Helicopter (ARH) stands and the service wants to work with contractor Bell Helicopter Textron [TXT] to make it work.

"We don't want anyone to think that we've turned our back on Bell," Brig. Gen. Stephen Mundt, director of Army aviation in the deputy chief of staff of operations office, said at the Pentagon Friday. "We're concerned. We want Bell to come back in and we want to make this program work."

The Army last week issued a show cause letter to Bell, giving the company 30 days to come back and tell the service how they will solve the process issues that are leading to cost and schedule uncertainty (Defense Daily, March 22).

The initial ARH contract was $3.6 billion contract for 368 airframes. Now the service wants 512 aircraft, bumping the contract total to $4.7 billion.

The new ARH is essential to the Army, which wanted all the new helicopters fielded and the older OH-58Ds--also built by Bell--retired by 2015. Now that milestone looks more more like 2017, Mundt said.

Even though the Army is committed to meeting the ARH requirement, one option would be to terminate the existing contract with Bell. The contract could be recompeted, or a service life extension program could be worked out for the OH-58D helicopter the ARH is to replace. But the Army is unlikely to take such drastic measures, which would likely draw some industry interest.

"I don't want to go that route," Mundt said. "The best thing for us is that Bell goes back and takes a look at its processes and figures out what it can do and convinces all of us that they promised on time and schedule and we we'll go back and talk to them about what they can and can't do."

The requirement has not changed.

"The Armed Reconnaissance Helicopter-- I don't care what it is. I've got to have it," Mundt said. The OH-58D, first fielded in 1985, is playing a large role in Afghanistan and Iraq.

When Mundt was a captain, the Army captain in charge of building the OH- 58D was Jeffrey Pino, now president of Sikorsky [UTX], Mundt said. The helicopter is "performing magnificently" considering its age and maintenance issues. "This airframe is over 50 years old right now."

"There's 18 to 32 pieces on the aircraft that are in obsolescence, so we watch that every single day because our concern is that if one fails catastrophically we've got now to ground the fleet and we can't afford to that," he said.

The 2005 ARH contract with Bell said the new aircraft would cost about $5.2 million for each airframe in low-rate initial production, Mundt said, with about $210 million for the system design and development phase--to take a commercial aircraft and integrating a mission equipment package on it. It was to be in the Army's hands in October 2008 (Defense Daily, Aug. 1, 2005).

The baseline, which is the way the program is laid out in terms of reasonable execution risk, said Bell would do it, but the schedule might be a little tight. So the program briefed to Congress gave the company up until July to December 2009 to have the first unit equipped. The difference between the contract and the baseline were agreed to by all involved parties.

"Today, right now, we are at risk as to whether that schedule can be maintained on the baseline, meaning can they deliver by December '09," Mundt said. "There's a question. They [Bell] said they were not sure." Additionally, the cost of the aircraft might rise as high as $9 million to $10 million each-- which is why everyone became so concerned.

"I need an aircraft today that meets all my KPP [key performance parameters]," Mundt said. "The threshold in terms of performance is 4,095 [pressure altitude, or how much power you have] and supposed to have growth potential in it at the objective end state to get to 6,095 and we did that so we could get an aircraft quickly and get it into the fight."

This is vital for operations in Afghanistan, for example, where operations are high and the temperatures hot, leading to power issues.

Bell is not having technical problems integrating equipment into the aircraft, Mundt said.

"This was not a technical issue--which was a congressional concern going into the program...The problem in my opinion, is processes--it's how you deal with it and how you build it on the floor."

In testimony before the House Armed Services Joint Air and Land Forces and Seapower and Expeditionary Forces subcommittees last week, Mundt said, the Army and Marine Corps position was that "we are concerned and they have got to make sure they've got the right processes, the right leadership, and you can build this airplane, you can build it on the schedule and you can build it within the cost parameters that we've talked about."

The Marines have experienced similar process concerns with Bell, which is part of a team that includes Boeing [BA], for the V-22, and H-1 programs (Defense Daily, Feb. 27).

"A bunch of use were blindsided," Mundt said. "Until a recent meeting with company officials, "nobody had said they couldn't build that helicopter for that cost."