Navy to award contract for Marine One helicopter fleet

[frigidmagi]

Washington Post

The last time the Pentagon tried to upgrade the president’s coolest ride — the fleet of helicopters that drop him at his doorstep on the South Lawn of the White House — it didn’t go well. Costs doubled. Delays sparked ridicule, then outrage. And President Obama, then just a few weeks in office, said it was “an example of the procurement process gone amok” before defense officials killed the program outright.

It was an embarrassing debacle that cost $3.2 billion and produced no usable helicopter, turning an iconic symbol of presidential power into an illustration of government waste and incompetence. Now, five years later, the aircraft are more in need of replacement than ever, some almost 40 years old.

So the Navy is on the verge of awarding the contract again — a process that will test whether it can learn from the past and whether the Pentagon can purchase major systems without busting budgets and deadlines.

The Navy has vowed to get it right this time, and it says it has taken many steps to ensure that the problems that plagued the program before — when the projected cost doubled to $13 billion — won’t be repeated.

But critics are already pointing to what they say could be serious problems. There appears to be only one bid on the project — led by the company that lost out last time — and some fear that the lack of competition could again lead to escalating costs. Another red flag: The Defense Department granted the Navy a waiver saying that bidders don’t have to build prototypes, which can help to reduce cost and risks.

“We believe that there should be competitive bidding,” said Ethan Rosenkranz, a national security policy analyst for the Project on Government Oversight. “We should have multiple contractors bidding for one program, especially after we spent $3.2 billion on the previous failed contract.”

Sen. John McCain (R-Ariz.) has promised to keep close watch over the program and has threatened to cut off funding if the process is unsatisfactory. He has been a harsh critic of the way the Pentagon buys everything from weapons to ships to fighter jets — especially the F-35 Lightning II, an Air Force fighter jet in development that is over budget and years behind schedule.

In 2009, McCain targeted the presidential helicopter program, saying, “I don’t think that there’s any more graphic demonstration of how good ideas have cost taxpayers an enormous amount of money.”

More recently, McCain spokesman Brian Rogers said the senator “hopes that the new program learned the lessons of the past.” But he cautioned that “given how early the new program is in its acquisition life cycle, he believes that vigilant oversight is warranted.”

In the wake of the Sept. 11, 2001, attacks, replacing the helicopters — which fly under the call sign “Marine One” when the president is aboard — became a priority for the Pentagon. In 2005, a team led by Lockheed Martin won the contract, beating out Sikorsky, which built the helicopters currently used in the Marine One program.

But soon it became a case study in how not to build a helicopter, analysts say. The design became so overloaded with new requirements — to be able to hover longer and at high altitudes, travel great distances without refueling, and defend against missile attacks — it essentially became an impossible task.

“Too many people had a seat at the table,” said Richard Aboulafia, an aviation analyst at the Fairfax-based Teal Group. “Everyone was chiming in for good measure. . . . Basically they were building something to survive a nuclear war. Literally. ”

In 2009, the Pentagon killed the program and eventually sold the helicopters that were in production to Canada for spare parts.

Since then, the Navy has dramatically scaled back the ambitions for the aircraft, officials said, and will use existing, proven technologies instead of trying to build new ones specifically for the helicopter.

“We want to be as transparent as possible,” said Navy Capt. Dean Peters, the program manager. “The last program was born in a completely different environment and was to some extent rushed into. With this program we’ve done the due diligence to make sure the requirements are achievable and affordable.”

While declining to provide a cost for the program, he said it would be “significantly less” than the $13 billion price tag it reached before the previous contract was canceled. The first helicopters could be available by the end of 2020 “if everything goes ideally,” he said.

In reviewing the program, the Government Accountability Office has noted how the Navy has reduced the passenger capacity, range and speed, among other things, which has led to “a streamlined acquisitions approach.” It concluded that the waiver allowing it to bypass the prototype requirement was justified because the cost of the prototypes would have exceeded the amount they would ultimately save the Defense Department.

Rep. Mac Thornberry (R-Tex.), the vice chairman of the House Armed Services Committee, said that the last effort failed because “it was almost like they were trying to cram rotors onto Air Force One. This time, there has been careful monitoring, and the process seems much more realistic thus far.”

Though several companies were initially expected to bid on the program, it appears that only one bidder surfaced: a team comprised of Sikorsky, which is a unit of United Technologies, and Lockheed Martin.

In a statement last year, AgustaWestland, which in teaming up with Lockheed Martin had won the contract in 2005, said it would not bid this time. The proposal had been written with provisions that “inhibit our ability to submit a competitive offering, and that provide a significant advantage to our likely competitor,” the company said in a statement last year.


The Navy wouldn’t say how many bids it has received to build the 21-helicopter fleet, which also transports the vice president, Cabinet secretaries and foreign dignitaries, but Peters said the contract is expected to be awarded in a matter of weeks. Sikorsky declined to comment.

Some are skeptical that once the helicopters start being built, the Navy, the White House, the Secret Service or any of the other agencies involved will be able to resist restoring expensive features that had been scrapped for savings and efficiency.

“Some bright person is going to say, ‘I know we took it out in order to get the contract signed in the first place, but I think we really underestimated our needs,’ ” said John Pike, the director of GlobalSecurity.org. “Sikorsky will sell you as much helicopter as you’re willing to pay for. And nothing is too good for the president. So you have to be concerned that they have temporarily scaled it back, but that it will bloat up again down the road.”

Sen. Charles E. Schumer (D-N.Y.), who has been pushing for Lockheed to get the contract because much of the work would be done at its facility in Upstate New York, said that the cost will be heavily scrutinized.

“Given what happened last time, there are a hundred eyeballs on this to make sure it stays on budget,” he said.

Loren Thompson, a defense analyst who also works as a consultant for Lockheed, said time is running out for the Navy. “They have to get this competition right the second time around because the existing helicopter fleet is getting quite old,” he said.

And he said that purchase goes far beyond the one contract: “The new helicopter is a symbol of whether the federal government can actually buy things intelligently.”

You know we really should start hammering out how we can fix the weakness in the procurement process.