* Sikorsky still plans to bid, Boeing weighing response
* Northrop says it decided to opt out after thorough review
By Andrea Shalal-Esa
WASHINGTON, Dec 11 Northrop Grumman Corp
and Italy's Finmeccanica SpA have decided not to bid
for a $6.84 billion contract to build 112 new combat search and
rescue helicopters for the U.S. Air Force, Northrop said on
Northrop, which teamed up with Finmeccanica's AgustaWestland
in September for the rescue helicopter contract, said the
decision would not affect the team's pursuit of a separate U.S.
Navy competition for a new presidential helicopter using
Northrop spokeswoman Margaret Mitchell-Jones said the two
companies decided to skip the Air Force competition after a
thorough analysis of the service's final request for proposals,
or RFP, which was published in October. Bids are due Jan. 3.
"We've reached this conclusion based on an extensive
evaluation of customer requirements under the current RFP,"
Mitchell-Jones said in a statement.
Northrop's decision comes amid growing industry unease about
the way the Air Force has structured the competition - one of
few new programs to be started in coming years - and other
companies may opt to skip the expense of preparing a bid.
The Air Force rules for the competition say no company will
be considered if its total bid is evaluated to cost more than
The Air Force's previous attempt to start replacing its
aging fleet of Sikorsky HH-60 Pave Hawk helicopters with CH-47
Chinook helicopters built by Boeing Co - a 2006 deal
valued at around $15 billion - was cancelled in 2009 after
multiple protests by the losing bidders.
The service released a narrowly written draft request for
proposals in March that was conceived as a "best value"
competition, but left some industry executives concerned about
whether the rules would allow them to win the bid, or make much
profit if they did.
Sean O'Keefe, chief executive of EADS North America
, told Reuters in July that his company might not bid
unless the Air Force dramatically revamped rules that would have
knocked its aircraft out of the running because it was not U.S.
certified, although it is in service in NATO countries.
Sikorsky Aircraft, a unit of United Technologies Corp
that has teamed up with Lockheed Martin Corp, is
expected to bid for the contract. Sikorsky declined to comment
on Northrop's decision.
Boeing, whose CH-47 won the initial competition in 2006, is
still considering how to respond to the Air Force request for
proposals, said spokesman Damien Mills.
Boeing and its partner on the V-22 tiltrotor, Bell
Helicopter, a unit of Textron Inc, had also expressed
interest in the competition early on, but the cost of that
aircraft make it an unlikely contender to replace the HH-60
given the Air Force's focus on affordability, according to
The Air Force revamped its approach to the rescue helicopter
program to put a premium on lower costs, since it is facing huge
outlays in coming years for new refueling tankers being built by
Boeing, F-35 fighter planes built by Lockheed Martin and a new
long-range bomber that it wants to start developing.
"The Air Force budget is under tremendous pressure," said
defense consultant Jim McAleese. "The tanker, F-35 and bomber
are critical priorities. Every other program must justify the
incremental gain in combat capabilities relative to its cost."
In October, the Air Force said it was pursuing a
"capability-based, best-value approach," with a big push to use
aircraft and training systems that are already in production.
Some analysts said the terms of the competition appeared to
be tailored to Sikorsky's Black Hawk helicopter.
The service said its approach had been carefully reviewed by
top Pentagon leaders to ensure a low-risk, executable process
that "will deliver the warfighter a product that meets the
requirement at an affordable price."
No immediate comment was available from the Air Force on