* United Tech's Sikorsky is only bidder
* Other possible bidders dropped out last month
* EADS executive says competition won't evaluate life cycle
By Andrea Shalal-Esa
WASHINGTON, Jan 4 The U.S. Air Force on Friday
declined to confirm that it had received only one bid for a $6.8
billion helicopter competition, but said it had procedures in
place that would allow the acquisition to continue regardless of
the number of bidders.
All but one of the contractors expected to bid to build a
new combat search and rescue helicopter for the Air Force
announced last month that they would not compete, raising the
prospect that the Air Force would have to adopt a different
approach to the acquisition program.
Sikorsky Aircraft, a unit of United Technologies Corp
, did submit a bid for the competition, based on its H-60
helicopter, according to a company spokesman. Other potential
competitors confirmed that they had decided to skip the bidding,
and at least one of the companies said it was exploring a
possible legal challenge to the terms of the competition.
Air Force spokesman Ed Gulick said he could not say how many
companies had submitted bids by the Thursday deadline because
that was "source selection sensitive," but the Air Force had
"acquisition procedures in place to proceed with this important
acquisition regardless of the number of bidders."
Gulick said the Air Force remained "committed to a fair,
open and transparent process" to pick a new, affordable Combat
Rescue Helicopter (CRH) that met the military's requirements,
but could only release details after selecting a winning bidder.
Lieutenant General Charles Davis, the top military official
in charge of Air Force acquisition, told Reuters in an interview
last month that the helicopter competition was structured to
tell potential bidders exactly what capabilities the Air Force
wanted and what it could afford.
He denied that the terms of the competition had been written
to favor the Black Hawk helicopter built by Sikorsky, and said
Sikorsky would be asked to submit certified cost and pricing
data if it turned out to be the sole bidder for the program.
Sikorsky was aware that it could be asked to provide such
data if no other bids came in, a spokesman said. Lockheed Martin
Corp is a key subcontractor on the Sikorsky bid.
Boeing Co, Textron Inc's Bell Helicopter unit
, EADS and Northrop Grumman Corp teamed
with AgustaWestland, part of Italy's Finmeccanica SpA,
announced last month that they would not bid for the work.
At the time, industry executives said the bidding rules were
so narrowly framed that they effectively excluded all but
Sikorsky's Black Hawk helicopter from the competition, and would
not reward extra capability offered by other aircraft.
EADS North America Chief Executive Sean O'Keefe told
Pentagon chief arms buyer Frank Kendall in a letter last month
that the Air Force's detailed mandatory requirements list had
derailed its plan to buy an "in-production, off-the-shelf"
helicopter and would result in an unnecessarily costly program.
As written, the terms of the competition also did not call
for an evaluation of the full life cycle costs of the bids,
despite the Defense Department's emphasis on affordability and a
new federal law which required such an evaluation, O'Keefe said.
No comment was immediately available from the Air Force or
Kendall's office on the letter from the EADS executive, a copy
of which was obtained by Reuters.
Davis last month said that the Air Force had already drawn
up plans for how to handle the procurement if only one company
submitted a bid, although he said the service would have
preferred to have a competitive process with more bidders.
He said the Air Force's move away from more "nebulous" and
"open-ended" procurements was positive for the industry,
allowing companies to make more informed decisions about whether
to spend money preparing a bid for a given competition.
He said the change toward more narrowly defined requirements
for military equipment was a result of multiple protests filed
by companies in recent years that challenged the more open and
subjective way procurements were structured in the past.
Boeing won the Air Force's last rescue helicopter
competition with its H-47 model, only to see the $15 billion
contract canceled after several protests by losing bidders.
"This is clearly a result of all of the issues that have
accumulated over the years of all of these high-visibility
protests," Davis said. As a result, the Air Force was now being
more diligent in the structuring of its acquisition programs.