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U.S. urged to reopen $15 bln helicopter deal

(Adds quotes, background, company reaction)

WASHINGTON, Aug 30 (Reuters) - A government watchdog urged the U.S. Air Force on Thursday to give two losing bidders another chance to compete against Boeing Co BA.N for a potential $15 billion rescue helicopter contract.

Boeing, which won the deal in November, said it was "very disappointed" that the Government Accountability Office, an arm of Congress, had upheld a second round of protests by United Technologies Corp's UTX.N Sikorsky Aircraft Corp. unit and Lockheed Martin Corp LMT.N, the losing bidders.

The Air Force’s top acquisition official, Sue Payton, said in a statement that the service was developing a plan to address GAO’s findings.

The Air Force describes the rescue helicopter as its No. 2 acquisition priority after mid-air refueling tankers.

Payton left little doubt in an interview last week that the helicopter competition would be reopened to the three companies if GAO upheld the latest protests.

“I’m here to tell you that there isn’t a winner right now in CSAR-X,” the Pentagon name for the combat search and rescue helicopter competition, Payton told Reuters last Friday. “The whole award could change,” she said. “We are serious about the opinion of the GAO.”

In its nonbinding ruling on the latest protests, GAO recommended letting the competitors revise cost, price and other aspects of their offers in response to a new evaluation scheme put in place after GAO upheld a previous protest by Sikorsky and Lockheed.

At issue was a contention that the Air Force’s method for evaluating operation and support costs was skewed in a way that favored Boeing’s HH-47 helicopter, which is based on its twin-rotor CH-47 Chinook.

The GAO said in its latest ruling that if the evaluation of revised proposals results in a determination that Boeing’s proposal no longer represents the best value to the government, the Air Force should terminate Boeing’s contract.

Sikorsky hopes the Air Force will take action to make sure all competing aircraft are fully and fairly evaluated, said Paul Jackson, a company spokesman.

Lockheed was prepared to support a schedule that will deliver this urgently needed capability” as quickly as possible, said spokesman Mike Drake.

Lockheed's candidate aircraft is based on the EH-101, produced by AgustaWestland Inc., a unit of the Italian defense manufacturer Finmeccanica SpA SIFI.MI.

Boeing, in its statement, said the Air Force’s original evaluation rated the performance of its HH-47 as “exceptional, low risk. By contrast, Boeing said, Lockheed was rated “acceptable, high risk” and Sikorsky was rated “acceptable, low risk.”

((Editing by Tim Dobbyn; e-mail:jim.wolf@reuters.com; telephone: 202-898-8402, washington.bureau.newsroom@reuters.com)) Keywords: BOEING LOCKHEED/UTX

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