May 29, 2007 / 7:53 PM / 13 years ago

Sikorsky blasts U.S. handling of helicopter contest

WASHINGTON (Reuters) - Sikorsky Aircraft, a unit of United Technologies Corp., blasted the U.S. Air Force’s handling of a $15 billion helicopter bidding competition, saying proposed changes appeared to favor Boeing and could waste billions of dollars.

In a scathing five-page letter to the service released on Tuesday, Sikorsky also said the initial winner of the competition, Boeing’s HH-47, would require more fuel and transport planes to deploy than the other candidates.

It said the Air Force’s refusal to allow Sikorsky and the other losing bidder, Lockheed Martin Corp., to update their technical proposals “indicates an attempt to justify the prior award without regard to consideration of the true attributes of the competing helicopters.”

The Air Force’s proposed change “contemplates a corrective action that is seriously flawed and one that will unnecessarily cost taxpayers billions of dollars which otherwise could have been avoided,” said the letter, which was dated May 21 and sent by Sikorsky’s director of government contracts, Ariel David.

Sikorsky’s release of the letter was a rare public lambasting of the Air Force by a company that hopes to do business with it, according to Loren Thompson, defense analyst with Virginia-based Lexington Institute.

Boeing Co.’s larger, two-rotor HH-47 initially won the competition in November, defeating smaller aircraft offered by Sikorsky and Lockheed Martin. The Air Force plans to replace 141 aging combat search-and-rescue helicopters.

But the Government Accountability Office in February upheld a protest filed by Sikorsky and Lockheed, saying the Air Force was inconsistent in how it evaluated the costs to operate and maintain the aircraft. The Air Force this month released draft changes to explain how it would assess those, but said it would not allow changes to other aspects of the proposals.

Sikorsky said it would “vigorously oppose any effort by the Air Force to repeat its mistakes, make new ones, or otherwise bypass the mandate for full and open competition.” Last week, Sikorsky suggested it may file another protest or a lawsuit, depending on how the contest unfolds.

Sen. John McCain, an Arizona Republican, is investigating the competition and has raised questions about why the Air Force picked the heavier Boeing aircraft after repeatedly saying it wanted a smaller medium-lift helicopter.

The Air Force, which did not mention McCain by name, said it is working to respond to questions posed by a U.S. senator.

In its letter, Sikorsky raised myriad issues, including the following:

* It said Air Force’s narrow changes were imposed “in a manner that appears exclusively to favor one offerer.”

* It criticized the Air Force’s decision to ignore a Pentagon directive requiring services to consider the total extent of fuel costs when buying aircraft, including “hidden” infrastructure costs for transport and carrying fuel.

* It said the Air Force’s decision to not include manpower efficiencies in its calculation ignored differences in the cost to hangar the respective aircraft, tear down and build up those aircraft for transport, and ferry them for missions.

If it ignored those differences, the Air Force “would be intentionally overlooking the significantly higher costs” of deploying Boeing’s HH-47, given the number of aircraft, personnel and fuel costs needed.

Sikorsky spokesman Paul Jackson said the company had not yet received a response from the Air Force.

Lockheed has said it hopes the Air Force addresses numerous issues it raised in written questions to the service.

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