October 3, 2016
One Huey Replacement or Two?
The timing of the USAF’s RFI for new helicopters begs questions about its requirements and its relationship with industry.
By James Hasik
The Pentagon’s 2015 budget had anticipated buying 72 aircraft for about $980 million, at $13.6 million each. The Air Force anticipates choosing a type in 2018, and taking deliveries between 2019 add 2021. The aircraft are intended to replace two fleets of Hueys: those that ferry guards amongst the 20th Air Force’s ballistic missile silos across Wyoming, Montana, and North Dakota; and those that transport Important People in and around Washington DC. And as Thomas Gibbons-Neft wrote for the Washington Post in April, “there’s a big fight over how to replace it.”
Earlier in this process, the USAF had sought to buy UH-60M Blackhawks from Sikorsky (Lockheed Martin) through that company's ongoing contract with the US Army. The service cited the Economy Act of 1932 as its statutory authority for this uncommon approach. That law, as amended and encoded at 31 USC 1535, permits one federal agency to buy goods through another’s contract, without a fresh program and without competition, if
- amounts are available;
- the head of the ordering agency or unit decides the order is in the best interest of the U.S. Government;
- the agency or unit to fill the order is able to provide or get by contract the ordered goods or services; and
- the head of the agency decides ordered goods or services cannot be provided by contract as conveniently or cheaply by a commercial enterprise.
In effect, the Air Force had decided that (1) it had the money, (2) the deal was good, (3) the Army could get the aircraft for it, and (4) Army-bought Blackhawks were the most convenient approach. It certainly wasn’t the low-cost approach: the Army’s average price on UH-60Ms is about $19 million—more than the Air Force had recently budgeted, and probably more than Airbus, Bell, Leonardo (Agusta-Westland), or MD Helicopters would bid with smaller aircraft. The proximate problem was that the service was overruled by someone in the Office of the Secretary of All Defense. My essay on this subject back in June argued that the centralizing bureaucrats in OSD really should trust the Air Force to decide on its own whether it needs certain helicopters sooner, even if they would be more expensive.
But there is a second question in the UH-1N replacement decision that the Air Force isn’t addressing: whether this is really one helicopter. That is, would the USAF’s needs be better served by two fleets of different helicopters, even if replacement takes longer? For even though both roles are currently undertaken by Hueys today, they might not be best filled by the same type of helicopter in the future. Flying out of Andrews Air Force Base may mean taking lots of people somewhere in an emergency, so seating capacity could be important. This need might point to the more expensive Black Hawks—even when bought under the “Economy” Act. Flying around three missile fields on the Great Plains is for keeping saboteurs and lunatics away from nuclear warheads, so speed may actually be more important than troop numbers.
And for a third question, did the Air Force earlier lead industry along, with a promise to eventually replace those two fleets in an open competition? To a considerable extent, Leonardo's AW139 was designed specifically to replace Hueys with an aircraft that cruises at 165 knots. For a conventional helicopter, that’s fast. Clearly no helicopter company designs a new machine solely for a projected purchase of 72 units, but that number, factored with a probability of success, was probably a line item in the decision model. If the company invested the big money that’s often required for a serious military bid on speculation, well, that was a business decision. Hopefully it wasn’t made after questionable representations.
Whatever the case, the Air Force is now promising a single, open competition. Still, the possibility does remind me of the dithering at the Department of National Defence in Ottawa over the Canadian Army’s now-defunct Close Combat Vehicle (CCV) program. Up until Christmas of 2013, unsuccessful bidders Nexter and Hägglunds each spent millions on marketing with a promise of a procurement. When the entire program was cancelled in favor of a sole-source award to General Dynamics, they were both very annoyed, and very reasonably so. As I wrote back then, citing comments from Tim Paige, then-president of the Canadian Association of Defense and Security Industries, that’s no way to treat prospective bidders.
Otherwise, I’m all in favor of moving out smartly with procurement decisions. As such, two months from RFI to RFP is speedy, but perhaps not unwarrantedly so, with source selection teams that know the few firms in the industry and their products. Airbus, Bell, Leonardo, and MD probably all have good reason to bid, but all should (and will) read that forthcoming RFP closely. Therein, the Air Force will be revealing its preferences, and implicitly signaling which bid is likely to be successful. If it doesn’t reveal too much preference, it may get a good price too. That’s as it should be—military procurement is foremost about quality kit for the troops, as the leadership defines it, and not about giving every plausible contractor an even shot at a deal. Each company can decide on its own how much effort to apply to the process. In the end, the USAF will get a quality helicopter, and several dejected bidders will pull up to bid another day.
James Hasik is a senior fellow at the Brent Scowcroft Center on International Security.