Fort Worth, USA: Senior US Army officials are expected to decide by Friday this week whether they would allow Bell Helicopter to continue developing a new combat helicopter, the ARH-70 Armed Reconnaissance Helicopter, a considerably modified, combat version of its civilian 407 model. The contract is potentially worth $3-$5 billion for the Fort Worth based company.
The Army is currently reviewing submissions made by Bell to resolve production delays, and soaring costs, for the ARH-70. The review comes two months after the Dept of Defence sought to cancel the contract with Bell because of delays and cost overruns. Bell appealed the decision and got itself a reprieve of one month in which to come up with a revised proposal.
Market analysts say that even if the programme is allowed to continue, Textron, Bell's owner, will likely have to take a charge of $100 million or more this year to cover cost overruns on the program. Bell has already spent more than $25 million of its own money buying materials needed to build the first production ARH helicopters, according to reports.
If Bell receives the contract, the helicopters would be built at Bell's Mirabel, Canada, facility and then transported to Fort Worth. Specialized work for the Army will be performed at a new Bell facility at Alliance airport.
A cancellation of the contract would result in calling for a new competition, which could delay fielding of new helicopters by two years or more. The US Army is desperate for new helicopters, which it says it needs as soon as it can get them. It has fielded a requirement for 512 new helicopters.
The Army is not willing to accept Bell's delivery projections, according to which Bell can deliver a sufficient number of helicopters to equip the first combat unit only around December 2009.
According to reports, Army officials concede that part of the fault for the delays and rising costs lay with the force itself for changing requirements and specifications after the original contract was signed in July 2005.
With the Army's permission, Bell has continued work on development of the aircraft at its own expense. It's demonstrator models have already flown a total of more than 600 hours, and are meeting key performance requirements. Bell said it met a critical combat suitability requirement recently by preparing and loading two ARH prototypes aboard an Air Force C-130 cargo plane, and then unloading them and having them combat ready in less than 15 minutes.
Boeing, which competed with Bell for the original contract, is waiting to step in if Bell's production schedule fails to meet Army approval. Last week Boeing officials showed a new version of the helicopter they had originally proposed, and said it could meet all the Army's performance requirements and could also be delivered on time.