You will be redirected to the page you want to view in  seconds.

Sikorsky pricing on USAF Combat Rescue Helo expires soon

Mar. 3, 2014 - 06:00AM   |  
The Air Force wants to buy 112 new helicopters to replace the aging Sikorsky Pave Hawks.
The Air Force wants to buy 112 new helicopters to replace the aging Sikorsky Pave Hawks. (Staff Sgt. Aaron D. Allmon II / Air Force)
  • Filed Under

As the defense community waits to see whether the Air Force’s Combat Rescue Helicopter (CRH) program will be funded in the FY 2015 budget, producer Sikorsky’s price proposal is set to expire by the end of March.

According to a Sikorsky official, the company’s proposal was good through Sept. 2013. The company agreed to extend that through the end of March at the behest of the Air Force as the service attempted to sort its way through its ongoing budget crunch.

If the service does not award the contract before the end of the month, it would either have to request another price extension from Sikorsky, or ask the company to update its costs and provide a new estimate.

That is a consideration in how the service moves forward with the contract, according to Lt. Gen. Charles Davis, Air Force military deputy for acquisition. He noted that Sikorsky has been helpful during the delayed decision process, but said they could not extend their offering forever.

“It’s not so much do they extend [their bid], it’s how and when we make a decision about signing the contract or not,” Davis said. “I don’t think we need them to extend anything. We just need to decide how that is going to roll out in the budget.”

An updated price would come from Sikorsky talking with its suppliers and gathering information on those costs. While dramatic swings in costs would seem unlikely, an increase in price for the Air Force is not out of the question.

“A lot of the economics say, ‘Sure, take advantage and also cover your higher cost,’” Richard Aboulafia, vice-president of analysis with the Teal Group, said. “On the other hand, this is a terrible time to make yourself a budgetary target. I think they’ll probably balance the two and just negotiate.”

Aboulafia also pointed out that the declining volume of UH-60M production may be contributing to increased costs in the time since the original bid was submitted.

“They’re not going to get greedy, but it’s probably an opportunity to cover some higher costs they might be incurring,” he said.

The Combat Rescue Helicopter program is the Air Force’s latest attempt to modernize its combat search and rescue fleet. The Air Force wants to buy 112 new helicopters to replace the aging Sikorsky Pave Hawks. In late November, the service said it would select Sikorsky if it can award a contract.

The Sikorsky official had not received word from the Air Force about the program’s fate in the FY 2015 budget, but said the company “anticipates positive news” on Tuesday.

But the secretary of the Air Force indicated CRH is one of those programs that may not make the cut in the budget release.

“We have current helicopters that perform this mission,” Deborah Lee James, Air Force secretary, said at a Bloomberg sponsored event last week. “They are getting old. They won’t last forever, so something’s got to give. It’s a priority, but we have to rack and stack that priority along with the others.”

“I personally am looking at this very hard,” she continued. “It’s a question of can we afford it, can we afford it now versus later, [and] is it better to do upgrades or buy new? So it’s all of these different factors we need to weigh.”

Even if CRH is not awarded as part of the president’s budget, Congress is already eyeing more funding for the program, according to a Capitol Hill aide.

Answers by RallyPoint

Join trending discussions in the military's #1 professional community. See what members like yourself have to say from across the DoD.

More In News

Start your day with a roundup of top defense news.

VA Home Loan

Search By:

Product Options:
Zip Code:

From Our Blogs


The latest from PT365

News for your in-box

Sign up now for free Military Times E-Reports. Choose from Money and Education. Subscribers: log in for premium e-newsletters.

This Week's Army Times

This Week's Army Times

CrossFit vs. unit PT
Troops will do the training plans in a $2.5 million study

Subscribe for Print or Digital delivery today!

MilitaryTimes Green Trusted Classifieds Looking to buy, sell and connect on Military Times?
Browse expanded listings across hundreds of military installations.
Faces of valorHonoring those who fought and died in Operations Iraqi Freedom and Enduring Freedom.
hall of valorThe Hall of Valor is a searchable database of valor award citations collected by Doug Sterner, a Vietnam veteran and Military Times contributing editor, and by Military Times staff.

All you need to know about your military benefits.

Benefits handbook

Guard & Reserve All you need to know about the Guard & Reserve.

guard and reserve handbook