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Thu, Mar 06, 2008

Australia Cancels Seasprite Helicopter Contract

Kaman Declines Comment On Alleged Safety Issues

When Australian Prime Minister Kevin Rudd's new government took over after elections last November, Rudd ordered a review of military procurement contracts. The country's agreement to purchase 11 Navy Seasprite helicopters from US-based Kaman Corporation apparently will be the first major cancellation of a standing contract. It may not be the last.

The Washington Post reports the contract with Kaman, signed in 1997, was due to be completed by 2002 -- but only nine helicopters have been delivered, flight testing of those delivered turned up safety concerns, and the Australian navy grounded the Seasprites in April 2006.

Defense Minister Joel Fitzgibbon told reporters that, while the equivalent of $1.2 billion had already been invested, it was time to cut losses and move on. "The project had to be canceled on safety grounds alone," he said. "The airworthiness and crash worthiness of the aircraft was not up to 21st century standards and it was pretty clear the capability was not likely to be delivered in full."

A spokesperson for Kaman declined to comment on the safety allegations, but on Wednesday company CEO Neal Keating said Kaman would try to work out an amicable solution with Australian officials.

"Although we have created a highly capable aircraft for the Royal Australian Navy and continue to fulfill our obligations to the Commonwealth under our contract, we appreciate the thoughtful approach and time invested by the current Government in addressing our program and we will work with them toward arriving at a satisfactory arrangement," he said.

Parsing that... Australia will have to negotiate its way out of the deal.

Rudd's new government has also been critical of its predecessor's decision to pay Boeing $4.6 billion for 24 F/A-18 Super Hornet fighters. Fitzgibbon says he's prepared to cancel that contract, as well, pending a review next month.

FMI: www.defence.gov.au/raaf/, www.kaman.com

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