Cornische Aviation And Maintenance Limited Had Questioned Scope Of The Contract

In June 2011, the US Army issued a $367 million sole source award to the Russian arms company Rosoboronexport for the purchase of 21 Mi-17 aircraft, initial spares and engineering support for Afghanistan. With no public announcement, the Army also included an option for an additional $550 million in aircraft and long term support. Cornische Aviation and Maintenance Limited, Sharjah, UAE protested to the U.S. General Accounting Office that the Army's inclusion of multi-year sustainment support was in violation of U.S. Federal Acquisition Regulations, and on Tuesday announced they have won their protest against the US Army for improperly including sustainment in the contract for 21 Russian Mi-17 helicopters.

File Photo

"This program is essentially a cash cow for the Russians and the U.S. Army," said Cornische spokesman Jeff Rashim. "Rosoboronexport is buying the aircraft for $7.5 million and selling them to the U.S. for $16.4 million. As if that was not enough profit, the Army agreed to give the Russians an option for $100 million in spares and depot level test equipment with margins exceeding 100%." 

"It is impossible to understand why the US Army is not concerned that they are overpaying hundreds of millions for this Russian equipment," Rashim said. "The US government should demand an audit."

The U.S. General Accounting Office ruled on Thursday, August 11th that the U.S. Army must take corrective action and remove the long-term spares and depot level test equipment from the Rosoboronexport contract. Corrective action is to occur in the next 60 days.

FMI: www.gao.gov