GAO Quells Further Protests

In a significant shift in direction from earlier statements, the US Air Force agreed last week to put a $15 billion contract for a new combat search-and-rescue helicopter up for bid once again, in respond to protests from losing bidders and a recommendation from the Government Accounting Office.

As Aero-News reported, the GAO recommended the Air Force reopen bidding on the deal -- which was awarded to Boeing in November 2006 -- in February, following protests from rival bidders Lockheed Martin and Sikorsky. On March 22, Air Force Secretary Michael W. Wynne told a Senate committee the USAF would not, repeat not, reopen bidding.

Wynne did agree to hear further arguments from both parties, however, and abide by GAO recommendations on those protests. On Friday, the GAO denied "all of the additional arguments," but did not elaborate as details are still under a gag order, reports Bloomberg.

For its part, Boeing -- which had offered a SAR variant of its HH-47 Chinook twinrotor platform (shown at top) for the CSAR-X deal -- said it would not protest or appeal the Air Force decision to reopen bidding... and at least one analyst believes things will still work out for the Chicago-based defense contractor in the end.

"This is positive for Boeing," said Cowen & Co. analyst Cai Von Rumohr. "Any justification to limit protest grounds to one issue makes it easier for the service. The GAO legitimized the rest of the decision by throwing out the other grounds." (Bloomberg notes Cowen & Co. holds shares in Boeing, and United Technologies.)

The USAF decided to reopen bidding to take into account the issue of support costs, which Sikorsky and Lockheed believe will strengthen the position of their offerings compared to the HH-47.

Sikorsky has proposed its HH-92 Super Hawk (center) for the CSAR-X role; Lockheed is pitching a variant of the three-engined US101 helicopter (shown above).

FMI: www.af.mil, www.gao.gov