August 1, 2006

US Air Force helicopter award delayed until September

WASHINGTON (Reuters) - The U.S. Air Force has postponed
plans to award a multibillion dollar contract for new combat
search-and-rescue helicopters by at least one month until
September, a spokeswoman said.

Industry executives and analysts are closely watching the
"Combat Search and Rescue (CSAR-X)" competition, which will buy
up to 141 helicopters and five test aircraft to replace the Air
Force's Sikorsky HH-60G Pave Hawks. The overall value of the
contract could be as high as $10 billion, they said.

Competitors include Chicago-based Boeing Co. with a variant
of the CH-47 Chinook helicopter that is widely used by the Army
and special forces. Sikorsky, part of United Technologies
Corp., has teamed with Boeing to offer a version of its VH-92.

Analysts say the US101, chosen last year as the next
presidential helicopter, could have the best shot at winning
the Air Force competition. That helicopter is built by Lockheed
Martin Corp. and AgustaWestland Inc., owned by Italy's
Finmeccanica SpA.

The Air Force spokeswoman said no date had been set, but
the service now expected to award the contract in September.

"The US101 is regarded as the one to beat," said Richard
Aboulafia, analyst with the Virginia-based Teal Group. The
aircraft's three engines made it ideal for use in combat and
that it offered more space than Sikorsky's VH-92, he said.

However some advisers to Defense Secretary Donald Rumsfeld
would prefer the Chinook variant, said Loren Thompson of the
Virginia-based Lexington Institute. That would trim the number
of spare parts needed and training for maintenance crews

the Army already has large numbers on hand, he said.

Thompson said the delay in the contract award could be due
to pressure by top Pentagon officials on the Air Force to trim
back the requirements for the aircraft.

"The program is being loaded up with more performance
requirements than is prudent," he said, noting that any
reduction in the amount of equipment that needs to go aboard
the helicopter could favor the Sikorsky bid.

The Air Force will use the helicopters to rescue wounded
soldiers from the battlefield, deliver humanitarian aid and
evacuate people caught in disasters like Hurricane Katrina.

The Bush administration budget proposal earmarked $254
million for the helicopter in fiscal year 2007, which begins on
October 1. Congress has the final say on defense spending.