The Air Force expects to spend over $1 billion in its effort to rebid the combat-search-and-rescue (CSAR-X) replacement helicopter contract, according to a top acquisition official for the service.
“There is a monetary impact, where the Air Force has lost just over a billion dollars between fiscal year 2006 and ’13 for this program,” Maj. Gen. Scott Gray, the director of global reach programs in the Air Force acquisitions office, said during a recent Pentagon briefing.
The Air Force awarded the CSAR-X contract, valued at approximately $15 billion, to Boeing [BA] in November 2006. Following two Government Accountability Office (GAO) decisions upholding protests by losing bidders Lockheed Martin [LMT] and Sikorsky [UTX], the competition was reopened. All three companies submitted new bids in May.
Gray reiterated previous Air Force statements that the service is still on track to award a contract for 141 aircraft this fall.
In addition to the $1 billion-plus cost of the delay, Gray said the new fleet will not be operational for at least a year past the original target date. An “initial operating capability,” or IOC, for the first round of new helicopters was expected in fiscal year 2012; instead, the IOC is now expected sometime between the first quarter of FY ’13 and the fourth quarter of FY ’14.
The new fleet will replace the Air Force’s aging HH-60 CSAR helicopters.
Asked whether the Air Force will experience any advantages as a result of the delay in awarding a contract, Gray said some forward-looking capabilities planned for a later round of upgrades could be mature enough for incorporation into the initial fleet.
The companies “know what the Block 10 requirements are,” he said, “and theoretically they could pull something to the left.”
“That would be the only silver lining I could see to the delay,” he added.
Gray told sister publication Defense Daily last week that the Air Force has already begun incorporating lessons from its troubled KC-X aerial refueling aircraft contract selection into other large-scale acquisition programs such as CSAR-X (Defense Daily, Aug. 15).
The GAO earlier this summer sustained Boeing’s March 11 protest of the $35 billion KC-X contract award to Northrop Grumman and industry partner European Aeronautic Defense and Space Co. (EADS) (Defense Daily, June 19).
Gray said acting Air Force Secretary Michael Donley directed the Air Force acquisitions office to examine the GAO’s findings for “lessons learned.”
The most significant change to the CSAR-X acquisition process, according to Gray, is the emphasis on “much better documentation” of interaction with contractors.
“We’re working hard to make sure that the i’s are dotted and the t’s are crossed this time,” he said.
In addition, the Office of the Secretary of Defense is conducting “peer reviews” of the Air Force’s effort in the CSAR-X acquisition.
The general again acknowledged the potential impact on the award date of a pending DoD Inspector General’s investigation of possible source selection irregularities.
However, “as of today, we have heard absolutely nothing from the DoD IG that would lead us to believe that this is going to impact [the source selection] at all,” Gray reiterated yesterday. He said he still expects the IG’s draft report next month.