The Army is aiming to ink a multiyear contract with Boeing [BA] for AH-64E Apaches and expects approval from Defense Secretary Ashton Carter in March 2016, program officials said on Monday.
But if budget instability persists and the current continuing resolution is extended to fund the rest of fiscal year 2016, it could throw a wrench into the service’s ability to sign or execute a multiyear contract as planned.
Col. Jeff Hager, Army project manager for Apache attack helicopters, said he was unsure what effect a long-term CR would have on the multiyear deal.
“It really depends on the rules that are levied down through PEO (program executive office) to the project office at the time, because they’re different every year,” he said, adding that he wouldn’t speculate on how long the CR will last.
The contract would cover production of 240 AH-64Es for the Army in fiscal years 2017 through 2021, and would contain options for foreign military sales. The Defense Department expects to save 10 percent through the multiyear when compared to single-year contracts, according to information from the Army’s program executive office for aviation.
Army Secretary John McHugh gave the go ahead to continue pursuing a multiyear contract this summer, Hager said. Since then, Boeing has submitted its proposal to the service, and the director of Cost Assessment and Program Evaluation (CAPE) is analyzing it.
The Army plans to obtain a total of 690 AH-64Es, a sum that includes remanufactured AH-64Ds and new aircraft from Boeing.
Starting in January, the company will begin producing AH-64Es with a package of hardware and software upgrades, including Link 16 connectivity that will allow pilots to share data with the other U.S. services and NATO. A second set of upgrades is slated to be inserted into production in January 2019, Hager said.
Boeing has delivered 217 “Echos,”including 87 for international customers, said Kim Smith, its vice president of attack helicopters. A roll-out of the first South Korean Apache is planned for November 2.
The company is in discussions with 10 countries–including current and new customers–about further sales of the AH-64E, said Mark Ballew, Boeing’s director of business development for attack helicopters . “We’re responding to written requests for four countries right now and are in conversations with the other ones.”
He estimated that those discussions will yield the sale or remanufacture of at least 75 AH-64Es, adding that “75 is actually probably a conservative number.”
Boeing in 2014 signed a letter of offer and acceptance with Qatar and is gauging whether to offer the Apache to Poland, which has a requirement for an armed reconnaissance aircraft, he said.