The Navy’s effort to establish a new multiyear deal for its growing fleet of MH-60S and R helicopters secured a key endorsement this week, with members of the Senate Armed Services Committee giving the sea service the go-ahead on the new buying plan.
In February, Pentagon acquisition executive Ashton Carter approved the Navy’s certification to begin the two new multiyear programs, which would guarantee production of the airframe and system components for the R and S versions of the aircraft.
Both new multiyear plans, if approved, would result in the production of 140 of the Lockheed Martin [LMT]- and Sikorsky [UTX] -built MH- 60Rs and 65 MH-60Ss in annual 24- and 18-aircraft block buys, respectively. The Pentagon and the services are aiming to secure congressional approval for that first tranche of MH- 60S and R buys in the department’s fiscal year 2012 budget plan.
The five-year multiyear plan, as outlined by members of the Senate Armed Services Committee, will cover the Navy versions of the MH-60R and S, as well as the UH-60 Black Hawk version fielded by the Army. “The committee believes the program continues to meet the criteria for multiyear procurement,” members wrote in a report accompanying their version of the fiscal year 2012 defense spending bill.
While panel members were supportive of the MYP for the H-60 fleet, they did express some concerns over the cost savings percentages produced by services and their industry counterparts in the preceding multiyear deal.
The previous deal, inked in 2007, only produced an average cost savings of four percent, compared to estimated costs for the helicopters, if they were procured as single year buys, according to the report. The understood cost savings goals for any approved MYP deal is roughly 10 percent. The fact that Navy and Army acquisition personnel were only able to squeeze four percent from the deal “is not encouraging,” lawmakers wrote.
“The committee expects that committing future [Pentagon] leaders, Congress and taxpayers to multiyear contracts is justified [only] by the substantial savings that would not be achieved by annual contracts,” the report states.
To ensure that expected 10 percent cost savings goal is met, committee members are requiring Army Secretary John MuHugh to provide Capitol Hill with annual updates on cost savings for the duration of the new multiyear H-60 deal, according to the legislation.
Those reviews will provide lawmakers information on “progress achieved in meeting or exceeding” the understood 10 percent cost savings threshold “used to justify granting this authority,” it adds.