The Navy has awarded a $2 billion contract that will run into 2020 to provide spares and repair parts for the service fleet of more than 500 MH-60 Seahawk helicopters.
The contract was awarded to Maritime Helicopter Support Company (MHSCo), a joint venture between Lockheed Martin [LMT] and Sikorsky, a division of United Technologies [UTX]. Lockheed Martin supplies the avionics for the Seahawks, while Sikorsky is the airframe maker.
The venture was formed on a performance-based model, which pays it for every hour the MH-60s are in the air, incentivizing the two companies to find efficient processes to keep the aircraft flying.
MHSCo officials in January suggested the contract award would soon be coming pending some final negotiations.
The contract covers repair, modification, overhaul and replacement of hardware, including manufacturing of new material, as well as storage, requisition processing, obsolescence management and reliability improvement through January 2020, according to the Navy’s contract award.
Rod Skotty, president of MHSCo who came over from Lockheed Martin, and George Mitchell, vice president of defense aircraft and support at Sikorsky, told reporters March 2 that the award shows the value of performance-based models.
The two firms created MHSCo in 2004 to manage the supplies, spare parts and repairs for the aircraft. Since forming, the partnership has received about $2.6 billion in contracts, including for the sustainment of Australia’s fleet of MH-60s, Skotty has previously said.
Mitchell said Sikorsky is looking to work with the Army on a similar type of arrangement for the support of Black Hawk Helicopters.