Marines' H-1 Helicopter Woes Aired

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InsideDefense.com NewsStand | Christopher J. Castelli | May 30, 2006

When Pentagon officials meet this week to decide the fate of Bell Helicopter Textron’s troubled H-1 helicopter program, they will be under pressure from Capitol Hill to address not only this program’s particular concerns but also systemic problems that could affect Bell’s other rotorcraft programs, as well as helicopter programs managed by other contractors.

The H-1 program is supposed to provide both light utility (UH-1) and attack (AH-1) helicopters to the Marine Corps. But the program has experienced delayed deliveries and increasing costs, as the Senate Armed Services Committee recently noted in the report that accompanies its version of the fiscal year 2007 defense authorization bill.

Pentagon acquisition executive Kenneth Krieg is scheduled to decide whether to proceed with the program at a Defense Acquisition Board meeting May 31. Navy acquisition executive Delores Etter’s review of the H-1 program during a May 17 visit to Bell Helicopter Textron’s facility in Amarillo, TX, was “constructive,” according to the company (Inside the Navy, May 22, p1). Capt. Tom Van Leunen, Etter’s spokesman, said Etter plans to recommend a “way ahead” for the program, though he declined to speculate on the outcome of the meeting.

Last month, the Navy warned Bell that the H-1 program was in serious jeopardy because the Texas-based company has been failing to meet the department’s needs. The program has “multiple areas of concern that must be addressed in the near term,” wrote Steven Bizier, a contracting officer with Naval Air Systems Command (Inside the Navy, April 17, p1). His memo to the company indicated the Navy would reserve the option of killing the program because Bell has not adhered to existing contractual delivery schedules.

The memo demands “fundamental changes” in Bell’s management practices as well as production tools and processes. Further, the memo slams Bell for losing its accreditation in earned value management, one of the main methods contractors and government program managers use to track the performance of contractors working on major acquisition programs (ITN, April 3, p1).

Thomas Gelli, a spokesman for the Defense Contract Management Agency (DCMA), and Mike Cox, a spokesman for Bell, confirmed last week the company has not yet earned back its accreditation.

“We are in the very early stages of working on the areas needing attention,” said Cox. The process calls for Bell to submit a corrective action plan that DCMA must approve, he added. Once that is done, Bell will follow the plan to correct those areas that need fixing, he said. When Bell has “worked through the plan,” the company will ask DCMA to conduct another audit to evaluate its earned value management system, said Cox. Bell has not yet requested a new audit, he said.

The Senate report, issued this month, echoes concerns expressed in the Navy memo.

“These problems appear, at least in part, to have been caused by deficient cost control and cost accounting procedures by which the contractor manages the programs and through which Department of Defense acquisition officials can manage the government’s equities in the programs,” the Senate panel writes. “This raises concerns with the committee, since these same procedures have been used on other existing programs and could be used on future programs as well.”

Since the Marine Corps’ MV-22 Osprey, Special Operations Command’s CV-22 Osprey, the VH-71 presidential helicopter, and the Army’s Armed Reconnaissance Helicopter programs will all be acquired in whole or in part from Bell, the committee believes that DOD-wide attention should be focused on the corrective actions that are being proposed for restructuring the H-1 program, the panel writes.

Further, the Senate report urges Krieg to conduct a thorough review of the cost-control and cost-accounting procedures for helicopter acquisition programs of Bell and other helicopter prime contractors.

“We need to be sure that we are getting fair value for the billions of dollars that the taxpayer will be investing in the various helicopter acquisition programs in the current plan,” the Senate report states. The committee will reserve judgment on the plan to restructure the H-1 program until the Pentagon completes its review, according to the report.

This is the fourth time the H-1 program has required substantial changes to both cost and schedule while addressing numerous technical issues, according to the Navy memo issued last month.