- The Washington Times - Friday, January 28, 2005

Lockheed Martin yesterday won a $1.7 billion contract to build a new fleet of presidential helicopters, a prestigious award for the Bethesda defense contractor and its European partners, who will make part of the aircraft.

“This decision truly reflects the best value and capability for the American taxpayer who is funding it, the Marines who will operate it and the future presidents who will fly in it,” said John Young, the Navy’s assistant secretary for research, development and acquisitions.

Mr. Young said the total Marine One development and acquisition cost would be $6.1 billion for 23 helicopters, with the first scheduled for delivery in October 2009.

Lockheed Martin and Sikorsky Aircraft, based in Stratford, Conn., had battled fiercely for the contract to build Marine One, the designation given to helicopters used to transport presidents since Dwight D. Eisenhower.

The companies brought widely different approaches to the project.

Sikorsky, owned by United Technologies, emphasized a tradition of helicopter manufacturing — it built the current, aging Marine One fleet — and work with American subcontractors to give the aircraft an “all-American” label.

Lockheed Martin, which does not manufacture helicopters, brokered a trans-Atlantic partnership that coupled its high-tech electronic systems with a European-made platform to create the US101. The European partner is AgustaWestland, a company with operations in Italy and Britain, two of the United States’ closer allies.

Because of the different approaches and partners, the Navy’s decision has been closely watched by politicians on both sides of the Atlantic, all keenly aware that the U.S. taxpayer dollars would help support defense jobs wherever the funds are spent.

Sen. Joe Lieberman, Connecticut Democrat, said the Navy’s decision was “outrageously wrong.”

“As I said from day one, our commander-in-chief should fly in the very best helicopter made in America — and the only one that meets that standard was Sikorsky’s,” Mr. Lieberman said, adding that he would work to “right this wrong.”

Pentagon officials yesterday said that initially about one-third of the US101 would be built in Europe, including the fuselage and rotor blades in Britain and gearboxes in Italy.

But the bulk of work will be in the United States. AgustaWestland’s U.S. offices are in Reston. Lockheed Martin’s Systems Integration unit, which put the deal together, is based in Owego, N.Y., and Bell Helicopter, another partner, is based in Texas. Dozens of companies, from Maine to California, are tapped as suppliers.

In the end, the Navy said it based its decision strictly on technical merits, not political considerations. Lockheed’s product required less work to meet Pentagon specifications, making it more economical, Mr. Young said. “There are no political influences in this,” he said.

Lockheed and its partners celebrated the decision.

“We are honored that trust has been placed in Lockheed Martin and Team US101 for this vital and highly visible mission,” said Robert J. Stevens, chief executive officer of Lockheed Martin.

“We are confident that the US101 will provide the best capability for the president,” said Pier Francesco Guarguaglini, chairman and chief executive of Finmeccanica, AgustaWestland’s parent company.

Defense analysts said the Navy’s decision may encourage European companies looking to break into U.S. contracting.

“For Lockheed Martin it’s an important statement about globalization and about systems integration,” said Richard Aboulafia, a defense analyst at the Teal Group. “It also reinforces the two-way street message” that European programs can compete for Pentagon contracts.

The decision also will allow the companies to research and develop new helicopter technology on the government’s dime, opening the door to even more lucrative defense contracts in the future. Both Lockheed and Sikorsky are eyeing a pending Air Force acquisition of search-and-rescue helicopters, valued at roughly $6 billion.

Sikorsky yesterday said its helicopter was the better product.

“Sikorsky and our all-American supplier team are disappointed with this outcome,” said Stephen N. Finger, president of Sikorsky Aircraft.

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