In a rare demonstration of
decisiveness regarding failing procurement projects, the United States
Department of Defense has cancelled the ARH-70 helicopter. The cancellation was
justified by the 1981 Nunn-McCurdy law, which mandates a project be cancelled
if it goes more than 25 percent over budget, and a compelling case cannot be
made that the system is critical for national security. The ARH-70 is 70
percent over budget, there is little chance of the budget problems being fixed,
and the army has lots of helicopters that can do what the ARH-70 was designed
after two years of delays, and huge increases in costs. This cancellation is
nothing new, as the army has cancelled several too-expensive projects in the
last decade. This came despite manufacturers mustering their Congressional and
military allies to oppose such moves. The army told the ARH-70 manufacturer to
come up with a convincing rescue plan. No such plan was produced, and now
another helicopter manufacturer will get a shot at the contract.
The army was
supposed to get the first of its new ARH-70 scout helicopters by September,
2008. But over a year ago that slipped to sometime in 2010. It got worse. The
ARH-70 was supposed to cost $8-9 million each. That was the original 2005
estimate. But now the manufacturer, Bell Helicopter, wants over $12 million per
aircraft. The army originally wanted to buy 368 ARH-70s. But with the delays
and price increases, that number was sure to shrink.
The 2.8 ton
ARH-70A is a militarized Bell 407. The helicopter it is replacing, the OH-58D, itself
a militarized version of the older Bell 206. ARH stands for or armed
reconnaissance helicopter. ARH-70 has a max speed of 243 kilometers an hour,
and max range of 577 kilometers. It was supposed to be a straightforward
conversion. A new engine and tail assembly, plus adding a fire control and
weapons system similar to that installed in the OH-58D. But problems were
encountered, that took more time, and money, than Bell expected, to fix. If you
follow defense procurement, you've heard that many times before.
Kiowa Warrior has a top speed of 226 kilometers per hour, and a range of 241
kilometers. It has a mast-mounted sight, which carries a powerful FLIR (heat
sensing camera) and a laser designator. The OH-58D is lightly armed, and
usually only carries four Hellfire (anti-vehicle) or Stinger (anti-aircraft)
missiles, or 14 70mm unguided (or guided) rockets.
and price increases are attributed to the usual problems. The manufacturer
over-promised, and the army keeps adding new features to the fire control and
cockpit electronics. The manufacturer knows how this works, and has lawyers,
tech writers, Congressional lobbyists and public relations teams standing by to
come up with perfectly good, and legal, reasons for the delays and cost
increases. The military, and the taxpayers, usually relent and pay up. Not
always, but usually. Collective amnesia then sets in, and the process is
repeated endlessly. But in the last decade, that has begun to change.
Troublesome projects are increasingly at risk, and that acts as an incentive to
make things work.
Nunn-McCurdy law was intended to eliminate the overruns, but for over two
decades it did not, or at least not often. What is happening is that the military in general, and the army in
particular, is changing the rules. Some of that is coming from the public
becoming aware of the game, and forcing the politicians to back off from
supporting these bloated projects. The military appreciates this for other
reasons, primarily because a way over-budget project is often one that is not
performing up to spec either. This has also become more widely known, making
Nunn-McCurdy one of those rare procurement laws that have grown more effective
over the years.
was itself the result of the cancellation of the RAH-66 Comanche helicopter.
The army will now seek another new scout helicopter, while refurbishing and
upgrading some of the current 375 OH-58D scout helicopters in the meantime.
Whoever gets the new contract will probably be more successful, as they have no
doubt that the army will act if the project gets out of control.