Bell Helicopter is working on a recovery plan for the ARH-70A Armed Reconnaissance Helicopter after being ordered to stop work on the programme by the US Army, concerned by the spiralling costs and development delays.
The stop-work order was issued last week after a special Army Systems Acquisition Review Council meeting that decided not to cancel the programme, but to give Bell 30 days "to describe a strategy to maximise contract performance while minimising the negative cost and schedule impact on the government", says the army. "We are assembling all the people to develop the best path forward," says Bell.
Cost estimates for system development and demonstration (SDD) and low-rate initial production (LRIP) have grown by more than 50%, says the US Army, while the date for the first unit to be equipped has slipped from September 2008 to December 2009. Bell was awarded a $210 million development contract in July 2004, but the army says the estimate for completion of SDD is now more than $300 million.
The date for the first unit to be shipped has slipped by over a year
The army also has firm fixed-priced options of the first two LRIP lots, and Bell has warned it will lose money on these helicopters unless it can renegotiate the price. "We are not in negotiation with Bell on the price," says the army, which originally planned to buy 368 ARHs, but recently increased this to 512 to include the National Guard.
Bell blames design changes for the delays, and the company recently cancelled the Model 417 commercial version of the ARH. The third flight-test ARH-70 crashed on its 21 February first flight when its engine lost power, possibly because of fuel starvation.