An arbitration tribunal has cleared MD Helicopters to continue bidding for a US Army helicopter contract and overruled legal objections from competitor and one-time partner Boeing.

The ruling by a Phoenix-based arbitration panel means MD Helicopters can offer the MD540F light helicopter to the army for the Armed Aerial Scout (AAS) deal, according to court documents filed by the company. Arbitration was necessary because Boeing had objected to MD Helicopters' bid.

In 2005, Boeing and MD Helicopters had agreed to offer the Mission Enhanced Little Bird (MELB) based on the MD530 for the armed reconnaissance helicopter (ARH) programme. Boeing lost the contract to a bid based on the Bell Helicopter 407, but in 2008, the army cancelled Bell's contract due to spiraling costs and schedule delays. Meanwhile, the service continues to fly a fleet of about 340 Bell OH-58D Kiowa Warriors that the ARH programme had been intended to replace.

In 2011, the army launched the AAS programme, drawing bids based on the AgustaWestland AW169, Bell OH-58F Block II, Boeing AH-6i, EADS North America AAS-72X/X+, MD Helicopters MD540F and Sikorsky S-97 Raider. A year later, however, Boeing informed MD Helicopters that it could not submit a bid for the AAS contract, based on the companies' previous agreement on the ARH programme, according to court documents.

MD Helicopters appealed Boeing's challenge to an arbitrator, arguing that it was using an overly broad interpretation of the 2005 agreement. In MD Helicopters' view, the agreement only covered progammes involving the MD530F airframe and the MELB kit. The arbitration panel recently sided with MD Helicopters, the court documents say.

The meaning of MD Helicopters' legal victory is difficult to gauge, however. The army still has not committed to launching an acquisition programme for the AAS, as it still considering relying on modernized OH-58F Block 1s.

In May, Lt Gen William Phillips, principal military deputy to the army's acquisition and logistics chief, testified in Congress that the army would make a decision on AAS in the third quarter of 2013. The army's programme executive office for aviation confirmed on 23 July that no decision had yet been made.

Source: Flight International