A Lockheed Martin and Sikorsky joint venture will expand support of more than 500 naval H-60 helicopters under a $2 billion, five-year contract renewal awarded on 27 February, the companies say.

The latest renewal extends the Maritime Helicopter Support Company's (MHSCo) performance-based logistics contract with the navy through 2019, as the navy transitions to a fleet of only MH-60R and MH-60S anti-submarine warfare and maritime patrol variants.

As the fleet consolidates to a larger overall number of the two models, MHSCo’s contract will expand to cover more than 1,700 parts compared to 1,266 under the new deal.

Although other performance-based support contracts have come under fire due to concerns about excessive profits, Lockheed and Sikorsky officials say the MHSCo deal should serve as a new model for such contracts.

Starting in 2010, MHSCo incorporated provisions that allow the government to split the profits on parts that did not need to be repaired or replaced as often as forecasted. MHSCo also has agreed to provide visibility into the company’s costs to the navy officials.

“We believe that it served a very good function to demonstrate to the government that they are getting excellent value for the money they are spending,” says Rod Skotty, president of MHSCo. “Other [contractors] chose not to follow suit and they suffered the consequences as a result.”

Source: FlightGlobal.com