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Competition, Not Closed Process, Will Deliver Best Air Force Chopper

by Pete Sepp / /

The Honorable Mac Thornberry, Chairman
The Honorable Adam Smith, Ranking Member
Committee on Armed Services
United States House of Representatives
Washington, DC 20515 

Dear Chairman Thornberry, Ranking Member Smith, and Members of the Committee:

As you embark upon the complex task of drafting the Fiscal Year 2017 National Defense Authorization Act, you will encounter numerous issues with a deep, long-term impact on national security. A vital consideration underlying all these issues is a fiscally responsible, results-driven approach to setting program priorities. Accordingly, National Taxpayers Union (NTU) urges you to maximize every possible opportunity for exercising prudent oversight in systems procurement. One such opportunity we wish to bring to the Committee’s attention relates to the Air Force’s current UH-1N Twin Huey Replacement effort, whose roots grew from the Common Vertical Lift Support Platform (CVLSP).

NTU and its thousands of members across the United States are concerned over reports last month that senior Air Force planners were considering a sole-source procurement under the Economy Act to furnish the service with rotorcraft whose primary mission is national security related. Our concerns are compounded by a February 26 letter signed by 15 of your colleagues urging the Committee to “direct the U.S. Air Force to purchase UH-60M Black Hawk Helicopters from the U.S. Army’s current block buy grant.”

As we explained in a letter to your colleagues on the Senate Armed Services Committee five years ago, since its founding NTU has been involved in a plethora of discussions over defense purchasing policies, lately including the F-35 program, the Littoral Combat Ship, and the Sea-Based Deterrence Fund. In all of these cases, our motivation has been to advocate on behalf of obtaining the best possible value to taxpayers as well as Americans in uniform. Just as we stated in 2011 with CVLSP, NTU believes that a vigorous competition for the Twin Huey Replacement now, under properly defined mission requirements, will deliver this value. Furthermore, we believe that with your leadership, such a process can furnish a suitable system to the Air Force in an expeditious timeframe.

The Competition in Contracting Act specifically forbids sole-source procurements in cases where the agency’s own disregard for proper advance planning created the self-justification for such awards. Based on this provision, it is difficult to conceive of a clearer instance where sole-sourcing should not be allowed than with the Twin Huey Replacement. The Air Force originally purchased the UH-1Ns in 1969, the year National Taxpayers Union was founded. Nearly 10 years before the latest urgency driving a new procurement – the Huey’s poor performance during a nuclear security exercise in 2015 – the Air Force proposed the CVLSP program because the existing UH-1N fleet was rated “not effective.” In 2011, amid various and sometimes conflicting pronouncements from Air Force officials over whether or not a competition would occur, NTU called upon lawmakers to move ahead with a compact, straightforward bidding process that would “fast-track” CVLSP. Instead, the program was terminated in 2013.

The irony here is not lost on taxpayers, few of whom are experts in military contracting; thus it should certainly not escape Members of this Committee.  Had the Air Force avoided this tortuous chain of events and instead worked with Congress in a consistent manner– prior to 2013 – to conduct a competitive procurement for the UH-1N Replacement, the Air Force would have a capable fleet fully in service or phasing into service now.  With four decades of experience engaging in military funding issues, NTU and its staff believe a properly structured competitive process will still produce the best outcome for our service people, as well as for taxpayers.  The points our organization made in support of fair and open competition in 2011 hold true today, perhaps more so given the financial challenges facing the defense budget:

  • Numerous options are available that may meet or exceed a reasonable UH-1N Replacement requirement. Several firms, including Bell, Airbus, and AgustaWestland offer robust aircraft that are proven in a variety of commercial, military, and security missions under challenging conditions. The capability advantages of these aircraft over the legacy platform are considerable and include dramatically improved speed, range, power-to-weight ratio, environmental footprint, flight handling, defensive systems, survivability, and all-weather performance.

  • As for the procurement and total-life-cycle costs, the advantages of competition should be obvious.  The acquisition cost alone for a significantly larger asset such as the UH-60M could exceed $1 billion, along with billions more in operations and maintenance expenses.  It has been reported that the cost of a UH-60M may be twice as much as other suitable options to procure and three times as much to operate. Lawmakers should bear in mind that in this scenario the UH-60M, a combat aircraft, would be performing a non-deployable mission within the continental U.S. Competition could answer the question of whether such a purchase is “overkill.”

  • Not surprisingly, each company, including Sikorsky, claims that its systems provide significant benefits for the customer and for taxpayers. The “discovery process” afforded by competitive bidding will allow for a proper evaluation of the technical capabilities of the bidders, along with a more complete picture of the fiscal implications of each offering.  Assertions that economies of scale and common supply chains offer cost advantages can be properly evaluated against sound accounting principles and budgeting models.

  • Finally, one persistent problem NTU has observed with defense programs is “mission creep by design,” whereby an initial requirement is retooled through the input of numerous parties to become fulfillable only through a limited number of platforms (sometimes just one). This can stifle creative solutions – among them adaptations of off-the-shelf commercial designs – that could answer the services’ purposes more nimbly and cost-effectively. Competitively bidding the UH-1N Replacement, guided by an RFP that is rightsized to the mission rather than a preconceived system, could prompt desperately-needed reforms to the way the military fulfills its needs.

Although the CVLSP and Twin Huey Replacement initiatives have so far not served as paragons of procurement reform, there is still time to correct the mistakes of the past. In late 2015, before last month’s speculation from Air Force officials that part of the UH-1N Replacement might be conducted on a sole-source basis, the service announced it was developing a capabilities request for rotorcraft that would be “off-the-shelf.” Congress and the Pentagon should follow through on this step with vigor now. The result will chart a militarily and fiscally prudent course for other programs to emulate, at a time when a paradigm shift in procurement strategies is imperative.

In March, the Congressional Budget Office reported that the pause in rising federal deficits will be more brief and shallow than projected just seven months ago, and will resume a trillion-dollar trajectory within five fiscal years. In this alarming environment, the warning from former Joint Chiefs Chairman Admiral Mullen that the national debt is a security threat to the United States seems all the more prophetic. Likewise, his advice to “steward every dollar that we have” seems all the more preeminent. For these reasons, the UH-1N Replacement should serve as an example of sound management rather than a failure of sensible oversight, and NTU stands ready to assist you in reaching this goal. 

Sincerely,

Pete Sepp
President