Lockheed's Troubled Helicopter Making Progress, Gets $79 Million

(Bloomberg) -- Lockheed Martin Corp.’s troubled $31 billion Marine Corps helicopter program has demonstrated enough progress overcoming technical problems that it warrants receiving previously withheld research dollars, according to top lawmakers on the House Armed Services Committee.

Committee Chairman Adam Smith and ranking Republican Mac Thornberry wrote then-Acting Deputy Secretary of Defense David Norquist on July 17 that they agreed to free up $79 million for the CH-53K helicopter, known as the King Stallion. Their letter came two days after a Pentagon briefing on the copter’s progress.

“The committee is satisfied both with the Department of Navy’s actions to address program deficiencies and with the independent assessment” provided by Robert Behler, the Pentagon’s director of operational testing, they said in the letter. “The committee expects to see continued progress on technical deficiency correction.”

In April, Smith turned down a Navy request to shift $158 million to correct flaws with the King Stallion, agreeing to move only half that amount from other programs. The shift was approved by the three other congressional defense panels, but one committee can block action.

Gas Intake

Smith, a Democrat from Washington state, said he was blocking the remaining $79 million until the Pentagon’s test office provided a report about what progress was being made to solve the heavy lift helicopter’s most serious technical problem -- the ingestion of exhaust gas back into one of the aircraft’s three engines.

Lockheed’s CH-53K program director, Bill Falk, said in an email that “this approval demonstrates the continued confidence the legislative branch and the U.S. Marine Corps have” in the company’s ability to deliver.

The copter “continues to make positive progress on addressing the open technical issues, including engine gas re-ingestion,” Lieutenant Colonel Michael Andrews, a spokesman for Pentagon acquisitions chief Ellen Lord, said in an email.

The extra $79 million “will be used to facilitate continued development, testing and program progress towards correcting technical issues,” said Colonel Jack Perrin, the program manager. Perrin said the Navy was “executing well” on a restructured acquisition plan designed to put more pressure on Lockheed to resolve technical problems.

Two Years Late

Perrin said the program is on track to meet a late 2021 date for an initial operational capability, about two years later than a planned December declaration. An update to the schedule will come later this summer, he added.

The Naval Air Systems Command acknowledged in April that the helicopter wouldn’t meet the December 2019 target date. The roster of unresolved technical deficiencies grew to 106 items from about 94 logged in December, according to Navy documents.

Lockheed’s Rotary and Mission Systems unit this year received a $1.1 billion contract for 12 CH-53K low-rate initial production helicopters, part of a planned 200-aircraft program.

“We anticipate production will continue beyond the 2030 time frame providing long-term growth opportunities, well into the future,” Marillyn Hewson, chief executive officer of Bethesda, Maryland-based Lockheed told analysts Tuesday.

But that sustained growth depends on the helicopter being assessed as “operationally effective” and “operationally suitable” during rigorous combat testing that was supposed to have commenced this year but instead has been delayed until May 2021, according to the Government Accountability Office.

“Program officials stated that all technical problems likely will not be addressed before operational testing begins,” the GAO said in the April report. One previously undisclosed problem: “a failure in the software to detect the transition from ground to flight causing increased safety concerns,” GAO said.

To contact the reporter on this story: Tony Capaccio in Washington at acapaccio@bloomberg.net

To contact the editors responsible for this story: Bill Faries at wfaries@bloomberg.net, Larry Liebert

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