US Department of Defense Cancels Bell Helicopter's ARH Contract

On Thursday 16 October the US Department of Defense released the following statement:

DoD Announces Non-Certification Of Armed Reconaissance Helicopter Program

Today, the Department of Defense notified the Congress and the contractor, Bell Helicopter, that it will not certify the U.S. Army Armed Reconnaissance Helicopter (ARH) program for continuation.
 
John Young, undersecretary of defense for acquisition, technology and logistics, in consultation with senior Defense and Army officials, has determined that the fundamental cost and schedule basis underlying award of the ARH contract is no longer valid.
 
The ARH contract was awarded for an expected development cost of $359 million and a procurement average unit cost of $8.56 million. Currently, DoD estimates that development will cost $942 million and the procurement average unit cost will be $14.48 million. Delivery of ARH to the Army was originally scheduled to take place by 2009, but the current projection is for 2013.
 
“Rather than continue this program”, Young said, “I have decided that the best course of action is to provide the Army with an opportunity to define a coherent, disciplined Kiowa Warrior helicopter replacement program, and to obtain more rigorous contract terms for its development.”
 
Secretary of the Army Pete Geren stated, “The cost and schedule that were the focus of the decision to award the contract to Bell Helicopter are no longer valid. We have a duty to the Army and the taxpayer to move ahead with an alternative course of action to meet this critical capability for our Soldiers at the best price and as soon as possible.”

Later the same day Bell Helicopter issued its own statement:

BELL STATEMENT ON ARH TERMINATION ANNOUNCEMENT

We were notified late today by DoD and the U.S. Army that the Armed Reconnaissance Helicopter (ARH) program has been terminated for convenience. 

We are extremely disappointed by this decision and still believe that the ARH-70A is the best replacement for the Kiowa Warrior.  The ARH System Development and Demonstration (SDD) contract test aircraft have already accumulated over 1,400 flight hours and have accomplished several important program milestones.

The ARH has proven to be a great performing aircraft and we are in the process of evaluating the impact of this decision and our next steps.

Bell Helicopter will continue to work closely with the U.S. Army to support the Kiowa Warrior as it continues to be a critical weapons system engaged in combat in two conflicts.

Joseph LaMarca Jr., Senior Vice President Communications, Bell Helicopter Textron