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U.S. Navy Renews Successful Helicopter Logistics Program with $1.4B Follow-on Contract

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U.S. Navy Renews Successful Helicopter Logistics Program with $1.4B Follow-on Contract

January 20, 2011

  Woodbridge, Virginia - The Maritime Helicopter Support Company, a joint venture of Lockheed Martin [NYSE: LMT] and Sikorsky Aircraft Corporation, a subsidiary of United Technologies Corp. [NYSE: UTX], has received a $1.4 billion firm fixed price contract from the U.S. Navy to continue providing performance-based logistics support for more than 490 in-service H-60 SEAHAWK® helicopters.

The contract requires the Maritime Helicopter Support Company (MHSCo) to manage the supply chain and provide as-needed repair of more than 1,250 aircraft components and subsystems for the Navy’s H-60 Tip-to-Tail performance-based logistics (PBL) program. Supported aircraft include Navy SH-60B, SH-60F, HH-60H, MH-60R and MH-60S helicopters, Coast Guard HH-60J helicopters and other H-60 aircraft operated by customers of the Navy’s Foreign Military Sales program.

Sikorsky’s aftermarket support company Sikorsky Aerospace Services, Shelton, Conn., and Lockheed Martin Mission Systems and Sensors, Owego, NY, will fulfill the contract through January 31, 2015. The H-60 Tip-to-Tail PBL program will enable the Navy/MHSCo team to continue the accomplishments achieved under the initial five-year contract awarded in January 2004. Today, the program is among the largest of its kind for a fully functional aircraft fleet.

“H-60 Tip-to-Tail is recognized as one of the U.S. Navy’s most successful PBL programs,” said RADM Raymond Berube, commander, Naval Inventory Control Point in Philadelphia, which procures, manages, and supplies spare parts for naval aircraft, submarines and ships worldwide. “By meeting the Navy’s rigorous on-time parts delivery requirements, MHSCo has set a high standard of support that has had a very positive effect on H-60 flight operations.”

Performance-based logistics programs incentivize the contractor to meet measurable performance goals as the criteria for payment. In 2004, by applying commercial best practices across the supply chain, MHSCo quickly boosted delivery of replacement parts and assemblies to the fleet by 25 percent.

“Over the past seven years, MHSCo has consistently exceeded contract requirements, and enhanced the customer’s fleet readiness, by improving the availability and reliability of H-60 materiel and providing effective inventory control and materiel obsolescence management,” said David Adler, president of Sikorsky Aerospace Services. “This follow-on contract will enable MHSCo to continue to provide the maximum value and the highest service levels to the U.S. Government, the taxpayer and the warfighter.”

“Last September, Defense Secretary Robert Gates asked industry to reduce lifecycle costs and improve performance,” said Dan Schultz, vice president and general manager, Lockheed Martin Ship & Aviation Systems. “Through MHSCo, our two companies have shown that performance based logistics, properly implemented, can achieve those goals.”

Headquartered in Bethesda, Md., Lockheed Martin is a global security company that employs about 133,000 people worldwide and is principally engaged in the research, design, development, manufacture, integration and sustainment of advanced technology systems, products and services. The Corporation reported 2009 sales of $44.0 billion.

Sikorsky Aircraft Corp., based in Stratford, Conn., is a world leader in helicopter design, manufacture and service. Its Sikorsky Aerospace Services business designs and applies advanced logistics and supply chain solutions for commercial rotary, military rotary and fixed wing operators. United Technologies Corp., based in Hartford, Conn., provides a broad range of high technology products and support services to the aerospace and building systems industries worldwide.

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