United Technologies Wins U.S. Air Force Chopper Contract

United Technologies Corp. (UTX) won a $1.28 billion contract from the U.S. Air Force for combat rescue helicopters that will replace an aging fleet.

The agreement with the company’s Sikorsky division has an estimated value of as much as $7.9 billion if all options are exercised, the Pentagon said yesterday. It will probably include about 112 new choppers.

This is Sikorsky’s second major chopper contract from the military in less than two months. The Pentagon awarded the company a $1.24 billion agreement in May for helicopters to ferry the president and executive branch officials. Sikorsky was the sole bidder in both cases.

The contract for combat rescue helicopters first went to Boeing Co. (BA) in 2006. It was delayed by protests from United Technologies’ Sikorsky division and Lockheed Martin Corp. (LMT), once competitors on the project and now teammates.

The helicopter, a modified version of the Black Hawk, is intended to rescue pilots downed during missions. It also would perform civil search and rescue, humanitarian missions, disaster relief and casualty evacuation. The current HH-60 Pave Hawk entered service in 1982 and is also made by Sikorsky.

“Since 1943, Sikorsky has proudly provided the combat rescue helicopter platform to enable the Air Force to perform one of its most important and sacred missions -- bringing our downed service members home safely,” Sikorsky President Mick Maurer said in a statement. “I’m tremendously pleased that we will continue to do so for years to come.”

Program Delays

In yesterday’s announcement, the Air Force said it obligated, or promised, about $298 million in funds at the time of the award. Work will be performed in Stratford, Connecticut, and the contract set to end in June 2029.

The Pentagon included no funding for the helicopter in its budget request for the next fiscal year, saying the program would be delayed because of federal spending constraints.

In March, the Air Force reversed itself, saying it expected to award the contract by the end of June.

United Technologies, based in Hartford, Connecticut, and Bethesda, Maryland-based Lockheed competed separately when the Air Force first sought bids in 2005. They successfully challenged the initial award to Boeing before the U.S. Government Accountability Office, which arbitrates contract disputes.

Lockheed will provide defensive systems, computers, weather sensors and other equipment for the helicopters.

Congressional Allies

The program had many friends in Congress. More than 70 House members from both parties signed a letter to Defense Secretary Chuck Hagel in December urging its inclusion in the Pentagon budget.

In separate letters in October and November, 15 lawmakers urged leaders of the Senate and House Appropriations defense subcommittees to put helicopter funding in the final spending bill for the current fiscal year. More than $300 million was in the legislation.

“The combat rescue helicopters are critical life-saving assets that the Air Force has needed for years to replace its current fleet of worn-down aircraft,” Representative Rosa DeLauro, a Connecticut Democrat who helped draft the December congressional letter, said in March.

To contact the reporters on this story: Tony Capaccio in Washington at acapaccio@bloomberg.net; Jonathan D. Salant in Washington at jsalant@bloomberg.net

To contact the editors responsible for this story: Stephanie Stoughton at sstoughton@bloomberg.net; John Walcott at jwalcott9@bloomberg.net Justin Blum

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