WASHINGTON, March 26 (UPI) -- Bell Helicopter has 30 days to turn around a troubled Army helicopter program or lose the contract, a U.S. Army official said.
The Armed Reconnaissance Helicopter in intended to be a low-cost upgrade of the 407 commercial helicopter built by Bell with additional sensors and avionics. It is meant to replace the OH-58D Kiowa Warrior.
At a target price of $5.2 million per aircraft, the ARH takes the place of the $14.6 billion Comanche helicopter which was cancelled in 2004.
Brig. Gen. Stephen Mundt, the Army's aviation director, said the latest information from the company shows it will cost between $9 million and $10 million per aircraft, an unacceptable price.
The Army has given Bell a month to scrub the program to see if it can find way to reduce the price without compromising the capabilities of the aircraft. If it cannot, one of the options is to terminate the contract.
The contract could be worth $4.7 billion for 512 aircraft.
Mundt said the Bell price jump caught the Army by surprise.
"A bunch of us got blindsided," he said.
Mundt said he was confident that Bell would not face any technical issues integrating new sensors and weapons into the aircraft. The problem was in the manufacturing process. He said he hoped Bell would revise its procedures to bring down the cost.
"We don't want anyone to think we've turned our back on Bell," Mundt said.
