June 13, 2013
The Pentagon has finally signed a $6.5 billion, five-year deal with Bell-Boeing for the next 99 V-22 tiltrotors — 92 MV-22s used by the Marine Corps and seven CV-22s for U.S. Air Force special operations forces.
The deal covers five years of work through fiscal 2017 and will save $1 billion compared to buying the 99 aircraft in annual procurements, according to program officials. This savings figure is up from a target of $850 million espoused last year by the V-22’s program manager, Marine Corps Col. Gregory Masiello.
The actual contract announcement, released June 12, includes a total value of more than $4.9 billion for the second multiyear procurement. The total value adds up to closer to $6.5 billion, however, because the Pentagon issued a contract Dec. 28 to the Bell-Boeing team to bridge production operations pending approval of the full multiyear deal. That contract was valued at $1.4 billion.
The first V-22 multiyear procurement was originally valued at about $10.4 billion for 167 V-22s; it was later modified to add five CV-22 orders and another two MV-22s.
Though the V-22 provides a rotorcraft’s vertical takeoff and landing flexibility combined with enhanced speed, its high cost has always been troublesome for the program. Program officials said early in the project they hoped to reduce the per-unit price to $58 million, though the aircraft in 2012 still cost $67 million apiece, including the Rolls-Royce engines.
Officials at Naval Air Systems Command did not return calls about the target unit cost in this second multiyear deal.
Though Bell-Boeing officials have long been optimistic on a possible sale of the aircraft to the United Arab Emirates, there has been no firm commitment. Defense Secretary Chuck Hagel has promised 17 of the tiltrotors to Israel, though it remains unclear in which lot they will be purchased or when a firm contract will be crafted.