Captain Cate Mueller, another Navy spokeswoman, said the Navy planned to award a fixed-price contract with an incentive fee for the development program, moving to fixed-price terms for low rate initial production and full production.
She said the new program was structured to emphasize “affordability, cost control and risk reduction in balance with system performance,” before any major contracts are awarded.
The Navy included $1.85 billion for the program in its budget request for fiscal 2013 through 2017, with funding to increase $61.2 million the first year to $687.7 million in fiscal 2017.
The Navy’s new procurement program comes as weapons companies brace for additional cuts in defense spending, regardless of whether Congress is able to avert $500 billion in reductions that are due to start taking effect in January.
Congressional aides said the Navy’s plan to slowly ramp up funding for the program could ensure its survival, even if some additional cuts are imposed on the Pentagon as part of a compromise to avoid the full brunt of the cuts now planned.
Burdick said the first helicopters built under the previous Lockheed program were sold to Canada, while some additional parts were sold to Denmark.
It was not immediately clear how much money was raised by the sales, but the Navy had planned to use the funds to defray the termination costs it owed Lockheed for cancelling the program.