Seahawk cancellations threaten multi-year deal, Sikorsky warns

The US military’s budget request for fiscal year 2015 includes cuts to a number of aircraft programmes, but Sikorsky and analysts call one item unique – the proposed cancellation of orders for 29 MH-60R Seahawks under a multi-year contract. If approved by Congress, such a move would raise broad concerns about the surety of other contractors’ multi-year procurement deals, and affect orders for UH-60 Black Hawks from the US Army and some foreign partners under the same contract.

“An actual [multi-year procurement] cancellation would be unprecedented,” says Richard Aboulafia, vice president of Teal Group.  Aboulafia calls USN’s proposal a “game of chicken”, and “a plea to Congress to insert the cash.” But if Congress doesn’t blink, “the navy might well need to either re-instate the contract or pay high cancellation fees,” he says.