Army's choice of Apache, Lakota is not merely about dollars and cents
With the ink still fresh on the Army's aviation restructuring, questions are already surfacing about the assumptions behind a proposal to retire the Bell OH-58D and TH-67 fleets in the next five years.
The idea was quickly crafted late last year to reduce the cost of Army aviation due to sequestration and belt-tightening as the war in Afghanistan winds down. Army officials say they plan to shift all of theAH-64Es from the Army Guard into active duty and some into the armed reconnaissance role. New Group UH-72s would assume the training mission (AW&ST Jan. 20, p. 22).
The Army cites a few justifications. First is the pressure to reduce cost. Another is the advanced age of the retiring aircraft. Finally, the service chose fewer fleets of like helicopters to help streamline maintenance and support. “In the aggregate, we are ultimately going to end up saving money. . . . We are not going to be able to deliver anything new; we are just going to have to employ the stuff we have better,” said Maj. Gen. Kevin Mangum, commander of the Army Aviation Center of Excellence, at an Army conference this month. But he did not say how much would be saved, nor over what length of time.
Although money was clearly a driving factor, it may not have been of paramount concern in this case. The Army's decision to retain its highly capable, twin-engine Apaches and Lakotas over the single-engine OH-58A/C/Ds and TH-67s reflects a move toward a more uniform fleet consisting of the most capable, multirole options already in their planning.
In a way, the Army is taking a page from the Air Force's playbook in choosing multirole assets designed for the most complex role—as is the case with the Apache for attack—but showing a willingness to use them in less-demanding missions. The alternative is to continue supporting two dissimilar fleets at a higher total cost. This mirrors the Air Force and Marine strategy of pushing theinto a multirole mission set; though optimized for stealthy incursions into hostile airspace, the aircraft most likely will be used for more mundane roles, such as interdiction and ground-support.
The issue of savings depends on assumptions and on what cost is “sunk” versus what is left to be paid. Still, the restructuring ultimately, is about what the Army values in terms of capabilities. And there is a value in preserving future developments; trimming down procurement accounts could allow the service to keep the Joint Multirole Program, which will eventually lead to a next-generation Apache and.
Skeptics of the Army's plan are already asking questions, and dissension on Capitol Hill could leave the service in a bind. Terminating a fleet is never easy. With jobs and missions at stake in home districts, the ante is high. The Army could find itself struggling to justify its plans, much like the Air Force, which proposed terminating itsBlock 30 two years ago and still has not made headway (AW&ST Jan. 20, p. 24).
On Jan. 16, eight members of Congress held a special session of speeches outlining the need to retain resources for the Army Guard and blasting the shift of Apaches into active duty (though they would be backfilled by Black Hawks). This is a “process that has lacked transparency, a process that has lacked deliberation,” said Rep. Scott Perry (R-Pa.), who headed the group.
Army leaders cite a cost avoidance of $6.9 billion for a service-life-extension (SLEP) program for the OH-58D Kiowa Warrior; this comes on top of $1.3 billion for a cockpit upgrade that is nearly one-third complete. Together, an Army official says, the OH-58A/C/D and TH-67 retirements could avoid $1 billion annually in operating cost. The Army declined to outline what specific items are in the $6.9 billion figure, and they did not break down the $1 billion. Skeptics wonder whether this is a true cost avoidance, or simply a choice of what to spend money on, as neither program reflects the total sunk cost. The service foresees spending at least $500 million annually in Apache procurement alone; and leaders are adamant to buy the full program of 690 of the helicopters.
But looking solely at cost—not capability—the Apache is a more expensive choice for the armed reconnaissance role as explained in an October 2013 study penned by consulting firm LMI; it was commissioned by Bell.
LMI says thecosts an additional $222,000 per aircraft to maintain annually. Kiowa's fuel consumption is lower, owing largely to its single-engine design. And it is deployable by as well as by C-5s and that typically transport the Apache. This, coupled with a smaller deployment footprint, contribute to an estimated $2.8 million less to deploy a squadron of Kiowas to South Korea and $2 million less to Afghanistan, according to the study.
The $6.9 billion is associated with a notional service-life-extension program. This would amount to $18.9 million apiece for all 368 Kiowas; less than half of what is actually required for such a job, according to industry sources. A new-build OH-58D would cost about $7.5 million, they say.
The SLEP was envisioned to include replacement of the most troublesome parts. Already, the Cockpit and Sensor Upgrade Program is addressing the most maintenance-hungry design feature of the helicopter; the mast-mounted sight is being repositioned to a place under the nose, reducing stress on the equipment. The Army has two developmental upgraded OH-58Fs. Another is undergoing load testing.
Although the Army would incur bills to sustain the Kiowa fleet, it also has billions yet to pay for its Apaches. Service officials refused to discuss the projected per-unit Apache cost; Boeing also declined to supply a breakdown. However, the fiscal 2013 and 2014 documents show a rough per-unit cost for remanufactured builds of $17-18 million, with a single new build coming in at about $37.1 million.
So a comparison of the per-unit cost of an AH-64E to a notional $18.9 million Kiowa upgrade would tilt planners toward spending the same money for more capability; but industry sources site a much lower actual cost for the Kiowa work.
Fifty AH-64Es, all remanufactured Ds, have been delivered to the Army, says Boeing spokeswoman Carole Thompson.
Meanwhile, the Army has cited cost avoidance by cutting short a SLEP for the TH-67. Bell has applied the SLEP to 52 of 181 aircraft. With an estimate of $1 million per tail, industry officials say, the company will deliver at about $250,000 per aircraft less than that.
Unlike with the Apache/Kiowa decision, the cost for the UH-72 is largely already sunk. Airbus has delivered 290 Lakotas of 304 on contract, and the Army expects to buy 20 in fiscal 2014; the program total is 345.