V-22 Opsrey Foreign Military Sales
|Israel||2014||6 + 6 ??|
|Japan||2014||17 + 23?|
The V-22's price as of 2006 was $69.9 million, but the Bell-Boeing joint venture and the Pentagon office that runs the program pledged to get the cost down to $58 million by 2009. In 2013 the V-22 program landed a commitment from the Pentagon for a $6.5 billion, five-year multi-year contract for 99 Ospreys, with an average unit price of $70 million.
Annual US military helicopter demand fell from 370 aircraft in 1985 to 90 by 1996. In response to the constrained acquisition budgets in the 1990s, the Military Services opted to remanufacture legacy platforms and focus development budgets on only two new start helicopter programs from the 1980s: the V-22 Osprey and RAH-66 Comanche [which was eventually cancelled]. With the remanufacture of the AH-64, H-1, H-60, and CH-47 helicopters beginning in 1992, delivered units ranged from 90 to 120 annually from 1998 to 2004.
The Defense Department’s budget-driven re-manufacture strategy in the 1990s produced a series of sole-sourced relationships, leaving few real competitive opportunities among the helicopter prime contractors to force technology refresh cycles. With limited competition, few new platform contracts, and declining government technology investments, industry was left little incentive to invest in independent research.
The Arms Export Control Act, enacted in 1976, directs the U.S. engage in international programs to support national security interests. These interests include military interoperability/force multiplication; political access and influence, and economic benefits of shared development; economies of scale; and a strong industrial base. The FMS process can be initiated by a simple phone call, but there is a very specific process from that point. The call may request a basic briefing or information, which in turn may result in a Letter of Request (LOR) from the country, which begins the formal FMS process. Government program teams then prepare a Letter of Offer and Acceptance (LOA) containing cost, schedule, performance and logistics elements specific to that effort. This preparation includes multiple technology transfer approval processes and may include a notice to Congress. If the country accepts the LOA, the FMS case is implemented and the acquisition process begins.
The record of contract wins of U.S. vertical lift manufacturers in global, civilian and non-DoD helicopter competitions also may reflect the industry’s focus on remanufacture at the expense of innovation. While there had admittedly been few US competitions to drive the innovation potential of U.S. vertical lift suppliers, there have been many global competitions for military helicopters that US manufacturers could have used to refresh their products. US suppliers did not perform particularly well.
NASA reported in 1991 that civilian requests for tiltrotor airplanes in the 40 seat range could exceed 2,600 individual units. Bell-Boeing argued in 1990 that the large number of potential foreign sales would translate to an economic benefit of between $10-15 billion by the year 2010.
A number of government and military leaders from several countries expressed interest and engaged in serious discussions of potential purchases. Those known to have inquired by 2006 included Britain, whose navy uses short-deck aircraft carriers, as well as Australia and Japan. Defense Secretary Chuck Hagel identified Israel as a buyer in April 2013, and the United Arab Emirates was believed to be interested. By that time some believed the US may sell as many as 100 Ospreys to other countries. By late 2013 US officials had provided briefings on the V-22 to the United Arab Emirates, Japan, Canada, Saudi Arabia, Qatar, Italy, Brazil, Colombia, Singapore, United Kingdom and Australia.
As of 2013 the UK would come last as a potential customer as the economic climate in the European country was not right enough for such a high-value defence contracts. Initially sales of six aircraft to Israel were planned, with a long-term requirement for twice as many aircraft. Japan was interested in 20 to 40 V-22s over the longer term. The United Arab Emirates is interested in acquiring about 10 V-22s.
Seoul was considering the purchase of a batch of Bell Boeing V-22 Osprey tiltrotor aircraft in early 2015. Representatives from Boeing were due to visit South Korea later in the year to discuss the possibility of providing Seoul with the Ospreys. South Korea's military planned to use these multi-purpose VTOL (vertical take-off and landing) aircraft for its special forces and use them to support troops based on remote South Korean islands in the Yellow Sea.
The United Arab Emirates and a number of other countries are looking at buying 6 to 12 of the aircraft, company executives told Reuters at the Paris air show 17 June 2015. Boeing Co and Bell Helicopter said more countries are interested in buying the tiltrotor, with another 100 sales possible in coming years.
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