EADS and Lockheed team up for U.S. bid

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By Andrea Shalal-Esa

WASHINGTON (Reuters) - Europe's EADS on Monday said it was teaming up with No. 1 U.S. defence contractor Lockheed Martin to offer an armed version of EADS' UH-72A Light Utility Helicopter in a new multibillion-dollar U.S. Army helicopter competition.

U.S. and European defence companies have been gearing up for a revamped helicopter competition after the Pentagon cancelled a $6.2 billion(4.1 billion pounds) program led by Textron's Bell Helicopter unit last year when costs ran over budget.

The Army is expected to seek roughly $6 billion for about 500 helicopters and their initial requirements were that the craft be able to operate at 6,000 feet and in 95-degree Fahrenheit temperatures.

EADS said it would build the helicopters, based on the twin-engine Eurocopter EC145 commercial aircraft, at the same Mississippi plant where it makes the Army's UH-72A Lakota light helicopter, also based on the EC145. Lockheed would handle the integration of weapons and other missions systems for the program, EADS said.

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EADS said it has delivered 67 UH-72As to the Army on or ahead of time, and on cost. EADS is due to build a total of 345 UH-72A helicopters for the Army.

The Obama administration is expected to release details of its proposed budget for fiscal 2010, which begins in October, but industry officials said they did not expect the new armed helicopter program to draw substantial funding until 2011.

The Army had hoped to finalise its requirements for the helicopter in a request for proposals this summer. Army Aviation Director Brigadier General Walter Davis said last month the Army needed to replace its ageing OH-58D Kiowa Warrior fleet, the most heavily used Army helicopter in Iraq and Afghanistan as well as the oldest.

The competition is expected to draw offers from EADS, Boeing , Sikorsky Aircraft, a unit of United Technologies and AgustaWestland, a unit of Italy's Finmeccanica .

EADS North America Chief Executive Ralph Crosby told Reuters in March starting with an existing helicopter could help the Army get what it needed within two years instead of four, and for far less than developing a whole new helicopter.

The agreement with Lockheed follows EADS' work as a subcontractor to Northrop Grumman Corp in competition to build new aerial refuelling tankers for the U.S. Air Force. Northrop and EADS won the $35 billion contract in February 2008, but the Pentagon decided to rebid the contract after government auditors upheld a protest by losing bidder Boeing.

EADS also teamed up with Raytheon Co to bid in a joint Army-Air Force joint cargo airplane competition, but lost the competition to a team comprised of L-3 Communications Holdings and Alenia, a unit of Italy's Finmeccanica.

(Reporting by Andrea Shalal-Esa, editing by Leslie Gevirtz)

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