Finmeccanica gets $1.9 billion UK helicopter contract

[Heliport]

Associated Press/MilanFinmeccanica gets helicopter contract

Finmeccanica SpA of Italy said Thursday one if its units had been awarded a 1.5 billion euros ($1.9 billion) contract to supply helicopters to the United Kingdom.

The aerospace and defense company said the contract was part of the U.K. Ministry of Defence's planned 4.5 billion euros ($5.8 billion) helicopter procurement over the next 10 years.

The unit that won the contract is Future Lynx -- a division of Agusta Westland, which Finmeccanica bought last year from the U.K.'s GKN PLC.

In January, Finmeccanica secured a contract with U.S. partners Lockheed Martin Corp. and Textron Inc. unit Bell Helicopter, to supply helicopters to the White House.

The company's Thursday announcement came one day after European Union regulators approved a deal between Finmeccanica SpA and Britain's BAE Systems PLC to create a major joint venture in defense electronics.

Finmeccanica had said in January that it had signed a final agreement with BAE to create Eurosystems, a set of three joint ventures in defense electronics.

Finmeccanica said it would pay the British group 516 million euros ($690 million) as part of a deal that will create Europe's second-largest group in the sector.

[Flying Lawyer]

Times report Westland £1bn helicopter deal angers rivals

GEOFF HOON, the Defence Secretary, has handed a £1 billion helicopter contract directly to AgustaWestland, ignoring calls from rival manufacturers that the order should be put out to competition.

News of the £1 billion order for a new generation of Lynx helicopters was greeted with delight in Yeovil, where unions had feared that many of the group’s 3,300 jobs would be under threat if the order was not secured. But rival manufacturers were furious that they had not been allowed to compete to provide reconaissance and maritime attack helicopters.

Mr Hoon’s determination to award the contract to Westland caused fierce Cabinet debate between the MoD and the Treasury.

It was suggested that the MoD wanted to prevent rumours of job losses at the Somerset plant in the run-up to an election and that ministers were “scared” by the political power of Westland.

But a spokesman for the MoD insisted yesterday that the Treasury supported the decision to award the contract to Italian-owned AgustaWestland.

“Competition remains the cornerstone of MoD procurement policy,” a spokesman said last night. “But the current Lynx is coming to the end of its life and the cost of sustaining it through a competition was so high that it is better value for money to go for one supplier,” the spokesman said.

The £1 billion order will provide about a third of the new helicopters the armed forces require over the next ten years. The MoD held out the prospect of a full competition for the rest of the MoD’s helicopter needs, worth an additional £2 billion.

EADS, the European space and defence group, which has been arguing to be included in any competition said: “We welcome the Ministry’s proposal to have a competition in the Land Lift (troop moving) programme.”

Privately, the group is thought to be furious that its offer to allow its helicopters to be built under licence at Yeovil by an AgustaWestland workforce trained by EADS had been overlooked.

The Franco-German manufacuturer’s Eurocopter arm had offered to work with AgustaWestland and wanted to build a production line for its own helicopters in the UK. It claims that it could have undercut the AgustaWestland quote.

Boeing was also anxious to compete for the contract.
I imagine the proximity of this announcement to the forthcoming General Election is purely coincidental.

[alouette]

How is it possible to issue a no-bid contract? Isn't the rule to have a few competitors lined up prior to handing out this juicy deal? Please, someone should clarify. Or did some politician receive a major pension deal under the table?:*