$800 Million NRE Overrun
 

Cdnnighthawk,

If you know there is a non-recurring engineering ( that's what you meant by NRE, correct? ) cost overrun of $800M, and you are publishing it in a public forum, then a lot of other people know that as well.

They say, " Never say Never in Aviation ", but if that were the case it would surprise me ( I mean, really surprise me ) that personnel changes have not been made at SA.

Another question that suggests itself is how SA would recover $800M on 28 production aircraft. Not 100% certain, but that's not a cost plus contract as I recall, so it's not obvious to me how SA gets back that kind of money.

Is it possible that there is an extra zero in the number you quoted and the NRE overrun is $80M ?

Thanks,
John Dixson

Rumour for a rumour network
 

Heard that Sikorsky is poised to just "walk away" from Cdn Cyclone project in its entirety. Pay their fines and declare the whole thing a bust.

Anyone?

That is a misguided quote, the CH 148 Cyclone is very much a frigate born maritime helicopter and not at all intended to conduct dedicated SAR in Canada. It must however be capable to perform SAR duties as a secondary role to it's Naval warfare role.

What you have heard sounds to me like a fabricated rumour that has been cast out for no other purpose than a fishing expedition for comment.

I take the bait... my comment:
Sikorsky and Canada are certainly not pleased with each other over the terms and performance of the current MHP contracts. I don't' believe that anyone can possibly deny that.

What remains to be seen is whether Canada will accept junk for the currently (and oft amended upwards price) for the Cyclone or will Canada call the hands dealt. Only in the event of the latter will Sikorsky fold in my view.

The most likely outcome (my view) is that we (the RCN & RCAF) will end up being stuck with a pig in a poke and we will learn to live with it.

I sincerely hope that the Canadian MHP lesson does not get repeated elsewhere (enemies excepted).:ugh:

JD...
I no longer have the link but I assure you that the following are accurate excerpts from the UTC SEC submission filed one year ago:

Page 6-7

“….Sikorsky is also developing ... the CH-148 derivative of the H-92 helicopter, a military variant of the S-92 helicopter, for the Canadian government. The latter is being developed under a fixed-price contract that provides for the development, production, and 24-year logistical support of 28 helicopters. This is the largest and most expansive fixed-price development contract in Sikorsky’s history. As previously disclosed, in June 2010 Sikorsky and the Canadian government signed contract amendments that revised the delivery schedule and contract specifications, and established the requirements for the first six interim aircraft deliveries to enable initial operational test and evaluation activities prior to the scheduled delivery of final configuration helicopters starting in June 2012. The amendments also included modifications to the liquidated damages schedule, readjustment of payment schedules, resolution of open disputes and other program enhancements. Delivery of the interim configuration helicopters was scheduled to commence in November 2010, but is now expected to begin in the first quarter of 2011.”

Page 15:

“…Sikorsky is also developing the CH-53K next generation heavy lift helicopter for the U.S. Marine Corps and the CH-148 derivative of the H-92 helicopter, a military variant of the S-92 helicopter, for the Canadian government. The latter is being developed under an approximately $3 billion firm, fixed-price contract that provides for the development, production, and 24-year logistical support of 28 helicopters. This is the largest and most expansive fixed-price development contract in Sikorsky’s history. As previously disclosed, in June 2010 Sikorsky and the Canadian government signed contract amendments that revised the delivery schedule and contract specifications, and established the requirements for the first six interim aircraft deliveries to enable initial operational test and evaluation activities prior to the scheduled delivery of final configuration helicopters starting in June 2012. The amendments also included modifications to the liquidated damages schedule, readjustment of payment schedules, resolution of open disputes and other program enhancements. Delivery of the interim configuration helicopters was scheduled to commence in November 2010, but is now expected to begin in the first quarter of 2011.”


Page 38:

“…As of December 31, 2010 and 2009, inventory also includes capitalized contract development costs of $804 million and $862 million, respectively, related to certain aerospace programs. These capitalized costs will be liquidated as production units are delivered to the customer. The capitalized contract development costs within inventory principally relate to capitalized costs on Sikorsky’s CH-148 contract with the Canadian government. The CH-148 is a derivative of the H-92, a military variant of the S-92.”

MHP Costs
 

Cdnnighthawk,

In your earlier post you referred to "unplanned" NRE costs, whereas this last post refers to capitalized contract development costs. When you wrote "unplanned", I took your meaning to be just that, i.e., an overrun above planned ( and capitalized ) development costs.

If I am interpreting your last post correctly, you take the position that all of the capitalized development costs referred to in the submit tall are unplanned ( an overrun ). All I posit is that if that were true, my expectation would be some immediate and decisive executive action, and to recover that egregious an overrun on 28 machines would be looking at the world in rather rose colored glasses. As I said, though, "Never say never in aviation " and it's hard looking at that program from the outside to know all of the details.

Thanks,
John Dixson

S92 Legacy of Heroes tour:

So I've been reading all the media coverage of the S92 Legacy of Heroes tour and can't help but wonder if they really believe that the S92 is such a great machine for our military heroes as depicted on the camouflage paint scheme of the aircraft. As a Canadian and former Sea King driver I can't help but think why would they not just put that effort and those funds in completing their commitment to the CH148 Cyclone and damn well deliver on their agreement.

In one of the articles the president of Sikorky presented a strong picture of the company’s succesful history and recent achievements. While I do not begrudge those achievements I find it appaling how Sikorsky has handled the contract to provide Canada’s brave men and women with the agreed upon CH148 Cyclone. Their handling of this contract is nothing short of shameful particularly for a military that has been flying their product since 1963 in the CH124 Sea King.

It will be 50 years for the Sea King in 2013 and sadly Sikorsky will barely be starting their deliveries of a watered down version of the product they contractually agreed to deliver. It is an affront to Canadians and I believe that Sikorsky is better than that. They are obviously aware of their failing since I have yet to see Canada on their S92 Legacy of Heroes tour. I believe they should man up and make amends to our government and our military.

I’m a fan of Sikosky helicopters but this contract is a true black mark on this proud company. Sadly as far as the Canadian military is concerned this should be titled the Legacy of Apathy tour.

Fire away Nick.

[It will be 50 years for the Sea King in 2013 and sadly Sikorsky will barely be starting their deliveries of a watered down version of the product they contractually agreed to deliver. It is an affront to Canadians and I believe that Sikorsky is better than that.]

The latest from Sikorsky is that they hope to deliver two interim Cyclones to Shearwater this month (April 2012) and a further two by the beginning of June. These aircraft are expected to remain under Sikorsky title (i.e. not accepted yet by the customer) for several months. Sikorsky Cyclone #806 that has been hangared at Shearwater since May 2011 is being returned to Sikorsky facilities in the US. The four interim aircraft to be delivered soon will be used for the first serial of aircrew and groundcrew initial cadre training (ICT) but it is anticipated that they will still have significant operating restrictions. Bear in mind that this is unofficial forward-looking information at this time and is subject to change (eg. further delay).

It has been reported that those 'interim' (non-compliant) MH-92As will be restricted.

NO - IFR :uhoh:
NO - NIGHT :uhoh:
NO - OVERWATER FLIGHT :uhoh:

Not much of a capability.. :sad:

Cyclone vs Merlin
 

Not that it is any excuse for the Sikorsky, but as an amusing anecdote:
As far as I can remember, the same restrictions applied to the RN Merlin in the early days+No flying in rain, no landing on soft ground, no.... And the list went on and on.


Torcher

The Canadian program seems to point out the difficulties that are being experienced by many programs world-wide, a product not just of the mistakes made by the company that produces the product, but also the mistakes made by the national military people who run their side of the project. If someone knows of a successful similar development project, post it here, please!

The development of a new system is often a delicate dance between the folks who specify and the folks who design and develop the solution to that spec, sort of like a new kitchen for a house, or a swimming pool. Bad customers make failed projects, and blaming only the contractor is often simplistic. No country seems to buy off the shelf, that all want to design a new system, and ask for one tailored to their preceived needs. Development is difficult because the folks who write the spec are also the folks who determine if the aircraft is in compliance, so that items that are poorly communicated often need redesign since the "judge" is also the "Jury" and the "Executioner".

When a junior officer (in charge of approval of a part of the system)decides the spec means something far beyond the scope of the previous junior officer who approved the original design (a near certainty since many officers rotate through assignments every 2 or 3 years), the project quickly collapses into a scramble to redesign and re-test. Since many of the project team members on the military side have no professional training, the comedy can be devastating, and can look like a Fawlty Towers episode.

I recall a country program where the manufacturer actually stole the partially completed aircraft at midnight from the in-country completion partner, and spiritited tham back to the home country for completion!

Most of the problems in the Canadian program seem to be on the system side, a highly specialized, separate program within the program, developed by Canadians for the project, and highly dependant on that collaboration between military customers and civilian developers. Rumor says that is the messiest part of this whole thing, and the most customized part, one that could not be off the shelf, since the military insisted it must be custom, specifically designed for the Cyclone.

Torcher - For sure the the AW101 (EH101/Merlin/Cormorant) has not been without it's problems, but at least it has 30 minute run dry time and not certified through some dodgy loop hole. :}

At the time of the order for the Cyclone the Canadians could have had an 'off the shelf' aircraft with proven maritime/ASW capability and commonality with another in-service aircraft. :ugh:

Pretty much every aircraft/system will go through the 'bath tub reliability curve' (Bathtub curve - Wikipedia, the free encyclopedia) and experience initial (excuse the term) 'infant mortality failures'. For that reason I'd never buy the first model/version of a new car, I'd wait for the 'mark II' version and hopefully the manufacturer has had the opportunity to iron out all/some of the problems with the first model.

Maybe this would be a good rule for the Canadian government to follow but I guess it's too late for the Cyclone (unless they ditch it as Sikorsky have obviously failed to fulfil their contractural obligations and buy something that's proven - and no not necessarily the AW101).:E

RJSquirrel - you have MoD procurement in a nutshell there!

Off the shelf
 

Espresso

From personal experience, formerly involved in government procurement processes, I believe the only way to go (espescially for smaller nations) is COTS.

Let the manufacturers present their goods from a fairly broad and simple set of requirements, then decide what best fills your requirements vs cost, and there you have it (Make sure you have a fire proof contract, including OEM logistic support)

Examples of success:
Sweden, 15 Blackhawks off the current production line, including training and support.
Norway, C130J, off the current production line. In service within 18 months of ordering.

Examples of failure:
Norway, New SAR Helicopters. Procurement program initiated in 2007, and still has not produced anything other than papers and unrealistic requirements. Latest in service forecast 2020. Original Seaking replacement was scheduled for 2008.
Norwegian frigates (similar process), supposed to be a state of the art multi-purpose weapon system.
Turned out to be a weaponless, out of date ASW frigate. Mostly due to the time it took from project start until it was finished, but also due to the "We must specify all aspects of the procurement ourself, and under no circumstances buy anything already available" mentality:ugh::ugh::ugh:

Torcher

Having been involved with the Cormorant procurement in Canada, one of the most difficult hurdles is that the project was managed by a civilian bureaucrat, with a government office making sure that the Canadian worker was going to get their fare share of work for the money spent. Mistakes by the military people is often the easy finger to point and I for one don't like it. The military has its flaws, but when it comes to a requirement, they meticulously look at every option and plan accordingly. Money does hinder the procurement in that everyone wants a piece of it, including politicians! Really, it comes down to an RFP being so watered down to meet what industry can provide with the most spin-offs being the overriding issue, not performance. When it comes to performance, the military will get a machine and work within those limitation, and fix later. Joe VCR working at GE will still be employed. I'm not against this but it is what it is. Keeps people employed, not necessary give the military the perfect helicopter.

Torcher, SARBlad & Crab. I agree with all your comments. Why is it noboby ever seems to learn the lessons of previous poor military procurement programmes?

Unfortunately for government military programmes politics nearly always come it to it, as well as often changing requirements as different threats come and go during the often protracted procurement process.

It is much easier if you're buying something 'off the shelf' like the examples cited by Tourcher. I guess one of the problems now is that new military aircraft programmes are so expensive and complex they have to be funded by one or more 'launch' customers and it is a long and arduous process before you get a sufficiently 'mature' aircraft.

Wherever possible manufacturers need 'off line' developement to hopfully perfect the design as much as possible before offering it for sale. But like I said unless a government comes to these manufacturers with big wad of cash they can't afford to do this.

As for the Cyclone, I had heard (purely rumour) that Sikorsky had hoped/expected to win the previous US presidential contratct and would have used this wad of cash do to a lot of the 'militarizing' of the aircraft. Unfortunately they didn't and had to start from scratch with a 100% civil aircraft for the Canadians. Throw in there all the problems issues with the gearbox, and those that other contributors (e.g. squirrel) have mentioned, and there you have it.

BUT, if you always buy existing aircraft 'off the shelf' then the industry is never going to move forward and delevop new aircraft.

espresso drinker:
I disagree with your last statement about developing new aircraft.
Absent a hot shooting war where you need a big improvement over the enemy, there is little that will drive a military to ask for something better. Look at Sikorsky's very bold move to develop a larger version of the co-axial design. The President of Sikorsky said that if they waited for the military to put out an RFP, it would be something that might be 10% better than the Blackhawk, where their machine is significantly better.
More to the point the civil world does have a lot of innovation and development - the competition is pretty fierce, and none of the major manufacturers had a military order for what is now the AW-139, the Bell 525 and the original S-92. Those new aircraft can perform quite a few of the non-shooting military missions quite well, and were all developed without a military requirement.

The COTS dogma is an abject failure, when attempting to use a civilian-designed and certified helicopter.

In each and every case, requirement creep catches up to the machine. This causes schedule delays, performance hits, and budget overruns.

S92 - CH148 : 4 years late now, millions over budget, and still no completed IDMGB or mission system package

VH71 - AW101 : Billions over budget thanks to insane requirement changes midway though the design process

CSARX, VXX : All axed due to inflated costs in the face of progressively tighter budgets

EC145 - UH72 : One of the few touted "success stories", but this is because this machine was not very militarized and its mission is designed almost exactly the same as its civil counterpart (quite a rarity). That said, even this helicopter had some fairly major issues with its new avionics overheating, which required the addition of some fairly ungainly cooling equipment cutting into its capacity.

The idea that taking a COTS machine and "cheaply" obtaining your military helicopter is deeply flawed and this has been proven over recent history. The customer always realizes (after the contract award) just how much of a compromise it is to be constrained to the COTS product performance, and then tries to redesign it to such an extent that the process breaks down.

sans,
Frankly, your point proves the opposite - NONE of those programs was even remotely COTS, and they wandered in the never-never land of requirements gone bad.

Example: The Canadian requirement was supposed to have described in great length what the control knobs for the radar would be like - diameter, scaling marks, etc. Somebody sent lots of time making their requirements precise. Unfortunately, modern radars don't have knobs.

Every one of those programs were designated from the outset to use a COTS airframe to save money from developing anything new. That was my whole point.

Just a reminder for everyone regarding the COTS/OTS discussion...

The Cyclone was proposed and bought as a "largely non-developmental aircraft". In fact, the rules of the MH competition required that the aircraft selected be "off-the-shelf to the maximum extent possible". BTW, since being announced as the winner if the competition, there has been no "spec creep" to speak of, but UTC has gone so far as to claim repeatedly in its SEC submissions since 2008 that the Cyclone is the most expansive development program in Sikorsky's history as an excuse for the delays.

The subject of S-92 development requirements was raised at the press conference in Ottawa on 23 July 2004 following the contract announcement... excerpt copied here:

"Question: Christian B, Toronto Star. Just wondering what assurance has Sikorsky given you in terms of the fact that this helicopter is not used in any other military and conversion from a civilian version which obviously has some issues. I’m just wondering, you know, Cormorant has claimed this will, you know, push it back by years.

Alan Williams: First of all the company we have selected, Sikorsky International, is one of the world renowned helicopter manufacturers. They’ve got a history of competence and capability in delivery that ranks with anybody and secondly, this model is on the production line albeit in a commercial mode but they have already sold a fair number and have produced a number. Thirdly, any helicopter that we would have acquired would have to be tailored to meet our needs. The frame is one that’s in production. The mission systems that will be integrated by General Dynamics Canada are all commercial off the shelf products. The challenge of course is the sophisticated integration. So we have absolutely no doubt that it can be done. The bid produced by Sikorsky reflects its rigorous planning of activities. They’ve submitted to us a plan that had 24 pages, 4,912 activities, each one constant, each one scheduled with required resources. We’ll be monitoring that very very closely to make sure they deliver on what they said but there’s absolutely no doubt in our minds that they have shown us that they have the capability to deliver the plan and the product that we need."

Mid May and the two interim still not delivered?

A Cyclone flew in yesterday afternoon, so there is now one taking up some hangar space

I hope she is not just taking up space, get her airborne before the fog rolls in !

Enjoy the new beast, she is a quantum leap forward.

Pas

Big mac..Is that in additiion to the one that has been there since last year or the same aircraft doing a circuit !!

She's a new bird, the one we had sitting here for the last year went back to Sikorsky a couple months ago.

Looks like she might be the first of the two birds we are suppose to get this summer to start some training on.

Better buy some good ear-plugs! http://www.pprune.org/rotorheads/362...lying-s92.html Best of luck.

There definitely has been some limited Cyclone flying going on at Shearwater this past week; however, there seems to be a cloud of secrecy about it. Even my normally talkative Sikorsky sources decline to say anything about it. One of them did say that it has been conducting some "flight tests" aircraft and will not be being used for training. The aircraft appears to have a long nose boom fitted. Do you know what the tail number is?

I never got a chance to see what the tail number was....have just heard/seen it flying around a bit, but other then that no rumours about it as of yet

UFO Flying Over Shearwater? No It’s A Cyclone Helicopter | Ottawa Citizen

The mystery continues. The aircraft in your photo does not have a nose boom; the one spotted on the ramp (at a long distance from across the field) appeared to have a boom (maybe it was a tow bar attached?). A zoom up on your photo reveals some orange (i.e. potentially instrumented test gear or external test markings for photo tracking and analysis). Others who have seen it in flight here last week said that it stayed over land with the landing gear was always down and one reported seeing orange on it as well.

Heard it was 'sent back' or 'went back' to wence it came and isn't in CYAW anymore. Couldn't have been a delivery.

You are correct. The Cyclone seen turning on the ramp and later flying near Shearwater last week was Cyclone 806. This is the aircraft that was "delivered" to Shearwater in May 2011 and which has been parked there ever since. Last week it was conducting post-maintenance flight testing by Sikorsky test pilots following the installation of modified servo actuator valves which failed during an earlier return-to-Sikorsky flight attempt in April. The aircraft was recently safely returned to Sikorsky facilities in the US. There are currently no Cyclones in Canada.

Rotorhead 124,

How did you hear it. Thought you wear deaf?


Can you help answer question on other thread. Your silence on the S&R experience and exposoure is making many of us wonder if this is true!


Smurfet is still the hottest chick!

Was it returning for Jeff Pino's (Pres of Sikorsky) retirement or did it cause his retirement?

TC

You've raised an interesting question. When Jeff Pino replaced Stephen Finger at Sikorsky in 2006, there was much pudding made by UTC about the latter's outstanding performance as Sikorsky's chief steward and also, that Stephen would be taking over the top job at P&W (UTC's plum). I've seen nothing of the same for Jeff... simply that he is retiring from his position as Sikorsky President on 1 July. Jeff Pino, at 57, is indeed a few years shy of the normal CEO retirement age in the US.

That and the delays with the S-76D and the poor performance of the division last year ? UTC has never been a benevolent instititution..

You should have heard Pino at this year's AHS CEO presentation....talk about a guy clearly on the way out taking his potshots!

I met him in person once before back in 2008 and he seemed nice enough back then.

When is Good Enough, Good Enough?
 

I hate to interject common sense in to the equation, but here goes. Sikorsky over the years has certified and delivered many aircraft with very good certified auto pilots. Some of these were developed in cahoots with quality venders. Along comes Canada, and Sikorsky promises a better mouse trap, in terms of a fly by wire system, that will be the cats pajamas of all systems. This comes on the tails of a US Army Blackhawk program that failed to deliver a quality product. Customers around the world are presently flying certified IFR S-92 aircraft with very capable systems. If you have a product that is already 90% of capable what are you willing to pay for in terms of money and delays for the remaining 10%? Are the additional capabilities actually required and beneficial to the program? :8

JC

I am sure the Canadians would accept the ships at the standard 92 IFR price. However, at $200M apiece it should work as advertised. Once accepted there is no going back, and all fixes to meet the original requirements will just cost more.

TC