A multi-year procurement of 268 AH-64E Apache attack helicopters will save the U.S. government $330 million over the term of the contract, manufacturer Boeing and the Army’s Apache project manager said. Originally announced on March 15, the five-year, $3.4 billion contract represents the first such agreement for the latest E-model Apache.
The base contract calls for Boeing to supply 244 remanufactured Apaches to the Army from Fiscal Years 2017 to 2021, with options for up to 450 helicopters. One option exercised with the multi-year agreement is the foreign military sale of 24 new-build AH-64Es to Saudi Arabia, which already operates a comparable number of E models stemming from a huge 2010 arms package as well as AH-64A/Ds. The Royal Saudi Land Forces and the Saudi Arabia National Guard use AH-64Es, and in the past expressed a need for up to 60.
The multi-year buy saves 10 percent of the cost of lumping together annual procurements, said Col. Joe Hoecherl, Apache project manager—a discount of about $330 million. “This commitment provides stable funding and the ability for Boeing and our other prime contractors to plan and make financial commitments to countless suppliers across the period of the multi-year contract. This helps ensure stable employment and garner greater efficiencies,” he said.
Hoecherl and Kim Smith, Boeing attack helicopters vice president and program manager, spoke with reporters by video conference from Boeing’s Mesa, Arizona final assembly facility on March 22, before participating in a signing ceremony there.
Smith said the multi-year agreement resulted from more than three years of negotiations involving the Army Contracting Command and Apache program office at Redstone Arsenal, Alabama, the Defense Contract Management Agency, the Defense Contract Audit Agency, a Cost Assessment Program Evaluation group and industry partners.
“I’ve been looking forward to this day for quite some time,” Smith remarked. “We have demonstrated through a thoughtful process and through years of hard work that we have negotiated a fair deal for all parties. We will continue to provide the world’s best attack helicopter to our U.S. Army customer as well as a contractual vehicle that will expedite the award of additonal options by our U.S. Army customer or other, international customers.”
Boeing since 2011 has delivered 181 AH-64Es to the U.S. Army, which plans to eventually buy 690 of the latest-generation attack helicopter. Remanufactured E models are built with new fuselages supplied by Korea Aerospace Industries from Sacheon, South Korea, and components disassembled and repaired from older Apaches by Science Engineering Services in Huntsville, Alabama. The Mesa facility is assembling five Apaches per month currently and will increase to eight-per-month in September, Smith said.