MD can bid on Army contract

Ruling will let Mesa helicopter firm challenge Boeing

MDHelicopters Inc. will join Boeing Co., its Mesa neighbor, in competing for a multibilliondollar U.S. Army contract to build a new reconnaissance helicopter.

An arbitration ruling last month cleared MD Helicopters to pursue the long-delayed air- craft Army contract despite Boeing’s claims that a 2005 agreement prohibited MD Helicopters from offering its MD540F helicopter to U.S. or foreign military entities.

MD Helicopters challenged Boeing’s position and filed for arbitration last August over its 2005 agreement with Boeing. In its filing, MD Helicopters called Boeing’s stance a “naked attempt to restrain competition.”

The arbitration proceedings are confidential but the related documents are public in the U.S. District Court of Arizona.

Boeing declined comment on the arbitration ruling because of the confidentiality clause.

Lynn Tilton, MD Helicopters chief executive, said in a statement that the company looks “forward to continuing the collaboration between MD Helicopters and the Department of Defense.”

MD Helicopters and Boeing are among the aviation companies that have pursued an Army contract to build the so-called Armed Aerial Scout helicopter at an estimated cost of $13 million to $15 million per aircraft.

An unspecified number of aircraft would replace OH-58 Kiowa Warrior helicopters that were developed in the 1960s.

The Army is seeking a light helicopter capable of flying at higher altitudes and temperatures.

An Army decision on the new helicopter had been expected last December but has been delayed until later this summer, according to

Efforts to replace the Kiowa Warrior helicopters go back more than a decade, and it has been a tortured path for the

Army and military contractors seeking to build the aircraft.

Boeing and Sikorsky were partners on a planned Comanche helicopter, but that $38.3 billion program was canceled in 2004.

MD Helicopters and Boeing joined forces in 2005 on a Mission Enhanced Little Bird helicopter based on a modified MD530F aircraft.

The Army instead picked Bell Helicopters but canceled that helicopter program in 2008.

In 2005, MDHelicopters sold some of the intellectual property for the Mission Enhanced Little Bird helicopter to Boeing and got a license to use the technology, according to the arbitration documents.

In a counterclaim to MD Helicopters’ filing last year, Boeing sought to block MD Helicopters from selling its MD540F helicopter or any similarly configured aircraft to any U.S. or foreign military organizations.

A arbitration panel representing the International Institute for Conflict Prevention and Resolution ruled in favor of MD Helicopters that it could sell its helicopters to foreign military organizations and pursue the latest U.S. Army helicopter program, announced in 2011.

MD Helicopters has about 280 employees at its facility at Mesa’s Falcon Field. Patriarch Partners LLC acquired the company in 2005.

Boeing operates at a facility northwest of Falcon Field with about 4,700 workers and an additional 178 at other facilities.