05 Apr 17. Cobham Said to Overhaul Contract Bidding Strategy After Setbacks. Cobham Plc is reviewing its bid process for U.S. aerospace and defense contracts as part of a broader restructuring effort following a series of profit warnings and cost overruns on existing supply deals, people with knowledge of the initiative said.
Cobham, a U.K. specialist in aerial refueling equipment and electronic-warfare systems, plans to retrain key sales staff, modify the terms and conditions that it applies to new contracts and pare expenses to reduce bid prices, according to the people, who asked not to be named as the measures aren’t public.
Chief Executive Officer David Lockwood is seeking to bolster his company’s standing with defense contractors Lockheed Martin Corp., Raytheon Co., Northrop Grumman Corp. and Boeing Co. after a number of contract stumbles. Cobham missed out on the latest phase of a program to upgrade U.S. defenses against anti-ship missiles, while a wrangle with Boeing over a contract to supply refueling gear resulted in a £150m ($187m) charge.
Cobham is acting after a survey last year showed clients found the Wimborne, England-based company’s terms onerous and difficult to accommodate, one of the people said. Its pricing structure is also hurting sales prospects, while poor program execution has led to more than 50 million pounds of delayed revenue from overdue orders, they said.
The measures come as Lockwood, who took over in December, implements a wider cost-cutting drive following a run of five profit warnings in 18 months. The earnings revisions culminated in writedowns and adjustments of more than £830m on Feb. 16 that included the Boeing hit and sent Cobham stock to its biggest intraday drop for at least 28 years.
Cobham referred Bloomberg to its March 2 earnings statement where the company highlighted “improved customer relationships” as a priority for 2017. In the release, Lockwood said he had “encouraging early engagements” with a number of clients. The company declined to comment further. (Source: Hawker Chase/Bloomberg)
06 Apr 17. Initial speed requirements pushed UH-1Y out of Huey competition. The US Air Force originally set out stringent speed requirements for its UH-1N Huey replacement that would have pushed Bell Helicopter’s UH-1Y Venom out of the competition.
In February, the service announced it would delay the release of its final request for proposal to recapitalise its Huey fleet, after contractors told the service their off-the-shelf solutions would not meet all of the proposed requirements. The competition has peaked the interest of at least four contenders including Sikorsky’s UH-60M Black Hawk, Airbus UH-72A Lakotas, Leonardo AW139 and Bell’s UH-1Y. The USAF is discussing the requirements with industry and plans to release a second RFP this month, with the final RFP slated for this summer, a service spokesman says this week.
For Bell, the air force’s specific requirements for speed, endurance and payload affected its bid, Scott Clifton, director of global military business development at Bell, tells FlightGlobal. The UH-1Y fell short of the air force’s proposed speed requirement by three to seven knots, Clifton says. Bell would have needed to modify the UH-1Y to meet those speed requirements, which would have delayed the timeline to field the aircraft. The GE T700-401C powers the UH-1Y today, but the Venom could reach higher speeds by upgrading to the 701D engine found in Sikorsky’s Black Hawk and Boeing’s Apache.
“When it said ‘it needs to go this fast,’ the speed was slightly different,” Clifton says. “So we had put in slightly upgraded engines and we wouldn’t be able to meet that at the time of proposals.”
The air force is also seeking a helicopter that can meet very hot, high altitude conditions for a three-hour mission, Clifton says. Much of the Huey’s mission guarding the air force’s Minuteman III silos is conducted out of America’s far north, including two bases in North Dakot