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Buying Helicopters for Afghanistan €- It Will Make You Laugh. It Will Make You Cry.
If you want to supply the Afghan Air Force with a multi-use transport helicopter, look no further than the Russian-made Mi-17. This helicopter was designed for service in Afghanistan. It works at high altitudes and in hot, dusty conditions. It is relatively low-tech and easy to maintain. It comes in both a civilian variant and a more powerful and structurally reinforced military variant. It is commonly used around the world. Importantly, the Afghans are familiar with it, some having been trained in its use by factory representatives and others having been shot at from them.
How does one acquire one of these beauties? The DoD tried three ways:
1. Purchase them used on the open market. A used Mi-17 military variant can be had for between $6 and $8 million. However, one must consider that a used Russian military helicopter may have had a difficult life, and may not be something that you would want to give to a friend.
2. Purchase a new civilian variant and have it upgraded. The Navy issued a competitive solicitation for 21 Mi-17s on July 6, 2010. This option suffered from two fatal flaws: (1) converting the civilian variant to the military variant raised some air worthiness issues, and (2) the Russians would not allow the US to purchase either variant except through the official Russian military equipment export firm, Rosoboronexport.
3. Buy brand-new military variants from the OEM through Rosoboronexport. (See Russia Today article on the procurement[i].)
Of course, the third option was the best choice. DoD was able to buy the model and variant of the helicopter it wanted, received direct access to the OEM for technical data, and avoided aircraft repaired with counterfeit parts. In addition to these benefits, the contract could be administered by the Army’s newly formed Non-Standard Rotary Wing Aircraft Project Management Office, a team of experts that specialized in procuring and maintaining helicopters not normally found in the US military’s inventory of aircraft[ii].
Now when the congress spends taxpayer money on military goods and services it is not enough to purchase the best goods and services from the only available source, someone has to justify that the process was followed and the price was fair and reasonable. (We will not address the issues with the source because they seem to have resolved themselves[iii], nor will we address the bid protests that resulted from the cancelation of the competitive solicitation that the GAO denied because these issues are not the point of this article.)
The Army’s project management office addressed its responsibility to justify the reasonableness of the price as you would expect of an experienced procurement team, they requested certified cost or pricing data. Also as you would expect, it is against Russian law to provide certified cost or pricing data. (If the data were defective, how would that be discovered, and what could be done about it?) The Army then set about performing price analysis. Using a variety of aircraft, including some unarmed military variants, and some civilian variants, the Army was able to determine that the price of $17 million a pop was a great deal. This analysis was further supported by comparing the price of the military variant from Rosoboronexport to the price of procuring and upgrading the civilian variant. With these studies the Army was able to provide sufficient support for a DoD independent review team, which included members from DCAA and DCMA, to conclude that the price was reasonable[iv].
I love this line of work! It makes you laugh. (...requesting cost or pricing data... from the Russians...really? It makes you cry. (Congress is investigating the purchase of the best product for the mission from the only available source at a reasonable price). It makes you want to get an expert, even to support the most obvious actions.
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