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The U.S. Court of Appeals for the Federal Circuit has cleared the way for the Army to sole source 16 additional UH-72A Lakotas from Airbus Helicopters, overturning a lower court’s injunction against the purchase.
In a decision issued on Jan. 23, the Federal Circuit found that a Court of Federal Claims judge erred in finding that the Army violated the Competition in Contracting Act (CICA) when it declared the Lakota as its institutional training helicopter. Judge Susan Braden also abused her discretion when she supplemented the administrative record to reach her conclusions, the appeals court found.
The ruling comes after more than three years of legal wrangling in the wake of the Army’s Aviation Restructure Initiative (ARI), which, among other things, called for replacing the Army’s aging fleet of single-engine Bell TH-67 training helicopters with UH-72A Lakotas.
The Army had competitively selected the Lakota as its Light Utility Helicopter in 2006. The ARI called for using existing Lakotas to replace TH-67s, but the Army ultimately determined that to comply with the restructure initiative it would need to increase its Lakota fleet by 110 helicopters, from 317 to 427.
In September 2014, the Army published a sources sought notice declaring its intention to purchase 155 Lakotas on an “other than full and competitive basis.” (According to the Federal Circuit ruling, the Army sought Lakotas in excess of its 110-aircraft requirement for potential sales to foreign militaries or other government agencies.)
However, when AgustaWestland North America (now Leonardo Helicopters) filed a legal complaint, the Army instead chose to exercise the remaining options on its 2006 contract with Airbus. When that contract expired, the Army was still 16 helicopters short, and in December 2015 it issued a Justification and Approval (J&A) to sole source those Lakotas from Airbus.
AgustaWestland didn’t back down, and in a ruling issued in August 2016, Judge Braden sided with the company. She found that the Army’s declaration of the UH-72A as its institutional training helicopter was essentially a procurement decision in violation of CICA, and issued a preliminary injunction giving the Army six months to proceed with a competitive procurement or issue a revised J&A.
Instead, the Army appealed to the Federal Circuit, arguing that Braden exceeded her jurisdictional authority in questioning an Army policy decision, the ARI. The Federal Circuit agreed with the Army, finding that because the ARI did not direct or even discuss procurement of UH-72A Lakotas, it was not a procurement decision and therefore not subject to Braden’s review.
Furthermore, the Federal Circuit found that the Army’s J&A was not arbitrary and capricious, but instead provided a “coherent and reasonable” explanation of its decision to sole source the 16 Lakotas. The appeals court therefore reversed Braden’s decision and vacated her preliminary injunction.
The ruling is welcome news for Airbus, as it allows UH-72A production to continue at its manufacturing facility in Columbus, Mississippi. In early January, only three Lakotas remained to be delivered under all prior contracts with the Army.
In a statement provided to Vertical, Airbus declared, “We hope that the appellate court’s ruling today will finally end a two-year saga of one contractor attempting to wrestle business from a customer by holding Army readiness hostage. This ruling also removes the threat that Leonardo has held over the heads of our American workers in Mississippi — more than 40 percent of whom are U.S. military veterans — as it has tied up Army procurement long enough to nearly shut down our American production line.”
Even as it waited on the ruling, the Army appeared to be taking steps to procure additional Lakotas on the basis of language in the 2017 Defense Appropriations Act, which provided $187 million to purchase 28 Lakotas in support of ongoing mission requirements at the Army Aviation Center of Excellence at Fort Rucker, the Combat Training Centers, and the Army Test and Evaluation Center.
The Army is likely to seek even more Lakotas in the future. In May 2016, it advised the Court of Federal Claims that it had identified a need for an additional 97 Lakota helicopters, although it had not yet decided when or how it would procure them.
When contacted by Vertical, a Leonardo Helicopters spokesperson said that the company did not immediately have comment on the matter.