Sikorsky, Lockheed team to bid for US helicopter

* Lockheed sees possible US Navy award in 2011 or 2012

* Teaming deal follows rival bids for last helicopter

* Lockheed still negotiating termination of VH-71 with Navy

By Andrea Shalal-Esa

Defense News: WASHINGTON, April 19 (Reuters) - Former rivals Sikorsky Aircraft and Lockheed Martin Corp (LMT.N) said they would join forces in a follow-on U.S. Navy presidential helicopter competition even as Lockheed continued to negotiate a settlement over termination of the previous program.

Under the teaming agreement, Sikorsky, a unit of United Technologies Corp (UTX.N) and maker of the current fleet of presidential helicopters since 1957, will offer its H-92 medium-lift helicopter, while Lockheed will supply the major subsystems and integrate the mission systems package.

In a joint statement the companies said they had outlined their plans in a response to the U.S. Navy's request for information, a precursor to a formal follow-on competition.

Dan Spoor, vice president of aviation systems for Lockheed's mission systems and sensors division, told Reuters he did not expect a Navy contract award until 2011 or 2012 after it completes a new analysis of alternatives.

He said Lockheed was continuing to negotiate a termination agreement with the Navy for the previous VH-71 presidential helicopter program, which it had run together with AgustaWestland, a unit of Italy's Finmeccanica SpA (SIFI.MI).

The Pentagon terminated its contract with Lockheed in 2009 after the team delivered nine test and pilot production aircraft based on AgustaWestland's EH101 helicopter.

Rob Stallard, analyst with Macquarie Securities, said potential other bidders for the Navy contract could include Boeing Co (BA.N), Textron Inc's (TXT.N) Bell Helicopter unit and Finmeccanica's AgustaWestland.

Spoor said Lockheed was no longer marketing AgustaWestland's 101-based helicopter in the United States, but continued to work together with the company in Britain.

He said it could still take a couple of years to reach a termination settlement with the Navy, given the complexity of the program and the number of aircraft and other inventory involved.

Navy officials told a Senate Armed Services subcommittee last week that they expected to receive a termination proposal from Lockheed in late fiscal year 2010 and reach a settlement in fiscal year 2011, which begins on Oct. 1.

Lockheed decided to pursue an agreement with Sikorsky, which had bid for and lost the previous contract, once the Navy decided it wanted a helicopter manufacturer to be the prime contractor for the new helicopter contract, Spoor said.

But he said the companies had worked together closely for four decades on several Navy helicopter programs, and it made sense to work together now given Sikorsky's experience with the existing fleet and Lockheed's intimate knowledge of the White House's needs and requirements through the VH-71 contract.

He said Sikorsky's H-92 helicopter was a bit smaller than the 101, but said Sikorsky had made "tremendous progress" on the relatively new helicopter and it was doing well in sea trials for Canada.

In a statement, Scott Starrett, president of Sikorsky Military Systems, also highlighted the two companies' previous work together and said they offered the Navy "a proven and formidable track record as a team."

Sikorsky designed-and-built the VH-3D and VH-60N aircraft -- designated "Marine One" when the president is on board -- that have been transporting the president since the 1960s.

Sikorsky and Lockheed also agreed to explore business opportunities involving other Sikorsky programs. (Reporting by Andrea Shalal-Esa; Editing by Tim Dobbyn)