U.S Navy To Procure V-22 Ospreys Worth $6 Billion

The U.S Navy is planning to sign a five year contract worth under $6.5 billion to buy 99 new V-22 Osprey tilt-rotor aircraft built by Boeing Co and Bell Helicopter, Bell-Textron Inc officials said.

The U.S Marine Corps Colonel Gregory Masiello said the multiyear contract covers the period from fiscal year 2013 through 2017 and includes options for 22 additional aircraft.

"Given the current fiscal situation, it speaks volumes as far as the confidence that the Department of Defense and the government have in the V-22," Masiello said further. "This is a big year for us."

This contract allows 92 of the aircraft in the new order to be built for the U.S Marine Corps, the main buyer of the V-22s, with the U.S Air Force set to receive seven aircraft. The U.S Navy's Naval Air Systems Command oversees the program and negotiates contracts with the manufacturers.

Masiello said the five-year contract would save the U.S Navy $1 billion compared with buying the aircraft one at a time.

The U.S Navy is already exploring the possibility of a third multiyear contract for 100 or more aircraft, which could include the 48 V-22s that the Navy plans buying for its own use, as well as possible international sales, he said.

The contract signing is scheduled for Wednesday. Masiello said the contract would be a modification of an initial single-year deal valued at $1.4 billion that was announced in December.

He said the agreement was good news for the prime contractors on the program, but would also stabilize production for smaller suppliers that build parts for the aircraft.

The U.S Navy could save billions of dollars if it uses the V-22 to replace its fleet of aging C-2 supply aircraft, he said.

Two V-22s had also been added to the military unit that flies the U.S. president, while others were being deployed to Britain and Spain, he said.

International interest in the new aircraft also remained high, Masiello said, noting that the U.S. government had provided briefings to Saudi Arabia, Qatar, the United Arab Emirates, Italy, Brazil, Colombia, Singapore and Australia.

He said the Pentagon was exchanging letters with three countries on possible V-22 purchases but did not name them.

The U.S Defense Secretary Chuck Hagel announced in April that Israel would be the first foreign buyer of the V-22. Sources said Israel would receive five or six V-22s at an estimated price of $70 million each.