Apache is currently providing vital battle-winning capability in support of UK and coalition forces on operations in Afghanistan. Building on the existing support arrangements in place, on 6 October I announced the award of a through-life integrated operational support (IOS) contract to AgustaWestland for implementation of the Apache Helicopter Future Support Arrangements (FSA). This IOS contract is an output-based contract where specific levels of support are required to be achieved by industry while allowing industry to decide the optimum way to provide that support. Under the contract, one of the key areas will see AgustaWestland increasing the availability of the Apache helicopters from the current level to over 70 per cent. which will be of significant benefit to front-line users. In addition the contract will reduce through-life costs through AgustaWestland implementing continuous improvements in the service provided.
This contract will build on the existing effective and efficient engineering and logistical support for the Apache AH Mkl helicopter to the frontline. The contract is valued at £439 million for the period to March 2014, with a price review thereafter, and transfers to industry further responsibility for Apache AH Mkl maintenance and support and associated risk of delivering the required output. The contract is forecast to deliver savings in the region of £50 million over the first contract period as compared to the projected costs of current support arrangements, with the potential to deliver further savings through life. This will be achieved whilst also increasing aircraft availability.
The contract represents another step forward in the helicopter plans set out in the MOD-AgustaWestland strategic partnering arrangement, strengthens our relationship with the industry, and will increase aircraft availability levels despite reducing through-life costs. Progress with this IOS contract builds on the similar support contracts already in place for the Sea King and Merlin helicopters that have also been previously awarded to AgustaWestland.
Overall the Apache IOS contract provides excellent value for money for the taxpayer and delivers improved and efficient support to the frontline.