Tuesday 14 March 2006, 2:26pm EST
By Andrea Shalal-Esa

WASHINGTON, March 14 (Reuters) - Top Pentagon officials will review an Air
Force program valued at up to $10 billion for new combat search-and-rescue
helicopters as part of a broader effort to streamline U.S. military
purchasing.

Chief Pentagon arms buyer Kenneth Krieg will chair a so-called "investment
review" on March 23 of the Combat Search and Rescue (CSAR-X) program to
replace the Air Force's Sikorsky HH-60G Pave Hawks, said Pentagon
spokeswoman Cheryl Irwin.

The program is due to include five test aircraft and up to 141 production
helicopters.

Analysts and industry executives are watching the process closely since this
is the first-ever Pentagon investment review
-- and it comes far into a competition that began last year and is due to
wrap up in August.

Some say the whole CSAR-X program could be scrapped or revamped, while
others say a Pentagon-led drive to reduce the overall number of helicopters
operated by the U.S. military could favor Boeing Co.'s (BA.N: Quote,
Profile, Research) HH-47 bid with a variant of the Chinook that is widely
used by the Army and special forces.

Irwin said the review was meant to review the CSAR-X acquisition strategy in
view of the 2007 budget proposal, the results of the Pentagon's quadrennial
review and "additional studies of alternative strategies."

She gave no further details, and denied suggestions by industry sources that
the review would slip into April.

Following the review, Krieg's office could approve a formal acquisition
strategy, which would pave the way for a formal program start in the summer
and a contract award, Irwin said.

In addition to Boeing, other bidders include Lockheed Martin Corp. (LMT.N:
Quote, Profile, Research) and AgustaWestland Inc., owned by Italy's
Finmeccanica SpA (SIFI.MI: Quote, Profile, Research), which are offering the
US101, which won a $6 billion contract to build the next presidential
helicopter in January 2005.

Sikorsky, part of United Technologies Corp. (UTX.N: Quote, Profile,
Research), has teamed with Boeing Co. (BA.N: Quote, Profile, Research) to
offer a version of its VH-92, the losing contender for the presidential
helicopter.

"The whole idea is to try to rationalize what systems they're buying," said
Loren Thompson of the Virginia-based Lexington Institute. "It's all part of
a broader effort to run the Pentagon in the simplest, most efficient
manner."

He said some advisers to Krieg favored picking the Chinook variant for
CSAR-X, because that would trim the number of spare parts needed, as well as
training for maintenance crews.

But he said the Air Force appeared to favor the Lockheed helicopter, which
is smaller than the Chinook.

Richard Aboulafia with the Virginia-based Teal Group said the Pentagon
review could put the whole CSAR-X program in jeopardy, given increasing
competition for defense spending.

"There's serious risk here. Everyone is looking for ways to keep the budget
profile down," he said.

Industry officials said they did not expect the Pentagon to cancel the
program, especially given last month's news that the Air Force was proposing
to accelerate the program by two years by adding $849 million to program
funding.

Boeing's van Horn, who heads Boeing's Chinook bid, said Krieg wanted to be
sure the program was executable, fully funded and that the Air Force would
complete the program.

The recent decision to accelerate the program was a sign of the Air Force's
commitment, he said, adding, "To me, the money seems to be there. They've
actually added money."

Lockheed was looking forward to learning more about the review process and
its results, said spokesman Greg Caires.

The Air Force will use the helicopters to rescue wounded soldiers from the
battlefield, deliver humanitarian aid and evacuate people caught in
disasters like Hurricane Katrina.

The Bush administration budget proposal earmarked $254 million for the
helicopter in fiscal year 2007, which begins on Oct. 1. Congress has the
final say on defense spending.

I thought the V-22 was to be the answer to this problem?

Quoted: I thought the V-22 was to be the answer to this problem?

The CV-22 has nothing to do with this program.  

The CV-22 will be supporting special operations with the USAF Special Operations Wing.

CSAR is Combat Search and Rescue, they support everyone (including civillians) alongside other joint assets, with search and rescue capability.

The USAF has to buy something, or they'll have nothing.  Their 60's are reaching retirement in flgiht hours on the airframe.