Sikorsky Adds Potential Australian Supplier to Support Naval Helicopter Bid

Sikorsky, a United Technologies Company (UTX), has signed a MOU with Australian materials company Quickstep Holdings Limited (QHL:ASX) so that it may begin providing support to the American helicopter manufacturer. The MOU will allow Quickstep to be a supplier to Sikorsky global supply chain and will also allow development of Quickstep manufacturing technology in support of Sikorsky.

The deal helps supports Sikorsky bid for a new helicopter for the Australian Navy. Sikorsky has submitted a proposal based on a version of the MH-60R SeaHawk that they currently provide to the U.S. Navy.

If Sikorsky does win the contract which may be awarded before the end of this year having an Australian partner only helps as it means some of the contract cost remains in Australia. Some nations require a percentage of any new contract to be invested in their economy by the foreign winner. These offsets vary by government but right now Australia does not have such a policy. In some places such as India there large offset requirement has been a barrier for Western companies especially to sell to them and as part of their plans to modernize their military they have had to adjust them.

It only makes good business sense for a company to include domestic ones in support of their programs. It makes the government feel better that some of the money spent on the system remains in their economy. All of the teams bidding on the new armored vehicle for Australia for instance have teamed with a domestic provider in a move to aid their proposals.

Sikorsky will also gain by having a local supplier in Asia that will support their other efforts to win business including selling commercial products. This might speed up replacement parts and repairs while also reducing their costs meaning a better price for their customers. It does mean though less work in the long run for their U.S. support contractors and that consideration must balance any efforts to expand overseas.

Photo from Stephen Edmonds’ flickr photostream.

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