By PEO AviationMay 23, 2018
Every year the Army disposes of government property, including aircraft, which is worn out, obsolete and, for the most part, receives no value from the disposal process. The Program Executive Office for Aviation is making creative use of the General Services Administration authority to exchange non-excess property for similar items, resulting in a significant resource dividend.
"The Black Hawk Exchange and Sales Team Program is the Army's premier method of eliminating the divestment cost of an obsolete and non-excess fleet and obtaining replacement aircraft from the revenue generated," Gerald Dwyer, Army Aviation Exchange/Sale Program representative, said.
Some 271 H-60 Black Hawk helicopters have been divested since the BEST program began in 2014 resulting in $230 million in revenue, through reimbursement or credited to the H-60M multi-year contracts, and a $68 million divestment cost avoidance.
The H-60A and L models are out of production but are widely used by U.S. civilian contractors, federal/state agencies and international customers.
"The BEST program allows other governmental activities, commercial firms and foreign governments to acquire used flyable aircraft, rapidly at an affordable cost," Dwyer said.
Eligible aircraft through the BEST program are offered first to U.S. federal agencies as a reimbursable transfer and State Agencies for Surplus Property as a negotiated sale. Any remaining aircraft can be offered to the Original Equipment Manufacturer for an administrative credit and GSA auction to contractors. The proceeds must be applied in whole or part toward payment for property acquired to replace the exchanged property.
Twenty-nine countries employ or are considering H-60 variants of the Black Hawk for their fleets and several countries have active foreign military sales H-60 cases, according to Dwyer.
The Program Executive Office for Aviation's BEST program is recognized by the Department of the Army G4, Army Acquisition Executive and GSA and is approved for the exchange and sale of 400-800 obsolete and non-excess H-60 aircraft through 2026.
Department of Defense program managers may consider pursuing an aircraft exchange (or other equitable exchange), sale or reimbursable transfer -- provided all proceeds are used to purchase, rent or lease a replacement aircraft. This process is regulated by the GSA and the exchange/sale authority provides the Army an opportunity to obtain some value for old, obsolete items when acquiring similar items. Using the exchange/sale authority also enables agencies to avoid the costs associated with holding the property and processing it through the normal disposal cycle.
A predecessor of the BEST program was 2004-12's Cargo Helicopter Alternate Procurement Strategy Program, which was designed to allow up to 40 used CH-47D aircraft be acquired by other government agencies, industry or international partners. Under the CHAPS program, CH-47D aircraft were exchanged with the Original Equipment Manufacturer for a credit or GSA and the value would then be used to procure a new CH-47F model. The benefits to the Army of a new CH-47F airframe rather than a remanufactured airframe were numerous including reduced operations and support cost and an increased life expectancy for the CH-47F fleet.
"The exchange and sale process provides considerable benefits to both U.S. DOD and industry," Dwyer said. "The process is tailor made to address the current resourcing challenges and increases the worldwide vertical flight fleet significantly."