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Navy Purchase of Airplanes
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1075890
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Navy Purchase of Airplanes
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Vernon C. Loen and Charles Leppert Files
Vernon Loen's and Charles Leppert's General Subject Files
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Procurement and disposal
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1976-03-31
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The original documents are located in Box 18, folder "Navy Purchase of Airplanes" of the
Loen and Leppert Files at the Gerald R. Ford Presidential Library.
Copyright Notice
The copyright law of the United States (Title 17, United States Code) governs the making of
photocopies or other reproductions of copyrighted material. Gerald Ford donated to the United
States of America his copyrights in all of his unpublished writings in National Archives collections.
Works prepared by U.S. Government employees as part of their official duties are in the public
domain. The copyrights to materials written by other individuals or organizations are presumed to
remain with them. If you think any of the information displayed in the PDF is subject to a valid
copyright claim, please contact the Gerald R. Ford Presidential Library.
Digitized from Box 18 of the Loen and Leppert Files at the Gerald R. Ford Presidential Library
Pennsylvania Congressional Belegation
STEERING COMMITTEE
JAMES E. VAN ZANDT, Secretary
2183 RAYBURN OFFICE BUILDING
THOMAS E. MORGAN. M.C., CHAIRMAN
WILLIAM A. BARRETT. M.C.
WASHINGTON, p. c. 20515
DANIEL J. FLOOD. M.C.
HERMAN T. SCHNEEBELI. M.C.
JOSEPH M. MCDADE. M.C.
March 31, 1976
FIVE
Honorable J. William Middendorf II
Secretary of the Navy
The Pentagon
Washington, D. C. 20350
My dear Mr. Secretary:
As members of the Pennsylvania Congressional Delegation Steering
Committee, which speaks for the entire Pennsylvania Delegation, we wish to
call to your attention the bid of Piper Aircraft Corporation, Lock Haven,
Pennsylvania, for a Naval Air Systems Command procurement of VTAMX airplanes.
The Solicitation number is N00019-76-R-0037.
Piper Aircraft has long held an excellent reputation in the general
aviation field. The enclosed data shows their airplane to meet or exceed
all of the Navy's technical specifications and program requirements and to
have the lowest cost of ownership, particularly in regard to superior fuel
economy. In addition to being within the Navy's specification framework,
the significant fuel savings associated with selecting the more efficient
Piper airplane will help conserve this nation's critical fuel reserves.
An historical review of contract awards indicates that the Navy has
routinely purchased all its light aircraft from a single aircraft company.
In this connection, your attention is called to page 6 of the enclosed. It
is the opinion of the Steering Committee that opening up this type of pro-
curement to new competitive sources of supply will ultimately benefit both
the Navy and the taxpayer.
The Pennsylvania Congressional Delegation has taken a great interest
in this procurement because of the substantial impact this work would have in
reducing unemployment and boosting Pennsylvania's economy. Central Pennsylvania
is a labor surplus area. As of January 1, 1976, the unemployment rate for
Clinton County and the central Pennsylvania area stood at 14.7% while
Pennsylvania's rate was 8.9% and the nation's rate was 7.8%. It is the
understanding of the Steering Committee that while this procurement is not
a set aside, a company from such an area would be accorded some further con-
sideration in bid evaluation.
FORD
Honorable J. William Middendorf II
-2-
March 31, 1976
The Pennsylvania Congressional Delegation will appreciate your care-
ful and open-minded consideration of this matter.
Sincerely yours,
Jhonson i. magan
Thomas E. Morgan, Chairman
Pennsylvania Congressional Delegation
Steering Committee
HTXchneber
William A. Barrett
Merman T. Schneebeli
Daniel J. Flood JalenDar Joseph M. McDade
FORD
RICHARD G. QUICK
HUGH SCOTT
ADMINISTRATIVE ASSISTANT
PENNSYLVANIA
United States Senate
WASHINGTON, D.C. 20510
March 16, 1976
Honorable J. William Middendorf, II
Secretary
Department of the Navy
The Pentagon
Washington, D. C. 20350
Dear Bill:
It has just come to my attention that Piper Aircraft Corpora-
tion of Lock Haven, Pennsylvania, is competing for a Naval Air
Systems Command procurement of VTAMX airplanes to be used for
maritime patrol pilot training. The Solicitation number is
N00019-R-0037. I am delighted to express my great interest in
this to you personally because of the substantial impact this
work would have in reducing unemployment and boosting Pennsylvania's
economy. As you well know, Piper has long held an excellent
reputation in the general aviation field. Therefore, I have no
hesitation in properly soliciting your attention to them.
Central Pennsylvania is a labor surplus area. As of January 1,
1976, the unemployment rate for Clinton County and the central
Pennsylvania area stood at 14.7% while Pennsylvania's rate was 8.9%
and the Nation's rate was 7.8%. I understand that while this
procurement is not a set aside, a company from such an area may
be accorded some further consideration on bid evaluation and its
status as a labor surplus concern may entitle it to award in case
of tie bids in accordance with the Buy America clause of the
Solicitation.
I am told that if Piper were to be awarded this work a sub-
stantial improvement of the unemployment rate and general economic
outlook would result in central Pennsylvania and throughout the
Commonwealth. Piper advises me that it would add about 190 workers
directly to its work force and it is conservatively estimated that
138 more jobs would be created locally by the ripple effects. This
would be a dramatic reduction of the level of unemployment - a most
needed and not unhappy consequence, indeed. The total impact on the
Pennsylvania economy is expected to be in excess of $100 million.
Piper believes this will come from subcontracting work done by other
Pennsylvania firms, the additional commercial sales which would be
generated, as well as from the direct and indirect economic effects
of a substantially increased payroll.
Honorable J. William Middendorf, II
March 16, 1976
Page 2
Piper's data shows their airplane to meet or exceed all of
the Navy's technical specifications and program requirements, to
have by far the lowest initial purchase price, to have significantly
lower operational and maintenance costs and superior fuel economy.
On the merits Piper appears to have a superior training plane.
It seems that for the last 25 years the Navy has purchased
all its light aircraft from one aircraft company. Perhaps it is
time to open up this closed system and to give others the opporunity
to compete. This would ultimately benefit both the Navy and the
taxpayer.
I am most anxious that this matter receive your careful and
open minded consideration and I would be pleased to have your
comments after proper analysis.
With my thanks and kind personal regard,
Sincerely,
Hugh Hugh Scott
United States Senator
HS/ds
PIPER
VTAMX
(V)
Heavier than air
(T) Trainer
(A) Advanced
(M)
Multi-engine
(X)
Manufacturer - unknown
-1-
VTAMX
Scope - Piper is competing for a contract for 61 aircraft PLUS the support of these airplanes for 5 years.
Support includes spare parts and full maintenance. Piper will guarantee a fixed price per flight
hour (turn key job)
Value - Contract value is
Aircraft Procurement Navy (APN)
Operational and Maintenance (O&MN)
FY 76
9.2M
FY 7T
4.8M
FY 77
15.3M
2M(?) In budget review
FY 78
16.9M
4M(?)
46.2M
FY 79
----
4M(?)
FY 80
-
5M(?)
FY 81
-
5M(?)
Probable Total Value:
66M
Additional Commercial Sales:
34M
Long term total impact on Pennsylvania's economy is estimated at $100M.
Stability - VTAMX contract will bring long term employment stability as compated to rapid
economic swings of the commercial market.
-2-
VTAMX
Purpose - Train Naval aviators to transition from Beech T34 trainers to anti-submarine patrol aircraft.
Training to occur at NAS Corpus Christi, Texas.
Benefits to Navy - Significantly lower operating cost than present trainer.
- Provide a safer aircraft to train in (present TS-2's are 20 years old)
- Student pilot would be training in an aircraft similar to current Navy patrol
aircraft.
- New trainer provides better learning environment - quieter - more room.
- Accomplish same training in fewer flight hours.
-3-
VTAMX COMPETITION
Company
Commercial Designation
Factory Location
Airplane Type
Piper
Cheyenne
Lock Haven, Pa.
Turbo Prop
Renovo, Pa.
Quehanna, Pa.
Beech
King Air
Wichita, Kansas
Turbo Prop
Rockwell
690A
Bethany, Okla.
Turbo Prop
Cessna
Citation
Wichita, Kansas
Fan Jet
All of these products would provide a superior training airplane and would operate at less cost
than the current multi-engine airplane.
Only the turbo prop airplanes meet the Navy's mission requirements. Only minor modifications
necessary to adapt to Navy training role for Piper Cheyenne and Beech King Air.
-4-
VTAMX
COMMERCIAL COST COMPARISON
Production -
All of these aircraft have been on the commercial market for at least two (2) years.
Commercial Catalogue Price - all aircraft equipped alike (most favored customer).
Piper Cheyenne
$510,915
Beech King Air (E-90)
$603,835
Rockwell 690A
$589,692
Cessna Citation
$746,648
Navy Adaptation - The Navy has asked for special training equipment, which in Piper's case added
less than four per cent (4%)
Contract Features - The large size of the order will allow improved manufacturing efficiencies.
The fixed price aspects over five (5) years introduce unusual business risks.
Caution -
Commercial prices provide an established basis of comparison.
-5-
GOVERNMENT PROCUREMENT ASPECTS
Navy has procured ALL of its light aircraft from Beech.
- T-34 A - First production, 1950
B - Second model
C - Currently in production
- T-42
Trainer
- U-21 (Queen Air)
- C-12A (70 King Air)
Air Force and Army have procured similar aircraft over the years from Beech and Cessna.
DOD procurement enhances commercial sales both domestic and foreign.
DoD procurement is vital to support sales to foreign governments.
-6-
PIPER CHEYENNE FEATURES
1. Cheyenne meets or exceeds all of the Navy requirements.
2. Cheyenne is the lightest and smallest airplane in the competition.
Weight
Piper Cheyenne
9,000
Beech King Air, E-90
10,100
Rockwell 690A
10,250
Cessna Citation
11,500
3. Cheyenne uses less fuel than the competition because of its smaller size and lighter weight.
The Navy pilot training program is very well defined and the use of the airplane was clearly
defined in the Navy solicitation to industry.
Computing the fuel used during a 10 year period while flying the VTAMX mission, the Piper Cheyenne
saves the Navy:
4,100,000 gallons over Beech King Air
9,300,000 gallons over Rockwell 690A
41,200,000 gallons over Cessna Citation.
4. Next to initial purchase price, fuel cost is the most expensive item of ownership. The other
expenses, such as tires, brakes, oil, will be very similar for all airplanes.
5. Piper Cheyenne meets or exceeds all technical requirements and offers the Navy the lowest cost
of ownership.
-7-
CONCLUSIONS
1. If Piper Cheyenne wins VTAMX, it provides a new and continuous source of revenue to
Pennsylvania ($10M per year).
2. If Piper Cheyenne wins VTAMX, it provides employment stability in our industrial segment.
3. If Piper Cheyenne wins VIAMX, it provides DoD a new, proven and competitive source of supply.
4. Piper has never sought out government contracts and therefore lacks contacts with Navy
organization.
5. Although Piper has an excellent reputation for durable aircraft in the general aviation field,
the government procurement experts have no experience with our product.
6. Piper does not maintain a Washington office with its attendant costs and benefits.
7. Piper wants the contract to go to the lowest qualified bidder, and may need help to insure
the procurement is made on this basis.
-8-
PIPER BUSINESS IN PENNSYLVANIA
CONGRESSIONAL DISTRICT
1975 DOLLARS
CONGRESSIONAL DISTRICT
1975 DOLLARS
#1, 2, 3, 4, 13
$4,678,237.04
#21
$ 5,725.61
#5
106,161.72
22
2,818.35
6
107,812.47
23
3,028,314.54
#7
91,628.40
24
22,453.75
8
175,876.27
25
373.20
#9
50,074.45
#10
138,627.46
#11
403,818.70
TOTAL BUSINESS IN 1975:
$25,553,258
12
1,605.98
#14, 18, 20
1,958,771.55
#16
73,994.17
#15
296,466.74
#17
10,687,335.13
#19
93,163.42
-9-