After years of hesitation, the Navy finally decided last year to buy 44 CMV-22B variant Ospreys to replace its C-2A Greyhound airplanes in Carrier Onboard Delivery (COD) missions. But the way the Navy handled the V-22 in this year’s budget calls into question how firm its commitment to buying that many Ospreys really is. The Navy has so many competing, expensive and higher priorities that some Osprey partisans wonder if the money will be there for all those aircraft in the end even if, as expected, the Naval Air Systems Command (NAVAIR) and Osprey makers Bell Helicopter and Boeing Co. negotiate a new multiyear contract – a bulk purchase at lower unit prices. In other words, the poverty penalty could come into play.
“The stress on the budget is real, it’s acute,” said one retired Marine general. “We don’t know right now how many airplanes the Department of the Navy is going to buy. If the multi-year falls apart, it could be less.”
Under an informal rule set by Congress, multiyear contracts are required to provide at least a 10 percent saving over annual contracts. Under the final year of the program’s second multiyear contract, the Marine Corps requested 16 Ospreys in fiscal 2017 at a “flyaway” price of $74.7 million apiece. Future projections released with this year’s budget show that price rising to $94.7 million per Osprey if they don’t get a new multiyear.