Lockheed Martin VH - 71 Kestrel The Lockheed Martin VH - 71 Kestrel is a variant of the AgustaWestland AW101 ( formerly EH101 ) , that was being developed to replace the United States Marine Corps ' Marine One U . S . Presidential transport fleet . It was being produced by the Lockheed Martin – led " US101 Team " of Lockheed Martin Systems Integration – Owego ( LMSI ) , AgustaWestland and Bell Helicopter . In February 2009 , President Barack Obama asked Secretary of Defense Robert Gates about placing the project on hold or canceling it because of its high cost : over $ 13 billion for the planned 28 helicopters . In June 2009 , the U . S . Navy terminated the contract and said remaining funds would be spent to upgrade to the existing Presidential fleet of VH - 3D and VH - 60N helicopters . The VH - 71 helicopters were then sold to Canada for use as spare parts for its fleet of AgustaWestland CH - 149 Cormorant search and rescue helicopters . Development . US101 and VXX competition . The AgustaWestland AW101 , originally designated as " EH101 " , was originally developed and produced by EH Industries , a joint venture between the British Westland Helicopters and Italian Agusta companies ; Westland merged with Agusta in 2001 . On 23 July 2002 , Lockheed Martin and AgustaWestland signed a 10 - year agreement to jointly market , produce and support a medium - lift helicopter , an AW101 derivative designated " US101 " , in the United States . The companies envisaged the aircraft performing three major roles ; U . S . Air Force combat search and rescue , U . S . Coast Guard search and rescue , and U . S . Marine Corps executive transport . On 15 May 2003 , AgustaWestland signed an agreement with Bell Helicopter to undertake final assembly of the US101 in the U . S . Under the pact , AgustaWestland would produce the main rotor blades and main fuselage sections at its Yeovil , UK , facility . The company would produce other components , including the gearbox , at its Cascina Costa , Italy facility . This represents a work share of 36 % . The remaining 64 % work share is split between Lockheed Martin ( 31 % ) and Bell Helicopter ( 27 % ) and others ( 6 % ) . On 18 December 2003 , the United States Department of Defense issued a Request for Proposals ( RFP ) to supply 23 helicopters to replace the 11 VH - 3Ds and 8 VH - 60Ns of the Marine Corps ' HMX - 1 squadron , which performs the role of Presidential helicopter transportation . This requirement was given the designation of VXX . Two companies , AgustaWestland and Sikorsky Aircraft responded to the VXX request for proposal s ( RFP ) . Sikorsky had proposed the VH - 92 , a variant of the H - 92 Superhawk , in partnership with FlightSafety International , L - 3 Communications , Northrop Grumman , Rockwell Collins , Vought Aircraft Industries , and GE - Aviation . On 28 January 2005 , the Department of Defense announced that it had selected the US101 as the winner . It has been speculated that the US101 ' s three engines had been a decisive factor over the rivaling twin - engined VH - 92 . The US101 team was awarded a US $ 1 . 7 billion contract for the System Development and Demonstration phase . In July 2005 , the US101 was given the designation " VH - 71 Kestrel " . Program problems and delays . Delays and engineering issues plagued the VH - 71 ' s development . By 2007 , the estimated cost of developing and modifying the aircraft had risen by 40 % to $ 2 . 4 billion and had passed the $ 4 . 2 billion expected for the production of the fleet . In March 2008 , the program cost had risen and was projected to cost a total $ 11 . 2 billion , or about $ 400 million per helicopter . During dialogue over the CSAR - X ( in which the EH101 was LMSI ' s offering ) , the Air Force Source Selection Authority ( SSA ) had stated the VH - 71 ' s program ' s performance had been " unsatisfactory " . In March 2007 , a Government Accountability Office ( GAO ) report , upholding Sikorsky and Lockheed ' s protests against Boeing ' s HH - 47 , mentioned " LMSI had received a little confidence rating for past performance due to unsatisfactory performance under its current contract for the VH - 71 Presidential helicopter , which was evaluated as the most highly relevant to this procurement . " The SSA stated that LMSI had " show [ n ] that it could not reliably meet important schedule requirements and had difficulty in systems engineering flow - downs to their subcontractors . " Lockheed responded that government insistence on extensive modifications , not anticipated in the RFP , as the source of the cost overruns . A later GAO report in 2011 concluded that development of the VH - 71 was not allowed flexibility or trade - offs considered by the customer . In December 2007 , DoD officials met with the White House Military Office to discuss the program ' s future ; the Pentagon had apparently wanted to terminate the VH - 71 due to setbacks , budget issues , and design problems . The White House overruled a decision to cancel ; the program was effectively placed on hold while options were considered . In July 2008 , the VH - 71A ( also called Increment 1 ) was to reach operating capability in 2010 . The second phase of the development , VH - 71B ( Increment 2 ) was expected to start entering service in 2017 . In October 2008 , while commenting on defense programs likely to be cut following the change in government , John Young , the Undersecretary of Defense for Acquisition , Technology and Logistics , stated that the VH - 71 " is very high on that list " . The rising cost of VH - 71 program contrasted poorly with President Barack Obama ' s stance on curbing government spending ; during a White House gathering in February 2009 President Obama commented that the procurement process had " gone amok and we are going to have to fix it . " He additionally stated that " The helicopter I have now seems perfectly adequate to me . " In March 2009 the projected total cost for the planned 28 VH - 71s was over $ 13 billion . On 6 April 2009 the proposed Defense budget announced by Defense Secretary Robert Gates had not included funding for the VH - 71 . On 1 June 2009 , the U . S . Navy announced that the contract was officially canceled , remaining funds were to be reinvested in upgrades to the existing fleet of VH - 3D and VH - 60N helicopters . The aircraft ' s cancellation provoked commentators to speak out about its impact on future acquisition contracts with European businesses . The failure by the U . S . Department of Defense acquisition process as demonstrated by the VH - 71 may scare away potential partners . Around March 2009 , a coalition of lawmakers encouraged the Administration to continue a variation of the VH - 71 program . A letter issued by several members of Congress urged the President to support a VH - 71 program . On 22 July 2009 the House Appropriations Committee approved $ 485 million to make five VH - 71As operational . Options and restructuring . The Congressional Research Service ( CRS ) estimated that shutting down VH - 71 production , upgrading the existing fleet , and later implementing a successor program would cost $ 14 – $ 21 billion . It was reported not only that a new fleet would not be available until 2024 ( at which point the existing helicopters would have remained in service while being over 50 years old ) , but that terminating the existing program would waste more than $ 3 billion in sunk VH - 71 costs . Following the President ’ s decision to terminate the program a variety of law makers , think tanks and media outlets publicly concluded it would be more cost effective and less time consuming to continue with a variation of the existing VH - 71 program . In 2009 , the CRS proposed four options for the current VH - 71 program . Option 1 was to continue with VH - 71 program with Increment I and II versions ; the additional cost was estimated at $ 10 billion and the entry into service date was 2019 . Option 2 was to restructure VH - 71 program to provide 23 Increment I aircraft ; at an additional cost of $ 6 . 4 billion and would be operational by 2012 . Option 3 was to restructure VH - 71 program to provide 19 Increment I aircraft to replace current fleet ; the additional cost for this option was estimated at $ 5 . 6 billion and the entry into service by 2012 . The last option was to upgrade and extend life of current fleet at a cost of $ 1 . 4 billion ; however this would not meet the standards required for future presidential helicopters , and would require replacement sooner . In addition to the cost of a new procurement program , industry officials say that to merely extend the operating life of the current fleet is a risky choice because it is both less secure and costly to maintain . Lawmakers from both sides of the aisle , including Senator Chuck Schumer ( D - NY ) and Representative Roscoe Bartlett ( R - MD ) have been outspoken critics of the Pentagon in the matter — Bartlett recently claiming that " they had this conversation outside the partnership and we regret that . " Loren Thompson , an analyst for the Lexington Institute , stated " I do not believe that the story of VH - 71 is over . . . Secretary Gates has not made a convincing case for terminating the program , and there is no alternative helicopter that can satisfy range and payload requirements while still landing on the White House lawn . " On 19 December 2009 , President Obama signed a joint House and Senate Defense Appropriation Bill for FY 2010 , which includes $ 130 million funding for the Marine One program : $ 100 million to recoup technologies developed under the VH - 71 Kestrel program , and $ 30 million for the Navy ' s initial studies on a new VH - XX program . In February 2010 , the Navy issued a request for information to the aviation industry . In April 2010 , Lockheed Martin announced they would team with Sikorsky in offering the Sikorsky S - 92 instead of the VH - 71 . In June 2010 , Boeing announced it is considering a U . S . - built licensed version of the AgustaWestland AW101 for the renewed VXX program ; Boeing is also considering the Bell - Boeing V - 22 Osprey and Boeing CH - 47 Chinook . In June 2011 , nine VH - 71s were purchased for $ 164 million by Canada for use as spare parts for its fleet of AgustaWestland CH - 149 Cormorant search and rescue helicopter , which is also based upon the AW101 . In 2013 , media reports stated Canada is studying if up to four of the VH - 71s can be certified for operational use . Testing . The first test VH - 71A , Test Vehicle # 2 ( TV - 2 ) , made its initial flight on 3 July 2007 at AgustaWestland ' s facility in Yeovil in the UK . Lockheed Martin also used an EH101 , designated TV - 1 , for initial testing in the United States ; these tests included landing on the lawn of the White House . The first production VH - 71A , Pilot Production # 1 ( PP - 1 ) , made its maiden flight on 22 September 2008 from Yeovil . The US Air Force transported the helicopter in a C - 17 Globemaster III to Naval Air Station Patuxent River , Maryland for further testing . The first production VH - 71 joined the test program at NAS Patuxent River , beginning ground testing in early December 2008 . Variants . Other competitions . The US101 is also competing for two USAF contracts , the 141 - aircraft Combat Search and Rescue Replacement ( CSAR - X ) project ( originally won by the Boeing HH - 47 on 10 November 2006 , but now subject to a second procurement competition ) , and the 70 - aircraft Common Vertical Lift Support Program ( CVLSP ) . Specifications ( VH - 71 ) . Specifications with an asterisk ( * ) next to them are specifically for the VH - 71 . All others are for EH101 / AW101 .