Nope… the agreement was basically that Kaman gets the helos back and keeps most of the money. If Kaman is able to sell them on, then they and the RAN will split the proceeds.
http://www.av8r.net/index.cfm?ContentBlockID=6945d434-53ca-49dd-bde4-fdfb6d0487b3&
Kaman Agrees To Cancel Aussie Helo Contract
Sat, 22 Mar ’08
But Looses Little In Agreement.
The next time you go to buy a new car, or airplane… you might want to take a negotiator from Kaman Corp. with you. The US helicopter maker reached an agreement this week with the Australian government to cancel a controversial 1997 order that was years behind schedule… but in the end, one could argue Kaman still came out way ahead.
The Hartford Courant reports the agreement — reached Wednesday, following a series of negotiations between both sides at Kaman’s headquarters in Bloomfield, CT — will leave Kaman with all the SH-2G Seasprite helicopters it had contracted to provide to the Australian Navy… and, most of the $600 million Australia had already paid towards the deal.
See what we mean?
As ANN reported, nine helicopters were delivered to Australia out of 11 signed for… and those birds were delivered years after the agreed-upon 2002 date. Furthermore, Australia alleged flight testing of those delivered Seasprites turned up safety concerns; the navy grounded its Seasprites in April 2006.
Incoming Australian Prime Minister Kevin Rudd ordered the contract cancelled last year… but Kaman played hardball, saying Australia would have to negotiate terms. The manufacturer also stuck by the Seasprite’s safety record, noting New Zealand and other countries use the helicopters with no major problems.
Under Wednesday’s agreement, Kaman conceded the delays, saying a former subcontractor was to blame — notably, in the slow development of a promised advanced avionics system. The manufacturer will buy back all 11 Seasprites, and try to resell them… with Australia and Kaman splitting the profits.
Kaman also agreed to pay Australia at least $37 million in retributions, and release it from a $35 million payment against work already performed. Australia will see that money regardless of whether Kaman is able to resell the helicopters.
So, Kaman keeps $563m (after it returns $37m), writes off $35m and any expenses not covered by the $563m… and gets a split of whatever the helos sell for.
The RAN ends up having paid $563m (after the refund), and gets a split of whatever the helos sell for.
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