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HELICOPTER AIR SERVICE PROGRAM    21 

manufacturer to you, contributes to your more efficient operation of helicopter aircraft? 

A. Yes, sir. 

Q. Would you provide for me, sir, an enlargement or a reason for your statement at the foot of page two: The aircraft common to both commercial helicopter operators and the Army have been in operation long enough so that the major problems have been resolved?"

I am interested in what major problems you have in mind when you make that statement.
 
A. Well, I think an aircraft system, one way or another, when it first comes out will have some deficiencies that are not readily apparent, but will show up in some period of operation, time of service. 

And, obviously you are going to get the major defects and most of the defects of any magnitude earlier in the program. In other words, a design which is not just adequate, or a manufacture which is not just quite adequate, normally shows up earlier in the program, and as you make the necessary modifications to remove the problem area to improve the components, the product, you have fewer of these crises come up, to speak, fewer of the problem areas.

Q. In other words, these major problems are mechanical problems that may arise, is that right, for the most part? They are mostly mechanical problems?

A. Yes, mechanical. Structural, also. They can ben [[be]] structural.

Q. What prompts you to believe, or what prompts your statement that the major problems have been resolved?

A. Well, this is my own feeling based on experience. I mean, we could obviously have a major crisis arise tomorrow or next week. It is always a possibility. But, the aircraft that we are talking about here primarily, say S-58, has been in operation quite a long time, and as we accumulate more and more hours of service time, why I think our confidence level rises and we feel that there will probably be less possibility of a major crisis developing, structurally or mechanically.

Q. Are you at liberty to say, sir, whether you are now receiving information on the operations of what has been identified as an S-61 from any commercial operator?

A. No, sir, we are not receiving any. We do not have the S-61 in the Army system at present.

Q. On the matter of awarding contracts to perform overhaul on helicopter parts, is the success of such an award dependent on price, or are there other factors that enter into an award of a contract to perform overhaul?

A. It is on a competitive basis normally, and price is your major factor. However, if a company, organization, would submit a low bid and you think that you can prove, you are pretty sure, that this individual is not capable of doing it, either through experience or perhaps a plant survey would indicate he does not have the equipment to, not manufacture, but to overhaul or re-work to the tolerances spelled out, then you would have to eliminate that individual from competition.

Q. Are you at liberty to say, sir, and I am not requiring a response to this if it is protected in some way, but are you at liberty to say in dollar volume the amount of money that has been involved in awards for repairs or modifications of helicopter equipment over, say, a period of 1 year, say 1962?

A. Well, there would be no restriction on my giving the figure. Unfortunately, I do not have. This is primarily the responsibility of our Contracting Branch, contracting group, and as such why the Engineering does not normally accumulate that sort of data.

Mr. MCKINNON. Thank you, sir. I have no further questions.

Examiner DONOHUE. Any redirect?

Mr. OLIVER. I have just a couple questions, Mr. Examiner.

CROSS-EXAMINATION

By Mr. OLIVER:

Q. Mr. Bannick, in regard to your testimony that the major problems have been resolved, and speaking of the S-58, it is fair to say, is it not, that you still have a number of service problems with this S-58, which have to be resolved from time to time?

A. We still have some. Of course, some that we are living with today result from our product improvement, the modifications which are normally incorporated, say, during overhaul, for instance - the time lag involved there.