Apache Sale

The Pentagon late this afternoon formally announced a $904 million contract for Boeing to sell 36 AH-46E Apache Block III attack helicopters to South Korea.

Inside the Army reported on the sale in July, albeit for a slightly higher price:

Apaches are seen as a hot ticket item in Army foreign military sales and the demand for this is expected to rise, according to a service official not authorized to speak on the record. The recent sale to South Korea and other impending contracts are evidence that Apache FMS is heating up.

A Letter of Offer and Acceptance (LOA) with South Korea was announced on April 17 for 36 Apache helicopters valued at $1.6 billion, Kim Gillespie, spokeswoman for ASAC, wrote in a July 25 statement to Inside the Army. The Apache was ultimately chosen after the South Koreans held a competition to select the attack helicopter.

"We received an LOR (letter of request) to submit a proposal last year, and [Korea's Defense Acquisition Program Administration] competed these proposals through a very rigorous process," ASAC's Pacific Command Regional Director Col. Stephen Smith is quoted as saying in an ASAC statement provided by Gillespie.

For the Army, according to the statement, the purchase is expected to account for one-tenth of the Army FMS for fiscal year 2013.

The Defense Security Cooperation Agency notified Congress of the possible sale of Apaches to South Korea on Sept. 21, 2012, according to a Sept. 25, 2012 agency statement.

Typically, an increase in FMS of American weapon systems is beneficial to the U.S. government because the purchases help extend production lines and lower unit costs. Foreign countries may also invest in the modernization of certain weapon systems taking some of that funding burden off of the United States.