Pentagon eyes project to preserve helicopter design capabilities NEW YORK (Reuters) - The U.S. Defense Department may fund initial work on a new military helicopter in a year or two to preserve the industry's critical design capabilities for that sector, the Pentagon's chief weapons buyer said on Wednesday. Defense Undersecretary Frank Kendall told an investor conference he was concerned that the U.S. defense industry could lose the capacity to generate new designs for military helicopters because the Pentagon had not funded development of a new attack helicopter for many years. "We really need to do something in some cases to preserve our design teams, which once they're gone away, are very hard to bring back," Kendall told a conference hosted by Credit Suisse. Kendall invited weapons makers last month to participate in an 18-month initiative led by the Pentagon's Defense Advanced Research Projects Agency (DARPA) that will look at the next era in U.S. air combat superiority after the F-35 and F-22 fighters are retired decades from now. He said the department could launch a similar initiative for helicopters in a year or two. "You get several things from that - you move the technology forward, you reduce the lead time to the next product, you preserve your industrial base capacity," he said. The U.S. Air Force and the U.S. Navy have launched new competitions for two different helicopter programs, but both services are looking for aircraft that already exist - not "clean sheet" designs built specifically for the military. The U.S. Army is also considering a competition to replace its aging OH-58 Kiowa Warrior armed scout helicopters, although officials may still opt to extend the life of the existing aircraft, which were built by Bell Helicopter, a unit of Textron Inc. Kendall said Army officials believed they could afford a new procurement program, but the answer would depend on the service's future budget levels. "They think they can still get that in, depending upon what the cost cap is," he said. But there is an affordability constraint, so I don't know what's going to happen there. Future Pentagon budget levels are uncertain, since Congress has not passed a budget for fiscal 2013, which began October 1, and lawmakers may yet avert $600 billion in U.S. budget reductions that are due to kick in at the beginning of January. Sikorsky, a unit of United Technologies Corp, as well as Boeing Co and Europe's EADS have urged the Army to buy new helicopters, instead of extending the life of the old ones. Army spokesman Dov Schwartz said the Army was evaluating the results of flight demonstrations completed by several helicopter makers earlier this year. No decision is expected prior to the first of the year,' he said. Reporting By Andrea Shalal-Esa; Editing by Leslie Adler and Jan Paschal