In 1956, the US Navy launched a competition to meet its requirement for a compact, all-weather multipurpose naval helicopter. Kaman's K-20 model was selected as the winner. Kaman was awarded a contract for four prototype and 12 production HU2K-1 helicopters in late 1957. Kaman's design was for a conventional helicopter powered by a single General Electric T58-8F turboshaft engine, driving a 44-foot four-bladed main rotor and a four-bladed tail rotor.
In 1960, the Royal Canadian Navy (RCN) announced that the HU2K was the frontrunner for a large anti-submarine warfare contract; the Canadian Treasury Board had approved an initial procurement of 12 units for $14.5 million. Abruptly, Kaman raised the estimated price to $23 million, and there was concern that the helicopter's performance projections were overly-optimistic. The Naval Board decided to wait until after the USN had conducted sea trials before approving the purchase. These trials revealed the HU2K to be substantially heavier, underpowered, and incapable of meeting the RCN's requirements. Thus, in late 1961, the RCN chose the Sikorsky Sea King instead.
With no follow-on orders, Kaman ended production in the late 1960s after delivering 184 SH-2s to the US Navy; although production would be later restarted in 1971 to manufacture an improved variant of the helicopter, the SH-2F. A significant factor in the reopening of the production line was that the Navy's Sikorsky SH-60 Sea Hawk, which was newer and more capable in anti-submarine operations, was too large to be operated from the small flight decks of older frigates.
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