The US Air Force ordered an initial batch of twelve XH-49A for Texas Tower support and Artic search and rescue. The XH-49A was based on the BV-107/II. In Oct 1962 the designation was changed to XCH-46B Sea Knight. USAF serial numbers were assigned, but when Air Force reps visited the Vertol Plant in Morton, PA in late 1962 and realized that Vertol could not meet the delivery deadline with the huge orders from the Army for CH-47s and the Navy & Marines for CH-46s, they cancelled the contract before any airframes were produced and ordered the Sikorsky S-61R
(CH-3C) instead. This loss of a potentially lucrative contract to its arch helicopter rival caused Boeing to make dramatic changes to production and management practices to improve delivery timelines to both the Army & Marines.