On May 12, 1995, at 1030 hours mountain standard time, a Schweizer 269C helicopter, N6120A, sustained a hard landing about 7 miles northwest of Scottsdale Airport, Scottsdale, Arizona. The pilots were conducting a local visual flight rules instructional flight. The helicopter, registered to and operated by Luso America, Inc., Scottsdale, sustained substantial damage. Neither the certificated commercial pilot/certified flight instructor (CFI) nor the certificated private pilot/dual student was injured. Visual meteorological conditions prevailed. The flight originated at the Scottsdale Airport at 0945 hours. The operator reported in a telephone interview conducted on May 15, 1995, that the CFI said the dual student was practicing a forward flight autorotation. The CFI planned to terminate the autorotation with a power recovery, but the helicopter struck the ground. In the aircraft accident report, the CFI said that preceding the accident he was demonstrating an autorotation, with the student pilot on the controls, out of an "S" turn. While on final approach before the flare, the helicopter's airspeed was indicating 55 knots and the main rotor blades were turning at 470 rpm. The CFI moderately flared the helicopter at 40 feet above the ground (agl) and the indicated airspeed reduced to 15 knots. He then leveled the helicopter and initiated a power recovery, but the engine and rotor rpm needles did not join up. He said that when he increased the collective the engine rpm did not increase and the main rotor rpm began to decrease. The CFI then slowly lowered the collective and increased the throttle, but without success. At this time the helicopter was between 6 and 8 feet agl and between 10 and 12 knots forward speed; the engine was producing 2,700 rpm and the main rotor was turning at 420 rpm. On ground contact, the helicopter spun to the right about 1 1/2 revolutions. The helicopter came to rest about 20 feet from the original touchdown point and the engine was producing power. In a written statement, the dual student essentially confirmed the CFI's statement. The dual student did say that the engine rpm did not increase when the CFI raised the collective and added power. According to the airplane's pilots flight manual, the normal engine operating range is between 3,000 and 3,200 rpm. The normal main rotor operating range is between 380 and 504 rpm.