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Canceled US contract with Brazil's Embraer stirs confusion

The Air Force was set to buy aircraft to use in its Afghanistan exit strategy but broke off the deal over unspecified paperwork problems.
Super tucanEnlarge
Three light attack and pilot training Super Tucano planes are shown to the Colombian press 14 December, 2006, at the military Airport in Bogota, Colombia. Colombian Airforce bougth twenty-five (25) airplanes from Brazil for surveillance mission in the forest. (Mauricio Duenas/AFP/Getty Images)

The US Air Force canceled a deal to purchase military planes from Brazilian aircraft manufacturer Embraer, in the latest of a series of Air Force procurement affairs in the last decade.

The cancelation of the $355-million contract, awarded to Embraer and its US partner Sierra Nevada Corp in December, reopens the bidding process between Embraer and Kansas-based Hawker Beechcraft Inc., although the Air Force has indicated it is still interested in the Brazilian company.

"Embraer is obviously a great company and the Super Tucano is a very fine aircraft," US Deputy Secretary of State William J. Burns said at an event in Rio de Janeiro, according to Reuters. "The United States is now in the midst of some internal processes but we remain interested."

The United States blamed faulty paperwork for breaking off the deal but failed to cite sepecific problems.

The deal had been seen as a sign of confidence in relations with the expanding Brazilian economy. Brazil, whose President Dilma Roussef is set to visit Washington, D.C. next month, was confused by the surprise change of plans.

"The Brazilian government learned with surprise of the suspension of the bid process to purchase A-29 Super Tucano aircraft by the United States Air Force, in particular due to its manner and timing," the Foreign Affairs Ministry said in a statement on its website. "This development is not considered conducive to strengthening relations between the two countries on defense affairs."

The Air Force is interested in purchasing a fleet of 20 Super Tucanos — Super Toucans in English — as a light ground-attack craft for the Afghan Air Force as part of the United States' strategy for leaving the country. The turboprop planes are cheaper to operate and maintain than jet fighters, and would serve as both trainers and attack planes in Afghanistan.

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The Super Tucano has been put to use throughout the Caribbean and South America as a tool against drug trafficking 
and counter-insurgency operations against the FARC in Colombia. It would serve a similar purpose in Afghanistan.

However, there is a political shadow behind the cancelation. Hawker Beechcraft had filed suit in the US Court of Federal Claims after the Air Force excluded its product, the Beechcraft AT-6. The company also emphasized potential US job losses as a result of its exclusion.

Bill Boisture, chairman of operating subsidiary Hawker Beechcraft Corp., commended the Air Force's decision. "We look forward to competing for this contract as this important initiative moves forward," he said.

After the decision was announced, Rep. Tim Griffin (R., Ark.) said in a statement that rescinding the contract was "the right decision." Adding that the reassessed contract "could potentially mean new jobs for central Arkansas."

Hawker has said 1,400 jobs, including manufacturing and supplier jobs, would directly result from AT-6 production. However, the Sierra Nevada-Embraer team had plans to manufacture its aircraft in Jacksonville, Fla.

"We are extremely disappointed in the decision to set aside the contract award for the Light Air Support program," said Taco Gilbert, vice president of intelligence, surveillance and reconnaissance business development at Sierra Nevada, "particularly since we know that we had the superior product."

http://www.globalpost.com/dispatches/globalpost-blogs/que-pasa/canceled-us-contract-brazils-embraer-stirs-confusion

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