January 4, 2012
By Jim Moore
A federal judge could rule as early as next week on a bid by Hawker Beechcraft to halt a U.S. Air Force light attack and reconnaissance contract recently awarded to Brazilian manufacturer Embraer.
The Air Force announced Jan. 4 that the contract is on hold pending resolution of the litigation, though the Pentagon is eager to proceed with the $355 million deal awarded in December to provide 20 single-engine turboprop aircraft with light air support, reconnaissance, and advanced training capabilities to Afghan security forces.
“Clearly, the Air Force believes that this is a fair and open competition,” said Lt. Col. Wesley Miller. “We are very much looking forward to moving forward with the contract. The LAS (light air support) is a wartime support contract for a partner in conflict. This involves a sense of urgency and mission accomplishment.”
The deal, starting with 20 airplanes, had potential to grow to a $1 billion, five-year deal that would support 1,400 American jobs, Hawker Beechcraft argues in its legal defense of the AT-6 program.
Defense industry analyst Wayne Plucker, of Frost & Sullivan, said Hawker Beechcraft will be hard-pressed to prove the Air Force erred in choosing the Embraer-314 Super Tucano, which is a purpose-built reconnaissance and light attack aircraft and not an adaptation of the ubiquitous T-6 trainer.
“The contested points that Hawker makes aren’t bad ones,” Plucker said. “I just don’t think they’re compelling ones.”
Hawker Beechcraft said the company and its partners--Lockheed Martin, CMC Esterline, Pratt & Whitney Canada, L-3 Wescam, and CAE--have invested more than $100 million adapting the T-6 used to train every fixed-wing pilot in the U.S. military, along with other nations, for a new mission: light air support.
Plucker said the long association with U.S. military aviation may be part of the AT-6’s downfall, with the Air Force seeking an aircraft that is “internationally portable.”
They want something that doesn’t have U.S. fingerprints all over it, depending on what part of the world it ends up in,” Plucker said. “I think that was part of the thought process, to be blunt.”
Richard Aboulafia, an industry analyst at Teal Group, said given that the Government Accountability Office has declined to review a challenge to the Embraer award by Hawker Beechcraft, it is unlikely that the federal court will be swayed. He is also skeptical it will amount to a $1 billion deal when all is said and done, unless the Air Force decides to “equip the entire Afghan air force with these.”
“I think losing it would not be the end of the world (for Hawker Beechcraft),” Aboulafia said. “You’ve got a company that does have an issue with revenue and debt … the decision by its financial backers to stick with it will depend on signs of recovery in the business jet market, not on a contract for a couple of dozen trainers.”
On that front, Aboulafia sees signs of hope--as long as consumer confidence returns. The business aviation market is flush with cash and pent-up demand, he said.
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