Bloomberg News

U.S. Air Force Restarts Afghanistan Aircraft Competition

April 13, 2012

The U.S. Air Force will restart its stalled $1 billion competition to buy light attack aircraft for the Afghanistan military, it said today.

The military will issue a draft request for proposals April 17 and a final version April 30, the service said in an e-mailed statement. A new award is scheduled for early 2013.

The Air Force on Feb. 28 canceled a disputed $1 billion contract to Sierra Nevada Corp. after determining the documentation used to make the award was flawed.

Sierra Nevada and its Brazilian subcontractor, Embraer SA (EMBR3), will again compete against Hawker Beechcraft Corp. Hawker, a closely held company that is 49 percent-owned by Goldman Sachs Group Inc. (GS:US), had protested the Defense Department’s December decision, which gave Sierra the order to provide the aircraft for the Afghan military.

Hawker sued the military in the U.S. Court of Federal Claims in Washington, claiming it was unfairly eliminated from the competition. The decision was a blow to the Wichita, Kansas- based company, which has been struggling with slower defense spending.

Spokesmen for Hawker, Sparks, Nevada-based Sierra and Embraer didn’t immediately respond to phone calls and e-mails.

Embraer hoped to use the contract to establish a relationship with the Pentagon, Chief Executive Officer Frederico Curado told reporters on April 10 at the U.S. Chamber of Commerce in Washington.

“This tends to give us opportunities for future transactions,” Curado said. He said the contract would give the company credibility abroad as well.

“We just have to hope that when this process is reconsidered or reopened that there are no changes to the original specs,” he said. “If there are no changes, I think the same reasons that made us win the first time will make us win the second time.”

To contact the reporters on this story: Tony Capaccio in Washington at acapaccio@bloomberg.net; Danielle Ivory in Washington at divory@bloomberg.net

To contact the editor responsible for this story: Stephanie Stoughton at sstoughton@bloomberg.net


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