February 16, 2012

Hawker Beechcraft still fighting Air Force contract decision

The feud between Hawker Beechcraft and Sierra Nevada Corp., Embraer’s U.S. partner for a light air support contract with the U.S. Air Force, continues.

The feud between Hawker Beechcraft and Sierra Nevada Corp., Embraer’s U.S. partner for a light air support contract with the U.S. Air Force, continues.

On Wednesday, Sierra Nevada said it was exploring options on how to mitigate delays on the delivery of Embraer Super Tucano aircraft to the Air Force. First shipments were to begin in April 2013, but the Air Force has said it now expects delays because of a lawsuit filed by Hawker Beechcraft seeking to determine whether the bidding process was conducted legally. As a result of the litigation, the Air Force issued a temporary stop work order on the contract.

In November, the Air Force eliminated Hawker Beechcraft from the competition, saying it had not adequately corrected deficiencies in its proposal. In December, it awarded a $355 million contract for 20 planes, three ground-training devices and three years of support to Sierra Nevada Corp., based in Sparks, Nev.

Hawker Beechcraft came out swinging after the contract was awarded. Due to missed deadlines, its protest to the Government Accountability Office was denied. So was a request to the Air Force for a briefing about its elimination from the contest.

The company filed a lawsuit, set up a website, implemented a write-your-Congressman campaign to protest tax dollars going abroad, and gained support from the Kansas delegation, which questioned the Air Force’s bidding procedures and the purchase of Brazilian aircraft.

Sierra Nevada countered that it will assemble Super Tucanos at a new facility in Jacksonville, Fla., and that more than 88 percent of the plane by dollar value is from U.S. suppliers or countries that qualify under the Buy America Act.

Two weeks ago, it put out a point-counterpoint news release countering Hawker Beechcraft claims, saying that Hawker Beechcraft is moving jobs to Mexico and noting its co-ownership by Canada’s Onex Corp. and investment banker Goldman Sachs.

Hawker Beechcraft says the light air support program represents 1,400 jobs, including 800 at the Wichita-based company. The Hawker Beechcraft jobs include 500 in engineering and program management, and 300 Machinists-represented jobs.

The light air support aircraft will be used in Afghanistan to conduct advanced flight training, aerial reconnaissance and light air support operations.

“It is integral to U.S. plans to provide the Afghanistan government with an indigenous advanced training and combat capable aircraft to facilitate that country’s internal security capability,” Sierra Nevada said in a statement.

U.S. Rep. Mike Pompeo, R-Wichita, likens the contract award to the flawed decade-long fight to replace the aging Air Force aerial refueling tanker. After three rounds, Boeing beat Airbus’ parent company, EADS, a year ago.

Hawker Beechcraft and Pompeo held a joint news conference last month saying they want the Air Force to explain why the company was excluded from the contract, which is expected to be worth up to nearly $1 billion with follow-on contracts. They also want to know why the contract was awarded to Sierra Nevada on Dec. 22 but wasn’t announced until Dec. 30. Normally defense contracts are posted the day they’re awarded.

“We believe there’s been a flaw in the acquisition process,” Bill Boisture, Hawker Beechcraft’s CEO, said at the time.

Hawker Beechcraft offered its AT-6 turboprop, based on its T-6 trainer, in the contract bidding. A GAO report said that the Air Force found deficiencies with the plane.

“The agency concluded that multiple deficiencies and significant weaknesses found in (Hawker Beechcraft’s) proposal make it technically unacceptable and results in unacceptable mission capability risk,” the Air Force said in the GAO report.

But Hawker Beechcraft says that’s because the specifications kept changing.

“We have said that we believe there were ever-changing requirements as part of the (selection) process,” said Hawker Beechcraft spokeswoman Nicole Alexander. “That now is one piece of our appeal to the court.”

Motions on the case are due to the U.S. Court of Federal Claim on March 6, according to an Air Force background paper on light air support contract issued in January.

“The USAF is confident in the merits of the contract award decision and anticipates the litigation will be quickly resolved,” it said in the background paper.

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