February 28, 2012

Air Force cancels contract Hawker Beechcraft filed suit over

The Air Force has canceled a light air support contract awarded to Sierra Nevada Corp. – instead of Hawker Beechcraft – while it reviews the acquisition process used, the Air Force said Tuesday.

Its acquisition executive is "not satisfied with the quality of the documentation supporting the award decision,” the Air Force said in a statement.

The action is highly unusual, Rep. Mike Pompeo said in a conference call.

“That’s no small undertaking,” Pompeo said. “It’s a contractual process. They have now undone that contract. The Air Force does not do that lightly.”

The Air Force’s action suggests the bid process was flawed, he said.

In November, the Air Force eliminated Hawker Beechcraft from the competition, saying the company had not adequately corrected deficiencies in its proposal. It then awarded the $355million contract to Sierra Nevada the next month. Sierra Nevada was the U.S. partner of Brazil-based Embraer.

The contract is expected to be worth up to nearly $1billion with follow-on contracts.

Hawker Beechcraft filed suit in January, questioning the selection process and whether it was conducted legally. The Air Force issued a stop work order on the contract as a result.

The Air Force has advised the Department of Justice of its latest action, which is effective Friday, it said in a statement Tuesday.

"While we pursue perfection, we sometimes fall short, and when we do we will take corrective action," Michael Donley, U.S. Secretary of the Air Force, said in a statement.

Gen. Donald Hoffman, commander of Air Force Materiel Command, has initiated an investigation into the matter, the Air Force said. The Air Force declined further comment beyond its statement, it said.

Bill Boisture, chairman of Hawker Beechcraft Corp., commended the Air Force for its decision.

“We believe strongly it is the right thing for the Air Force, the taxpayers and the people of Hawker Beechcraft,” Boisture said in a statement. “We look forward to competing for this contract as this important initiative moves forward.

“We continue to believe the American manufactured AT-6 is the right aircraft for this critical United States mission.”

Taco Gilbert, vice president of business development of Sierra Nevada’s intelligence, surveillance and reconnaissance unit, said the company is disappointed in the Air Force’s decision.

“We remain supremely convinced in our aircraft,” Gilbert said. “It is by far the most capable that’s out there.”

The fact that the Air Force is reviewing the process is a big step forward, said U.S. Sen. Pat Roberts.

“This is what we were trying to get the Secretary of the Air Force to do way back in November,” he said.

Sierra Nevada offered Embraer’s Super Tucano for the light air support aircraft, while Hawker Beechcraft offered its Wichita-built AT-6 turboprop, based on its T-6 trainer.

Hawker Beechcraft officials have said that the specifications kept changing during the selection process. And it wondered why it was eliminated from the competition at the very end of the process.

Roberts said the delegation took a request for a debriefing to Secretary of Defense Leon Panetta in January after requests to Donley were unsuccessful.

“He was not helpful at all,” Roberts said of Donley.

The Air Force has been saying the competition was open and transparent, Pompeo said.

“I can’t tell you whether it was fair or not; I can certainly tell you whether it was transparent,” he said. “And it has not been.”

It’s unknown whether the findings will lead to a reopening of the bid, he said.

If the process is determined to have been flawed, the Air Force will have to redo the process, Pompeo said. It’s not yet known what the timeline or the next step will be, he said.

The light air support aircraft will be used in Afghanistan to conduct advanced flight training, aerial reconnaissance and light air support operations. First shipments were to begin in April 2013.

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