Hawker-Beech Sues to Block Embraer Air Force Contract

Embraer Super Tucano

By Gary P Jackson

Doing some follow up on a story about the battle between Hawker-Beechcraft and the United States Air Force, concerning contracting rules that excluded them from bidding on a project that was eventually awarded to Brazilian aircraft manufacturer Embraer. What caught our eye in this deal initially is the fact Obama’s puppet master, George Soros, the self proclaimed “owner of the democrat party” has ties to the Brazilian company.

From Flying Magazine:

Embraer has won a hotly contested contract to build counterinsurgency aircraft in its first deal with the U.S. Air Force, marking a major victory for the Brazilian company and an important milestone in relations between the two countries. The contract award has also touched off a fierce PR and legal offensive by the losing bidder, Hawker Beechcraft, which has filed a lawsuit in federal court aimed at blocking the decision.

At the heart of the matter is Embraer’s successful win over Hawker Beechcraft of a contract potentially worth nearly $1 billion under which Embraer will provide the Air Force with Super Tucano light attack aircraft and support services for missions mainly in Afghanistan.

Hawker Beechcraft filed suit with the Court of Federal Claims following notification that the Government Accountability Office (GAO) declined to review its protest of an Air Force decision to exclude the Beechcraft AT-6 from the Light Air Support (LAS) competition. The company says it was given “no concrete reasons” for the AT-6’s exclusion, having been denied an explanation by the U.S. Air Force on two separate occasions.

“We are disappointed in the GAO’s decision as we were relying on their investigation to provide transparency into what has been a bidding process of inconsistent, irregular and constantly changing requirements,” said Bill Boisture, Hawker Beechcraft chairman and CEO. “We find ourselves still without answers, which is unacceptable, and continue to believe that our exclusion from this important contract was made without basis in process or fact.”

For the past year, Hawker Beechcraft and Embraer have competed for a contract to supply 35 airplanes to the Air Force. That number could grow to 55 and be worth up to $950 million.

The AT-6, Hawker Beechcraft notes, is designed and manufactured in the U.S. to be used by the U.S and its allies. Keeping the contract in the U.S. would help preserve 1,400 domestic jobs at 181 companies in 39 states. Adapted from the company’s T-6 trainer, the AT-6 is designed for counterinsurgency, close air support, armed overwatch and homeland security. The company has said that winning the contract would keep its T-6 production line running after 2015, when final deliveries of the trainers to the U.S. Navy are scheduled to take place.

While losing the contract could lead to job losses in Wichita, Embraer has made a compelling case for U.S. job creation in its bid proposal. The company said it will build the Super Tucanos in Florida in partnership with prime contractor Sierra Nevada, a U.S.-based technology company. The companies say they’ll use more than 70 U.S. suppliers and create more than 1,200 U.S. jobs.

Hawker Beechcraft doesn’t deny that the Embraer contract award could lead to job creation. Rather, the company says it is seeking straight answers from the Air Force.

“As a U.S. company, we believe we deserve a fair chance at this contract,” Boisture said. “Hawker Beechcraft has been delivering U.S. Department of Defense aircraft certified to military specifications for more than 50 years. We are qualified and prepared to continue doing so for the Air Force’s LAS operations with our capable, affordable and sustainable AT-6 aircraft.”

Hawker Beechcraft also said it was kept in the dark about Embraer’s contract win, learning about it only at a court hearing after it filed its federal lawsuit.

“During the hearing, the government revealed that the unannounced award apparently was made on Dec. 22, 2011, shortly after the Government Accountability Office declined to review Hawker Beechcraft’s protest against its exclusion from the LAS competition,” the company said in a statement. “Per federal regulations, federal agencies are generally required to make a public award announcement by 5 p.m. ET on the day of the award.”

Arguing that the facts don’t add up, leaders at Hawker Beechcraft seem to sense a conspiracy is brewing. “This is yet another example of the Air Force’s lack of transparency throughout this competition,” said Boisture. “With this development, it now seems even clearer that the Air Force intended to award the contract to Embraer from early in this process.”

At the hearing on Dec. 28, Hawker Beechcraft requested that the court grant a temporary restraining order to preclude the Air Force from moving forward in the contract process. The court agreed to establish an accelerated schedule for briefings on the temporary restraining order and the legal merits of the case. A ruling on Hawker Beechcraft’s request for a temporary restraining order is expected as early as Jan. 11.

Businessweek adds:

“We were relying on their investigation to provide transparency into what has been a bidding process of inconsistent, irregular and constantly changing requirements,” Bill Boisture, chairman and chief executive officer of Hawker Beechcraft Co., said in an e-mailed statement. We “continue to believe that our exclusion from this important contract was made without basis in process or fact,” he added.

The company claims that it worked closely with the Air Force and has spent more than $100 million over the past two years preparing to meet the contract requirements, according to the statement.

The Air Force, in a one page memorandum, notified the company on Nov. 1 that the AT-6 was excluded from consideration, according to a court filing.

Laura Sweeney, a Justice Department spokeswoman, declined to comment on the lawsuit.

The case is Hawker Beechcraft Defense Company LLC v. U.S., 11-897, U.S. Court of Federal Claims (Washington).

Lack of transparency and irregular activities are the hallmark of the Obama regime. It will be part of Obama’s legacy.

I can’t comment on the fitness of either aircraft for the tasks they would be assigned. The Hawker AT-6 is a new aircraft from a well established manufacturer with a great reputation. The Embraer Super Tucano is built by an upstart company, but the aircraft is already in service around the world, and by all accounts performing well.

My concern is the bidding process, the fact the Air Force allowed Hawker-Beechcraft to invest $100 million, only to exclude them from bidding, and instead of giving them a detailed explanation, gave them what amounts to a “Dear John” letter. It raises suspicions, and certainly deserves a look at.

Hawker-Beechcraft Denied Big Air Force Contract in Favor of Brazilian Company With Soros Connections

Hawker-Beechcraft AT-6

*Update: Hawker-Beechcraft sues to block Embraer’s Air Force Contract

By Gary P Jackson

Here’s a little something that caught my eye today. It seems after investing around $100 million in this project, Hawker-Beechcraft has been excluded from a contract, worth almost $1 billion, to build a new light air support plane.

What intrigues me is the Brazilian company Embraer, the likely contract winner, is currently under investigation by the U.S. Securities and Exchange Commission, and the Justice Department, for possible violations of the US Foreign Corrupt Practices Act.

According to Financial Times, Embraer is “venturing into the defense industry” and “is one of a select few Brazilian companies that has managed to break out of the Latin American market and compete on a global scale”

You can read more about the corruption investigation here.

Here’s what the Wichita Eagle is reporting:

Hawker Beechcraft Corp. says the Air Force has informed the company that it lost out on a military contract worth nearly $1 billion.

The company had hoped to win the Light Air Support contract with its AT-6, an armed version of its T-6 trainer. But on Friday, the company said it received a letter from the Air Force saying the AT-6 had been excluded from the competition. The company wants an explanation.

According to the company’s news release: “The letter provides no basis for the exclusion. We are both confounded and troubled by this decision, as we have been working closely with the Air Force for two years and, with our partners Lockheed Martin, CMC Esterline, Pratt & Whitney Canada, L-3 WESCAM and CAE, have invested more than $100 million preparing to meet the Air Force’s specific requirements.”

The piston planes are designed for counterinsurgency, close air support, armed overwatch and homeland security.

Hawker Beechcraft said it continues to believe the AT-6 is the most capable, affordable and sustainable aircraft in the competition based on the Air Force’s specifications. The company has said that winning the award would have kept its T-6 production line running after 2015. The company has said that 1,400 employees in 20 states – including 800 at Hawker Beechcraft in Wichita – work on the AT-6 and T-6 programs at the company and its U.S. suppliers and partners.

The company said Friday that it had no further comment, for now.

The decision appears to leave the field open to the Super Tucano built by Brazil’s Embraer for the initial contract to supply 35 with the potential for 55 aircraft worth up to $950 million. And that doesn’t include foreign sales.

The Air Force’s move surprised aircraft industry analyst Richard Aboulafia of the Teal Group.

“They seemed to be the front runner for the contract,” he said of Hawker. “They had the most infrastructure spread over the most states and the most political support.”

He said the loss is not critical to the company’s survival, but it would have been a great boost to maintaining work and workers as the company’s T-6 contract runs down.

“The challenge is to build for the military market until the civil market comes back,” Aboulafia said. “And nobody knows when the civil market will come back, probably some time next year, but there’s no guarantee.”

Analyst Wayne Plucker, industry manager for aerospace at Frost & Sullivan, downplayed the importance of the contract to the company.

“It might lead to more layoffs and other adjustments internally, but I don’t think it significantly affects them as a going concern,” he said. “They just need to find another product niche.”

He said the Super Tucano was built specifically for this kind of mission, while the AT-6 is an adaption that wasn’t perfect. Embraer has struggled to sell enough of the planes so it has priced them very aggressively.

U.S. Rep. Mike Pompeo, R-Wichita, said in an e-mailed statement that he was disappointed by the decision..

“I have already demanded answers from the Pentagon on why they made this very unfortunate decision, and will continue to do so,” he wrote. “This contract is critical both to our nation’s security and to jobs in Wichita, Kansas.”

The Obama regime sure seems to favor Brazil for some reason. It may be the fact Obama’s boss, George Soros, has many investments there. As we know, Obama gave the Soros owned Brazilian oil giant Petrobas $10 billion a couple years back, just days after Soros bought controlling interest in the company.

Whitney Pitcher found more about the connection between Petrobas, and Obama’s repeated efforts to stifle American oil exploration. Obama has told the Brazilian leaders he wants America to be their best customer for oil.

Doing some research it seems George Soros has a connection to Embraer through Harbin-Embraer Aircraft a Chinese-Brazilian joint venture, and Hainan Airlines, which Soros owns a significant stake in.

Not sure what to make of this.

By all accounts, both Hawker-Beechcraft and Embraer have a great aircraft that would fit the requirements for the mission. The Hawker is a converted trainer, while Embraer is mission specific, and already in service in Latin America.

The purpose-built aspect vs an older, reconfigured design may have been the deciding factor, with nothing sinister going on behind the scenes.

It’s troubling, however, that Hawker-Beechcraft was given no real explanation for this decision. It’s also troubling we’d buy a military aircraft from a foreign manufacturer, under any circumstances. As bad as Americans need jobs, it doesn’t make a lot of sense. Never mind the national security factor.

This may be a legit deal, but Congress needs to look into this, especially since Embraer is already under investigation for corrupt practices, likely pay-offs and bribes. [Though I am only speculating here.]

Hopefully this will be examined further, and before any money changes hands.