Kansas-based Hawker Beechcraft is going to court to get some answers from the US Air Force concerning its decision to disqualify Hawker’s AT-6 from competition to produce a new light attack aircraft for the US and allied militaries. The court case comes on the heels of the Government Accounting Office’s decision not to review the Air Force’s disqualification of Hawker Beechcraft. Until the Air Force abruptly announced the disqualification in November, the AT-6 was considered by many to be the frontrunner in the Air Force’s Light Air Support program. The USAF so far has not explained its decision, which leaves just one competitor in the field, Embraer and its Super Tucano. That competitor carries significant and possibly disqualifying baggage in the form of connections to the Iranian government, and a new bribery investigation. Embraer is not only controlled by the Brazilian government, it is currently under investigation by the Securities and Exchange Commission for possible violation of the US Foreign Corrupt Practices Act. That Act prohibits companies from bribing foreign officials or making other illegal payments to gain or retain business.
That investigation began in November 2011, and appears to still be in the early stages. Embraer is accused of engaging in bribery in three countries, none of which have been identified publicly. If found guilty, the company could be banned from doing any business with the US government at all. The SEC’s investigation of Embraer went public about three weeks before the Air Force disqualified Hawker Beechcraft without explanation.
Additionally, while outsourcing the contract to Embraer would create just 50 jobs in the United States, Hawker Beechcraft says the AT-6 would create about 1,400 jobs at 181 companies across 39 states. It would also keep the manufacturing and parts and supply chains all within the United States. Awarding the contract to Embraer puts most of the platform’s ecosystem outside the US. The AT-6, meanwhile, is built on the proven T-6 platform, which is currently in use by the USAF and other allied air forces. More than 700 T-6 aircraft have been built to date, and Hawker Beechcraft has built more than 14,000 aircraft for the US military overall.
Kansas Congressman Tim Huelskamp, who serves on the House Veterans’ Affairs Committee, lambasted the Obama administration’s decision in a statement issued December 27:
“It is simply wrong for the Obama Administration to hire a Brazilian company to handle national security when we have a qualified and competent American company that can do the job,” Congressman Huelskamp said. “With millions of Americans out of work, it makes no sense to award the work to a foreign company. Along with my colleagues in the Kansas delegation, I will continue to attempt to right this wrong in order to preserve America’s national and economic security interests.”
The editorial board of the Wichita Eagle, the Taxpayer Protection Alliance, Women Impacting Public Policy, and others have come out questioning the Air Force’s decision.
Given President Obama’s rhetoric against American companies that outsource jobs overseas, the decision to outsource the next generation of US light attack aircraft to a questionable overseas company is curious, to say the least. The administration’s rough treatment of Hawker Beechcraft may well have a political dimension, as the company is well known for manufacturing high performance business jets. The president has sharply criticized “corporate jet owners” on several occasions. Additionally, Embraer boasts of its attention to “environmental sustainability,” which may have helped boost its profile with the administration that brought us the boondoggle known as Solyndra.
The LAS contract is worth between $1 billion and $1.5 billion.