The most basic obligation of the federal government is to defend America’s economic and national security interests at home, and abroad.
As president of Frontiers of Freedom, I have long called for President Barack Obama to demonstrate his commitment to government transparency by publicly explaining why his Administration abruptly disqualified a proven American manufacturer from competing for a major U.S. military contract, and awarded a no-bid, $1 billion military defense contract to Embraer, a foreign aerospace giant partially controlled by the government of Brazil.
That’s why, after months of silence, our organization was gratified to hear the stunning announcement by the U.S. Air Force that its contract award to Embraer would be reversed, and that its contract process would be fully investigated in what a senior official described as a major “embarrassment.”
Unfortunately, an even greater embarrassment is this: less than 48 hours after the administration’s appropriate reversal of Embraer’s contract, a top U.S. State Department official quietly travelled to Brazil, and seemingly apologized to the Brazilian government for its decision. No such apology was ever issued to Hawker Beechcraft, the Wichita-based manufacturer it abruptly disqualified last fall.
Worse, the administration’s inexplicable move came after the Brazilian government issued a brazen warning to the United States, declaring that its decision to rescind the contract was not “conducive to strengthening relations between the two countries on defense affairs.”
At best, this episode serves as an example of government ineptitude, and a lack of transparency on the part of an administration whose actions have fallen short it’s rhetoric. At worst, this episode highlights a dangerous foreign policy that appeases foreign governments hostile to our national interests – despite our economic and national security needs here at home.
All of this began with a bid by two aerospace manufacturers, American company Hawker Beechcraft and Brazil’s Embraer, for a major U.S. Air Force contract to build aircraft for its Light Air Support (LAS) program to assist in the training of Afghan pilots.
Last fall, the Air Force abruptly, and without explanation, excluded Hawker Beechcraft from the competition. Only after Hawker Beechcraft filed suit with the Court of Federal Claims did the company, and American taxpayers, learn that the Air Force had quietly handed the almost one billion dollar contract – and almost fifteen hundred manufacturing jobs associated with it – to Brazil’s Embraer.
The planes are similar, but that is where the similarities between the two companies end.
Hawker Beechcraft has successfully delivered for the U.S. military, including its construction of aircraft used to train virtually every U.S. military pilot.
Embraer is controlled by the Brazilian government through its ownership of a “golden share,” a clause giving the Brazilian government veto rights over the creation and alteration of military programs, regardless of its impact on Brazilian affairs.
This means that if the Department of Defense were to award this contract to Embraer, the Brazilian government, which has a notably strained and inconsistent relationship with the United States, would have the power to shut down production or maintenance of American defense aircraft at any time, with no notice.
The Brazilian government has repeatedly sidestepped and circumnavigated U.N. trade sanctions against Iran, has embraced Iranian-president Mahmoud Ahmadinejad, and has refused to pursue anti-terror policies within its own borders. Further, Brazil has been a long and vocal critic of the our. War on Terror.
Finally, Embraer was awarded the no-bid contract despite the fact that the US Security and Exchange Commission is investigating the company for potential violation of the U.S. Foreign Corrupt Practices Act, which prohibits companies from making illegal payments to obtain government contracts.
Outsourcing important defense programs through no-bid contracts to foreign countries like Brazil is a threat not only to the American economy, but also to our national security. That is, however, effectively what the Obama administration did.
This is likely the reason for the administration’s subsequent reversal of the contract, and its investigation into the entire matter. Still, Frontiers of Freedom believes that any goodwill the administration may have earned by admitting its procurement mistake, and rescinding its award to Embraer has now been lost amidst its apology tour Brazil.
Americans are right to ask why the federal government is bending over backwards to appease a foreign country, and a corporation it partly owns.
Contradictory statements from Embraer’s partner in the contract bid, Sierra Nevada Corp, are raising new questions about the Brazilian government’s apparent interest in the contract.
Taco Gilbert, Ret. USAF Brigadier General, and a Vice President with Sierra Nevada Corp., is fond of repeating his company’s contention that its aircraft would be made in the U.S., and that “no new jobs are being created in Brazil as a result of this contract.” This contention is at odds with the facts. Sierra Nevada has been forced to admit that only fifty new American jobs would be created under the terms of its contract award.
Americans are also waiting for Gilbert to explain Sierra’s questionable history regarding crony capitalism, pay-to-play, and close ties to scandal-plagued politicians. (Chuck Neubauer, “E-Mails Lay Bare Firms’ Pay-To-Play Links To Lawmaker,” The Washington Times, 6/22/10)
We can only hope the administration’s inexplicable placating of the Brazilian government is not about its retaliatory fears over the potential loss of an order for Boeing Corporation to build a series of jets for Brazil’s Air Force.
According to Reuters, “The cancellation of the Embraer deal caused some senior figures within President Dilma Rousseff’s administration to wonder if it was retaliation for Boeing reportedly falling out of favor, officials told Reuters this week.”
If past is prologue, American taxpayers may never know the answers to these puzzling questions. But, as long as the economic and national security of the American people are stake, Frontiers of Freedom will keep asking.
Try investigating Leo Gerard and his actions regarding Brazil mining giant Vale.
I became somewhat less outraged by this when I learned that the Brazilian plane, which already exists and is well respected, would be assembled in the USA, while Hawker Beechcraft is also a now-foreign owned subsidiary of the old US company, and the aircraft they bid does not yet exist, etc.
This may or may not absolve the bidding issues, but the substance of the contract is perhaps not that hugely different after all.
“Further, Brazil has been a long and vocal critic of the our.[sic] War on Terror.” I don’t see this as a negative. All-in-all this seems to be a badly reasoned and written piece about a very important issue.
@ #2 josh –
What are you talking about? Hawker Beechcraft submitted an armed variant of the T-6 Texan II which is one of the primary trainer aircaft in the US Military. And Hawker is partly owned by a “foreign” company, Toronto based Onex….. But the other parent company is Goldman Sachs.
Regardless of who will do the best job of producing the planes, the process followed here did harm, which can perhaps be alleviated by a swift and -credible- explanation of what happened, and why, and why it won’t happen in the future. For example, if there is only one vendor who has planes already built, they automatically get the contract, that may make sense.
When you grant a contract, however, then “ungrant” it, you make enemies. Any playground in the world could have taught them that.
Aviation Week had a cover story on the two aircraft last year. The writers actually flew both aircraft and the evaluation put them pretty much even. One plane was a good as the other. The aircraft is a low performance fighter, about like the old WWII Mustang. Propeller driven, single turbine engine, machine guns and bomb racks, no radar. Useful for air support strikes, but dead meat against enemy jet fighters. It was supposed to be economical, but the contract with Embraer was for $17 million a plane, cheaper than the $75 million for an F35, but not all that cheap, considering that it is a low end aircraft.
The real scandal, this is the SECOND Air Force contract screwup in a row. First they made a mess of the tanker contract, messy includes a blatant attempt by the Air Force to tip the tanker job to Airbus, three contract reversals, lawsuits, and a foreign policy dispute with France. Apparently the Air Force put the tanker job people onto the Light Strike Fighter contract and lo and behold, they screwed it up again.
Although the Obama administration most likely had a hand in it, the Air Force is largely responsible for this disaster.
And, the coming budget cuts mean the program has lost it’s funding. Rather than tell the Brazilians we are too broke to buy their planes, we tell ‘em their were “bidding irregularities” and so you don’t get the job and we don’t pay contract termination costs.
“The aircraft is a low performance fighter, about like the old WWII Mustang. Propeller driven, single turbine engine, machine guns and bomb racks, no radar. Useful for air support strikes, but dead meat against enemy jet fighters.”
Spoken like a true zoomie. This aircraft is needed for a specific role, and that role is *not* going to be one you’d need in a high-threat environment.
The Light Strike Fighter was supposed to be something cheap enough for the Colombians and the Afghans to afford. After US Air Force procurement finished gold plating it up to $17 million per airplane, it is no longer cheap. And it is still low performance compared to the A10. I don’t have a problem with low performance per se, I do have a problem with paying $17 mil for a low performance aircraft.
First the AT-6 II is not a proven aircraft; the T-6 II is a proven trainer. The US government has spent over $20 million helping Hawker Beechcraft through pork barrel spending in developing the AT-6 II for the ANG. This testing has not been completed. Hawker plays the American card when it suits but makes most of the small parts in Mexico and has steadily moving work outside the US. Both companies use mostly American parts and the amount of US work is close on both Aircraft. Boeing stands to lose a much larger contract with Brazil over the cancellation of the LAS contract. That is why Obama sent a representative to Brazil; trying to protect jobs. This story is one sided and leaves a lot of facts out. The truth the whole story is more complex than sound bites.
Follow the money. Somewhere, somehow, Obama made money off awarding to Brazil.
The AT-6 is production ready. It uses the A10C weapons system. It has successfully demonstrated use of a wide range of US weapons from GPS bombs to laser guided missiles.
The Super Tucano does not and all this stuff would have to be integrated and certified. That is not cheap. And would mean Embraer would have to do a lot of work.
The AT-6 weighs less and has a greater fuel fraction which means longer loiter time and a larger weapons store. The above reasons means its a better machine for the CAS mission.
The AT-6 has an established logistics train in the US Military. Again, this makes it cheaper to maintain.
I am glad this was cancelled. Strategic issues and on the merits of the platforms, the AT-6 is the way to go.
This is key:
..”if the Department of Defense were to award this contract to Embraer, the Brazilian government, which has a notably strained and inconsistent relationship with the United States, would have the power to shut down production or maintenance of American defense aircraft at any time, with no notice.”
These aircraft would be built in the United States. Should Embraer decide to stop building them, the DoD could take over the factory and order production to resume.
This aircraft would be “assembled” in the US – where do you think those parts come from?
I’ve got a better idea… since this is supposedly for an airplane we’re going to hand over to the Afghani’s, let’s just cancel the contract in it’s entirety and not do it. Maybe pull some OV10s out of storage or something instead.
when I see Brazil freaking out about this and saying this harms relations, that greatly bolsters the argument against ever using anything Brazilian again for defense purposes. I don’t want our military relying on countries that are only our allies when it’s incredibly profitable, and not really allies if not bribed. Long term, they would leverage this over us.
I assume the aircraft are roughly equivalent because this is a very basic plane. But at the very least we need some answers about their strange process.
So this is KC-X all over again. The aircraft was going to be built in the United States (and the “domestic” one is going to be built overseas) but because the sticker on the side is a Dirty Furrin’ Contrey we can’t be having with it.
Interestingly, BGen Gilbert was fired as Commandant of Cadets at the Air Force Academy due to a scandal over abuse of female cadets.
And how is that relevant to this discussion?
This is the Change we voted for in Nov-08 – I Hope you’re satisfied.
What if this administration has put so many idealogues in decision positions, that they are losing control of the (central) mission (whatever that may be…)?
All the back-pedaling, apologies, and do-overs suggest to me that may be the case…loose rules and vague mission priorities make for an awful lot of confusion.
Man, the weeding-out process for the next bunch could be a long night of long knives…
George Soros may own stock in Embraer. Soros repositioned himself in Petrobras, Brazilian state-controlled oil company, to get dividends just a few days before Obama committed $2 billion in loans and guarantees for Petrobras’ offshore operations in 2009.
Since the AT-6 is really a Swiss Pilatus PC-9, it is no more inherently American than a Brazilian Tucano assembled in America.
The AT-6 is NOT production ready. It doesn’t exist. It’s a paper design which is why Hawker Beechcraft was automatically disqualified. Furthermore, it is made by a Canadian owned company. The Super Tucano is a combat proven aircraft. It was co-developed with Northrop Grumman.
This is important! The AT-6 doesn’t have an established logistics system or depot. Embraer does; it’s an established platform already in use by several nations. The AT-6 solution would create a one-off, stovepiped logistic system to support the 20 or 30 planes the Afghan AF wants to buys (“major contract”, my ass). That stovepiped logistics tail might be more expensive for the Afghanis, than if they bought into Embraer’s existing supply system.
Do the people in charge of procurement get to travel to Brazil if their plane won?
Ooooh, I’ll get to go to Brazil 2 times a year, let’s buy theirs.
The real question is why was Hawker Beechcraft disqualified. That is now being shoved under the rug. Hawker Beechcraft deserves an answer if for no other reason that it wants to determine whether it will be barred from future contracts. But neither H-B, nor the American public will ever know.
The innuendo is because our President wanted the Brazilians to win. It may be payback for Brazil’s efforts to reinstall former Honduran president Manuel Zelaya, who had been legally ousted from power in 2009 for taking steps to become President for Life.
Zelaya was a buddy of Hugo Chavez. Obama cut off all foreign aid to Honduras in retaliation for Zelaya’s ouster. In the meantime Brazilian diplomatic personnel spirited Zelaya back into the country after he had sought haven in Costa Rica, and gave him sanctuary in Brazil’s embassy where he conducted a propaganda campaign to regain power.
Shortly after the Zelaya flap, the US government’s Ex-Im bank gave Brazil a $2 billion less than market rate loan for its offshore deep water drillling operation. And this was just after the BP spill in US waters.
There is a coziness between the Obama administration and Brazil and I suspect that is the real reason for the favovarble treatment for Brazil’s Embraer.
In my humble opinion, the problem starts as soon as the words “to train Afghan pilots” enters the mix. I think we could do away with the contract and whole issue entirely, by just not providing these aircraft to the Afghans. I see Foamer up there agrees with me.