Beechcraft to Protest Sierra Nevada/Embraer Contract Win
Mar 12th 2013 10:44AM
Updated Mar 12th 2013 10:46AM
Beechcraft Corp. plans to "protest" a contract awarded to a competitor, saying the Air Force chose a more expensive option and its decision puts 1,400 jobs in Kansas and other states in jeopardy.
About two weeks ago, privately held U.S.-based aerospace firm Sierra Nevada won a competition, in alliance with Brazil's Embraer , to produce 20 Light Air Support aircraft for the Afghan air force. The U.S. Air Force would buy 20 Super Tucano prop-driver fighter planes, and deliver them to Afghanistan for use by the local military. Winning the competition to supply the planes, Sierra Nevada and Embraer (SN-E) stood to receive as much as $950 million for their work.
In a reprise of a dispute that scuttled a similar contract back in 2011, rival aerospace firm Beechcraft announced last week that it intends to formally protest the contract's award to SN-E, once again perhaps delaying delivery of the planes to the conflict zone. According to Goldman Sachs -owned Beechcraft, "Our belief that we have the best aircraft was confirmed by the Air Force rating our aircraft 'exceptional' and the fact that we are the lower cost solution was confirmed by the USAF's public award announcement."
Beechcraft argues that in addition to offering "less capable aircraft," the SN-E offering also costs $125 million more than Beechcraft would charge to build its own AT-6 Texan II fighters. An AOL Defense article reports that Beechcraft bid $297 million to build 20 planes for the Air Force.
Beechcraft said it intends to file its protest with the Government Accountability Office which, if it finds Beechcraft's objections have merit, has the power to order the Air Force to rebid the contract.
The article Beechcraft to Protest Sierra Nevada/Embraer Contract Win originally appeared on Fool.com.Fool contributor Rich Smith has no position in any stocks mentioned. The Motley Fool recommends Embraer-Empresa Brasileira and Goldman Sachs. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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