Florida, Colorado take on Kansas in fight over $427M Air Force contract

Lawmakers from three states are in a high-stakes fight over a $427 million Air Force contract to build light planes for the Afghan military.

The fight pits Brazil’s Embraer, Sierra Nevada Corp. and lawmakers from Florida and Colorado, where the 20 planes are now set to be built, against the Kansas delegation and losing bidder Beechcraft, an aerospace firm based in Wichita, Kan. At stake are about 1,400 jobs.

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Beechcraft and the Kansas lawmakers say the company’s bid was cheaper and that the Air Force is siding with a foreign company over a U.S. defense firm. Beechcraft filed a protest of the bid with the Government Accountability Office (GAO), which is now reviewing it. It has also launched a federal lawsuit seeking to undo the contract.

“When it comes to producing aircraft that will help Americans come home from Afghanistan, the U.S. Air Force today concluded that America’s 'best interest' now rests on the shoulders of Brazil,” Beechcraft said in a statement earlier this month.

Embraer and Sierra Nevada say that the foreign preference argument from Beechcraft is nonsense, because the planes will be built at a new Embraer plant in Jacksonville, Fla. The avionics package would be constructed at Sierra Nevada's Centennial, Colo., facility.

Sens. Pat Roberts (R-Kan.) and Jerry Moran (R-Kan.) and Rep. Mike Pompeo (R-Kan.) have written Defense Secretary Chuck Hagel two letters this month over the contract.

In the first, they asked for a “thorough, compelling explanation” for the decision, arguing that the consequences of the award to the U.S. industrial base were “staggering.”

“While the U.S. aviation manufacturing industry continues to recover, now is the time to invest in U.S. jobs and manufacturing and not abroad,” the Kansas lawmakers wrote.

Four Florida lawmakers, Sens. Marco Rubio (R-Fla.) and Bill Nelson (D-Fla.) and Reps. Ander Crenshaw (R-Fla.) and Corrine Brown (D-Fla.), responded that it was important to provide Afghanistan with the light air support aircraft “without delay.”

“We know that you understand the urgency of this situation and we applaud the determination of the Air Force to move forward with this program despite numerous delays,” the lawmakers wrote to Hagel. “Please know that we stand ready to assist in any manner to ensure that these aircraft reach our warfighters and partners on the ground in Afghanistan without delay.”

A second round of letters was sparked after the Air Force lifted a Stop Work Order due to the review, which prompted Embraer to sign a lease on a new Jacksonville, Fla., assembly facility.

Beechcraft filed a lawsuit in the Court of Federal Claims to contest the Air Force’s decision, and the Kansas delegation urged Hagel to “personally reevaluate this decision and reinstate the Stop Work Order.”

“To proceed with a contract that may not stand up before the GAO is a waste of taxpayer dollars and an affront to good governance,” the Kansas lawmakers said.

This time, the delegation from Colorado, one of the states where Sierra Nevada has facilities, responded with a letter to Hagel sent on Monday.

“It is our strong opinion that the Air Force’s decision to select the SNC/Embraer team was well founded and should be upheld without additional delays,” wrote Sens. Mark Udall (D-Colo.) and Michael Bennet (D-Colo.) and Rep. Mike Coffman (R-Colo.).

This is the second time Beechcraft has protested the contract being awarded to Sierra Nevada and Embraer.

The Air Force canceled the first winning bid last year after Beechcraft said it was unfairly disqualified. The Air Force decided it had documentation problems with the contract and required both companies to make new bids.

Embraer’s A-29 Super Tucano was chosen again last month over Beechcraft’s AT-6.

The politics surrounding the contract award go beyond U.S. soil, too. Brazil is in the process of selecting a contractor for a multibillion-dollar fighter contract in which U.S.-based Boeing is one of the finalists.

Brazil’s president raised the contract dispute last year with President Obama during a visit to the White House.

The stakes are also high for Beechcraft, which was formerly Hawker Beechcraft before recently emerging from bankruptcy.

“I think what makes this relatively small program a lightning rod is the fact that if Beechcraft loses, it could be the end of the road for the company,” said Loren Thompson, a defense analyst at the Lexington Institute who consults for several defense firms.

“Beechcraft is one of the few surviving aircraft companies in Wichita, which used to be one of the world’s largest concentrations of aircraft technologies.”