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Brazilian Government Pouting About Need for Transparency in Procurement Process

By: Ben Howe (Diary)  |  March 26th, 2012 at 08:30 AM  | 

RESIZE: AAA

When I first wrote about Hawker-Beechcraft losing the U.S. Airforce light aircraft contract to Brazilian company Embraer, I didn’t expect it to be as controversial as it ended up being. I even had one person on twitter tell me it was downright birther-like to think there was something fishy going on.

Turns out people above my pay grade concurred as the US Air Force has suspended the contract pending an internal investigation:

While we pursue perfection, we sometimes fall short, and when we do we will take corrective action,” says Air Force Secretary Michael Donley in a statement. Citing the ongoing litigation, he adds, “I can only say Air Force Senior Acquisition Executive David Van Buren is not satisfied with the quality of the documentation supporting the award decision.” (emphasis mine)

As Rep. Mike Pompeo alluded to when it happened, this is not something that the Air Force would do simply to bow to political pressure:

The action is highly unusual, Rep. Mike Pompeo said in a conference call.

“That’s no small undertaking,” Pompeo said. “It’s a contractual process. They have now undone that contract. The Air Force does not do that lightly.”

I’ve said from the beginning of the saga that the reasons for Hawker-Beechcraft’s bid disqualification could be perfectly legitimate. But normally when someone is disqualified (as opposed to simply losing the bid) they are given a reason. Hawker was not and for me that raised an eyebrow. That eyebrow continued to be raised as I looked into Embraer and its cozy relationship (as in ownership stake) with the Brazilian government and the Brazilian government’s cozy relationship (as in, nuclear assistance) with that bastion of peace and understanding, Iran.

Well, Embraer won’t be taking the USAF’s desire to be more transparent lying down and, in diplomatic terms has made clear that this could cause them to take their ball and go home.

The Brazilian government has warned Washington that the abrupt cancellation by the US Air Force of an order of warplanes from Embraer, the country’s aircraft manufacturer, could damage military relations.

[...]

“The Brazilian government learnt with surprise of the suspension of the bid process to purchase A-29 Super Tucano aircraft by the United States Air Force, in particular due to its manner and timing,” the foreign affairs ministry said, referring to Embraer’s light attack aircraft.

“This development is not considered conducive to strengthening relations between the two countries on defence affairs.”

Rep. Pompeo agrees that there should be more transparency around the process:


Normally a contract dispute wouldn’t interest me so much but Embraer’s connections with some of the worst people on the planet had me concerned. Call me crazy, but I find connections to Iran disturbing in a weapons contract. But believing that the DoD would make such a huge error in awarding contracts is downright conspiratorial right? They’d never do anything like that! I mean, are there any other examples of …

U.S. Sens. John Cornyn (R-TX), Dick Durbin (D-IL), Kelly Ayotte (R-NH), and Kirsten Gillibrand (D-NY) today led a bipartisan letter to Secretary of Defense Leon Panetta calling for an end to the U.S. Governments relationship with the Russian state-controlled arms export firm Rosoboronexport, who until just three years ago had been the subject of U.S. sanctions for assisting Iran, and has for years been arming the Assad regime as they continue to commit atrocities against the Syrian people…

Oh…maybe not so conspiratorial after all?

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  • spinoneone

    is supposed to be building their twin engine business jets, the Phenom 100 – 400 series. Direct competition for Cessna and Gulfstream Aviation [Grumman brand] as the only U.S. owned business jet makers left.

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  • Change Jar Conservative

    I know that’s not possible now, but in a perfect world we’d have about six different weapons companies in this country and enough subcontractors to supply them all of the parts.

    This isn’t just my usual “why do Republicans want to offshore jobs” rant.

    It’s a matter of national security. Do we really want S. Korea making all of our chips for our airplanes? Do we have any way of telling that there isn’t some sort of killswitch in them that they could use should they ever become the enemy? ETC.

  • radioone

    that is cozy with Iran was going to build an airplane for the US Air Force?

    I never thought I’d live long enough to witness something like that, or Death Panels.

    How far we’ve fallen.

  • aesthete

    Though I’m a free-trader through and through from a economic standpoint, I do concede that there are pretty good national security reasons for why one might want to limit government military contracts to the US, and I agree with you on principle.

    OTOH… what happens when another country really does have a better lightbulb? Companies in Germany, Belgium, and Austria (among many others in Europe) have supplied us with many of our small arms — and many of those arms are significantly better than what their US competitors are supplying. There are basically three ways we can go about it:

    1) Steal the idea from those companies in violation of IP laws, and have our manufacturers use it.

    2) Negotiate for the lowest price/highest quality, as any rational actor would in a free market.

    3) Use our near-monopsony power in the market to meet political goals of US production or other domestic protections.

    Personally, I like a combination of 2 and 3 — you pretty much achieve the more important goals vis a vis domestic production, without shafting our allies or our ruining the federal government’s good name in business, or having a handful of domestic interests lobby their way to unreasonably high prices or continued poor service.

  • gawken

    Yesterday, just happened to catch, while channel surfing a little bit of FL Gov Scott on CNN with Candy Crowley. He mentioned that Embraer had just announced plans to open an office/facility in Florida,..with, I believe he said..more than 100 employees.

    Timing seems more than a little coincidental…and I expect that they will very soon announce that they are CANCELLING plans to open this facility, in response to the DOD’s actions in cancelling the contract.

    Many someone here can research the details…

  • aesthete

    Take a look at what goes on at SOFEX down in Jordan, or the history of arms dealing in WWII or the Cold War.

    It’s a sad situation — but when you’re in an industry that has a basically amoral-to-immoral clientele (with the axis of morality running from US State Dept apparatchiks to third world monsters), you’re probably not going to be inclined to be a particularly kind-hearted fellow, yourself.

  • rightland1111

    Read Drudge today…Obama caught on open mic…he wants Putin to give him more time. Nothing will hold him back during his second terms. Read it…more cancellations:

    http://abcnews.go.com/blogs/politics/2012/03/president-obama-asks-medvedev-for-space-on-missile-defense-after-my-election-i-have-more-flexibility/

  • Repair_Man_Jack

    What else will he feel “flexible” about once the election ends?

  • acat

    As it is, between the gilded weather vane, the horndog, the nanny-statist, and the quack, I’m not sure any of ‘em will know why this is a problem, let alone how to use it to motivate the Jacksonians to vote…

    Mew

  • rightland1111

    this really is. We are giving up our military superiority. Well, some of it…the rest is gone. Our Air Force is flying F-15′s….these came out in the 1970′s…the contract awarded in 1969. How bad is that.

    I’m not for going to war with everyone and certainly not nation building. I do believe in winning wars..but…that was WWII.

    Do all of you remember how Obama pulled the rug out from the Georgian President “S”…forget the spelling…when we made a commitment to provide defense missiles for them…and then did nothing to help them when Russia took their sovereign land for oil.

    If people cannot see that Obama’s mentors were all Communists…then I give up. Where do we think we are going when the cabinet, the czars and the President all believe in collective government with tyranny added for good measure.

  • aesthete

    We have a whole slew of people on the right who are utterly confused as to whether we should be praising Obama’s continuity and expansion of Bush-era policy, seeing it as a wake-up call for a departure from Bush-era policy, or conveniently ignoring this similarity and attacking Obama over very marginal or superficial differences. It doesn’t strike me that conservatives would recognize a defense conservative nowadays if he spoke softly and bopped them on the nose with his large stick!

  • acat

    Remember the Brewster Buffalo.

    Mew

  • Repair_Man_Jack

    Google Task Force Smith. That’s how bad our current trajectory is becomming.

  • acat

    I used the terms “defense hawk” and “Jacksonians”….

    You do, however, raise a valid point – leaving these as an exercise for the student is problematic in these times.

    “defense hawk” – one who work to increase the literal, physical defense of our nations’ borders. Rick Perry’s boots-on-the-ground approach to our southern border or the repeated calls for troops to the Arizona border would both be “defense hawk” positions.

    Jacksonians are from Meade’s spectrum, simplified explanation here …

    Mew

  • Risky

    Vrery interesting, I’ve bookmarked it.

  • Risky

    AS I’m from the UK I appreciate your aproach here. We also have occasions when there is a row over procurement possible involving US vs Domestic suppliers.

    My approach would be
    1. The first priority in defence spending is to get the best equipment possible for each dollar of defence spending.
    2. Security of supply in future is a key concern so deals with supplies from trusted long-standing allies are fine, but supplies from potentilly less reliable sources are a matter of concern.
    3 Do not mistake the interests of domestic defence contractors for the national interest.
    4. If you want to subsidise domestic employment do it directly not out of the defence budget.

  • rightland1111

    Acat…you are giving me an education. Now I’ve read about eight pieces on Pournelle’s Iron Law. I guess history repeats itself. But…Kitty…I can’t find anything about Brewster Buffalo. This must be an example of our “shadow government”…YES?