Kansan legislators on Friday asked the Department of Defense to provide an explanation for its decision to award a tax dollar-funded defense contract to a pricier, foreign bidder at a time of mandatory financial restraint.
Republican Sens. Pat Roberts and Jerry Moran, along with Republican Rep. Mike Pompeo, sent a letter to Secretary of Defense Chuck Hagel last week seeking answers regarding his department’s decision to award the Light Air Support (LAS) contract to Sierra Nevada Corporation.
After three years of collaboration and lawsuits, the Sierra Nevada Corp. was awarded the $427.5 million LAS contract to provide the Air Force with 20 light air support planes, which were to be given to the Afghan military for training within the next five years. The contract was awarded Feb. 27.
Sierra Nevada Corp. teamed up with Embraer, a Brazilian aircraft maker, and presented Embraer’s Super Tucano as their model vehicle, the Air Force Times reported.
The other corporation vying for the contract was Beechcraft, formerly known as Hawker Beechcraft, an American aircraft manufacturer located in Kansas. Beechcraft presented the AT-6 Light Attack Aircraft.
The Air Force rejected Beechcraft’s model because it was unclear whether the AT-6 could receive certification in the five years originally allotted to the corporations to complete the project, according to the Kansan legislators. Despite lawsuits, which delayed the decision-making process a whole year, the Air Force did not extend its deadline.
“This is an unreasonable concern given the history of [Beechcraft’s] aircraft certification in both the civil and military spheres,” the legislators said in the letter to Hagel. “Additionally, the accelerated timeline in this competition is due directly to the failures of the Air Force in the previous LAS procurement, which caused nearly a year’s delay.”
In 2011, Sierra Nevada Corp. was awarded the LAS contract, but the agreement was scrapped when Hawker Beecher filed a lawsuit because it was eliminated from the competition.
The Air Force canceled the contract with Sierra Nevada in March of 2012 after an investigation revealed a flaw in the bidding process. Sierra Nevada then sued in June, claiming the revised process favored Hawker Beechcraft, The Wichita Eagle reported.
Beechcraft’s bid was 30 percent lower than Embraer’s, because the AT-6 was less expensive to manufacture than the Super Tucano, according to USAF documents.
“As the nation is facing immense financial hurdles, including a trillion-dollar cut to the Department of Defense over the next decade, it seems unwise to select a higher-priced supplier with a product of inferior quality,” the letter to Hagel said.
And awarding the contract to Beechcraft would potentially have created more American jobs, because it is based in the United States.
Beechcraft presented the potential for 1,400 new American manufacturing jobs along with its AT-6 aircraft model. Jobs would have included approximately 800 engineering and manufacturing jobs in Kansas, and more than 600 at Beechcraft suppliers across the U.S., according to Nicole Alexander, communications and public affairs employee at Beechcraft.
It is unclear how many American jobs the Sierra Nevada/Embraer team plans to create. The Air Force Times reported that the award of the LAS contract to Sierra Nevada would create 50 “high-skilled” manufacturing jobs in Jacksonville, Fla.
It also stated that Embraer estimated the new facility would support 100 suppliers across 20 states, resulting in roughly 1,400 American jobs.
A press release issued by the office of Florida Republican Rep. Ander Crenshaw, confirmed the creation of 50 manufacturing jobs in Florida, but made no mention of the other supplier jobs.
Sierra Nevada Corp. failed to respond to inquiries on the topic of American job creation as a result of the contract.
It is speculated that the jobs in Jacksonville will be created, allegedly, for final production. The cheaper, manufacturing jobs will be sent to Brazil, according to a source familiar with the concerns of Roberts, Pompeo and Moran.
“With our national unemployment rate at nearly eight percent, it is imperative that programs funded by the taxpayer maintain a focus on increasing job growth and spending here at home. 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 Kansan legislators said in the letter to Hagel.
Despite lack of clarity on the estimated number of American jobs to be created by Sierra Nevada, the contract award has caught the attention of groups other than legislators.
Taxpayers demanded an explanation regarding the decision one day after the decision was made.
“We call on the Administration and DOD officials to halt this procurement process immediately and provide taxpayers a reasonable explanation as why they are prioritizing the interests of a foreign sovereign company ahead of the American worker and risking billions of taxpayer dollars,” David Williams, the president of the Taxpayers Protection Alliance, said Feb. 28.
The Taxpayers Protection Alliance is a nonprofit, nonpartisan organization that informs the public of the government’s effects on the economy, according to the organization’s website.
Williams also raised concerns over the final cost of the contract to taxpayers.
The award could potentially cost tax payers $950 million, depending on future needs. The contract includes not only the cost of production, but also “training devices, mission planning stations, mission debrief systems, spares for interim contractor support, activation at bases outside the U.S., site surveys, aircraft certification to military standards and data,” according to the Pentagon.
The Taxpayers Protection Alliance, as well as the Kansan legislators, also reportedly fear the implications of foreign affiliation.
“Brazilian government has a ‘golden share’ in Embraer, which essentially translates into operational control of the company,” Williams said.
Deputy Defense Secretary, Ash Carter, informed Brazilian Minister of Defense Celso Amorim, of the decision to award Sierra Nevada/Embraer with the multi-million dollar contract right after the decision was made.
The two leaders said “they look forward to scheduling the next U.S.-Brazil Cooperation Dialogue and contributing defense cooperation between the United States and Brazil,” according to a release by Pentagon press secretary George Little.
The Kansan legislators call the consequences of the award to national security, the American industrial base workers and the American taxpayer “staggering.”
They are still awaiting a response from Hagel.