BAE’s Hawk:
over the top
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The UK’s Serious Fraud Office (SFO) has spent the last 6 years chasing BAE systems over allegations that bribes were paid to secure foreign deals in a number of countries. Bribes are the least of the allegations involved in some international defense deals, and contract wins without inducements would be far more surprising in countries like Saudi Arabia, Tanzania, and South Africa. Nevertheless, the UK does have laws to prevent British firms from paying them.

An SFO investigation into the giant Saudi Al-Yamamah aircraft deal was killed in December 2006 on national security grounds, after the Saudis threatened to cut off anti-terrorism cooperation and intelligence sharing. The government’s decision was upheld by the British House of Lords, but the SFO continued to pursue other reports concerning Chile, the Czech Republic, Romania, South Africa, Tanzania, and Qatar. The US Department of Justice, meanwhile, never let go of the Saudi deal.

BAE systems was reportedly been given about a month by the UK SFO to plead guilty concerning its activities in 3 countries, or face formal charges. Several months later, a settlement was reached that included the SFO – and the US DoJ, who got the lion’s share…

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FH-77Bs, Kargil War
via Bharat Rakshak
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The competition is still stalled, but a $647 million DSCA request for the M777 may be an end run around India’s DPP. (Jan 26/10)

India’s $2 billion purchase of about 400 new 155mm self-propelled howitzers is intended to supplement India’s dwindling artillery stocks, while out-ranging and out-shooting Pakistan’s self-propelled M109 155mm guns. It seems simple enough, and BAE Systems Bofors had been competing against systems from Israel’s Soltam and Denel of South Africa.

Unfortunately, the competition has mostly served as a cautionary tale, a years-long affair filled with legal drama, accusations of corruption, and more than one re-start. Meanwhile, India’s stock of operational 155mm howitzers has dwindled to around 200. In 2007, a new RFP was issued, and the competition was expanded. Only to crash again in 2009. Is there an end in sight? Or a potential winner?

• Competition Background
• Contracts and Key Events [updated]
• Additional Readings
  
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Michael Baker Jr., Inc., a Virginia Beach, VA-based engineering unit of Michael Baker Corp., won a $75 million maximum value, indefinite-delivery/ indefinite-quantity contract for multimedia environmental compliance engineering support for the US Navy and other US Department of Defense installations in the Northeast, Southeast and Mid-Atlantic continental United States and some overseas locations. These locations are within the Naval Facilities Engineering Command (NAVFAC) Atlantic’s areas of responsibility.

The maximum dollar value includes a base period and 4 option years.

Michael Baker Jr. will prepare studies, plans, specifications, design, reports, cost estimates and associated engineering services in support of the following environmental compliance programs:

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A400M rollout, Seville
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Airbus’ A400M is a EUR 20+ billion program that aims to repeat Airbus’ civilian successes in the full size military transport market. A series of smart design decisions were made around capacity (35-37 tonnes/ 38-40 US tons, large enough for survivable armored vehicles), extensive use of modern materials, multi-role capability as a refueling tanker, and a multinational industrial program; all of which leave the aircraft well positioned to take overall market share from Lockheed Martin’s C-130 Hercules. If the USA’s C-17 is allowed to go out of production, the A400M would also have a strong position in the strategic transport market, with only Russian IL-76 and AN-124 aircraft as competition. To date, 184 orders have been placed by Germany (60), France (50), Spain (27), Britain (25), Turkey (10), South Africa (8), Belgium (7), Malaysia (4), and Luxembourg (1); and Chile has expressed an unfinalized interest in 3 planes.

Right now, the firm’s biggest issue is funding. The next biggest issue is timing. In November 2007, “Airbus A400M Program Delayed 6-12 Months” covered ongoing issues with Airbus’ new military transport. Those issues have escalated, and project is currently under moratorium as all parties decide what to do. Cancellation is not a realistic contractual option for most customers, but late deliveries can be refused, giving both Airbus and its customers negotiating leverage in talks.

This DID Spotlight article covers the latest developments as the A400M project slides toward production. Re-negotiations continue between EADS and participating governments – but South Africa has pulled out. A spot of good news for the program came with the aircraft’s first flight, but brinksmanship continues around new cost estimates and Airbus pullout threats…

• The A400M Program: A Snapshot
• The A400M Program: Airbus’ Dilemmas
• Updates & Key Events [updated]
• Additional Readings
  
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French Mirage F1s
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Morocco’s combat air force currently flies 2 squadrons of old F-5s, and 2 squadrons of only slightly newer Mirage F1s; T-37 light jets serve as key transitional trainers. Their neighbor and rival Algeria flies MiG-23s of similar vintage, but the Force Aérienne Algérienne also flies SU-24 Fencer and SU-25 Frogfoot strike aircraft, even more modern and capable MiG-29s, and is set to receive multi-role SU-30MKs as part of a multi-billion dollar weapons deal with Russia.

Morocco can’t beat that array. Instead, they’re looking for replacement aircraft that will prevent complete overmatch, and provide a measure of security. Initially, they looked to France. France’s Rafale is part of a set of European 4+ generation fighters that were developed and fielded during the 1990s-early 21st century, with the aim of surpassing existing offerings among America’s “teen series” fighters, as well as Russia’s MiG-29 Fulcrum and SU-27/30 Flanker family. “Dogfight at the Casbah: Rafale vs. F-16” discussed the French sales slip-ups that cost Dassault its first export order for the 4+ generation fighter. That outcome is now official.

Just to make things worse, the final multi-billion dollar deal involves new-build F-16s, at a price comparable to the rumored figures for the Rafale. Not to mention an accompanying American deal to replace Morocco’s T-37 trainer fleet with T-6Cs, and contracts for air-launched weapons, targeting pods, and C-27J short-haul transports. The latest development includes the main funding contract for 24 F-16s…

• Contracts and Key Events [updated]
• Why The F-16? DID Analysis – Dec. 2007
• Additional Readings
  
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FLIR Star SAFIRE III
thermal system image
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FLIR Systems received a $6.7 million contract to supply infrared multi-sensor surveillance systems to unidentified customers in the Middle East and North Africa.

The surveillance systems are based on a commercially-developed/military-qualified (CDMQ) model that provides EO/IR products deployable on airborne, maritime, and land platforms.

FLIR is supplying its Star SAFIRE III and Ultra Series surveillance systems:

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Malaysian SU-30MKM
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On May 24/07, a rollout and demonstration ceremony was held for the first 2 Su-30MKM fighters for the Royal Malaysan Airforce (RMAF) at Russia’s Irkutsk Aviation plant. Malaysia flies the F/A-18D Hornet, and was offered Boeing’s F/A-18 E/F Super Hornet, but chose the SU-30MKM instead. Their fighter fleet will now consist of R/F-5E/F Tiger IIs (to be phased out), F/A-18D Hornets, MiG-29 Fulcrums (until 2010), and SU-30MKMs. The results from their internal training and air combat exercises would be interesting, to say the least.

The original $900 million contract was signed with Irkut Corp. in August 2003, and involves 18 SU-30MKMs. Canards, stabilizers and fins will be manufactured by India’s HAL Nasik under a $25-30 million value subcontract. According to the contracts in place, Irkut was to deliver all aircraft by the end of 2008, but that hasn’t happened yet. Delivery of the final batch is ongoing.

The SU-30MKM is an advanced variant, whose performance involves considerable improvements over SU-30MK/MKK fighters. Malaysia also hopes its maintenance will be an improvement over the MiG-29Ns it has to phase out – and may be about to turn to China for help…

• The SU-30MKM
• The Malaysia Deal: Offsets & Updates [updated]
• Additional Readings
  
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Scratch one flag…
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In April 2005, South Africa’s Public Enterprises Minister Alec Erwin expected the cost of the SAAF’s 8 planned Airbus A400M medium-heavy military transport aircraft to be EUR 830 million. That converted to R 6.5 billion at those exchange rates, or about $177.75 million per plane in American dollars. South Africa reportedly intended to take delivery of 8 of the A400Ms from 2010-2014, with a further 6 on option. Ordering those additional 6 aircraft would reportedly have pushed the total contract value to EUR $1.5 billion, or about R11.9 billion at those exchange rates. When the deal was signed in December 2006, the price for 8 aircraft and initial fielding had risen to R 17.646 billion, or almost $2.5 billion: about $308 million per plane.

Meanwhile, South Africa bit the bullet and decided to upgrade its 8-9 aged C-130B Hercules planes. The first SAAF C-130Bs were delivered in 1963, and badly needed additional upgrades and refurbishment.

Subsequent delays to the A400M program were set to either extend the C-130Bs’ service, or force reliance on charters, even as the A400M’s likely costs grew. That SAAF aerial uncertainty has only grown, now that South Africa has become the first country to pull out of the A400M program…

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A129 ATAK
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Turkey has been looking to modernize its attack helicopter fleet since the mid-1990s, but the process has mostly served as an object lesson in how not to buy defense equipment. DID has covered difficulties with this competition before; after numerous snafus, technology transfer and production issues, and canceled competitions, all 3 invited American manufacturers had abandoned the competition entirely.

Even the most recent “final” round seemed imperiled, following reports of the Turkish military’s deep dissatisfaction with the choices; nevertheless, the competition survived long enough to pick a “winner”: an updated version of its A129. Now, signed industrial arrangements contracts with AugustaWestland allow the 12-year program to move forward at last. But Turkey didn’t just buy helicopters – they bought the model, lock, stock, and rotor. The “T-129” has now had its first flight, even as the Turkish military prepares an interim attack helicopter buy…

• The Finalists
• The Winner
• Contracts & Key Events
• Appendix A: “I Coulda Been A Contenda…”
• Additional Readings and Sources
  
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Italian FREMM
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According to London’s Asharq Al-Awsat, Algeria has shifted negotiations for 6 FREMM multirole frigates from France’s DCNS to Italy’s Fincantieri, while negotiating a contract with AgustaWestland for about 100 helicopters. The paper reports that Algeria will receive the frigates in 2011:

”...equipped with American anti-submarine missiles following a deal with Italy worth 4 billion euros. The deal replaces a similar agreement with France…. Algeria concluded another deal with Italy to sell 100 helicopters.”

Or are there deals at all? The latest report comes from UPI, which says the frigate order is now an international competition…

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