Brazil puts brakes on $7 billion fighter contract

07/16/2012 Andrew Elwell- defenceiq.com

Brazil has pushed back its decision to award the $7 billion contract for 36 next generation fighters by six months, according to an Air Force statement sent to AFP. This is the fourth time Brazil has extended the bidding window.

The fighters still under consideration are Dassault’s Rafale, which recently got the nod from the Indian government for its $20 billion MMRCA (medium multi-role combat aircraft) programme; Saab’s Gripen aircraft; and Boeing’s F/A-18 Super Hornet.

For some time the Rafale was thought to be the preferred option for the Brazilian Air Force as Dassault was willing to offer an unrestricted technology transfer if it won the contract. However, the Super Hornet is reported to be the cheaper option and Boeing has recently made some concessions on how much technology it is willing to transfer.

According to Brazil’s O Estado de S. Paulo newspaper, Boeing’s Vice President of the F/A-18 programme, Mike Gibbons, said Brazilian companies would have the “opportunity to construct components for the new Super Hornets and other future projects of Boeing.”

Further to this Boeing has recently struck a deal with Brazil’s aerospace giant Embraer to jointly work on the KC-390, a military transport and refuelling jet due in service 2016.

The six month extension, with bids now due by the end of December, could work in Boeing’s favour as the balance seems to be shifting away from the Rafale.

A recent report on Brazil’s defence industry indicates that aircraft imports account for 45.5% of its entire defence procurement allocation.