Israel Aircraft Industries (IAI) has one more month to convince South Korea it has sufficient support from the US government to deliver four Gulfstream G550-based airborne early-warning and control (AEW&C) aircraft, or risk losing the procurement to Boeing.
Industry sources say Seoul has given Boeing and IAI a 30 April deadline to submit required licences and additional technical data on their solutions to its E-X AEW&C requirement. South Korea’s Defence Acquisition Programme Administration (DAPA) plans to choose in May between Boeing’s 737 with Northrop Grumman Mesa radar or the G550 with IAI subsidary Elta’s Phalcon radar and negotiate a contract in June.
Sources say DAPA has indicated it will enter into sole source negotiations with Boeing if IAI does not meet its latest deadline. The Israeli company’s US partner DRS Technologies earlier this month secured a marketing licence from Washington to provide unclassified data on its communications suite for the estimated $1.1 billion programme. IAI believes this is sufficient to move the competition to the final phase, but sources warn that DRS has not yet applied for a licence to provide classified data or secured technical assistance agreements.
Boeing has already provided classified data and has in place technical assistance agreements. The company also missed a previous, October 2005 deadline for the project, but was able to secure a final licence for its satellite communications system by the end of last year. It is now trying to convince Seoul to award it a sole-source contract on the grounds that IAI is still unable to supply sufficient technical data.
An IAI source insists the DAPA “does not want to put us in a situation where because of bureaucratic issues we’ll be excluded” and says the company remains confident it can export the proposed DRS communications suite to South Korea, as it has already been supplied to the country as part of other programmes. “There is no reason the USA will object. It’s just a matter of the process,” the source says. DAPA is adamant the AEW&C acquisition will go forward by mid-year, but sources warn controversy over whether IAI has supplied sufficient data could make it difficult to award a contract by 30 June, when the current bids will expire.
BRENDAN SOBIE / SINGAPORE