The US government and Taiwan have signed a $3.8 billion deal, under which the US Air Force will evaluate upgrades for Taiwan's 145 Lockheed Martin F-16 A/B fighters.
Unsourced media reports of the deal first emerged last week. Representatives of the American Institute in Taiwan (the USA's de facto embassy in Taipei) and the US Defense Security Cooperation Agency have yet to officially announce the agreement, and declined to comment on the issue when contacted.
A statement from the US Taiwan Business Council, however, has congratulated both the US and Taiwan governments on the letter of offer and acceptance.
"The agreement provides for Taiwan, adding advanced active electronically scanned array (AESA) radar to its fighters, as well as for making structural upgrades, improving avionics, and expanding electronic warfare suites," it says.
The contenders for the radar upgrade are the Raytheon advanced combat radar (RACR) and Northrop's Grumman's Scalable Agile Beam Radar (SABR).
Lockheed appears to have secured the avionics upgrade. At the recent Farnborough air show, it signed a memorandum of cooperation related to Taiwan F-16 upgrades with Taiwan's Aerospace Industrial Development Corporation (AIDC).
"Lockheed Martin and AIDC have been working together for many years supporting Taiwan's F-16," said Lockheed in a brief email to Flightglobal. "We are impressed with AIDC's capability, and we are looking forward to the opportunity to expand this relationship as we begin to implement the Taiwan F-16 upgrade programme."
However, BAE Systems, which has extensive F-16 upgrade experience, questions the fairness of the competition.
"BAE Systems strongly supports competition for F-16 avionics upgrade programmes," it says. "BAE Systems was not part of the decision process in Taiwan that recommended selection of a sole source, nor was BAE Systems offered the opportunity to compete or be evaluated for this programme."
"We respect Taiwan's decision. However, we believe the lack of competition does not ultimately provide the needed flexibility to cost-effectively solve the unique problems faced by the end-user. If asked, BAE Systems would welcome the opportunity to provide a competitive bid," it added.
The US Taiwan Business Council says that from 2016, Taiwan will withdraw a squadron of 24 aircraft at a time for upgrades and modernisation. Given that 16 aircraft are permanently located at the USAF's Luke AFB, this will mean that only 73 F-16 A/B's will be available for operational service while the upgrade programme is underway.
To help fill this gap, the council calls on the US government to sell Taiwan additional fighters. Taiwan has long desired 66 F-16 C/Ds, but so far, the US has balked at approving this sale owing to fear of angering China.
Nonetheless, the radar and avionics upgrades for Taiwan's F-16 A/B fleet will see these aircraft transformed into some of the most effective F-16s in the world. The AESA radar, in particular, will greatly enhance the type's survivability and lethality in both the air-to-air and ground attack missions.