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http://ca.reuters.com/article/topNews/i ... ZC20110117
Exclusive: Rousseff "starting over" in Brazil jets tender
Mon Jan 17, 2011 1:48am EST By Brian Winter
BRASILIA (Reuters) - New Brazilian President Dilma Rousseff has decided to delay awarding a multi-billion dollar Air Force jet contract and reevaluate the finalists' bids, in a move that could signal a realignment of Brazil's strategic and defense alliances, sources with knowledge of the decision told Reuters.
The surprise decision is a blow to France's Dassault, which as recently as last month looked like a lock to quickly win the deal, and puts its U.S.-based rival Boeing back in with a chance.
Rousseff's predecessor, Luiz Inacio Lula da Silva, had while in office repeatedly expressed his preference for Dassault's bid to build at least 36 Rafale jets at a cost of more than $4 billion as part of a long-running effort to modernize the Brazilian Air Force fleet.
The other finalists for the contract were the Gripen NG, produced by Sweden's Saab, and Boeing's F-18.
Lula left office on January 1 without resolving the issue, although many observers believed the final decision in favor of Dassault was a mere formality since Rousseff was Lula's chief of staff and she has retained many of his Cabinet members, including the defense minister.
Instead, Rousseff has opted to "start over" in her evaluation process with no clear preference for any of the finalists, a senior government source said.
In a sign that Boeing is still in the running, Rousseff personally asked U.S. senators visiting Brasilia last week for additional technology transfer guarantees from the U.S. Congress to bolster the Boeing bid, sources with knowledge of the conversation said.
Last Monday, Rousseff asked U.S. Senator John McCain -- the ranking member of the Senate Armed Services Committee, which has jurisdiction over aeronautical issues --
and fellow Republican Senator John Barrasso if the U.S. Congress would be able to provide an additional, formal guarantee of technology transfers in the Boeing bid.
"It's relevant that she was the one who raised the subject," one of the sources said, also speaking on condition of anonymity.
Boeing and U.S. officials including Defense Secretary Robert Gates have already provided guarantees regarding technology transfers,
but Rousseff may be seeking more generous terms -- or additional promises that could help ease misgivings among senior members of Brazil's armed forces and defense ministry, many of whom have favored the French bid.
The stakes only seem to grow over time.
The contract will likely be worth much more than the initial bids, which have been reported by Brazilian media in the $4 billion to $6 billion range.
Maintenance contracts will be lucrative, and Brazil could eventually buy more than 100 aircraft.