/reeve.gif)
http://www.defensenews.com/article/2012 ... |FRONTPAGEPentagon Stop-Work Order Adds to French Aircraft Cost
Sep. 24, 2012 - 09:10AM
PARIS — France is being asked to pay an extra $5 million on a $466 million contract after the Pentagon ordered Boeing to stop work to upgrade the French Air Force’s four airborne early warning aircraft, sources familiar with the situation said.
Although relatively small, about 1 percent of the program budget, the added cost and negotiations are grating on the nerves of French defense officials.
“Program protection issues” over technology deemed too sensitive for export led U.S. Defense Department officials to issue an order in the domain of stop-work on the upgrade of the four French E-3F airborne warning and control system (AWACS) aircraft, a source briefed on the subject said.
DoD’s export procedure seems to have been slow on the program protection issues, but defense officials insist the client must pay.
If the changes are accepted, the upgrade is expected to start in the first half of 2013, a year late, the French official said. France is the first export client for midlife upgrade to the Block 40/45 standard, also being installed in the U.S. Air Force’s 32-strong AWACS fleet.
U.S. officials early this summer called for a due diligence study to see whether there was a technical risk on the export deal and asked Boeing to put a hold on the French upgrade, agreed to under a $466 million contract signed in 2010 under Foreign Military Sales (FMS) rules.
The total contract comprises $440 million and a $26 million reserve amount under the FMS regime. Boeing gets $324 million of the total amount, as prime contractor for the upgrade.
“The credibility of FMS is in play,” a second French official said. Cost increases are part of negotiations being held “in the framework of the contract,” the official said.
This is a subscription only section
Want to read more? It's only €10/year.
No account yet? Just Create an account first and head to the shop