Air Force cancels contract for Sierra Nevada aircraft

WASHINGTON -- The U.S. Air Force said Tuesday that it was canceling a $355 million disputed contract that had been awarded to Sierra Nevada Corp. for light-air support aircraft.

Air Force Secretary Michael B. Donley said the Air Force was setting the contract aside and opening an investigation because a review found deficiencies in the documentation supporting the decision.

"While we pursue perfection, we sometimes fall short, and when we do we will take corrective action," Donley said in a statement. "Since the acquisition is still in litigation, I can only say that the Air Force Senior Acquisition Executive, David Van Buren, is not satisfied with the quality of the documentation supporting the award decision."

Hawker Beechcraft of Wichita, Kan., filed a lawsuit challenging the Air Force's decision in December to award the contract to Sierra Nevada Corp., which has its headquarters in Sparks, to provide 20 Embraer EMB-314 Super Tucanos. The single-engine turbroprop planes are intended to be used in Afghanistan.

Embraer SA, a Brazilian company, intends to manufacture the aircraft in the United States. A Sierra Nevada official said they would be built in Jacksonville, Fla.

Hawker Beechcraft offered its AT-6 turboprop in the contract bidding but was dropped from the competition in November after the Air Force said it found deficiencies with the plane.

The Air Force already had issued a stop order for the aircraft because of the lawsuit. At the time, officials said they believed the competition had been fair.

Taco Gilbert, a retired Air Force general and Sierra Nevada's vice president for business development, said the company was disappointed by the decision but was determined to win back the contract.

"We are supremely confident in this aircraft and the team we have assembled," Gilbert said. "We hope there will be an expedited decision moving forward."

While the initial award to Sierra was for $355 million, the total contract value was estimated at close to $1 billion depending on how many planes the Air Force would end up ordering. The company said its work would support 1,200 U.S. supplier jobs.

Hawker Beechcraft issued a statement saying it looked forward to competing again for the contract.

Contact Stephens Washington Bureau reporter Peter Urban at purban@stephensmedia.com or at 202-783-1760.