Posted on 11/05/2014 4:30:28 PM PST by sukhoi-30mki
The U.S. government on Wednesday said it had canceled, at the request of South Korea, a preliminary contract with the U.S. unit of Britain's BAE Systems (BAES.L) to upgrade 134 F-16 fighter jets, ending a major arms deal initially valued at $1.7 billion.
The unusual move, announced by the Pentagon's Defense Security Cooperation Agency, paves the way for South Korea to pursue a similar upgrade deal with Lockheed Martin Corp (LMT.N), the warplanes' original manufacturer.
The decision raises questions about the ability of non-original equipment makers like BAE to compete in the market to upgrade thousands of F-16s in use around the world. BAE was the first non-OEM to win a competition to upgrade F-16s.
South Korea in October said it could cancel the project and seek a different contract after the U.S. Air Force told Seoul the projected cost of 1.75 trillion won ($1.7 billion) could rise by 800 billion won.
U.S. officials said the Air Force's estimate for the cost of the deal rose significantly after the U.S. government determined the sensitivity of the equipment involved meant the contract could not be negotiated by BAE directly with Seoul as a direct commercial sale. It instead needed to be handled as a government-to-government foreign arms sale.
(Excerpt) Read more at reuters.com ...
Almost sounds like Obamacare.
Exclusive: BAE Systems says U.S. halted its work on F-16 upgrades for South Korea
My favorite jet EVER. PURE SEX.
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