Hawker suit forces US Air Force to cancel deal with Embraer, Sierra Nevada

The US Air Force yesterday abruptly cancelled a $355-million deal it had signed with Sierra Nevada Corp and Brazil's Embraer for 20 light-support aircraft, citing problems with documents used to make the decision.

The Air Force, plagued by procurement scandals in the last decade, said the termination would be effective Friday, and it would investigate the award decision, which is being challenged in federal claims court by competitor Hawker Beechcraft.

"While we pursue perfection, we sometimes fall short, and when we do we will take corrective action," Air Force secretary Michael 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."

The Air Force told the companies it had yet not decided whether to start the procurement process afresh with new rules or to retain the previous rules, but it would let Hawker participate after it was knocked out of the competition last year. It would also seek dismissal of Hawker's lawsuit.

General Donald Hoffman, commander of Air Force Materiel Command, has ordered an investigation, according to Air Force spokeswoman Jennifer Cassidy, who declined to give further details as the bids received by the Air Force contained proprietary data from the companies.

News of the termination comes as a set back to the acquisition department of the Air Force, which has struggled to rebuild its reputation following a series of embarrassing reversals during a decade-long battle between Boeing Co and Europe's EADS to build 179 refueling aircraft for the US military.