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WASHINGTON, April 19 (Reuters) - The U.S. Air Force on Friday said U.S.-based Sierra Nevada Corp and Brazil's Embraer would continue work on a $428 million contract to build new attack planes for Afghanistan after a federal court rejected a challenge by rival Beechcraft.
U.S. Air Force spokesman Ed Gulick said the Court of Federal Claims denied Beechcraft's challenge, but the congressional Government Accountability Office (GAO) was still reviewing a separate protest that Beechcraft filed against the deal.
Continued work on the contract "honors the U.S. Air Force's critical and time-sensitive commitment to provide air support capability to the Afghan Air Force (AAF)," Gulick said.
Beechcraft, which emerged from Chapter 11 bankruptcy protection earlier this year, had sued the Air Force to halt work on the planes while federal auditors reviewed the company's protest. The Air Force had authorized Sierra Nevada and Embraer to keep working on the order, despite Beechcraft's protest.
A spokeswoman for the Kansas plane maker said the Witchita-based company was disappointed by the decision and planned to continue to contest the award through the GAO.
The court's decision was another twist in an ongoing battle over the Afghan plane orders - a dispute that has drawn the ire of the Brazilian government and which could complicate U.S. plans to withdraw from Afghanistan in 2014.
The Air Force is racing to get new planes to Afghanistan and train pilots to fly them as U.S. forces prepare to withdraw from the country after over a decade of war. (Reporting by Andrea Shalal-Esa; Editing by Leslie Gevirtz)