* Pentagon to review latest procurement problem
* Top general says embarrassed, looking for cause of issue
* Air Force purchase chief sees no lowering of requirements
By Andrea Shalal-Esa
WASHINGTON, March 8 The Pentagon could
assume control of major Air Force acquisition decisions after
paperwork problems prompted the service to abruptly cancel a
$355 million contract for 20 planes to be sold to Afghanistan,
the top Air Force officer said on Thursday.
"It's possible," Air Force Chief of Staff Gen. Norton
Schwartz said when asked if Pentagon acquisition officials could
take control of Air Force acquisitions again, as they did after
a major procurement scandal in the mid-2000s.
Schwartz told a defense conference hosted by Credit Suisse
and defense consultant Jim McAleese that he was embarrassed that
the Air Force had found "inadequate" documentation for the
contract award to privately held Sierra Nevada and partner
Last week he told reporters there would be "hell to pay" if
the issue turned out not to be an innocent mistake.
The canceled contract was to fund 20 light attack planes to
be produced for Afghanistan as part of a foreign military sale.
It was worth up to $1 billion, if all options were exercised.
He said acting Pentagon acquisition chief Frank Kendall
would make a recommendation on the oversight issue after
reviewing the facts of the Sierra Nevada case, and whether it
involved systemic issues or individual error.
The Air Force discovered the paperwork issue while preparing
for a lawsuit filed by Sierra Nevada's competitor, Hawker
Beechcraft, whose AT-6 plane the Air Force had previously
declared "technically insufficient."
Schwartz declined to give further details on an
investigation into the matter, citing the ongoing litigation.
"We'll certainly identify the root causes of that failure to
perform," he said, adding that it would be wrong to "cast
dispersion" on the entire Air Force acquisition workforce.
Schwartz said the whole issue was disappointing since the
Air Force had spent years trying to improve its acquisition
process after a spate of problems in the last decade, including
its first attempt to replace its aging KC-135 refueling planes.
The proposed lease deal with Boeing Co was canceled
by Congress in 2004 after the former No. 2 Air Force acquisition
official, Darleen Druyun, was sentenced to nine months in prison
for violating conflict of interest laws.
In that case, Druyun admitted steering the tanker deal and
other work to Boeing, where she took a job after her retirement.
Following that scandal, the Pentagon assumed control over
major Air Force acquisitions, gradually handing back control
over the following years.
The Pentagon in 2008 canceled a $35 billion contract awarded
to Northrop Grumman Corp and Europe's EADS
after government auditors found problems with the Air Force's
handling of the contract. Former Defense Secretary Robert Gates
returned control of the tanker program to the Air Force in 2009.
Air Force acquisition chief David Van Buren told Reuters at
the conference that the first phase of the investigation was
expected to wrap up next week, and that senior officials from
Kendall's office were already involved as part of that process.
He said he was not aware of any plans to reduce the
requirements for the new light attack aircraft - a concern
voiced on Wednesday by privately held Sierra Nevada Corp.
Sierra Nevada has urged the Air Force to quickly issue a
plan for redoing the Afghan plane competition, arguing that it
should review materials already submitted, rather than rewriting
the terms of the competition or starting it over again.
Hawker Beechcraft, which had sued in federal claims court to
reverse the contract award to Sierra Nevada and Embraer, and
Sierra Nevada have said they would bid again for the work.
Hawker insists that its AT-6 plane is the most capable,
affordable and sustainable light attack aircraft on the market.
Sierra Nevada said the Embraer A-29 Super Tucano is
combat-proven and in use by six air forces around the world.