US defense industry complains of unfair competition Aselsan to manufacture local payload for three UAV systems TUSAS dissolved, TAI becomes prime local contractor

WASHINGTON/ANKARA - Exclusive by TDN Defense Desk

 

  A Turkish nod to an Israeli consortium for the procurement of unmanned aerial vehicles (UAVs) has caused suspicion among U.S. defense industry sources and officials who think the U.S. contender for the contract was unfairly disqualified.

  Turkey's procurement office, the Undersecretariat for Defense Industry (SSM) has selected a team of Israeli Aircraft Industries (IAI) and Elbit for the supply of three UAV systems, a contract worth $183 million. IAI-Elbit was competing with U.S. General Atomics.

  The contract involves three systems -- 10 aircraft, surveillance equipment and ground control stations. Turkey's local industry will provide sub-systems and services amounting to 30 percent of the contract. SSM said the Israeli-team plan to finish their part of the project in 24 to 30 months.

  A procurement official familiar with the program admitted that SSM hastily went for the Israeli solution as it came under pressure from the military for the “quickest possible deal” to meet its operational needs. The UAV program had been crawling along for several years.

  SSM signed a prime contract with the Turkish Aeronautics Industry Corporation (TUSAS) only a day before the aviation company was legally dissolved as it merged with TAI earlier this year. Only days before TUSAS came under the corporate identity of TAI, it had signed the sub-contract with IAI-Elbit. That means that TAI will now run the UAV program.

  One U.S. industry source said that General Atomics' offer was practically disregarded due to contractual problems the U.S. company faced during the contest. “No U.S. bidder could have made a proposal under the terms and conditions specified by SSM for the UAV contract,” the source said.

  For example, he said, the contract is structured on a locally made payload for the UAVs – the critical part Turkey's military-owned Aselsan has been tasked to develop. SSM asked the two bidders to grant warranties for the payload Aselsan will develop in the future.

  While General Atomics refused to take the technical and financial responsibilities for a critical part a local company will develop, the Israeli team agreed to it.

  “That is against U.S. rules and regulations as well as against company policy,” said a defense expert in Washington who is familiar with Turkish procurement matters. “The contractual terms and conditions practically pushed the U.S. contender outside the competition. This was an unprecedented request on the part of SSM.” Thomas J. Cassidy Jr, the chief executive officer for General Atomics Aeronautical Systems, Inc. said that General Atomics competed on the Turkish UAV program but found it impossible to comply with the “extremely unrealistic terms and conditions demanded by the Turkish government as a condition for accepting a contract to provide Predator aircraft.”“It is extremely unrealistic that any responsible company could accept such terms and conditions and expect to perform professionally with integrity on this contract,” Cassidy Jr. said.

  Turkey has been operating General Atomics-produced GNAT-750s and I-GNATs for the past 12 years. “It is a disappointment that Predators, the most reliable and combat proven UAV system in the world, could not havebeen acquired by the Government of Turkey, a NATO ally,” said Cassidy Jr. “Predators would have provided completeinteroperability with the U.S. Air Force and Italian Air Force Predator aircraft.”

  One problem concerning the UAV program is the demise of TUSAS as a legal entity. Turkish industry sources said the entire team of TUSAS officials who had been working on the UAV program had resigned as TAI absorbed the company.

  “That will, in the most optimistic scenario, cause major delays in the program,” said one source. “Separately, the Israelis have a bad past record in fulfilling their contractual commitments to Ankara. If they tend to stick to their habit, the UAV program would face new uncertainties.”

  The decision to award the contract to an Israeli partnership came ahead of a visit by Turkish Prime Minister Recep Tayyip Erdogan to Israel and the Palestinian territories on May 1-2, following a chilly period in Turkish-Israeli ties. Erdogan has harshly criticized the Jewish state's policies against the Palestinians, calling their policies “state terror” on one occasion last May.