Article Posted on : - Apr 29, 2011

The F-16 aircraft of Lockheed Martin.

NEW DELHI (PTI): Two American companies have lost out in India's multi-billion dollar combat fighter deal, a decision received by the US with "deep disappointment".

Boeing's F-18 and Lockheed Martin's F-16 were in contention for the bid under which India will procure 126 Medium Multirole Combat Aircraft (M-MRCA) for the IAF.

However, after intense trials, both these fighters were not considered by the Defence Ministry which shortlisted European Eurofighter and French Dassault Rafale. Also not considered were MiG-35 of Russia and Saab Gripen of Sweden.

Both the shortlisted firms have been asked by the Defence Ministry to extend till December 31 the validity of their commercial bids which were to expire on Thursday, officials said here.

"We have given two weeks time to the two companies to extend their bids upto December 31," an official said while noting that representatives of Eurofighter and Dassault Rafale had met Defence Ministry officials on Thursday.

Boeing, Lockheed Martin, Russian MiG-35 and Swedish Saab Gripen were conveyed the rejection of their bids on Wednesday, they added.

The Ministry will now work on "benchmarking" a reasonable price for the aircraft and then open the commercial bids of Dassault Rafael and Eurofighter Typhoon to select the lowest bidder for the tender, they said.

The deal is expected to be finalised by the end of present fiscal that ends on March 31 next year, they said.

The negotiations for fulfilling the offset clause and the Transfer of Technology (ToT) would be done simultaneously by the Ministry, officials said.

The US Embassy here said it was informed on Wednesday that two aircraft offered by the US Government through the Foreign Military Sales process were not selected for procurement by the Indian Ministry of Defence.

"We are reviewing the documents received from the Government of India and are respectful of the procurement process. We are, however, deeply disappointed by this news," Ambassador Timothy Roemer said.

He said he was "extremely confident" that the Boeing F-18IN and Lockheed-Martin F-16IN would provide the Indian Air Force an "unbeatable platform with proven technologies at a competitive price."

Roemer said he had been personally assured at the highest levels of the Indian government that the "procurement process for this aircraft has been and will be transparent and fair."

Remaining convinced that the US offers its defence partners around the globe the world’s most advanced and reliable technology, the envoy said, "We look forward to continuing to grow and develop our defence partnership with India."

Reacting to the decision, Boeing said, "We are obviously disappointed with this outcome. Our next step is to request the IAF for a debrief. Once we have reviewed the details. We will make a decision concerning our possible options, always keeping in mind the impact to the IAF."

However, Boeing did not specify the options being considered by it.

"We believe we offered the IAF a fully compliant and best value multi-role aircraft for its defined missions and we will continue to look for opportunities to help India modernise its armed forces and enhance its aerospace industry," it added in a statement.

Lockheed said the US government was working on a response to the letter issued to it by the Defence Ministry conveying the rejection of the US companies.

Swedish firm Saab said, "To support the continued participation of the MMRCA, we are willing to provide additional information to the IAF and Defence Ministry to address any concerns that may have resulted in this decision."

It said the company was "offering India a world-class next generation fighter aircraft at a very competitive price and an extensive technology transfer programme."

In a statement, it said the Gripen NG provides a price and life cycle cost, which will enable India to acquire the requisite number of aircraft which makes it "unmatched".