When South Korea in October dumped BAE Systems as the prime contractor in charge of upgrading its fleet of Lockheed Martin F-16s, it sent a message that companies other than the original equipment manufacturers would be fighting an uphill battle to access the global Fighting Falcon market.
A recent decision by Greece to hire Lockheed and Northrop Grumman to install modern avionics in its F-16s seems to have driven that message home. On the international market, it is the prerogative of each F-16 owning nation to either award upgrade work to Lockheed or shop around for a better deal, depending on how long each intends to operate the jets and desired capabilities.
The US State Department on 19 November announced the approval of a possible $188 million foreign military sale (FMS) to Greece for F-16 sustainment and associated equipment, parts and logistical support. Greece “needs the aircraft to ensure its F-16 fleet is properly sustained and modernized to maintain interoperability with the United States and other NATO countries,” the announcement says.
The announcement by the US Defense Security Cooperation Agency, names F-16 manufacturer Lockheed and its radar manufacturer of choice Northrop as principle contractors for the work. There are few other formal competitions ongoing for the avionics and radar upgrades, but coalition and NATO countries throughout Europe, the Middle East and Asia also will require upgrades to their F-16 fleets in coming years.
With about 3,000 operational jets worldwide, the F-16 is one of the most prolific fighters ever made. Analysts have pegged the international upgrade market at more than $3 billion. BAE emerged as Lockheed’s main competitor for the work when South Korea – long expected to follow the USAF lead – preemptively chose the US-based subsidiary of the British firm and Raytheon’s RACR active electronically scanned array (AESA) radar.
Boeing, which has traditionally integrated Raytheon radars into its fighter jets, also has expressed interest to capture F-16 upgrade market share. Lockheed has partnered with Northrop, which builds the scalable agile radar (SABR).
Taiwan was on board with the USAF’s decision to let Lockheed helm its combat avionics programmed extension suite (CAPES) effort to upgrade its F-16s. Now that the US has canceled CAPES for budgeting reasons, Taiwan must decide whether to continue funding CAPES on its own or to open the competition to Boeing and BAE.
South Korea in November canceled its contract with BAE, which is now suing the country’s military purchasing authority over the botched deal.
An industry source tells Flightglobal that South Korea dropped BAE because its low bid failed to factor in work it could not perform because of proprietary mission computer equipment owned by Lockheed.
“The reason why you saw failure with one of the primes was that company was not a fighter integrator,” he says. “If you’re a fighter integrator, that’s not a problem. If you look at Raytheon with RACR, they had no F-16 experience, but the harvested knowledge from F-18 and F-15 and won an export contest.”
In the UK, BAE is part of the consortium that developed the Eurofighter Typhoon, but the US-based subsidiary is not a fighter manufacturer.
Boeing has hands-on experience with the F-16 now that it has successfully completed a development programme to convert the jets to remotely piloted drones used for target practice. The company’s success with what is called the QF-16 suggests being a non-OEM is not an insurmountable hurdle.
The proprietary wall that BAE seems to have hit in South Korea is not as high for companies with prior fighter integration experience and would be non-existent by hiring Lockheed to do the work, though non-OEMs have touted their solutions as significantly less expensive. Despite BAE’s ultimate failure to seal a deal with South Korea, the episode at least demonstrates that F-16 operators are open to hiring non-OEMs to upgrade their jets, the source says.
“Any F-16 competition that hasn’t been decided yet will go for exportability, price, compatibility,” the industry source says. “Even if you were not the OEM, you can do that work. If you have built a fighter, then the technological solutions that apply can be imported to the F-16.”
Source: FlightGlobal.com
