Brazil is looking to replace obsolete fighter aircraft, including French Mirage jets, at the high end of its air force inventory as part of the so-called FX-2 fighter competition.
Six major contenders -- Boeing's F/A-18 E/F Super Hornet, Dassault's Rafale, EADS' Eurofighter, Lockheed Martin's F-16 Block 60, Saab's JAS-39 Gripen NG and Sukhoi's SU-35 -- are in the race to win a contract that is variously valued at up to $8 billion.
Brazilian negotiators reportedly received French offers of discounts of up to $2 billion in the total price if Brazil chooses Rafale as its jet fighter of choice.
Other manufacturers are in the competition with offers of other incentives and "sweeteners" -- including greater technology transfers in the assembly and manufacture of the chosen jet.
Brazil hopes the fighter jet deal will enable it to build the foundation of an advanced aircraft manufacturing industry. Brazilian aircraft manufacturer Embraer is competing with several of the FX-2 contenders in other fields, including passenger jets and tactical military transport aircraft.
Brazil announced its intention to buy replacements for its aging air force jets three years ago but delayed a procurement decision to this year. France was considered an early favorite to win the multibillion-dollar contract but the Boeing Co. has begun identifying Brazilian industries it could employ if it wins the contract.
Some Brazilian commanders were quoted to be in favor of signing up for JAS-39 Gripen NG, arguing Saab offered attractive technology transfer options.
Brazil retired a squadron of Mirage IIIs it bought in the 1980s and replaced them with 12 second-hand Mirage 2000Cs starting 2006. The top end of the air force inventory is widely considered to be obsolete and ready for replacements.
Analysts said the FX-2 competition was mainly delayed because of domestic policies and Brazil's transition from former President Luiz Inacio Lula da Silva to President Dilma Rousseff. But economic conditions and a burgeoning global defense market fighting for customers seem to be working in Brazil's favor.
Brazilian officials said the country wasn't in a great rush to enter a deal if it could secure better price and technology transfer terms.
The military commanders are comfortable with the country's mid-tier inventory which includes Brazilian-Italian AMX subsonic light attack jets, Brazil-made Super Tucano COIN surveillance turboprops and refurbished P-3 Orions for coastal patrols.