BRASILIA, Brazil, March 5 (UPI) -- Senior U.S. officials have talked with the Brazilian government in a damage-control exercise after the U.S. Air Force canceled a contract for Brazilian light attack aircraft.
The cancellation comes at a time when the Boeing Co. is campaigning to win a multibillion-dollar Brazilian government contract for up to 36 F-18 fighter jets in a competition with France's Dassault Rafale and Sweden's Saab AB's Gripen NG.
In contrast, the contract for Embraer's Super Tucano light attack aircraft is worth $355 million, likely to increase to $1 billion.
Brazilian officials reacted angrily to the cancellation and warned it could affect other defense relations. Brazilian aircraft manufacturer Embraer said it hoped it could still win the deal.
The U.S. Air Force awarded the contract for 20 Embraer Super Tucano light aircraft for deployment in Afghanistan last year but rescinded it this month, saying it wasn't satisfied with some of the paperwork.
The award was challenged by U.S. manufacturer Hawker Beechcraft Corp. which claimed its AT-6 aircraft was wrongly excluded from the selection process.
U.S. Deputy Secretary of State William Burns met with Brazilian government officials to reassure them the Super Tucano could still be in the competition and explained the cancellation as part of an internal process.
After the legal challenge by Hawker Beechcraft Corp. the award is under investigation and will most likely be revived, with Embraer and its rivals again invited to submit new bids.
Although Burns said the Super Tucano and the FX-2 jet fighter competition are "two separate issues," the Brazilian side is keen to find linkages between the two as a way of putting pressure to win the Super Tucano contract.
Embraer is in partnership with Sierra Nevada Corp. for the Super Tucano, which the Brazilian manufacturer sees as a key to its plans to expand the market for the light attack aircraft in North America and beyond in competition with U.S. rivals.
Both Brazilian government officials and Embraer said they were surprised by the cancellation.
"Along with its U.S. partner, Sierra Nevada Corp., Embraer participated in the LAS selection process providing, on time and without exceptions, all the required documentation," Embraer said in a statement.
"The decision in favor of the Super Tucano, announced on Dec. 30, 2011, by the U.S. Air Force, was a choice for the best product with proven performance in action and all the necessary capabilities to meet client demands," the aircraft manufacturer said.
"Embraer remains committed to offer the best solution to the U.S. Air Force and will await further clarification on the subject to decide next steps, in consultation with its partner, SNC," Embraer said.
Analysts said Brazilian hints at a linkage between the Super Tucano deal and the FX-2 jet fighter competition could complicate revival of the process for selecting a light attack aircraft for Afghanistan operations. The Hawker Beechcraft Corp. challenge to last year's award is still going through the legal process, which makes an early resolution of the light aircraft deal unlikely.
"This development is not considered conducive to strengthening relations between the countries on defense affairs," a Brazilian External Affairs Ministry statement said, in the clearest hint yet that the government is prepared to back any new bid by Embraer.