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Poland picks Lockheed F-16 in $3.5B deal

December 27, 2002 (by Anonymous) - Poland on Friday named Lockheed Martin's F-16 Fighting Falcon the winner of a three-way tender to supply 48 combat jets in a $3.5 billion deal, eastern Europe's largest ever defense order.
Lockheed, with its block 52 F-16 C/D model powered by F-100-229 engines from United Technologies unit Pratt & Whitney, beat two European rivals to land its first major contract in post-communist Europe.

The F-16 fought off French Dassault Aviation's Mirage 2000-5 Mk 2 and the Anglo-Swedish Jas-39 Gripen, built by BAE Systems and Saab.

The order is a triumph for a lobbying drive led by President George W. Bush and deals a blow to Europe's aerospace industry just two weeks after the European Union invited Poland and nine other countries to join in 2004.

Defense Minister Jerzy Szmajdzinski dismissed criticism that Poland, a NATO member since 1999, had bowed to U.S. pressure and said the best package of planes and reciprocal investments in Polish industry had won the day.

"Poland based its decision on merit, not politics," he told a news conference. "This deal guarantees our ability to participate in NATO operations and increases our security."

The F-16s will be delivered between 2006 and 2008, enabling Poland to scrap its obsolete Soviet-built MiGs, some of which have been in the air since the 1960s.

Lockheed, backed by a $3.8 billion U.S. government loan which foresees interest-only payments through 2010, said it won fair and square on technical and financial grounds.

Under Polish law, reciprocal investments, or "offset," must be worth at least 100% of a defense order. Warsaw's government hopes the capital injection will revive industry and help cut an 18% jobless rate.

Lockheed put together over 100 projects it valued at $9.8 billion, although Polish officials said they were worth about $6 billion.

That compared with 7.5 billion euros ($7.8 billion) from Gripen and just 3.8 billion euros ($3.9 billion) from Dassault.

Defense experts rate the F-16 and Mirage roughly equal as fighting machines, with the cheaper Gripen third, but gave the French poor marks for their offset proposal.

Contracts for the planes should be signed in March 2003, conditional on finalizing the offset package within a further 60 days. Polish officials estimated the total cost of the deal at $4.7 billion, including interest.

The F-16 comes equipped with Northrop Grumman Corp's APG-68(V)9 radar and ALQ-211(V)4 electronic warfare suite.

The fighter jet's weapons systems comprise the AIM-9X air-to-air missile, the AIM-120C AMRAAM missile, as well as Joint Stand-Off Weapon and Joint Direct Attack Munition Bombs.

Another triangular contest is under way between the F-16, Mirage and Gripen in Brazil, which wants 12 planes.