How to Get a No-Bid Contract for Russian Choppers
April 13th, 2009Via: Wired:
How did a company best known for its communications gear manage to get a $322 million, no-bid contract to supply the Iraqi military with Russian helicopters? Not even the Pentagon can come up with a convincing explanation.
Yesterday, I spent an hour on the phone with two Defense Department officials who tried to explain to me why ARINC, a Maryland subsidiary of the Carlyle Group, managed to become the United States’ largest broker for Russian military aircraft. They were polite and patient, but the only reason they gave me was that ARINC had some sort of one-of-a-kind, “special relationship” with Russia’s copter-supplier.
E-mails obtained by Danger Room through the Freedom of Information Act tell a very different story, however.
…
The two fine gentlemen on the phone with me yesterday wanted to assure me that everything was a-OK with this deal (and believe me, my heart goes out to them for this thankless task), but they clearly did not understand how the Russian aerospace industry works.
The Russians do not create exclusive agreements with American companies; they sell to whoever comes to them with a contract and the proven ability to pay. The officials involved in this sale should have realized one simple thing: By honoring an “exclusive agreement” rather than seeking multiple quotes, they allowed ARINC and the Russians to dictate the terms, which explains the the sky-high sticker price for the helos.
