Ukrainian Company Hopes to Build Tanker for US Air Force
The U.S. Air Force is supposed to choose a new air refueling tanker...again...by November 12. Some analysts believe that date could slip into December, or even next year.
The choice is between Boeing and Airbus parent EADS. A third bidder which came in at the last minute, U.S. Aerospace, was disqualified for delivering its bid five minutes past the deadline July 9.
Or did it?
U.S. Aerospace is based in Los Angeles, (TICKER: USAE.OB) with a market cap of about $3 million.
The company was created by investors looking for a defense and aerospace company registered in the United States, but small enough to take over.
Earlier this year, the group bought New Century, a subcontractor which makes components for P-3 Orions and 747s, reworked the debt, added $500 million, and changed the name. The goal is to become a prime contractor partnering with international manufacturers to bid on major contracts. The board believes that aerospace and defense will increasingly be sourced globally. However, the company is not profitable, sales are down, and while it is break even or better on a cash flow basis, it only has $311,000 cash on hand.
The Air Force isn't interested.
Why? Because the tanker U.S. Aerospace is offering...is Ukrainian. The company has partnered with Antonov to turn the AN-70 cargo plane into a tankerwhich will cost millions less to build, and potentially billions less to maintain, than tankers being offered by Boeing and EADS.
Too late, says the Air Force. You missed the deadline.
Not so fast.
U.S. Aerospace has filed protests with the GAO claiming the Air Force intentionally delayed its messenger when he arrived at Wright-Patterson Air Force Base on July 9, alleging there is no proof he was late.
CNBC has learned the company claims the Air Force has either destroyed or misplaced evidence which would prove the timing of the messenger's delivery, even going so far as to accuse one Air Force official of lying and claiming a General knew it.
These are very serious charges, and the GAO has agreed to consider the protests.
It could rule as early as October 6.
You may recall that a previous protest which the GAO granted forced the Air Force to scrap its tanker award to Northrop Grumman/EADSand start over.
But a Ukrainian tanker?
Given how difficult politically it's been for EADS to sell a European tanker to the U.S. military, what would happen if the Air Force even considered one made by a former Cold War enemy?
Is U.S. Aerospace serious?
Yes — and you can hear more about it by listening to our exclusive interview with U.S. Aerospace director Michael Goldberg.
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