F-X deal is back on. Brazil back in action

[Salty Dog]

In the US, states and local governments collect sales tax. The Federal government has no jurisdiction in the matter when it is a business to business transaction as is the case when components are bought elsewhere.

I do not dispute this with regards to the private sector. So what does this have to do with a foreign government making a purchase from the US Government?

 

[Salty Dog]

I've looked for information on this, & everything I've found is very clear in stating that sales taxes apply to retail transactions. In some, it is clearly thought to be so obvious that it is not explicitly stated, but "retailer" is used interchangeably with "business" throughout, making it obvious on what the tax is levied. While I have, of course, only looked at a small sample of the authorities in the USA which levy sales taxes, I've not yet found one which (according to the tax guides published by the authorities) levies a tax on intermediate goods. Can you point me to one - just one?

It appears to me that if there are any, they must be very rare, & given that it is an avoidable (you set up your business making components in a different jurisdiction) cost, I can't see that it is possible that sales tax could be a significant component - if a component at all - of the costs of a complex product such as the F-18E, made of parts sourced from suppliers scattered across the USA.

In other words, I can't see why you ever mentioned it. The differences in rates of corporation & payroll taxes, & employers social security contributions (the latter are very high in France, for example) are far more important, but I don't see anyone suggesting that price comparisons should be adjusted for them. VAT is relevant only because it is charged on domestic purchases, but not on exports, & thus affects price comparisons.

Looks like we need to get a definition from a tax expert which I am not.

To throw a wrench in the works, authorized individuals that purchase goods and services at the numerous US military retail stores throughout the USA do not pay any federal, state, or local taxes.

 

[Salty Dog]

The F-X2 finalists submitted their "Best and Final Offers" last week.

Dassault Rafale - Euro 50M
Boeing F/A-18E - USD 55M
Saab Gripen NG - USD 50M

Here's the buzz. . . . . The Gripen NG is seen as a prototype project with avionics yet to be sorted out. This is attractive for the FAB to develop new systems, however the top brass are not keen to acquire a system that is not yet fully operational. The F-18 and Rafale are technically tied ahead of the Gripen NG, the Rafale with an edge in technology, and the F-18 ahead in logistics support, especially availability and least cost in parts support. The F-18 also has an edge in weapons availability and price. France and the USA have pledged ToT, offsets, and partnering with Brazilian firms for in-country manufacture.

The FAB will submit their final recommendation to the Minister of Defense and President next week with the F-X2 winner to be announced on 7 September.

The F-X2 winner announcement is postponed until October. Some folks feel the date will be 23 Oct as this is the "Day of the Aviator".

The extension will give the Brazilian Air Force time to ask more detailed technical questions to the competitors which in turn are going to turn up the heat in their lobbying efforts.

 

[Vivendi]

Brazilian President Luiz Inacio Lula da Silva told AFP in an exclusive interview ahead of Sarkozy's two-day visit that the technology transfer offer gave the Rafale "an exceptional comparative advantage" over Boeing's F/A-18 Super Hornet and Saab's Gripen NG fighters.

While cautioning that Brazil's decision process still had to be approved by air force commanders and lawmakers, he praised France as "the only important country ready to discuss transfer of technology in all areas with us."

He stressed that "a country the size of Brazil can't buy a product from another country without technology transfer."

A Brazilian military expert who runs a specialist magazine titled Defesanet, Nelson During, told AFP that Brazil's decision should be known in October.

"The air force should send its evaluation of the three aircraft to the government on October 23 -- Day of the Aviator -- indicating its choice. Then, the National Defense Council should ratify that choice pretty quickly," he said.

Informed sources though said that Sarkozy's visit which starts Sunday and coincides with Brazil's Independence Day celebrations, could precipitate the announcement of the winning bid.

During said France's big advantage in the competition "is that it doesn't put restrictions on its technology -- it gives everything."

That appeared to contrast with the offers from Boeing and Saab.

The US company is subject to congressional oversight for defense technology exports -- something Brazil has run up against several times in the past, to its annoyance.

Saab's Gripen, while praised as a relatively cheap and versatile option, relies on outside contractors for some of its most essential equipment -- such as the US giant General Electric for the engine, and Italy's Selex for the combat radar. That could limit what technology it could ultimately transfer.

Brazil's aim is to not just buy aircraft off-the-shelf, but to use the purchase to boost its ambitions of becoming one of the 21st century's great powers.

Lula said Brazil's increasing clout on the world stage, and its natural resources in the Amazon and in offshore oil fields, required a defense industry to match.

For During, the essential criteria in the jet fighter bid were: How much technology will be transferred? What will Brazilian industry get out of it? What are Brazil's long-term geo-political goals?

"We already have a deal with France. Should we reinforce it? If we negotiate with the US, will we be forced to toe the line on its policies? Are there advantages to negotiating with the Swedes? These are the questions on Brazil's side," he said.

The price per plane -- one of the criticisms of the Rafale by its rival bidders -- "is not fundamental," During said.

"It's the operating cost that counts. The cost per hour of flight, of maintenance, of the electronics. We are a poor country and all this has to last for the next 30 years."

He added: "The Rafale is not the most expensive offer in terms of operating cost. That's the F/A-18."

AFP: France seen leading race to equip Brazil air force

I am surprised this During claims SH is more expensive than Rafale in operating costs...

Anyway, to me it seems that Rafale has more or less won this now.

Vivendi

 

[the road runner]

I am surprised this During claims SH is more expensive than Rafale in operating costs...

I would assume the super hornet is more expensive per hour because it has a greater capability

It will be very intresting to see what fighter Brazil chooses and what it will mean for the competition.

 

[Salty Dog]

Often it's the case in Brazil (and I´m sure elsewhere) the "Top Brass" (and even higher) do not communicate that well with the rank and file. If you speak to the latter (the end users), they highly favor the Super Hornet. Of course President Lula will speak high of France. President Sarkozy will be the guest of honor for the Brazilian Independence Day celebrations this Monday and Brazil will sign Euro 6.1 Bi contracts for (4) Scorpene SSK, a SSN, and 50 Eurocopter EC-725.

The announcement for the F-X2 winner should be made on 23 October.

 

[Vivendi]

I would assume the super hornet is more expensive per hour because it has a greater capability.

How so?

F-35 will (according to LM) cost less to operate than F-16. Do you expect the F-35 to be less capable than the F-16 because of that?

V

 

[swerve]

Rafale. And France will buy 10 KC-390, & assist in its development.

Sarkozy assiste a desfile militar em Brasília e assina acordo bilionário com governo brasileiro - O Globo

BRASÍLIA - O Brasil vai mesmo comprar, da França, caças Rafale para a Força Aérea Brasileira (FAB). Uma nota conjunta divulgada pelos dois governos confirma que serão 36 aviões de combate. Com o anúncio, encerra-se o processo de seleção feito pela FAB, o chamado programa FX-2. Perderam a disputa o caça sueco Gripen e o americano F18. A decisão foi tomada durante uma reunião do presidente Luiz Inácio da Silva com o colega francês Nicolas Sarkozy, no Palácio da Alvorada. O valor da compra dos 36 caças Rafale não foi divulgado, mas a estimativa era superior a R$ 3,8 bilhões.

A nota afirma ainda que a França pretende adquirir aviões do Brasil, tornando os dois países "parceiros estratégicos também no domínio aeronáutico". "Sarkozy comunicou a Lula a intenção de adquirir uma dezena de unidades da futura aeronave de transporte militar KC-390 (avião cargueiro que a brasileira Embraer pretende desenvolver) e manifestou a disposição dos industriais franceses de contribuir para o desenvolvimento do programa dessa aeronave", diz o comunicado.

36 Rafale, about 10 KC-390 the other way, French offer of contribution to KC-390 development (probably means the French have an advantage in supplying engines, avionics, etc), Rafale price not divulged but estimated to be more than 3.8 billion reais, i.e. more than $2 billion.

 

[Salty Dog]

Rafale. And France will buy 10 KC-390, & assist in its development.

Sarkozy assiste a desfile militar em Brasília e assina acordo bilionário com governo brasileiro - O Globo

That makes it 99% certain for the Rafale. There should be some interesting news on this during the week as the decision seems very political in nature.

Brasil confirma decisão de comprar 36 caças franceses

 

[Alonso Quijano]

That makes it 99% certain for the Rafale. There should be some interesting news on this during the week as the decision seems very political in nature.

Brasil confirma decisão de comprar 36 caças franceses

What do you think of this purchase?

 

[the road runner]

How so?

F-35 will (according to LM) cost less to operate than F-16. Do you expect the F-35 to be less capable than the F-16 because of that?

V

The Super Hornet dose have a greater capability against the competing aircraft
*mix of weapons that can be carried,
*APG-79 Aesa radar,
*open architecture mission computers
*High order language softwear,high speed fiber channel network,digital solid state recorder
*Joint Network cetric operations with link 16 MIDS
*digital comunication system capable of sending/recieving Voice,data,still or moving images from warships,ground stations,fighters and airborne control/survelance aircraft.
i could go on.................

I would go as far to say that the F18EFG has the greatest ALL ROUND capability in the Brazillian comp.

I like how the F18 Rhinos use jamming(as apposed to LO) as a means of punching thru a defensive perimiter.Its just another way of doing business.JSF uses LO to get the job done while the F18 Rhinos use Jamming.

Vivendi i would like to explain what i mean by capability.
As Salty Dog has pointed out......

If you speak to the latter (the end users), they highly favor the Super Hornet.

Well i assume they favour it because its the most capable aircraft

Vivendi as to your above Quote on the JSF costing less to operate than the F16 you need to use better Bait than that mate.ANYHOW here goes............................
I did not compare the JSF to F18 so it puzzles me why you have quoted me and asked a question ,about JSF when i am taliking about F18 ,and the competition in the Brazillian tender.I recon time will tell if the JSF will be cheaper to operate than the F16,but i would take what lockhead says with a pinch of salt.

I was only stating that i think the F18EFG is the most capabile aircraft in the Brazilian competition,and it seems some of the Brazilian pilots,agree that the F18 has the capabilities required.

Good luck to the French i would like to see the Rafael get some export success.........

 

[the road runner]

That makes it 99% certain for the Rafale. There should be some interesting news on this during the week as the decision seems very political in nature.

politics eh........
Well good luck to the French (if its true)for there first Export success of the Rafael....

Guess we will have to waite till the 23rd to see what the official word will be.

Salty can you elaborate more on the politics involved?

regards.....

 

[fretburner]

Didn't the Rafale score an order from some mid-east country?

Yes, politics. Maybe even Lula sending Obama a message - him being "displeased" with the Colombia bases thingy?

 

[Sea Toby]

Rafale aircraft maybe a bit expensive, but more easily swallowed by Brazil with the sale and development help for the KC-390 military jet transport aircraft. If this jet transport with the size and lift of a C-130J Hercules is a success, and at a price less than a Hercules, Brazil has a winner. I also like the tail changes from the beginning design as well. May I suggest a nickname for the KC-390..... a baby Globemaster..... LOL.....

It also didn't hurt France to support a Brazil/Rio 2018 Olympic games, nor Brazil to support another Winter games in France. An interesting sign though, the French PM flew to Brazil, not otherwise.

Its a good deal for both nations....

[ame="http://www.youtube.com/watch?v=hX6sjjpaUvA"]YouTube - Brasil: O Gigante Adormecido Acorda. - El Despertar Bélico del Brasil.- KC- 390[/ame]

 

[swerve]

The Super Hornet dose have a greater capability against the competing aircraft
*mix of weapons that can be carried,
*APG-79 Aesa radar,
*open architecture mission computers
*High order language softwear,high speed fiber channel network,digital solid state recorder
*Joint Network cetric operations with link 16 MIDS
*digital comunication system capable of sending/recieving Voice,data,still or moving images from warships,ground stations,fighters and airborne control/survelance aircraft.
i could go on.................
........

Apart from the mix of weapons, where it has more integrated than the others (but both - and Saab especially has shown itself both willing & able to do this quickly & cheaply - will integrate other weapons) & the AESA radar actually being in service (Rafales is in production but not service, Gripens is in development, though a less capable variant is in production for a US government customer) what of those do the others lack?

 

[the road runner]

Apart from the mix of weapons, where it has more integrated than the others (but both - and Saab especially has shown itself both willing & able to do this quickly & cheaply - will integrate other weapons) & the AESA radar actually being in service (Rafales is in production but not service, Gripens is in development, though a less capable variant is in production for a US government customer) what of those do the others lack?

The APG-79 Radar ,i believe is the biggest selling point on the F18 Rhinos
Add the weapons available(and in service now) and jamming into the mix and i think you have a winner.......

I am not saying that the other Aircraft lack the other capabilities mentioned in my above post.

But the F18 APG-79 is in service ,in large numbers, flying in very harsh condition.
I just think that alot of Risk has been eliminated if choosing a F18.

Regards

 

[Vivendi]

The Super Hornet dose have a greater capability against the competing aircraft
*mix of weapons that can be carried,
*APG-79 Aesa radar,
*open architecture mission computers
*High order language softwear,high speed fiber channel network,digital solid state recorder
*Joint Network cetric operations with link 16 MIDS
*digital comunication system capable of sending/recieving Voice,data,still or moving images from warships,ground stations,fighters and airborne control/survelance aircraft.
i could go on.................

I would go as far to say that the F18EFG has the greatest ALL ROUND capability in the Brazillian comp.

I like how the F18 Rhinos use jamming(as apposed to LO) as a means of punching thru a defensive perimiter.Its just another way of doing business.JSF uses LO to get the job done while the F18 Rhinos use Jamming.

Vivendi i would like to explain what i mean by capability.
As Salty Dog has pointed out......


Well i assume they favour it because its the most capable aircraft

Vivendi as to your above Quote on the JSF costing less to operate than the F16 you need to use better Bait than that mate.ANYHOW here goes............................
I did not compare the JSF to F18 so it puzzles me why you have quoted me and asked a question ,about JSF when i am taliking about F18 ,and the competition in the Brazillian tender.I recon time will tell if the JSF will be cheaper to operate than the F16,but i would take what lockhead says with a pinch of salt.

I was only stating that i think the F18EFG is the most capabile aircraft in the Brazilian competition,and it seems some of the Brazilian pilots,agree that the F18 has the capabilities required.

Good luck to the French i would like to see the Rafael get some export success.........

You misunderstood my question completely...

In your previous post you suggested that the high operating costs of the SH (compared to the operating costs of the Rafale) was because the SH is "more capable" than the Rafale.

I was questioning this link between operating costs and "capability" of the aircraft. I was not questioning the "capability" of the SH, since I have little reliable information to confirm or dismiss the claim that SH is "more capable" than Rafale.

I used the single-engine F-35 as an example of an a/c that is clearly more capable than the a/c it is replacing (the F-16) but will still have lower operating costs than the F-16. This is not just claimed by LM, also independent experts (i.e. the Norwegian evaluation commitee) is claiming this. I used this as an example to make the point that I did not necessarily see the link between capabilities and operating costs.

Making examples is a well known technique when one is discussing something. It was not meant as "baiting" in any way. It was merely used to illustrate a point I was trying to make.

For your comments above, I don't see they strengthen your claim that the operating costs of the SH is higher because the SH is "more capable".


Anyway, to comment further on the Brazil decision: The irony is that, after Dassault (and the other two European manufacturers) have been claiming for years that they have been losing competitions for political reasons, it is seems quite clear that SH lost this one for political reason...

And the other interesting thing is that, in spite of all the claims of SH being so extremely capable, and in spite of having the advantage of being backed by the US, it has sold only a limited number (is it 24?) SH to Australia -- SH has basically lost all other (export) competitions it has participated in so far! Well done for "the most capable" 4. gen a/c, backed by the worlds sole superpower....


V

 

[B3LA]

"independent experts (i.e. the Norwegian evaluation commitee)"

nfloorl:

Please, those "experts" have lost all of their credibility...

IHS Jane?s Editor Robert Hewson Wins Best Breaking News Submission Award - Jane's Press Centre

 

[Vivendi]

"independent experts (i.e. the Norwegian evaluation commitee)"

nfloorl:

Please, those "experts" have lost all of their credibility...

IHS Jane?s Editor Robert Hewson Wins Best Breaking News Submission Award - Jane's Press Centre

The claims by Hewson and others have been addressed by the Norwegian MoD. I don't have time to go through it now, but it turns out that the "flaws" and "mistakes" Hewson claimed to have found are non-existing. The Norwegian MoD has complete confidence in the evaluation report which has been audited by two independent companies.

I suspect that the "source" Hewson is referring to is a Mr. Berg, who has lost all his credibility due to his claims relating to that story.

If Energo reads this I'm sure he can explain it much better than I can. Anyway, gotta go now.


Vivendi

 

[Sea Toby]

With the full technology transfer French policy to Brazil, and with Brazil assembling much of the aircraft in Brazil, its a no brainer for Brazil to buy Rafale fighters. With the French buying and helping develop the KC-390 jet transports included in the deal, well that is icing on the cake....

Plus Brazil could use the naval version of the Rafale with their ex-French aircraft carrier. Those aging Skyhawks are looking more and more toothless. I understand the buy isn't large enough now for naval Rafale aircraft, but one never knows what the future will bring....