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

Salty Dog

Defense Professional
Verified Defense Pro
Defense Security Cooperation Agency
NEWS RELEASE
On the web: DSCA Home Media/Public Contact: (703) 601-3859
Transmittal No. 09-35
Brazil – F/A-18E/F Super Hornet Aircraft

http://www.dsca.mil/PressReleases/36-b/2009/Brazil_09-35.pdf
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
The info above was previously posted at the beginning of August 2009.

President Lula in September told President Sarkozy that Brazil has to pay the same price for the Rafale as the French armed forces.

A French Congressional Document cites the 2009 Rafale unit price between Euro 64 M and Euro 70 M a bit higher than the BAFO prices above.

The US $5.6 M for 36 Rafale being circulated in the Brazilian Press puts the Rafale unit price around US$ 155 M per Rafale.

As I see it, the Rafale for Brazil still comes out as the costliest proposition for Brazil. If Lula and MoD makes a Rafale decision, this will surely be challenged with the lawmakers and it should be interesting to see if the FAB will fully support it.
 

Feanor

Super Moderator
Staff member
Scandalous but not impossible, no? The Indian tender is completely up in the air, and it would make sense for them to make their best sales pitch. The economies of scale, future upgrade customer, and generally reputation would all make Rafale look better. Meanwhile the smaller Brazilian tender could be viewed as relatively secure because of internal political connections. I don't know if I'm totally missing the mark here, but what do you guys think? Could there be something in it?
 

Vivendi

Well-Known Member
Scandalous but not impossible, no? The Indian tender is completely up in the air, and it would make sense for them to make their best sales pitch. The economies of scale, future upgrade customer, and generally reputation would all make Rafale look better. Meanwhile the smaller Brazilian tender could be viewed as relatively secure because of internal political connections. I don't know if I'm totally missing the mark here, but what do you guys think? Could there be something in it?
Feanor,

IF we assume that the figures above from Salty dog are correct then: 50M USD for one Gripen; Multiply by 126 and you get 6.3 billion. Not 10 billion. Does this also mean that if Gripen wins both in Brazil and India then Brazil is paying more than it should and is sponsoring the Indian sale?

126 Rafale would then cost 8.950 billion USD; compare that to 6.93 billion for the SH (assuming 55 million USD a piece).

If we assume that each rafale in the Brazil tender is 71 million USD, that would be 2.556 billion for 36 planes. In addition there is a lot of other "stuff", which I guess then brings the total cost up to 5 billion.

The examples above show how nonsensical this is.
In order to do even try to do a comparison first one needs to establish what is included in each tender.

Second it becomes important to understand (as already stated in my previous post) what this 10 billion USD figure for India really means. They are running a competition including Mig 35 and Gripen at the low end, F16 and SH "in the middle" and Rafale and Typhoon at the high end of the cost scale. Is this 10 billion figure their total budget? Which could potentially mean that neither Rafale nor Typhoon stands a chance to win, which again would make the comparison to Brazil rather silly. Unless of course the 10 billion is mainly for "fly-away" + a minimum package and was allocated sufficiently large to allow for the most expensive bird in the race to win if IAF decides that's what they need. In which case, if Gripen is chosen in India, they will spend only some 65% of their budget...


Or is it just a rough figure somebody came up with to give a point estimate of what it will be in the end.

This is an interesting discussion but unless the above is more clarified it seems very speculative to me. Perhaps SD and F has the information that I am lacking that allows them to compare those two tenders in a meaningful manner. I would appreciate some links if the information is accessible on the internet.

Thanks.
 

Feanor

Super Moderator
Staff member
You know in all honesty the only answer I can give is I don't know. I was speculating as to the source of the price discrepancies. You may be right in that the discrepancies are due to differences in the contracts rather then pricing politics.
 

gf0012-aust

Grumpy Old Man
Staff member
Verified Defense Pro
Feanor,

IF we assume that the figures above from Salty dog are correct then: 50M USD for one Gripen; Multiply by 126 and you get 6.3 billion. Not 10 billion. Does this also mean that if Gripen wins both in Brazil and India then Brazil is paying more than it should and is sponsoring the Indian sale?
The key here is that there is obviously a sustainment and support cost factored in here.

Nobody from the Brasilian side is likely to articulate that because it is a security issues.

as a good example, RAAF has plonked down "nn" billion for the first batch of its JSF - the number includes through life support and is also factored on real stand up and continuing operational costs. ie not all countries do their TLS on the same basis (although they are starting to shift as its regarded as "real" accounting)

Its almost impossible to realistically break down these costs because there are always national security implications and because no one wants to have them declared in public (which is why these things always end up with "closed hearings" so as to protect national interest issues.)
 

Rish

New Member
Feanor,

IF we assume that the figures above from Salty dog are correct then: 50M USD for one Gripen; Multiply by 126 and you get 6.3 billion. Not 10 billion. Does this also mean that if Gripen wins both in Brazil and India then Brazil is paying more than it should and is sponsoring the Indian sale?

126 Rafale would then cost 8.950 billion USD; compare that to 6.93 billion for the SH (assuming 55 million USD a piece).

If we assume that each rafale in the Brazil tender is 71 million USD, that would be 2.556 billion for 36 planes. In addition there is a lot of other "stuff", which I guess then brings the total cost up to 5 billion.

The examples above show how nonsensical this is.
In order to do even try to do a comparison first one needs to establish what is included in each tender.

Second it becomes important to understand (as already stated in my previous post) what this 10 billion USD figure for India really means. They are running a competition including Mig 35 and Gripen at the low end, F16 and SH "in the middle" and Rafale and Typhoon at the high end of the cost scale. Is this 10 billion figure their total budget? Which could potentially mean that neither Rafale nor Typhoon stands a chance to win, which again would make the comparison to Brazil rather silly. Unless of course the 10 billion is mainly for "fly-away" + a minimum package and was allocated sufficiently large to allow for the most expensive bird in the race to win if IAF decides that's what they need. In which case, if Gripen is chosen in India, they will spend only some 65% of their budget...


Or is it just a rough figure somebody came up with to give a point estimate of what it will be in the end.

This is an interesting discussion but unless the above is more clarified it seems very speculative to me. Perhaps SD and F has the information that I am lacking that allows them to compare those two tenders in a meaningful manner. I would appreciate some links if the information is accessible on the internet.

Thanks.
That cost probably includes setting up the local manufacturing/assembly lines and vendor bases. it doesn't come cheap when you're starting from scratch. hal is already saturated with dozens of projects and increasing capacity to meet the required number of aircraft built per year for the MMRCA will make it necessary to significantly expand manufacturing capacity. I'm sure the budget planners took that into account. i think in addition to this and what gf0012-aust said above takes up a sizable portion of the budget. the rest is probably for inflation and to make sure enough money is allocated for whichever aircraft is chosen as a precaution.

project 17a is an illustration of what I'm taking about if you've kept up albeit a poor one.
 

Salty Dog

Defense Professional
Verified Defense Pro
A São Paulo-based body that represents almost 60% of Brazil's aerospace and defence companies has issued a scathing attack on the government's open support for the Dassault Rafale in its 36-aircraft F-X2 fighter contest.

Declaring that "the French fighter, if chosen, represents a defeat", the CIESP has released unconfirmed details on the bids.

Including maintenance costs, these total $10.2 billion for the Rafale, $7.7 billion for the Super Hornet and $6 billion for the Gripen NG, it claims. At just 2,500 positions, the Dassault-led proposal would also provide the smallest number of new jobs, while forging yet-closer defence industrial links with Paris would be "a grievous error for a country that wishes to assure its sovereignty", it alleges.
Brazil's F-X2 contest prompts further dispute
 

Feanor

Super Moderator
Staff member
The numbers seem relatively logical at least at first glance. The Rafale is the least-produced one, and ends up being the most expensive. The SH has a huge production run (relatively speaking) and ends up being a lot cheaper. The Gripen ends up even less expensive but not by quite as much.
 

Vivendi

Well-Known Member
I agree those figures look not too way off. Perhaps those figures are genuine, perhaps not. My take on it is, we don't know.

There seems to be so many rumors and so much disinformation that it's impossible to say what is "true" and "false".

For instance I have seen some reports claiming that Rafale ranked highest in the FAB evaluation, whereas others say that Gripen ranked the highest. Some have explained this with the different versions of the FAB report that reportedly have been generated.

Others have claimed that Rafale ranked highest in the "technical eval" only -- however I have also seen news reports claiming that Gripen was ranked highest in several categories, including "technical", whereas Rafale ranked lowest in most categories including "technical".

Such large discrepancies seem difficult to explain. So for the time being I tend to read and then ignore the reports coming from Brazil. Anyway, it is fun to watch, although also a bit sad -- an acquisition process should not be a circus like this.

I guess we will have a decision quite soon -- unless the whole thing is cancelled again.
 

dragonfire

New Member
And Brazil got a separate offer from Russia for Su-35 aircraft, and participation in the PAK-FA program.

Lenta.ru: Îðóæèå: Ðîññèÿ ïðåäëîæèëà Áðàçèëèè ñîâìåñòíóþ ðàçðàáîòêó ÏÀÊ ÔÀ

It seems to me like the offer is intended to compete with the ongoing tender, by offering technology sharing in regards to the PAK-FA as well as possibly priority production slots.
I thought the PAK-FA was only (atleast initialy) for Russia and India ?
 

Feanor

Super Moderator
Staff member
No. It was always intended for export to third parties. Russia and India just have production priority.
 
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