U.S. firms eye $2.43 billion Singapore F-16 order

[January 23, 2014]  By Andrea Shalal-Esa

WASHINGTON (Reuters) — The U.S. Defense Department has notified Congress that it had approved the sale to Singapore of upgrades for 60 F-16 fighter jets, setting off a potential competition for an order valued at $2.43 billion.

The Pentagon's Defense Security Cooperation Agency, or DSCA, said Singapore had requested an upgrade of 60 aging F-16 jets built by Lockheed Martin Corp <LMT.N> to improve their reliability and effectiveness in combat.

U.S. lawmakers generally have 30 days to block a sale, although such action is rare.

Lockheed, which built the original F-16s, and BAE Systems Plc <BAES.L>, a key supplier and subcontractor, are increasingly focused on capturing upgrade orders given reductions in U.S. and European military spending.

In its notification to Congress, DSCA did not name a prime contractor for the Singapore F-16 upgrades, and officials at the DSCA could not be reached for immediate comment on whether there would be an open competition or a sole source award.

Lockheed said it hoped to win the order. "Lockheed Martin has partnered with Singapore on the F-16 program for more than 25 years and we look forward to continuing to support them in the future," said spokesman Michael Rein.

But BAE is pressing for an open competition, arguing that it can carry out upgrades to existing F-16s for less cost.

Last year, BAE finalized a deal worth over $1 billion to upgrade over 130 South Korean F-16 fighters, and the company is seeking additional orders in Europe and Asia.

"We want to be considered as a competitor for Singapore's F-16 upgrade program and look forward to further discussions with them to support and deliver F-16 upgrade solutions tailored to their requirements," said BAE spokesman Neil Franz.

"Our team is very interested in this pursuit and would like to see an open competition," he said, noting that BAE provides about 40 percent of the mission equipment for current F-16s.

DSCA said the upgrades would give Singapore's F-16 fleet 70 advanced radar systems, new global positioning system (GPS) equipment, better "friend or foe" identification systems and an array of newer weapons, including laser-guided bombs.

Singapore continues to consider the purchase of F-35 fighter jets, also built by Lockheed.

DSCA said the proposed F-16 upgrade would contribute to U.S. foreign policy and national security by increasing Singapore's ability to maintain regional security.

"The improved capability, survivability, and reliability of newly upgraded F-16s will enhance the Republic of Singapore Air Force's ability to defend its borders and contribute to coalition operations with other allied forces," it said.

(Editing by Sofina Mirza-Reid)

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