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Eurojet pays dearly for engine re-bid delay

sudhir007

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Jul 6, 2009
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Eurojet pays dearly for engine re-bid delay - Money - DNA

European aerospace firm Eurojet missed being declared the lowest bidder — L1 — by a whisker for the engine deal of the indigenous light combat aircraft (LCA) Tejas Mark-II being developed by Aeronautical Development Agency (ADA).

The European consortium is engaged in a fierce battle with the American GE Aviation for providing technology and consultancy for the manufacture of 99 engines for the LCA Tejas Mark-II.

An official with knowledge about the bid, on the condition of anonymity, said Eurojet had submitted its revised bid on September 28 and it reached the Defence Research and Development Organisation (DRDO) on September 29.

“Eurojet marred its chance by submitting its bid a day before the announcement (of L1 biddder) was made — September 30. And so their revised bid was not considered,” he said.

He said Eurojet’s revised quotation for manufacturing of its EJ200 indigenously is lower than GE’s F-414 by $80-100 million.


According to sources, after reworking the bid and providing the details soughtby the price negotiation committee, the European consortium’s tender price is around $900 million while that of GE is $980 million. In the initial round, Eurojet’s bid was reportedly lower at $666 million compared with GE’s $822 million. It is learnt Eurojet’s price had shot up because it had not clearly specified certain items in its bid.

One of them was the $65 million cost of tools, which it is giving on ‘free on loan’ - meaning the tools would be returned on completion of the project.

GE, on the other hand, is providing the tools totally free.


“This and other costs, which were specified more clearly in response to queries from the price negotiation panel has closed the gap between Eurojet and GE but European engine maker’s bid is still lower than GE,” said a source.

Though, another source, who did not want to be named, said initially Eurojet’s bid had shot up to over $1000 million after they clarified certain expenses in the tender.

“They rushed to correct that (their bid climbing higher than GE’s) but by the time they came back with a revised bid, it was too late,” he said.

Price negotiation committee chairman and chief controller - R&D - of DRDO Dr CK Prahlada could not be reached for comments.

The LCA Tejas Mark-II is an upgraded version of the current Mark-I, which uses GE’s F404 engine.
 
jeez what a miss man.... unlucky people.. but if they dont want to give the manufacturing machines to us and take it back.. then i guess the deal doesnt make sense..
 
Eurojet should be given second chance. EJ200 is more advanced and new than F414. If they don't supply items worth $65 mn and we need to pay $100 mn less, still its better, we can buy them as well.
 
Eurojet should be given second chance. EJ200 is more advanced and new than F414. If they don't supply items worth $65 mn and we need to pay $100 mn less, still its better, we can buy them as well.

keep in mind though, the EJ would have required more airframe changes done to the LCA significantly delaying it. We need LCA to come out of the hangar asap
 
Eurojet should be given second chance. EJ200 is more advanced and new than F414. If they don't supply items worth $65 mn and we need to pay $100 mn less, still its better, we can buy them as well.

Although I am for the EJ engine, I have to say that if it was their fault of beeing late, it's not on us to give them a second chance.
However, I have some doubts about the article, because it's talking too much about unnamend sources and also that the EJ bid was first $1000, than $666 at the end $900 sounds strange to me.
 
keep in mind though, the EJ would have required more airframe changes done to the LCA significantly delaying it. We need LCA to come out of the hangar asap

As the lowest bidder is the only winner, I don't think that matters!!! They have sorted it out. Also it will help to select EF Typhoon.
 
Although I am for the EJ engine, I have to say that if it was their fault of beeing late, it's not on us to give them a second chance.
However, I have some doubts about the article, because it's talking too much about unnamend sources and also that the EJ bid was first $1000, than $666 at the end $900 sounds strange to me.

US companies complained and got re-bid chances multiple times. Example 197 light chopper deal.
 
US companies complained and got re-bid chances multiple times. Example 197 light chopper deal.

Sure and as we know that were political decision and I have some doubts if we will do it here as well. However, as Eurojet says, the contract is not signed so far and if the US really can't offer the ToT as they said, things will be different again. The only sad point is, I it would mean more delays for LCA.
 
Sure and as we know that were political decision and I have some doubts if we will do it here as well. However, as Eurojet says, the contract is not signed so far and if the US really can't offer the ToT as they said, things will be different again. The only sad point is, I it would mean more delays for LCA.

Thats why I said we should do that now itself. If we move forward with GE and later change our stand it will be serious delay. I am 100% sure US govt will make problems as well.
 
Thats why I said we should do that now itself. If we move forward with GE and later change our stand it will be serious delay. I am 100% sure US govt will make problems as well.
I think its best for us to chuck this TOT on engine and get the planes fly now.
The only huddle will be the TOT and clearance for TOT.

Why not just put the engine?, If EJ200 were there then the letest techs would have come to us, noe EJ not being there, and GE being an old engine, I think we should drop the TOT stuff and move ahead with the LCA 2.
 

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