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Beech Wins $7-Billion U.S. Trainer Derby : Defense: Raytheon unit beats Rockwell and Northrop Grumman on one of the decade's last big military contracts.


WASHINGTON — Raytheon Co.'s Beech Aircraft unit won a fiercely contested, $7-billion contract to build the next generation of training aircraft for the U.S. Air Force and Navy, the Pentagon announced Thursday.

Beech, in securing one of the last big military programs expected to be awarded in this decade, bested five rival entries that included planes developed by Los Angeles-based Northrop Grumman Corp. and Seal Beach-based Rockwell International Corp.

"We are tremendously pleased," Arthur E. Wegner, chief executive of Raytheon's aircraft group, said after Air Force Secretary Sheila E. Widnall made the announcement.

Beech, a familiar name in general aviation, will build 711 planes for the Air Force and Navy over the next 20 years under a program called the Joint Primary Aircraft Training System (JPATS). The aircraft will be assembled at Beech's headquarters in Wichita, Kan.

JPATS was an expensive contest. Beech and its rivals together have spent more than $500 million developing their entries since the competition began in the early 1990s, estimated Paul Nisbet, an analyst at the aerospace consulting firm JSA Research Inc. in Newport, R.I.

"Of course we're disappointed, especially after our team worked so hard to win the program," said Rockwell spokesman William Blanning.

Northrop Grumman, which had two planes in the contest, also was disappointed because "we felt both of our candidates were well-qualified," said its spokesman, Jim Taft.

Even if one of the California-based contractors had won JPATS, neither planned to build the airplanes in the state. Rockwell had picked Oklahoma, while Northrop Grumman had chosen Louisiana and Florida.

Air Force and Navy officials said the Beech plane provided the "best value," but declined to say whether Beech submitted the lowest bid. Darleen Dryun, the Air Force's acting acquisition chief, told a news conference that technical merit and manufacturing performance outweighed cost in choosing the winner.

The joint Navy and Air Force program is part of a much larger merger of flight training, in which student pilots from the two services will train together. The new planes will replace the Air Force's T-37 trainer--a 40-year-old model that doesn't even have a pressurized cockpit--and the Navy's T-34.

Rockwell and the Cessna division of Textron Inc. were thought only days ago to be the favorites for landing the contract. There also was speculation that the Pentagon would lean toward one of the jet-powered entrants rather than Beech's plane, which uses a propeller engine and is said to be less costly to purchase and operate.

The Beech plane, called the PC-9 MKII, is based on an aircraft designed by a Swiss company, Pilatus Aircraft Ltd., which is also a partner in Beech's JPATS effort.

But Nisbet said the cost advantages of Beech's turboprop design gave that plane a distinct advantage. He also said the selection of the Beech/Pilatus team was "a quid pro quo in some regards for the Swiss purchase of F/A-18s," the fighter jets built by U.S. defense giant McDonnell Douglas Corp., in 1993.

The first Beech trainer is scheduled to be delivered in 1999, but production will be relatively low in the early years and the final plane will not be delivered until 2017. That schedule is longer than previously announced, reflecting tight future Pentagon budgets.


Vartabedian reported from Washington and Peltz from Los Angeles.

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