Procurement: <b>December 30, 2002</b>

December 30, 2002

Poland selected brand-new Lockheed Martin Corp.'s Advanced Block 52 F-16 C/D (with United Technologies' unit Pratt & Whitney F-100-229 engines) fighters on 27 December, as the winner of a three-way tender to supply 48 new multi-role combat jets. Lockheed beat out Dassault Aviation's Mirage 2000-5 Mk 2 and the Anglo-Swedish Jas-39 Gripen (built by BAE Systems and Saab). The total package value is estimated to be around $3.5 billion, Eastern Europe's largest military deal to date.

Lockheed was backed by a $3.8 billion U.S. government financing package and a major lobbying effort by President Bush's administration. Under Poland's tender law, such reciprocal investments must be worth at least 100 percent of the contract sum. Lockheed has proposed just over $6 billion in "offset" investments in Poland, which joined the NATO alliance in 1999. For instance, Lockheed Martin support will make it easier to build a new $540 million installation in the Gdansk Refinery.

The United States had offered to lease 16 used F-16s to Poland for five years, at a cost of around $100 million (including training for pilots and ground crews) but the Poles wanted new equipment. The first F-16s are to be delivered by 2006 and the last deliveries would be in 2008, although the fleet would not reach full operational readiness until 2010-2011. Poland will eventually wear out of it's current collection of communist-era combat aircraft by about 2015. They will need about 100 multi-purpose fighter planes, to upgrade or replace 350 aging aircraft. The last Polish MiG-21s will be decommissioned in 2004 and the MiG-29s' service life expires in 2010, while the number of Sukhoy Su-22 fighters is steadily declining.

Even more pressing, Poland must find NATO-compatible planes before 2006 and so must rely on it's 22 MiG-29s for the next few years. Germany had upgraded it's own MiG-29 squadron with Russian help, but the Poles were more concerned with basic logistics. They had been purchasing spares for these planes by overpaying Belarusian and Ukrainian middlemen, but as of September 2002 they were able to buy spares and complete engines directly from the Russian manufacturer. - Adam Geibel