US embassy cable - 05ANKARA3846

C O N F I D E N T I A L SECTION 01 OF 02 ANKARA 003846 
 
SIPDIS 
 
STATE FOR EUR/SE AND PM/DTTC 
 
E.O. 12958: DECL: 06/28/2015 
TAGS: MARR, MASS, PREL, PGOV, TU 
SUBJECT: DEPUTY UNDER SECRETARY OF DEFENSE PATRICK 
UNDERSCORES CONTINUED CONCERNS WITH ATAK HELO TENDER 
 
REF: ANKARA 
 
Classified By: Acting DCM James R. Moore, reasons 1.4 (b) and (d). 
 
1.  (C) SUMMARY: Deputy Under Secretary of Defense (DUSD) for 
Industrial Affairs Suzanne Patrick notified Turkish Under 
Secretary for Defense Industries Murad Bayar that US 
 
SIPDIS 
companies and the US government remained concerned about many 
of the ATAK Helicopter tender terms and conditions (T&Cs), 
despite revisions made by the Turkish Undersecretariat for 
Defense Industries (Savunma Sanayi Mustesarligi - SSM) in 
response to input from Boeing.  She suggested several SSM 
actions that might address key industry concerns -- including 
hosting meetings for all prospective bidders with the mission 
computer design team -- and urged SSM to delay the bid 
submission deadline 6-9 months to carry them out.  Expressing 
receptivity to some of these ideas, Bayar nonetheless held 
that the schedule could not be further postponed absent 
assurances that US firms would participate.  SSM Aviation 
Department Head Sedat Guldogan said a meeting with a visiting 
Boeing team earlier that day had gone well and Boeing had 
already been invited to meet with the Turkish mission 
computer design consortium, prompting Bayar to declare that 
SSM was already meeting DUSD Patrick's recommendations.  He 
expressed his desire for Bell Helicopter to rejoin the 
competition and his intent to contact the company himself. 
END SUMMARY. 
 
2. (C) In a frank exchange during a two-hour meeting on June 
27, DUSD Patrick related to SSM U/S Bayer the concerns 
relayed to her by the three US firms (Boeing, Bell and 
Sikorsky) that had purchased the ATAK Helicopter tender 
regarding the tender's onerous T&Cs and the difficulty for US 
firms to participate.  While recognizing that SSM had revised 
the tender to remedy some issues raised by Boeing, DUSD 
Patrick underscored the changes had not gone far enough to 
ensure a fair playing field for US firms.  Enumerating the 
extensive corporate liability, technology transfer and 
licensing requirements, DUSD Patrick opined that the tender 
contained requests for much more information than was needed 
to achieve SSM's goal of integrating a Turkish mission 
computer onto a foreign helicopter platform. 
 
FURTHER SSM ACTION NEEDED TO DRAW IN US FIRMS 
--------------------------------------------- 
 
3. (C) After viewing SSM's ATAK Helicopter program summary, 
DUSD made several specific recommendations for actions that 
SSM could take that may alleviate some US defense industry 
concerns about the tender: 
 
- Mission Computer: DUSD emphasized the difficulty for a 
foreign firm to determine how to configure a helicopter 
without the 13 pieces of so-called "Delta Equipment" 
identified by SSM for local production and integration into 
the helo platform, and how to cost out a helo frame without 
these items.  She recommended that SSM take an additional 6-9 
months to pair the Turkish mission computer consortium 
(ASELSAN (electronics), TAI (aerospace) and TUBITAK (defense 
industrial research)) with all prospective bidders BEFORE bid 
submission.  With an understanding of the proposed Turkish 
mission computer configuration, US and other defense firms 
could better tailor their bids and design a compatible 
platform configuration. (Note: According to SSM, the mission 
computer has been in development since 2001 and is scheduled 
for a July 2006 test run.  End Note.)  Bayar said SSM had 
specifically detached the mission computer development from 
the tender to simplify the bid, but agreed DUSD's idea had 
merit.  However, given that the bid schedule had already been 
delayed three months following issuance of the revised tender 
in May, it could not be further delayed -- unless the USG 
could guarantee that both Boeing and Bell would participate. 
 
- Technical Data Packages (TDP): Saying that in US estimation 
the laundry list of TDPs required significantly exceeded 
SSM's needs based on their professed goal, and included far 
more information than SSM could utilize, DUSD recommended 
reducing the number of TDP requirements.  SSM Aviation 
Department Head Guldogan acknowledged that 50 TDPs were 
requested but protested that 20-30 of those were requests for 
manuals and other unrestricted information.  (Note: DUSD 
pointed out that SSM's production schedule listed a July 2006 
test date for the mission computer and a 2007 First Quarter 
deadline for TDP submission, suggesting that SSM is not/not 
requesting the TDPs for mission computer development. 
Guldogan confirmed that the TDP request is for integration, 
not design, of the mission computer and other Turkish 
components.  End Note.) 
 
- Delta Equipment: SSM identified 13 pieces of Turkish 
equipment for integration into the ATAK platform.  Beyond the 
mission computer, the list includes weaponry and some 
equipment currently produced in Turkey under joint venture 
with the US, such as a targeting system, radio, flare system 
and Moving Map.  DUSD suggested that Turkey prioritize these 
items and focus industry efforts only on those absolutely 
needed in order to simplify the integration challenge. 
 
SSM PLEASED WITH BOEING DISCUSSIONS 
----------------------------------- 
 
4. (C) Guldogan characterized SSM's meeting with Boeing 
representatives earlier that day as positive, saying that the 
two sides had agreed "mostly" that the company's risk had 
been eliminated, but acknowledging that the payment schedule 
was still under debate.  He added that SSM has done "almost" 
the maximum it can do, separating Boeing issues into three 
categories: government authorizations, which it wanted Boeing 
to work with the USG; items that increase production costs, 
some of which had been addressed; and legal impediments - 
which Guldogan pledged SSM's best efforts to remedy.  SSM had 
invited Boeing to meet with the mission computer consortium 
and Boeing had agreed to sit down with the mission Office of 
Defense Cooperation (ODC) to discuss a way forward on the 
technology transfer challenges.  Hearing this, Bayar said SSM 
was already meeting DUSD's recommendation on mission computer 
integration, suggesting that no further effort would be 
necessary on SSM's part. 
 
BELL - PLEASE COME BACK TO THE TABLE 
------------------------------------ 
 
5. (C) Bayar repeated several times SSM's interest in drawing 
Bell Helicopter back to the table.  He recognized that Bell's 
negative experience with the first tender -- which it won and 
negotiated for 7 years, only to see the tender canceled in 
2004 -- may have led to Bell's withdrawal from participation 
in the second tender.  In Bayar's view, however, the changes 
reflected in the revised tender issued in May might be 
significant enough to draw Bell back to the table. 
Recognizing that the USG can not act as an intermediary with 
a US firm, Bayar pledged to contact Bell's President himself. 
 
6. (SBU) Comment: In a subsequent meeting with Boeing, 
company officials suggested that the rosy picture painted by 
SSM regarding their discussions did not reflect reality.  The 
officials claim the revised ATAK tender only addressed 3-4% 
of the 100 issues Boeing had raised with SSM and that most of 
those changes were insubstantial.  They dismiss the proposed 
meeting with SSM's mission computer consortium as moderately 
helpful, saying that absent further changes to the tender it 
remained difficult for Boeing to bid.  They ask, however, 
that the USG not relay that to the GOT as the company has 
other business pending with SSM that it wants resolved first. 
 
7. (SBU) Comment (cont.): Other industry contacts have 
confirmed that SSM Under Secretary Bayar did contact Bell 
Helicopter Senior VP for Sales and Marketing Robert 
Fitzpatrick.  Our sources further indicated that the revised 
tender issued in May 2005 did not include sufficient changes 
to persuade Bell to re-join the competition.  End Comment. 
 
8. (U) This cable was not cleared with DUSD Patrick. 
MCELDOWNEY