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U.S. Navy says notice of possible F/A-18 orders posted in error

By Andrea Shalal-Esa

WASHINGTON (Reuters) - The U.S. Navy erroneously posted a notice about a possible order of up to 36 more Boeing Co F/A-18 fighter jets or EA-18G electronic attack planes due to "pre-decisional and internal budget discussions," a top Navy admiral said Friday.

Vice Admiral David Dunaway, commander of Naval Air Systems Command, issued a statement after the Navy canceled the notice. It had sparked confusion since the Navy's current plans call for it to switch to the radar-evading F-35 built by Lockheed Martin Corp in coming years and do not foresee further F/A-18 purchases after fiscal 2014.

"The posting was the result of pre-decisional and internal budget discussions and was posted erroneously," Dunaway said of the incident, which triggered fresh questions about the Navy's tepid commitment to the $392 billion program - the Pentagon's largest weapons program..

"We took immediate actions and retracted the solicitation," said the admiral, who oversees the Navy's aviation programs. He did not address the Navy's position on the F-35 program.

The incident caught officials at the Pentagon's F-35 program office and elsewhere in the U.S. military by surprise, since there are no plans to buy more F/A-18s in fiscal 2015 and production of the planes is slated to end in 2016.

However, Boeing and its supporters in Congress have sought to continue selling the Navy more of the company's F/A-18E/F Super Hornets and EA-18G Growlers as a hedge in case the carrier variant of the F-35 fighter jet runs into further delays or technical challenges.

The C-model of the jet is the furthest behind in development of all three models being built by Lockheed.

The Navy posted the pre-solicitation notice on a federal procurement website on October 17, but it first became public this week after an article published by Flightglobal.com.

Navy officials initially said the notice was meant to ensure that a "proper acquisition process" was in place if more U.S. or foreign orders emerged, but they said they had no plans to buy more Super Hornets or EA-18G Growlers in fiscal 2015.

Officials ultimately decided to rescind the notice since there is no U.S. or foreign military sales requirement for the Boeing jets in fiscal 2015, said one Navy official familiar with the internal discussions.

"There is no program of record and no budget for the procurement of additional aircraft," said the official. "The original notice was posted in error."

POSSIBLE DELAYS

Several U.S. defense officials called the incident "embarrassing". One said notices posted on the federal procurement website were generally vetted by four or more individuals before being posted.

The incident is particularly troubling to the U.S. Marine Corps, which is concerned that the Navy could undermine the F-35 program. The Marines, which have an urgent need to replace their current aging fleet, plan to start using the new F-35 B-models, which can land like a helicopter, from mid-2015, followed by the Air Force a year later.

The Navy will be the last U.S. military service to start using the carrier variant of the F-35, the C-model, in 2019.

However, those dates could be delayed if Congress does not rescind sequestration and a further 10 percent cut in funding is implemented in fiscal 2015. The Navy's plan for meeting that target calls for a two-year pause in F-35C orders, according to multiple sources familiar with the proposal.

One industry source said the Navy's decision to cancel the notice reflected the determination of senior Pentagon officials to "protect the F-35 at all cost out of fear of international partners walking away from their commitments".

The source, who was not authorized to speak publicly, said the Pentagon was "destroying the industrial base by not allowing for fair competition within the market".

Lockheed is developing three models of the new warplane for the U.S. military and eight partner countries: Britain, Canada, Turkey, Italy, Norway, Australia, Denmark and the Netherlands. Israel and Japan have also placed orders.

Unlike the other military services, the Navy's fleet of fighter jets is relatively young, bolstered by repeated increases in F/A-18 and EA-18G procurement in recent years, including 44 added to the Navy budget by U.S. since 2007.

Pentagon and F-35 program officials have warned that any moves by the Navy to postpone its purchases of F-35s would drive up the cost of the remaining planes to be bought by the Air Force, Marine Corps and U.S. allies.

(Reporting by Andrea Shalal-Esa; Editing by Eric Walsh and Jeremy Laurence)

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