Offsets in Defense Trade Fifth Annual Report To Congress – United States
Department of Commerce
The decision to codify its policy on offsets coincided with the Czech Republic’s announcement of its plan to devote $2 billion for the purchase of new fighter aircraft to replace its fleet of RussianMiGs. Since as early as March 1999, Czech Republic government officials have stated that offsets will be the main criteria for deciding which fighter aircraft they purchase. Because Czech officials view the technical parameters of the fighter jets being offered as so similar, offset packages will outweigh technical factors and price when making a final decision.
Realizing this new opportunity for sales, the Czech Republic has been inundated with offers from major international aerospace contractors. The companies vying to conclude deals with the Czech government include Boeing with its F/A-18, Lockheed Martin with
its F-16, British Aerospace-Saab with the JAS-39 Gripen and Dassault Aviation with its Mirage 2005. In addition to presenting their product, each firm is constructing offset packages (each of which will be at least 100 percent) and starting to create a niche for itself in the Czech economy. (13)
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