A major Defence contractor has accused Defence Minister, Stephen Smith, of failing to tell the truth when he said there had been a competition to choose Australia's next battlefield airlifter.
"Airbus Military is obliged to place on the public record our disappointment at the Minister's choice of words," a spokesman said. "There was no tender process and certainly no competition."
Mr Smith, responding to a specific question at a press conference yesterday, said there had been a competition between Airbus Military's C295 and the Alenia C-27J. "We down-selected the C27J," he said.
"Whenever a choice is made between competitors, there is always someone who's pleased with the outcome and someone who's disappointed. We've done the due diligence and we've come to the conclusion that the C-27 was the preferred choice for us."
Airbus Military says due diligence was lacking and that Defence is spending three times as much money for planes that can't be delivered before 2015.
"Defence seems to have rejected its own tried, tested and proven process of evaluating competing platforms," the spokesman said.
"Selection of the C-27J for $1.4 billion appears to have been based largely on the RAAFs own desktop assessments. This effort falls short of a full evaluation process."
Airbus said it could have had planes ready for delivery in six months - not three years - and that they would have cost a third of what is going to paid for the C-27J.
"Despite Airbus Military expending considerable resources responding to inquiries and requests for rudimentary information we are concerned the outcome may have been predetermined from the start.
An industry insider said there had been plenty of time to conduct a rigorous and formal competition between the two planes - the Rudd Government retired the Caribous, which the new aircraft will replace, in 2009 and the ADF has been having to make do in the meantime.
"The Minister says 10 C27Js will cost $1.4 billion - isn't that close to or even more than what you would pay for a JSF," he said.
"My understanding is nine of the 10 Australian aircraft are ones the US (which has mothballed its C-27J fleet) is no longer taking. I believe the US price was around $30 million or $31 million a unit (roughly the same as the C295). Why are they costing us so much?"
The Canberra Times has sought comment from Mr Smith's office on the Airbus Military claims.