Washington Report on Middle East Affairs, July/August 1998, Page 20

Defense & Intelligence

UAE May Bankroll Next-Generation Radar for Israeli F-16s

By Shawn L. Twing

The United Arab Emirates may inadvertently subsidize the research and development of an advanced radar system for Israel’s next purchase of U.S. fighter aircraft, Defense News reported in June. At issue is the Agile Beam Radar, an advanced radar system under development by Northrop Grumman that will equip the UAE’s recent $7 billion purchase of 80 F-16 tactical aircraft. Developing this highly advanced radar will cost the UAE hundreds of millions of dollars, and it may be used as a royalty-free bargaining chip to entice Israel to buy the Lockheed Martin F-16 instead of the F-15I built by Boeing.

This strange situation began recently when Israel asked U.S. Air Force permission to integrate an Israeli-produced radar system on U.S.-built F-16s, which would require the U.S. government to turn over highly sensitive software codes to Israel. After months of deliberation, the Air Force refused, citing a potential Israeli monopoly on the upgrade market if it were to receive that information, and national security concerns. “The real problem is configuration control,” an unnamed official told Defense News. “If the Israelis build or procure an F-16 with a nonstandard radar, it certainly will create some interoperability and supportability problems.

“Then, of course, there’s the issue of U.S. taxpayer dollars being used to fund [Israel’s] F-16 acquisition. It leaves us with the nagging feeling that we’d be using our money to create our own competition…and we’ve seen that with the F-5 and F-4 already,” that same official said. Israel repeatedly has won contracts to upgrade F-5 and F-4 aircraft, almost always at the expense of U.S. firms.

Concerns about the safety of advanced American technology in Israeli hands also played a role. “What [the Israelis] want is in the too-hard category,” a Pentagon official told Defense News. “We cannot relinquish control of the [software] codes to the central nervous system of the F-16…The issue is one of national security policy. We simply cannot let that genie out of the bottle.”

Israel retaliated by threatening to suspend the F-16 from competition for Israel’s next $2 billion purchase (with U.S. grant military aid) of fighter aircraft, which would leave the field open to the F-151 built by Boeing. Israel took delivery in January of the first of 25 F-151s—possibly the most advanced aircraft in service anywhere in the world today—also paid for exclusively with U.S. military aid.

To keep its plane in the competition, Lockheed Martin first lobbied the Air Force to allow Israel to install its own radar on U.S.-built F-16s. When that failed, it appears that Lockheed Martin and Northrop now are trying to include the UAE-funded Agile Beam Radar on the F-16s they are offering Israel. “While the Air Force has not approved the…concept, the firm has received permission to discuss the issue with Israeli industry,” U.S. government and industry sources told Defense News.

When customers subsidize the research and development of a new military product, as has the UAE in the case of Agile Beam Radar, it is customary for follow-on customers to pay royalties either to the contractor or to the initial customer or to both, depending on how the product was bankrolled. That procedure may not be applied to Israel, however.

“Although details are far from clear at this point, U.S. officials said Israel possibly could be exempted from paying tens, if not hundreds, of millions of dollars in royalty fees to the United Arab Emirates for use of technology developed for the Agile Beam Radar,” according to Defense News staff writer Barbara Rome.

If the Air Force allows Lockheed Martin and Northrop to include the Agile Beam Radar or its associated technologies on the F-16 offered to Israel for its next major fighter purchase, it therefore is possible that the UAE will have inadvertently subsidized Israel’s military edge in the Middle East. This radar system is far more advanced than anything in the current Israeli or even U.S. inventories.

If this situation develops, it will be interesting to see how the UAE reacts in the negotiations, particularly if Israel is exempted from paying royalty fees for the Agile Beam Radar. The UAE can play a decisive role in this debate, given the magnitude of its recently announced purchase of F-16s. With an estimated contract value in excess of $7 billion, including 80 planes and weapons worth some $5 billion and an additional $2 billion paid to the Pentagon for training and support, the UAE has incredible leverage. The question is, will the UAE use it?