WASHINGTON -- Raytheon and Leonardo have decided they will no longer "jointly pursue" the US Air Force's T-X trainer competition, leaving the door open for Leonardo to bid on the program without a partnership with a US prime contractor.

Raytheon made the announcement Wednesday in a short statement that said the "companies were unable to reach a business agreement that is in the best interest of the U.S. Air Force."

Leonardo's statement, issued shortly after, mimicked the Raytheon news release almost word for word, except for one sentence: "Leonardo is evaluating how to leverage on the strong capabilities and potential of the T-100, in the best interest of the U.S. Air Force."

Although Raytheon spokesman B.J. Boling confirmed that Raytheon will not longer be bidding on the program, the split does not rule out Leonardo continuing to pursue the T-X competition with its T-100 offering. Leonardo has already sold the M-346, on which the T-100 is based, to Italy, Israel, Poland and Singapore. 

Tensions have existed between the two companies over the business arrangement for the plane, with the partnership in danger during the fall before an Oct. 14 meeting seemed to clear the air. Sources tell Defense News the issue has focused on where the work on the plane would actually be done.

Just days after that meeting, Raytheon announced that Meridian, Mississippi, would be the site of its Final Assembly and Check Out (FACO) facility, should the companies win the T-X contract. The company estimated that the award would bring about 450 jobs to the FACO, which would be new construction.

Although Raytheon officials maintained that at least 70 percent of the T-X training solution, including ground systems, would be made in the United States, the company never fully articulated how much responsibility the US facility would have in the T-100 assembly process.

Raytheon hosted defense reporters in December at the would-be FACO location for a celebratory groundbreaking event featuring Mississippi lawmakers, southern food and T-100 mason jars. After revealing the first renderings of the FACO design, Roy Azevedo, vice president of secured sensor solutions at the company's space and airborne systems division, acknowledged Raytheon and Leonardo were still finalizing the workshare agreement.

"We are going to do final assembly and checkout right here, and there will be some amount of structural" assembly done in the US, he said. "We've not yet determined that. We're still doing that analysis."

Leonardo was originally teamed with General Dynamics on the T-100, but GD dropped out in March 2015. Defense News was first to report Raytheon would be joining the T-100 bid in September of that year. The companies made the partnership official in February of 2016.

Raytheon's withdrawal leaves at least four potential entrants to the T-X competition. Lockheed Martin plans to offer the T-50A, a modified version of Korean Aerospace Industries' T-50 trainer flown by South Korea and Indonesia, among other nations. Boeing and Northrop Grumman are separately pursuing clean sheet designs. And Sierra Nevada quietly teamed with Turkish Aerospace Industries to design the "Freedom Trainer," the latest entrant into the field.

The Air Force plans to buy 350 T-X aircraft and expects to downselect to a single vendor this year.

Tom Kington contributed to this story.

About Aaron Mehta and Valerie Insinna

Aaron Mehta was deputy editor and senior Pentagon correspondent for Defense News, covering policy, strategy and acquisition at the highest levels of the Defense Department and its international partners.

Valerie Insinna is Defense News' air warfare reporter. She previously worked the Navy/congressional beats for Defense Daily, which followed almost three years as a staff writer for National Defense Magazine. Prior to that, she worked as an editorial assistant for the Tokyo Shimbun’s Washington bureau.

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