German court approves drone deal over US industry challenge

DÜSSELDORF, Germany — A German court sided with the Berlin government to allow a leasing arrangement of the Heron TP drone to move forward, rejecting a protest by General Atomics over the fairness in competition.

The decision on May 31 means that the German defense ministry can award a contract to Airbus Defense and Space Airborne Solutions to operate five of the drones, made by Israel Aerospace Industries and to be stationed in Israel. The aircraft, intended to augment the Bundeswehr's intelligence, surveillance and reconnaissance capabilities, can optionally carry precision weapons, which makes them a highly sensitive project in Germany.

The German parliament still has to approve money for the plan, based on a proposal negotiated with Airbus in February. Defense officials are expected to present lawmakers with an appropriations request in June. German media previously reported a deal for the Heron TP drones to come in at roughly $640 million.

Time is of the essence for the German government. The upcoming summer break and the national election in the fall mean that any planned defense investments not approved soon will have to wait until next spring to be considered.

General Atomics' protest had been pending with Oberlandesgericht, the high court, here since late last summer, leaving some issue experts with the impression that the American company, which was hoping to sell a modified version of its Reaper drone, could be successful with its case.

The U.S. company had lost a previous challenge in a lower court last year.

German officials were so worried about losing the latest challenge and more time fielding the drones that there was talk in Berlin of a fallback plan. A government-to-government agreement with Israel, which is needed for the deal in any case, could have been expanded so that it would trump the competition requirements that General Atomics had cited in its argument, one official said.

"We are very disappointed with the outcome today," General Atomics spokeswoman Melissa Haynes said. "It does not correspond with our legal opinion, however, we continue to stand ready to support the German armed forces in any operation."

The Heron TP leasing deal is meant as an interim solution until a European multinational project, dubbed the Eurodrone, will make its debut in the mid-2020s.

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