WASHINGTON: The Air Force leadership is hurting in the wake of another botched acquisition and the continuing Dover Air Force Base burial scandal, and you could see it in the face of Gen. Norton Schwartz this morning.

The latest cock-up forced the Air Force to set aside, effective March 2, the $355 million contract for 20 Super Tucano small planes, with options for 15 more. The contract was awarded to privately held Sierra Nevada Corp, the prime contractor for the Embraer plane. This leaves the Afghan Air Force without an aircraft considered important to their ability to contain the Taliban and other assorted nasties. It also means that the Air Force will lose that money unless it moves quickly to hold a new competition that is not challenged by the loser.

“It is a profound disappointment if, in fact, we did not do this properly,” Schwartz said at a Defense Writers Group breakfast this morning. Air Force Materiel Command is leading an investigation into how and why the award was botched, as well as the process and adequacy of oversight, the Air Force Chief of Staff said. How bad might it be? “Our institutional reputation is at stake,” Schwartz admitted. His face was grim, his tone flat. He looked very serious. Will he hold anyone accountable, maybe fire someone, he was asked. His answer: “I can assure you if it wasn’t innocent, there will be hell to pay.”

While Schwartz cannot be blamed for it, the Air Force fabulously blew its first two attempts at replacing its aging airborne tankers. The final award to Boeing — under Schwartz — was hailed as one of the most technically competent and best managed competitions in recent times by the senior Pentagon leadership. Now you have a contract decision that appears to have been fundamentally botched on a technical basis, at least. So I asked Gen. Schwartz how he could reassure the American public that, in a time of declining budgets, the Air Force won’t waste their money and can be counted on to effectively manage contracts.

“We will work our asses off,” he said, twice. “The stakes are high. Believe me; I know that.” As the breakfast broke up, Schwartz told a small group of reporters that, ultimately, the problems were questions of leadership and oversight. He poked himself in the chest and shook his head saying, “And that’s me.” It’s worth pointing out that Schwartz was vaulted into his position after the loose nukes scandal rocked the Air Force and Defense Secretary Robert Gates fired the service’s leadership. Setting high standards and rebuilding what many viewed as a troubled service with an uncertain mission lies at the core of Gen. Schwartz’s legacy.

The Super Tucano award has already been challenged in federal claims court by competitor Hawker Beechcraft. The two companies have made a host of claims and counter-claims about the performance of their aircraft and the number of American jobs each would create. In a nutshell, Hawker Beechcraft is offering the AT-6 Texan II, a new variant of its T-6 trainer upgraded for combat, while Sierra Nevada Corporation is offering the Super Tucano, designed by the Brazilian firm Embraer but, Sierra Nevada insists, to be largely built in the United States. Hawker Beechcraft says it would hire 800 workers to build the AT-6 if it wins the contract and estimates another six hundred would be hired by various suppliers; Sierra Nevada declines to give an estimate on jobs but says the only significant part of its plane not built in the U.S. would be the basic sheet metal framework, and that no U.S. tax dollars on the program would create jobs in Brazil.

For an interesting take on the reaction in Brazil, see this story on the Second Line of Defense website.

Sydney Freedberg contributed to this story.