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Friday, March 23, 2012

US Air Force extends probe of Afghan plane deal, (NYSE: ERJ)

The U.S. Air Force on Friday said it was extending an investigation into an embarrassing mistake that prompted it to cancel a contract, valued at up to $1 billion, to sell Brazilian light attack planes to the Afghan government.Air Force General Donald Hoffman, commander of Air Force Materiel Command, granted investigators more time to look into the issue, said spokeswoman Jennifer Cassidy. She said a decision was now expected in coming weeks.The Air Force had no immediate comment on why it decided to extend the investigation, which is being conducted by Air Force legal officials along with some representatives of the Pentagon's chief weapons buyer, Frank Kendall.The problem began in January, when privately held U.S. defense contractor Sierra Nevada Corp and Brazilian planemaker Embraer SA beat out Hawker Beechcraft to win an order for 20 light attack planes. The U.S. Air Force was procuring the planes behalf of the Afghanistan government.

Embraer S.A. (Embraer) is engaged in the manufacturing of commercial aircraft. Shares of ERJ traded higher by 1.13% or $0.35/share to $31.40. In the past year, the shares have traded as low as $20.98 and as high as $34.75. On average, 1046870 shares of ERJ exchange hands on a given day and today's volume is recorded at 869073.