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The AIM-7 Sparrow guided itself through passive radar homing. That meant that the launch aircraft had to illuminate the missile's target with a source of continuous wave radio energy. The missile's homing head could use the reflections of that energy from the target to track and home in on the target. The F-20 would require a continuous wave illuminator (CWI) to accomplish that task. The only company to have developed such a device for use in a small aircraft was Ericsson in Sweden, for the Viggen aircraft. In order to meet the customer's requirement for AIM-7 capability, a sole source contract was awarded to Ericsson for development of a CWI for the F-20. This was, paradoxically, the only foreign subcontractor for the F-20 and at the same time the only one involving handling of classified material (the AIM-7 homing frequencies and other software/hardware interface documentation were classified Secret). As part of the contract, Ericsson would modify an existing CWI to fit in one of the F-20's gun bays. This would be used to demonstration-fire an AIM-7 from an F-20. After a year of very hard work by both Ericsson, the General Electric radar team, and the Northrop engineers, the AIM-7 was successfully fired from GI1001 on 27 February 1985. It successfully downed a Northrop BQM-104 drone 13 miles away.

The balance of the contract involved development of a production CWI specifically for the F-20. This miniaturized version would fit into a tight space in a belly bay of the F-20's nose, under the radar installation. Like all of the other traveling wave tubes and other delicate electronics in the nose, this CWI would be subject to an atrocious vibration environment when the F-20 fired its guns. When the F-20 was terminated, Ericsson's $ 1 million termination claim was accepted without on-the-spot fact-finding or a trip to Sweden to conduct negotiations. Northrop Internal Audit was suspicious of this settlement, but it had been mandated by management and they were called off when they questioned the matter.


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