Feds tout fairness, economic benefits in $2.3-billion military rescue plane deal

The government has an option to extend the maintenance contract another 15 years, which would increase the total price-tag to $4.7 billion.

National Defence estimates the full cost of buying, operating and maintaining the planes through 2052 will be around $14.7 billion.

Public Procurement Minister Judy Foote did not reveal why the C-295W was selected over Leonardo’s C-27J Spartan and Embraer’s KC-390 as she announced the choice during an event at CFB Trenton, one of four military bases where the planes will be located.

But she went out of her way to list the many steps the federal government had taken to ensure a fair and open competition, which included numerous industry consultations and other checks and balances.

“A fairness monitor was engaged,” she said, “and an independent third-party review was conducted to ensure the fairness and integrity of the procurement process.”

Those measures stand in stark contrast to what happened more than a decade ago, when the Martin government appeared on the verge of buying the C-27J.

The Chretien government actually first started the ball rolling on finding a replacement for the Buffalos and Hercules in 2002. Two years later, the Martin government set aside $1.3 billion to obtain new planes within 12 to 18 months.

But defence contractors accused the air force of writing its requirements to favour the C-27J — an echo of allegations levelled against the air force several years later with the F-35 stealth fighter.

Air force brass denied rigging the search-and-rescue plane’s requirements, but a National Research Council report published in March 2010 backed up the allegation and called for the requirements to be rewritten.

The Conservative government subsequently took oversight of the project out of the military’s hands — as also happened with the F-35 — and gave it to the Department of Public Procurement.

Leonardo released a terse statement Thursday saying it would not comment on the results until it been properly briefed by the government.

Defence analyst David Perry of the Canadian Global Affairs Institute said it will be important to know why the C-295W came out the eventual winner.

But on the surface, he said, the announcement appears to confirm the allegations against the air force and the need for independent oversight of military procurement projects.

“This was, in theory, not supposed to have been possible because the way the air force had written things before supposedly said there was only one company that could meet the requirements,” he said.

“It legitimizes what the Conservatives launched and what this government has embraced in terms of having an outside review of military requirements.”

There is still the chance Leonardo will launch some type of legal challenge, which could complicate what the Liberal government says is a good news story.

Defence analyst Martin Shadwick, who has written extensively on Canada’s search-and-rescue system for decades, said litigation has become the default response for defence companies that lose major competitions in recent years.

But he said one of the few benefits of the controversy that surrounded the project, and led to its lengthy timeline, is the large amount of oversight that was imposed, which should protect it from a legal challenge.

“It shouldn’t have taken 15 years,” he said. “But it has been pretty thoroughly challenged already.”

Foote touted the economic benefits of Airbus’s bid, which include pairing with Pratt & Whitney Canada to provide the C-295W’s engines, Montreal-based CAE Inc. for simulators and training, and St. John’s-based PAL Aerospace for maintenance.

“Canada’s leading commercial and defence aerospace companies will be able to leverage new opportunities with Airbus,” Foote said as Sajjan and RCAF commander Lt.-Gen. Mike Hood stood nearby.

Sajjan described the C-295Ws as a “game-changer” for the military’s search-and-rescue personnel, who respond to hundreds of emergency and distress calls across the country every year.

“Today we reaffirm our commitment to our women and men in uniform,” he said. “Our dedicated SAR team embodies our military’s commitment to protecting Canadians here, at home, no matter where they are.”

— Follow @leeberthiaume on Twitter

Lee Berthiaume, The Canadian Press

by Canadian Press

Feds tout fairness, economic benefits in $2.3-billion military rescue plane deal

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