The Defence Department is looking at proposing to cabinet a multibillion-dollar sole-source contract for the purchase of new search-and-rescue aircraft.
The plan would see the C-27J, an Italian aircraft to be built in the U.S., as the preferred plane for the $1.5-billion Canadian Forces fixed-wing search-and -rescue (FWSAR) project. Another $1.5 billion would be spent on long-term maintenance for the aircraft.
Although the C-27J, built by Alenia, is not being used by other countries in a primary search-and-rescue role, the Canadian air force favours the plane because of its range and speed. Defence Minister Peter MacKay is said to be involved in the latest initiative, but that does not guarantee cabinet will approve of such a deal.
The plan to replace the military's aging Buffalo search-and-rescue planes had stalled over the last five years, but Mr. MacKay recently said the program will now be a top priority.
"As Minister MacKay has noted, these aircraft are a critical component of Canada's home guard and, simply put, we need to have them," Jay Paxton, the minister's press secretary, said yesterday. "The minister's goal is to procure FWSAR early in the new year. Beyond that, it is premature to speculate on the exact nature of the aircraft."
Under consideration is a procurement using what is known as an Advance Contract Award Notice, or ACAN. That gives aerospace firms a limited amount of time, usually 15 to 30 days, to respond with a counter-proposal and convince the government they have a product that could compete with the Defence Department's choice, in this case the C-27J.
The use of ACANs have been criticized by some in the industry, as well as by opposition members of Parliament who argue it can undercut the bargaining position of the government since it gives a firm advance notice that its product has been selected.
But the Canadian Forces has had success with the process, which it used to purchase C-17 transportation aircraft from the U.S. The same process was used for the purchase of new Chinook helicopters, but that deal has run into difficulties. The process was started in the summer of 2006 and negotiations are still ongoing.
The latest development on the search-and-rescue aircraft has surprised Alenia's main competitor, Airbus Military, which produces the C-295 aircraft.
"We're caught off guard by the current initiative calling for an ACAN," said Martin Sefzig, Airbus's director of Canadian programs. "After five years of no evaluation and very little discussion, they now go for an ACAN. No aircraft has been tested. Why?"
Airbus Military highlights the C-295 as a proven plane with more than 60 in service, including in a search-and-rescue role.
Some aerospace industry insiders question whether the ACAN procurement method will survive cabinet scrutiny. There is bound to be objections raised by firms such as Bombardier, which had previously proposed the Canadian-built Dash-8 for the search-and-rescue program.