'Fast-tracked' search plane deal falls two years behind schedule
Liberals' lobbying forced change in tender specifications
a journalist
The Ottawa Citizen
June 5, 2005
A program to buy much-needed search and rescue planes, highlighted by Prime Minister Paul Martin as part of his commitment to revitalize the Canadian Forces and supposedly fast-tracked by government, has fallen two years behind schedule.
Part of the delay is because federal officials ordered the military to change the competition to allow a slower, cheaper aircraft to be considered for the $1.3-billion program.
Documents obtained by the Citizen show senior military officials told Defence Minister Bill Graham last August they were ready to proceed with the project, with a plan to award a contract for 15 aircraft in July 2005. Deliveries would start in late 2006, based on a timetable that required the government's approval, according to the briefing given to Mr. Graham and released to the Citizen under the Access to Information law.
An earlier schedule produced for Mr. Graham's predecessor, David Pratt, called for a contract to be awarded this month with aircraft deliveries starting in February 2006.
Air force officials now say they don't expect a contract to be awarded until the end of 2006 or early 2007. No date has been set for deliveries, but aerospace industry representatives expect those to happen in late 2008 or early 2009.
"The project has taken the time to further study the requirement and procurement strategy to ensure the program is aligned with the newly released Defence Policy Statement," noted military spokeswoman Maj. Lynne Chaloux in explaining the delay.
But government and industry officials say besides the defence policy review, the lobbying efforts of Spanish aerospace firm CASA to have its aircraft included in the competition contributed to derailing the schedule. Mr. Martin's government ordered the military back to the drawing board to come up with new aircraft requirements so CASA's C-295 transport plane could be considered. The search-and-rescue project has been a priority for the Liberal government since it was highlighted in October 2003, by then-Defence minister John McCallum.
In a rousing speech to troops in April 2004, Mr. Martin promised his government would fast-track the project, earning an ovation from appreciative military personnel. Government officials said the aircraft would be delivered 18 months after a deal was inked.
The project is to replace six Buffalo and 10 Hercules aircraft that are so old they are only available for rescue missions about 50 per cent of the time. The program had been seen in the defence industry as fairly straightforward, since the aircraft would not be outfitted with sophisticated weapon systems and planes were ready to be purchased off the shelf.
Air force officers had already identified the C-27J, built by the Italian firm Alenia, in addition to CASA's C-295 as the only aircraft to meet the requirements. Officers zeroed in on the C-27J as the best plane for search and rescue, because of its large size and speed, prompting complaints from CASA about favouritism toward it competitor.
Mr. Graham was told the minimum cruising speed needed for search and rescue, where response time is critical, would be 273 knots, about 500 kilometres an hour. CASA's aircraft has a speed of 260 knots, while the C-27J has a maximum speed of 325 knots.
The air force was also concerned about the C-295's cabin size and lack of sufficient cockpit visibility needed for rescue missions, according to military documents.
The concern was the C-295 would be too slow to reach northern areas from existing search-and-rescue bases at Greenwood, N.S., Trenton, Winnipeg, and Comox, B.C.
But aerospace and defence officials say CASA was able to override those concerns and appeal directly to Mr. Martin's desire for more of a military presence in the North. The company, a branch of the giant European consortium EADS, successfully pitched a scheme to base rescue planes in the Arctic, instead of having them fly up from existing installations.
The results of CASA's lobbying efforts materialized in the government's recent Defence Policy Statement, which noted the military would examine basing rescue planes in the Arctic. CASA argues that because its C-295 is cheaper to buy than the C-27J, the government could purchase more planes and significantly boost search and rescue capabilities.
"We believe within the existing budget of capital and in-service support, you could acquire the additional aircraft necessary to effectively revamp or enhance the (search-and-rescue) system for Canadians," said Bruce Johnston, president of EADS Canada. He said the C-295 still faces bias from some in the military.
Alenia officials declined comment on the decision to alter the aircraft requirements. But Alenia official Marcello Cianciaruso said when the government proceeds with its purchase, the company is ready to bid.
Some defence officials are not happy about altering the requirements to allow the C-295 to compete. There are concerns the cost of new search-and-rescue bases in the North will likely come out of the military's already-tight budget. There are also questions about why bases have to be built to accommodate a slower and smaller aircraft, when the C-27J would be able to reach northern destinations from current search-and-rescue bases.
© The Ottawa Citizen 2005