Canadian Government new aircraft procurement programs update.

Canadian Government new aircraft procurement programs update by Ken Pole.

 

With a handful of exceptions in the past couple of decades, the Canadian government’s flight plan for several new aircraft procurements has been plagued by turbulence. The most notable exceptions have been the smooth acquisitions of Boeing C-17 Globemaster IIIs and Lockheed-Martin C-130J Hercules transports. However, firmly stuck on the work-in-progress side of the Department of National Defence ledger are new fighters, fixed-wing search and rescue (FWSAR) platforms, and maritime helicopters. And then, although not military assets, there’s the equally problematic plan to acquire new Canadian Coast Guard (CCG) helicopters.

 

Adding to the overall uncertainty is the government’s determination to balance its books before the next general election, expected in October 2015. A key element of that drive was confirmation in the latest budget that $3.14 billion was being siphoned out of the Department of National Defence envelope over the next four years. Finance Minister Jim Flaherty has insisted that the funds – which represent more than a third of the government’s overall budget savings through to 2016-17 will be restored when DND needs them.

 

“There’s no point in having money sitting there when they can’t spend it this year – which they can’t,” Flaherty told reporters on budget day. “We’re . . . not taking it back, just pushing it forward, so they can use the money when it’s usable, when the hull of the ship is being built, for example, when they need the money.” There was no mention of how inflation in the interim will inevitably erode DND’s purchasing power – even in an anticipated era of annual budgetary surpluses. For its part, DND, with $4.73 billion for capital programs in its 2014-2015 Main Estimates, insists that “no planned procurement projects will be affected or delayed” by Flaherty’s recent surgery.

 

The latest Conference of Defence Associations Institute (CDAI) “strategic outlook”, a week after the budget, noted the government’s plan to “renew” the Canada First Defence Strategy (CFDS). The outlook’s authors – CDAI Executive Vice-President Ferry de Koerckhove and George Petrolekas, a former liaison to the NATO Joint Force Command – agreed that the CFDS was “due for a reset”, but warned that “it cannot be done in a vacuum if government needs are to be met effectively.”

 

De Koerckhove and Petrolekas also appreciated that DND must “do its share” as the government tries to eliminate the deficits it had created, but they said DND’s contribution must not be allowed to “cripple it through a numbers game.” They concluded that “lean is good if, at the end, efficiency is maintained or enhanced” and that achieving this would require “creativity and confidence.”

 

The RCAF program with the highest profile is the long-standing commitment to replacing its remaining Boeing CF-18 Hornets with a “next generation” fighter. Lockheed-Martin seemed to have a lock on that program when the government opted to sole-source acquisition of the F-35 Lightning II or Joint Strike Fighter in 2010, having invested in its development since 2002. That was despite the availability of other arguably capable platforms such as the Boeing F/A-18 Super Hornet, the Dassault Rafale C, the Eurofighter Typhoon, and the Saab JAS 39 Gripen.

 

Canada proposed 65 F-35s as replacements for its CF-18s, the first of which entered service in 1984 and have since undergone extensive upgrades since Boeing merged with McDonnell Douglas in 1997. While unit and long-term service costs associated with a JSF fleet are still a contentious and politically-loaded issue, there’s no disputing the initial industrial benefits so far. Some 70 domestic and foreign-controlled companies have received hundreds of millions of dollars worth of JSF work, including key components already in aircraft coming off the production line at Fort Worth, Texas.

 

That work and the potential for even more is often used by Lockheed Martin in support of its case for Canada to stick with the F-35 despite growing uncertainty about costs. The lead customer, the US Department of Defense has declined to be specific despite budget stresses which could mean fewer orders for aircraft and, implicitly, higher unit costs. The US Air Force has said it expects to pay at least US$159 million each for the F-35A conventional take-off and landing variant Canada wanted. That presents a credibility hurdle for the government’s insistence that the tab for each aircraft, including support services, would be $138 million, predicated on Lockheed Martin reducing costs as the program matures.

 

There was speculation in late 2012 that the Conservatives were getting set to cancel their government-to-government deal with the US because of the soaring costs, but Public Works & Government Services Canada (PWGSC) immediately discounted the prospect. The speculation evidently was sparked by testimony by General Tom Lawson, a former CF-18 pilot and now Chief of the Defence Staff before the House of Commons defence committee. Asked whether there was only one aircraft that could meet RCAF requirements, he replied that “all options are on the table.” Although he did not mention specific contenders, he pointed out that other countries were flying alternatives to the “fifth generation” F-35 with “great success.”

 

But concerns about the F-35 would not go away in Washington and Ottawa, where opposition politicians continued to hammer their respective administrations on cost. The Canadian government eventually “hit the reset button” in December 2012, potentially opening up the procurement to manufacturers other than Lockheed Martin. Rona Amrbose, the minister at PWGSC at the time, said “the next step is a full view of options” and the government would not proceed with a CF-18 replacement until a new National Fighter Procurement Secretariat had done “a complete assessment of all available aircraft.”

 

Equally delayed and just as troubled is the $3-billion plan to acquire new FWSAR aircraft. The need to replace the current fleet of 1960s-vintage de Havilland Canada C-115 Buffaloes was acknowledged in the 1980s; the premise being that a 30-year service life meant that new aircraft should preferably enter service before the end of the century. As usual, however, the Buffaloes remained in service and that goal came and went, before DND pitched the idea to the government in 2002.

 

DND issues a Statement of Operational Requirements (SOR) in 2004 and the 2004 federal budget included $1.3 billion for 15 aircraft, with deliveries to begin in 2006. But the project went off the rails almost immediately because of allegations that the SOR had been written with a specific aircraft in mind – not the mission.

 

The controversy dragged on, eventually prompting the government to commission a National Research Council (NRC) review of the SOR. In March 2010, the NRC’s Flight Research Laboratory team said that the SOR was “over-constrained” in its approach to mission profiles, operational standby, crew size and bases.

 

That prompted DND to effectively restart the program even though it insisted that the NRC report “as well as industry’s feedback, complements the work already done by DND to ensure the best possible solution for Canada’s complex SAR environment.”

 

Prospective replacements include the initial front-runners, the Airbus Military C-295 and the Alenia Aeronautica C-27J Spartan, high-wing twin-engine turboprops similar in concept to the Buffalos. Others include more Hercules, potentially offering the RCAF operational economies through parts and service commonality, or “remanufactured” Buffalos from British Columbia-based Viking Air Ltd., which contends that incorporation of new technologies into a DHC-5NG “next generation” Buffalo is viable. The Bell-Boeing V-22 Osprey tilt-rotor, while uniquely capable of doing the “rescue” as well as the “search” elements of the SAR mission, is generally seen as a low-probability candidate due to high up-front costs.

 

So-called “alternate service delivery” or partial privatization of SAR also is being considered, opening up such possibilities as company-owned and -operated aircraft, perhaps with one or two RCAF crewmembers, or possibly government-owned but privately-operated aircraft.

 

Then there is the Maritime Helicopter Project, which is rooted in the 1980s when the need to replace already-aging Sikorsky CH-124 Sea Kings was acknowledged and which, like FWSAR, is years behind schedule. It was infamously described in 2012 by then Defence Minister Peter MacKay as “the worst procurement in the history of Canada.” In fact, some Canadian Armed Forces personnel have retired after hoping throughout their careers for new shipborne helicopters!

 

As it stands today, there are four Sikorsky CH-134 Cyclones, a militarized S-92, being used at RCAF Base Shearwater, NS, for initial training. Six more are in storage at Plattsburgh, NY, pending RCAF acceptance of what the government still considers an “interim” maritime helicopter. The rest of the fleet of 28 are in “the build process.”

 

The plan was for official delivery of eight aircraft in 2013, followed by eight more each in 2014 and 2015. In early January, PWGSC acknlowledged the “ongoing challenges” presented by the MHP and accepted a Hitachi Consulting recommendation that “a different project structure and governance model” was needed to bring the project to completion. “The decision to continue . . . is consistent with our goals of getting the Canadian Armed Forces the equipment they need while protecting the investments taxpayers have already made,” Defence Minister Rob Nicholson said, adding that a new agreement with Sikorsky would see a fully-compliant Cyclone in service in 2018.

 

“Sikorsky has committed to deliver the needed helicopter capability at no additional cost,” PWGSC Minister Diane Finley said. “In addition, the government . . . will only issue further payment to Sikorsky upon capability delivery.” The new deal also committed Sikorsky to paying $88.6 million in liquidated damages for non-delivery. “We regret that we have not executed this program to the satisfaction of the government,” Sikorsky President Mick Maurer said. “We have completely restructured our approach, and added considerable new resources and technical expertise.”

 

As for the paramilitary CCG’s helicopters, May 27 is the deadline for industry to respond to a PWGSC Request for Proposals (RFP) for eight “off the shelf” medium-lift twin-engine helicopters. They would replace five 1970s Bell 212s and three 1960s Bell 206Ls, all manufactured in the United States. Potential candidates are the AgustaWestland AW139, Bell 412, Airbus Helicopters EC175 and Sikorsky S76D.

 

Meanwhile, a CCG plan to acquire 16 light twins is stalled in legal limbo nearly a year after the Bell 429 seemed to have been selected. They would replace its 14 remaining Messerschmitt-Bölkow-Blohm BO-105s, which were manufactured in Germany but assembled and delivered by Eurocopter Canada in the 1980s. That procurement fell afoul of allegations by competitors, notably AgustaWestland and Eurocopter, about the legitimacy of the competition, mainly allegations of favoritism by Transport Canada because of the way it had eased weight restrictions on the Bell 429. Eurocopter, now Airbus Helicopters, is suing in Federal Court for a judicial review, effectively stalling the program until there is a ruling, which is not expected until later this year.

 

An arm of Fisheries & Oceans Canada, the CCG is responsible for a “coast to coast to coast” array of critical missions. They include maintenance and construction of aids to navigation and telecommunications equipment, fisheries law enforcement, ice reconnaissance, and ship-to-shore personnel and cargo transfers. It also flies search-and-rescue backup for DND and supports various departments’ research programs. It’s clearly a maintenance-intense mission profile and the longer new helicopters are delayed, the more likely those missions – like key DND missions affected by project delays – will be compromised.

 

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