Back to news

May 31, 2019 | Local, Aerospace

Fighter RFP delayed again pending official review of industrial benefits policy

by Ken Pole

Shortly before Defence Minister Harjit Sajjan announced on May 29 that a formal request for proposals (RFP) to supply 88 new Canadian fighter jets would be delayed again — this time to mid-July — two potential contenders said that a proposal to scrap the customary industrial benefits element of the procurement is problematic.

Jim Barnes, director of Business Development in Canada for Boeing Defense, Space & Security and Roger Schallom, the company's St. Louis-based vice-president of International Business Development, along with Patrick Palmer, vice-president and head of Sales at Saab Canada Inc., expressed their common concern during briefings at CANSEC, the annual Ottawa trade show organized by the Canadian Association of Defence and Security Industries (CADSI).

Boeing's contender to replace the RCAF's legacy fleet of CF-188 Hornets is the F/A-18 Super Hornet, while Saab's is the JAS 39 Gripen (the company had a full-scale replica parked front-and-centre outside CANSEC's main entrance). The other contenders are Lockheed Martin's F-35 Lightning II Joint Strike Fighter (JSF) and Airbus Military's Eurofighter Typhoon.

Barring any further hiccups in a program fraught with political indecision and already years behind the original schedule, the RFP process overseen by Public Services and Procurement Canada (PSPC) is expected to lead to two finalists being chosen next year with a view to making a final selection in 2022.

The government had been expected to issue its RFP by May 31 after years of indecision, but that latest deadline in the troubled procurement was postponed as officials at DND, PSPC and Innovation, Science and Economic Development Canada review the industrial benefits element.

“This is proof that your feedback is heard and acted upon,” Sajjan told the CANSEC audience.

The proposed industrial benefits change was disclosed earlier this month by Richard Shimooka, a senior fellow at the Macdonald-Laurier Institute (MLI), an Ottawa-based think tank.

He said in a report published by the MLI (May 6) that the Canadian government was yielding to pressure from the United States by changing the long-established requirement that companies bidding for contracts agree to investing an equivalent amount in Canada. The fighter procurement, including in-service support, is expected to cost at least $18 billion.

Shimooka cited letters from U.S. officials that indicate “resentment and distrust towards the government of Canada had grown, particularly within the U.S. Air Force.” The letters evidently focused on the “significant strategic and economic benefits that have already been accrued from being part of the JSF program.”

However, he added, the letters also contained “an implicit (but clear) threat that Canada could be kicked out of the program if Ottawa continues with its current policy of trying to obtain guaranteed industrial benefits that, by their very nature, are not allowed under the JSF Program. . . . There was a complete lack of logic of Canada's policy, which seemed to ignore basic facts about membership in the JSF program, including clear advantages in cost and capability that the F-35 provided.”

In his CANSEC briefing, Barnes admitted to having been “surprised by the recommended changes” in the shift in the long-standing requirement. “That policy's been in place for decades and it's been very successful for Canadian industry,” he replied, questioning what he called the government's decision to “accommodate a competitor.”

Schallom added that adhering to the historic requirement for direct industrial offsets, rather than simply offering “non-binding” bidding opportunities on future contracts, would be better for Canada's economy over the expected 30 years or more of the new fighter program. “You're probably missing out on $30 billion-plus in guaranteed work.”

Saab's Palmer echoed that position 30 minutes later, saying that he is concerned that the “non-binding requirement may not necessarily give Canadians the best value over the long term,” but, “until we see the final RFP (request for proposals), I'll reserve final judgment.”

However, when asked how Saab had responded formally to the proposed change on industrial benefits, he said, “We've asked them for some more information as it relates to the specifics of how items are going to be measured,” but had “definitely indicated that it doesn't necessarily encourage the best solution for Canada at the end of the day.”

https://www.skiesmag.com/news/fighter-rfp-delayed-again-pending-official-review-of-industrial-benefits-policy

On the same subject

  • First two used Australian fighter jets arrive in Canada on Sunday

    February 18, 2019 | Local, Aerospace

    First two used Australian fighter jets arrive in Canada on Sunday

    DAVID PUGLIESE, OTTAWA CITIZEN The Royal Canadian Air Force will be showing off its first two used Australian fighter jets on Sunday at 4 Wing Cold Lake in Alberta. Representatives from the Royal Australian Air Force and the RCAF will mark the arrival of the F-18 jets that morning. Only local media have been invited to cover the event. The aircraft will be used to bolster the RCAF's CF-18 fleet. Pat Finn, assistant deputy minister for materiel at the Department of National Defence, told Postmedia in a recent interview that he expected the first two jets in the spring but there was hope they could arrive earlier. The two aircraft will be prepared for flying as quickly as possible. “I would say it could be by the summer the first couple are on the flight line and painted with the maple leaf,” Finn said. A second group of planes would arrive later this year. Eighteen of the Australian F-18 aircraft will eventually be flying for the Canadian Forces, while another seven will be used for testing and spare parts. Canada is paying Australia $90 million for the aircraft. The federal government originally estimated the purchase of the Australian jets would cost around $500 million, but Finn said that price reflected every aspect of the associated deal, not just the cost of purchasing the jets. Canada is also acquiring extra spare parts, the Australian jets will have to be outfitted with specific Canadian equipment and software and testing will be needed. The $500-million project estimate also included $50 million in contingency funds to cover any problems and another $35 million for the salaries of all civilian and military personnel involved over the life of the project. An additional $30 million will be spent on new infrastructure needed to accommodate the aircraft. Those costs add up to $360 million, Finn said. But DND also plans to upgrade its existing fleet of CF-18s with new communications gear and equipment required to meet regulations to operate in civilian airspace, improvements which the Australian jets will also eventually receive at a cost of around $110 million, an amount that brought the original estimate to nearly $500 million. The Liberal government had planned to buy 18 new Super Hornet fighter jets from U.S. aerospace giant Boeing to augment the Royal Canadian Air Force's CF-18s until new aircraft can be purchased in the coming years. But in 2017 Boeing complained to the U.S. Commerce Department that Canadian subsidies for Quebec-based Bombardier allowed it to sell its C-series civilian passenger aircraft in the U.S. at cut-rate prices. As a result, the administration of U.S. President Donald Trump enacted a tariff of almost 300 per cent against the Bombardier aircraft sold in the U.S. In retaliation, Canada cancelled the deal to buy the 18 Super Hornets, which would have cost more than US$5 billion. Instead of buying the new Super Hornets, the Liberals decided to acquire the used Australian jets. Defence Minister Harjit Sajjan has said the extra jets are needed to deal with a “capability gap,” as Canada does not have enough fighters to handle its commitments to NATO as well as protecting North America. But Conservative MPs say the capability gap doesn't exist and was concocted by the government to delay a larger project to buy new jets, a competition that might end up selecting the F-35 stealth fighter that during the 2015 election campaign the Liberals vowed never to purchase. In the fall of 2016, then-Royal Canadian Air Force commander Lt.-Gen. Mike Hood told senators that the Liberal government brought in a policy change which required the RCAF to be able to meet both its NATO and North American air defence commitments at the same time. That, in turn, created the capability gap, he said. Hood said he was not told about the reasons for the policy change. In November 2018 Auditor General Michael Ferguson issued a report noting that the purchase of the extra aircraft would not fix the fundamental weaknesses with the CF-18 fleet which is the aircraft's declining combat capability and a shortage of pilots and maintenance personnel. “The Australian F/A-18s will need modifications and upgrades to allow them to fly until 2032,” the report said. “These modifications will bring the F/A-18s to the same level as the CF-18s but will not improve the CF-18's combat capability.” “In our opinion, purchasing interim aircraft does not bring National Defence closer to consistently meeting the new operational requirement introduced in 2016,” the report added. The Canadian Forces says it is bringing in new initiatives to boost the numbers of pilots and maintenance staff. https://montrealgazette.com/news/national/defence-watch/first-two-used-australian-fighter-jets-arrive-in-canada-on-sunday/

  • PAL Aerospace and CarteNav with partner Thales Unveil Force Multiplier at Dubai Airshow

    November 13, 2017 | Local, Aerospace, C4ISR

    PAL Aerospace and CarteNav with partner Thales Unveil Force Multiplier at Dubai Airshow

    PAL Aerospace and CarteNav Solutions Announce launch of Force Multiplier An Industry leading “On Demand” Intelligence, Surveillance and Reconnaissance special mission platform On the occasion of the Dubai Air Dhow, DAS, PAL Aerospace announced the first public appearance of an On-Demand, Intelligence, Surveillance and Reconnaissance (ISR) Special Mission Platform named the Force Multiplier. Force Multiplier is an Intelligence, Surveillance and Reconnaissance platform for special missions operations. Ownership, operation, and maintenance are all responsibilities of PAL Aerospace and clients simply acquire the actionable data and experience that they require on this industry leading platform. The Special Mission platform is equipped with two full mission system suites, AMASCOS®, from Thales, and AIMS-ISR® from CarteNav – both mission system software suites which will accommodate a diverse range of ISR applications. Both mission systems will integrate to the Thales SEARCHMASTER® radar which is the highest performance-to-weight radar on the market. The solution fits interim and immediate requirements for surveillance and/or training missions under an on-demand contracting model. PAL Aerospace has operated over 250,000 flight hours of Special Missions and has over 40 Years of Fixed Wing Operations and Surveillance Experience. Our experience as an operator of surveillance missions leaves us uniquely qualified to bring this new platform to market with a view towards client needs and future innovation. Brian Chafe, Chief Executive Officer of PAL Aerospace, stated, “The announcement of this ISR asset is transformational for our organization. We are committed to delivering this platform so our customers can react when they need it most. We are confident that our clients will appreciate the approach that we have taken to provide a flexible, proven, reliable and low-risk solution.” Rick Hillier, General (retired – Former Chief of the Canadian Defense Staff), Chairman - PAL Aerospace, LLC stated “We are pleased to announce this significant investment at the Dubai Air Show to reinforce our commitment to this region and our over 10 year commitment to the people of the UAE.” "The entire CarteNav team is excited by the launch of Force Multiplier and are pleased to be a partner on this initiative. We are looking forward to delivering advanced ISR mission system and information management capabilities for a diversity of end customer's mission requirements. In addition, Force Multiplier is a platform that is ideal for ongoing innovation and advanced product development.” said Paul Evans, President of CarteNav Solutions. Speaking of the partnership, Philippe Duhamel, EVP Defence Mission Systems activities at Thales said, “We have a longstanding cooperation with PAL Aerospace where we have commonly addressed the UAE's and other clients' needs and delivered maritime patrol aircraft with a comprehensive suite of ISR solutions in past. Through the Force Multiplier and the collaboration with PAL Aerospace, Thales will be able to further extend its service offering and demonstrate our capabilities to our entire global customer base.” https://www.palaerospace.com/s/Media-Release-PAL-Aerospace-Force-Multiplier-Launch.pdf

  • Cyber attack hits engineering giant with contracts for military bases, power plants

    March 8, 2023 | Local, C4ISR

    Cyber attack hits engineering giant with contracts for military bases, power plants

    OTTAWA ? A Canadian engineering giant whose work involves critical military, power and transportation infrastructure across the country has been hit with a ransomware attack.

All news