31 mai 2019 | Local, Aérospatial

Fighter RFP delayed again pending official review of industrial benefits policy

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

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7 mai 2020 | Local, Terrestre

General Dynamics saw $1 billion bump after Canada-Saudi accord
By: Joe Gould &emsp; 1 day ago WASHINGTON ― General Dynamics has received $1 billion since the renegotiation of a $10 billion contract for Canada to sell light armored vehicles to Saudi Arabia, company officials said on its first quarter earnings call. In a deal last month, Canada lifted its ban on arms sales to Saudi Arabia, which in turn agreed to a speedier payment schedule for the LAVs. Canada had the vehicles on hold since 2018, following the death of Saudi journalist Jamal Khashoggi; and by October, Saudi Arabia had racked up $1.5 billion in back payments to General Dynamics. Amid news on the April 29 call that the company's revenue fell $512 million in connection with the coronavirus pandemic, General Dynamics Chief Financial Officer Jason Aiken highlighted “the formal signing of the restructured contract on the Canadian international program, which settled all issues to the satisfaction of the parties.” “With respect to our standing receivable you may recall that we received $500 million early in the first quarter and we received another $500 million this month. This will be very helpful to free cash flow in the second quarter,” Aiken said. “We will begin a regular cadence of scheduled payments in 2021 consistent with deliveries and making further progress in the scheduled amortization of the arrearage.” The company's Combat Systems division had revenue of $1.7 billion, up 4.4 percent over the same quarter last year, and sales to the U.S. government were up 12 percent. The firm's aerospace business segment also had revenue of $1.7 billion, but that represented a 23 percent fall from the same quarter last year. On April 9, Canada's foreign affairs minister, François-Philippe Champagne, announced Ottawa was “able to secure significant improvements” to the LAV contract, including more latitude for the Canadian government to speak about it. Under the new terms, Canada could also delay or deny export permits without penalty if it learned Saudi Arabia was not using the vehicles for their stated purpose. Ottawa would also be reviewing permit applications on a case-by-case basis to ensure they meet Canadian law and the U.N. Arms Trade Treaty. Though the Trudeau government has been under political pressure to scrap the LAV deal over human rights concerns, Champagne said its cancellation would have “resulted in billions of dollars in damages” and risked thousands of Canadian jobs across the defense supply chain. The vehicles are made by the General Dynamics Land Systems subsidiary in London, Ontario. https://www.defensenews.com/congress/2020/05/07/general-dynamics-saw-1-billion-bump-after-canada-saudi-accord
4 décembre 2019 | Local, Aérospatial, Naval, Terrestre, C4ISR

NATO at 70: leaders meet in London today
By Marc Montgomery Most alliances historically don't last more than a couple of decades, but the North Atlantic Treaty Alliance is 70 this year, and has grown over that time to its now 29 members. Originally formed as a protection against the Soviets, new and much different types of threats lurk, and there are divisions in the organisation. Colin Robertson, a former Canadian diplomat and a Vice President of the Canadian Global Affairs Institute. discusses the issues. U.S. President Donald Trump has been forcefully scolding many members of the Alliance for not living up to defence spending. In 2018, the Alliance widened the rules as to what counts as defence spending. Canada is among several members, including France and Germany, not living up to the commitment to spend at least two per cent of GDP on defence. This now includes for example, pensions paid to former soldiers. The Liberal government has been meticulously searching for any expense that might be counted as defence spending including RCMP expenses for members involved in peacekeeping, costs for Canada's spy agency-the Communications Security Establishment (CSE) and even death benefits for veteran's survivors. Canada now spends about 1.27 per cent of its Gross Domestic Product on defence. Robertson notes that the Alliance is burdened with disagreements, but that this is not unusual in NATO's history. It now faces new and much different threats from the more simpler Cold War period, such as new state actor threats, social but somewhat fluid and unorganised threats like piracy and mass migration, and non-state actors like Al Queda and DAESH, and a move by Russia and China to militarise space. While it has its hurdles to overcome, Robertson feels the Alliance will remain strong coming out of this week's meetings. https://www.rcinet.ca/en/2019/12/03/nato-at-70-leaders-meet-in-london-today/
1 octobre 2018 | Local, Naval

CSC 2018 Evaluation Stage
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