Wednesday, 4 July 2012

HOW NOT TO BUY A HELICOPTER


Thirty-five years ago, the government first set out to buy replacements for the 1960s-era Sea King maritime helicopters, even then considered close to their best-before dates.

In 1992, Brian Mulroney’s government ordered 50 Cormorant helicopters for both naval surveillance and maritime search-and-rescue, at a total cost of $4.8 billion.

In 1993, Jean Chr├ętien fulfilled an election promise to kill the deal to buy Cormorants he called unnecessary “Cadillac’s,” a move that cost taxpayers $478 million in cancellation penalties.

In 1998, after a long and carefully controlled bidding process for 15 new search-and-rescue helicopters the government wound up having to buy the same Cormorants.

In 2004, the government chose Sikorsky to supply the remaining 28 naval helicopters.


As of 2012, almost twenty years after the original $4.8 billion Cormorant purchase was cancelled, not one working maritime helicopter has been delivered. The auditor general has estimated taxpayers will now pay about $6.2 billion for roughly half as many Sikorskys.

How did we get to this point?

Nov 23/04: Deal signed. The Government of Canada signed contracts with Sikorsky International Operations Inc. for the Maritime Helicopter Project, to provide 28 helicopters (C$ 1.8 billion), as well as 20 years of in-service support and a training facility (C$ 3.2 billion), including construction of a training facility and a simulation and training suite.

April 12/05: Project office open. Sikorsky Aircraft Corp. and Canadian government officials today formally inaugurate a new Canadian Maritime Helicopter Project (MHP) office located here in the company’s main manufacturing facility in Stratford, CT.

January 2008: Sikorsky formally advises the Canadian government of delays in the original schedule

Dec 23/08: Canada’s government announces that they have renegotiated the contract with Sikorsky. DND will now begin receiving helicopters by November 2010, allowing necessary operational testing and training to begin prior to the delivery of mission-ready helicopters beginning in 2012, and all helicopters by 2013.The effect of these changes is to delay operational use of the helicopters for 2 years

June 8/10: It is announced that Sikorsky will deliver its CH-148s to the Canadian Armed Forces late, even by the revised schedule. Sikorsky will begin delivering only “interim helicopters” for testing and training by the renegotiated date of November 2010. Then, instead of delivering at a rate of one per month, Sikorsky will deliver only 6 helicopters by June 2012.The remaining 22 helicopters will be fully operational versions. They are promised as of June 2012.

June 30/10: The Canadian government and Sikorsky sign an agreement to amend their CH-148 contract. Damages will now be triggered only by failure to deliver interim helicopters starting in November 2010, and for failure to deliver the fully compliant helicopters beginning in June 2012. The C$ 3.2 billion 20-year in-service support contract will run until March 2028.

Jan 7/11: Sikorsky notifies the Canadian government that there will be a short delay in delivery of the first aircraft due to an issue outside of our control.

May 13/11: The first interim CH-148 Cyclone model arrives at 12 Wing Shearwater in Nova Scotia. It will be used to support ground-based training of Canadian Forces (CF) aircrew and technicians, and will remain under Sikorsky ownership and control for now.

Nov 28/11: The Canadian Press reports that the helicopter flown to Shearwater AB in Halifax earlier is still being used to train ground crew only and is not being flown.

Jan 27/12: The CH-148 safety certification process, and other delays, make it very unlikely that Sikorsky can begin delivering fully capable CH-148s with all mission software, for acceptance by June 2012. Defense sources say they’re only committed to 5 interim training helicopters in 2012.

July 2/12: The Globe and Mail reports that the deadline to begin delivering fully operational helicopters has now passed, without even interim helicopters that have been accepted for service. Public Works and National Defence are stating that they expect the delivery of the interim helicopters to occur “later this year.” This suggests the delivery of the fully compliant helicopters – initially scheduled for 2008 – will not happen until 2013.

How did we get to this point? It’s easy enough to fill in the dates and the missed deadlines, harder to understand how it happened. The Government and the DND said they were looking for an off the shelf maritime helicopter. What they are now trying to purchase is a new helicopter developed expressly for Canadian use. The litany of missed dates and forgone penalty payments speaks to an inability on the part of Canadian negotiators to adequately protect our interests. A report that two frigates the Canadian navy had retrofitted at an undisclosed expense so the Sikorskys could land on their decks are now being reconfigured right back to the way they were, to handle the old Sea Kings, tells us that the Navy is doing no better at managing this program.


One final note:

June 29, 2012 The Defense Security Cooperation Agency (DSCA) notified U.S. Congress June 26 of a possible Foreign Military Sale (FMS) to the Government Qatar of 10 MH-60R SEAHAWK Multi-Mission Helicopters, 12 MH-60S SEAHAWK Multi-Mission Helicopters with the Armed Helicopter Modification Kit, 48 T-700 GE 401C Engines (44 installed and 4 spare) with an option to purchase an additional 6 MH-60S SEAHAWK Multi-Mission Helicopters with the Armed Helicopter Modification Kit and 13 T-700 GE 401C Engines. The estimated cost is $2.5 billion.


This is a genuine off the shelf purchase of maritime helicopters. A case could be made that if the Government and the DND were to immediately cancel the current contract with Sikorsky and make a similar deal for Seahawk maritime helicopters(also made by Sikorsky) they would actually end up spending less money and getting helicopters sooner then they would if they continue on the current path.