PGWSC doormats?
Maybe there's a good reason for this. But for the life of me, I can't figure out what it would be.
Four million bucks in penalty isn't going to make or break DND's budget. But how much do you figure it costs per day to maintain our Sea King fleet? And why wouldn't we take the money to offset those costs?
If we're not going to enforce the provisions, what's the point in writing a binding contract?
Replacement helicopters for Canada's geriatric fleet of Sea Kings will be delivered at least 5½ weeks late from Sikorsky International because of a strike at the company's factory in the United States.
However, the federal government says the delay is reasonable, and it is foregoing the late penalty provisions in the contract, which allowed it to charge up to $100,000 a day in penalties to a maximum of $36 million. The $1.85-billion deal announced with fanfare by the federal Liberals in 2004 required delivery of the first of 28 maritime helicopters by Nov. 30, 2008.
That has been changed to Jan. 9, 2008.
Four million bucks in penalty isn't going to make or break DND's budget. But how much do you figure it costs per day to maintain our Sea King fleet? And why wouldn't we take the money to offset those costs?If we're not going to enforce the provisions, what's the point in writing a binding contract?
posted by Babbling Brooks at 10:50 p.m.
1 Comments:
Be careful when you allow labour to put a gun to the head of a company with overrun penalties though. Perhaps there is more to the story then we are getting... how long was the strike, what was dispute over (wages no doubt, but what else) and other factors. I imagine that all of these things must have been factored into the decision to accept the excuse for the later delivery.
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