Thursday, May 21, 2009

New Chinooks: The Foxtrot goes on...and on...

A contract for CH-47F helicopters for our Air Force has now, good grief, been in the works for almost three years and nothing has been signed (summary of the saga here). Meanwhile the Aussies have just upped and bought seven Chinook Foxtrots. As for us, maybe we can now only afford two fewer than planned:
Government looking to trim order for military helicopters, sources say

The Defence Department wants to trim its order for new battlefield helicopters as it struggles to keep the $4.7-billion program within budget, The Canadian Press has learned.

Federal officials have asked U.S. aircraft giant Boeing whether the order for 16 heavy-lift CH-47F Chinooks can be cut to 14, defence sources said.

The top-of-the-line [gratuitous, that] Chinooks were initially promised in 2006 by the Conservative government. But the project is years behind schedule and is still considered in the "definition phase," meaning it is the subject of negotiations between the company and the federal government.

"We're close" to a contract, said a defence insider, who spoke on condition of anonymity.

A National Defence spokeswoman refused to discuss proposals being exchanged with the Chicago-based corporation, but stressed that the federal government is still committed to the project.

"The government is currently negotiating with Boeing on the details of the contract and therefore cannot comment on the particulars of the contract at this time," Annie Arcand said.

"However, I can say that once a contract is finalized, it will meet the statement of operational requirements for the [medium-heavy-lift helicopter] and will provide excellent capability to the Canadian Forces."

A spokesman for Boeing declined comment.

The contract, under negotiation for a year, was supposed to be signed at the end of 2008 [fall 2008 actually, more here].

The program went off track when the air force began tinkering with the specifications only months after former defence minister Gordon O'Connor announced it in June, 2006 [there are reasons for the "tinkering"--see this 2007 post].

Military planners wanted a robust aircraft capable of fulfilling a variety of missions [maybe including insertion of special forces], and only the F model - the latest variant of the hardy CH-47 - would do [that's not quite accurate--as far as I can see CH-47Ds are no longer being manufactured, though re-builds are available].

The initial delivery date was supposed to be 2010, but defence officials conceded last year that it had slipped to late 2011 and could be pushed out to 2012 or beyond [initial operational capabililty is now supposed to be March 2014, see MEDIUM TO HEAVY LIFT HELICOPTER (MHLH) at end here].

Defence sources said talks with Boeing, which was pegged for the sole-source contract almost from the outset, also bogged down over the issue of industrial regional benefits [emphasis added, so what's new?] - that is, giving Canadian aerospace companies a piece of the pie.

This procurement will provide Industrial Regional Benefits equivalent to 100% of the contracted value for both the capital acquisition and integrated in-service support. The selected contractor will be required to identify, as specific work packages, 60% of the total acquisition commitment. For the integrated in-service support portion, 75% of the contract value will be direct work performed by a Canadian company. These industrial and regional benefits requirements will be negotiated and accepted by Industry Canada prior to contract signing.]

Chinooks are built at a plant in Philadelphia.

Earlier this year, a senior defence official, in a background interview, tried to smooth over the disagreement by saying industrial benefits "was not a show stopper."

But costs have risen since the initial proposal and statement of requirements was drafted in June, 2006, putting in danger the project's budget at a time when the recession has plunged the federal treasury into a multibillion-dollar deficit.

Last year, work on the navy's joint support ship program was halted when bids from the shipbuilding industry exceeded the planned budget.

Some skeptics within government have asked why the air force still needs heavy-lift helicopters when six used CH-47D Chinooks were bought from the U.S. Army for the Afghan mission.

The Defence Department's own 2009-10 budget estimates refer to "possible plans to acquire a medium- to heavy-lift helicopter capability [more on new-found government tentativeness here]."

In drawing up a statement of requirement for its battlefield helicopter, the air force said it needed a minimum fleet of 16 aircraft flown out of two bases in Canada.

That goal could still be met with fewer new helicopters, but some of the existing D model aircraft would have to be upgraded.

Another sign that the federal government is scrambling to save the programs came recently in documents obtained by the Bloc Québécois. The reports suggested the air force had proposed to centralize Chinook flight operations out of one air strip, Canadian Forces Base Petawawa, Ont., to cut costs.
Update: Now the Italians look to have done a good deal (via Spotlight on Military News and International Affairs):
The Italian Army confirmed that it is buying 16 Boeing CH-47F Chinook heavy-lift helicopters in a co-production deal with AgustaWestland that is worth approximately $1.23 billion...

New-build and remanufactured versions of the CH-47F, which are rolling off a common production line at Boeing’s factory in Philadelphia, feature a digital flight control system, integrated HUD, redesigned ramp and other structure, as well as an improved missile warning and countermeasure system. Italy previously acquired 40 CH-47C models in a license-build agreement, and is one of 14 international operators of the Chinook.

This time, Boeing will build the fuselages and AgustaWestland will do final assembly and systems integration. Deliveries will take place from 2013 to 2017.

The deal includes a license for AgustaWestland to market the CH-47F to the UK, other European countries and several countries in the Mediterranean region.
Upperdate: From DND's Reports on Plans and Priorities 2009-2010:
...the Government...has announced possible plans to acquire a Medium- to Heavy-Lift Helicopter (MHLH) capability, replenishment ships, a fleet of medium logistics trucks, Leopard 2 tanks and Arctic/Offshore Patrol Ships...


Blogger Babbling Brooks said...

From what I understand, the problem isn't the pork, it's the Air Force's requirements, and how much risk Boeing is willing to take on (not much) in the contract.

5:45 p.m., May 21, 2009  

Post a Comment

<< Home