Tuesday, August 11, 2009

CH-47F Chinooks: Three years to negotiate a contract

Not to mention one month to decide on making the announcement. As for the contract, a post at David Pugliese's Ottawa Citizen blog:
I’ve had more than a few emails from Defence Watch readers noting, and questioning, the numbers/details released about the Chinook purchase announced on Monday by Defence Minister Peter MacKay.

Here is what one reader notes: “Interesting that DND's 2006 press release referred to a $2 billion expenditure for 16 Chinooks, and today's announcement quoted $1.2 billion for 15 Chinooks. The various statements refer to Canadian mods, but these are presumably not as extensive as originally expected.”

The main points various readers make is that the Canadian Forces -- and taxpayers -- are actually paying more for less aircraft.

Here are what they are pointing out:

--In the summer of 2006 the Defence Department announced that the total cost of the purchase of 16 Chinooks would be around $4.7 billion. That included $2 billion for the aircraft and $2.7 billion for the in-service support.

--On Monday those numbers changed. Instead there will be 15 aircraft and now the total cost is around $5 billion.

--In addition, the delivery times have slipped. At various times, Cabinet ministers noted the delivery of the first helicopters would be in 2011….that later was modified to 2012. First delivery is now 2013 with final aircraft coming in 2014.

Modifications for the new Chinook F models include an upgraded electrical system, defensive suite, sensor system for flying in poor weather and long-range fuel tanks.

“These modifications aren’t that extensive, so why did it take three years to negotiate this contract?” asked reader Phil.

To try to find some of the answers to your questions, I compared notes with Canadian Press journalist and colleague Murray Brewster. We were both limited by DND public affairs to a 10-minute interview with NDHQ Chinook project officials so the chances of asking in-depth questions wasn’t really an option.

But here are the answers we received:

Why the reduction from 16 to 15 Chinooks? The response from project officers was that the Air Force determined that the job could be done with 15 aircraft. The 16 figure, they said, was based on the assumption that the Chinooks would be operating from two bases. Now the Chinooks will operate from one base.

Why the change from $4.7 billion to $5 billion? How do you go from paying $2 billion for 16 aircraft to paying $1.2 billion for 15 helicopters? The answer was that the original figures from the 2006 press releases and backgrounders produced by DND were just estimates.

The new numbers now break down as follows: $1.2 billion for Boeing for the aircraft, $2.2 billion for in-service support and the remaining (approx. $1.6 billion) for new infrastructure, project management costs and other services associated with long-term operations of the Chinooks.

Why delivery in 2013 instead of 2011? The answer we received was that was what Boeing negotiated for.

Murray Brewster did point out that the original documentation issued by DND noted that 16 Chinooks was the absolute minimum number of helicopters needed by the Canadian Forces.

Over to you for your views.
At least the number is 15; in May it was reported the number might be only 14. As for where the new Chinooks will be based:

The Chinooks would be operated from a single base, with CFB Petawawa in the Ottawa Valley seen as the front-runner for that location.

The Canadian Forces had originally planned to operate the helicopters from two bases. The government has yet to announce what base will be selected as home to the new aircraft...

From the official news release:
...“These helicopters are key to keeping Canadians safe and secure by giving our military a robust ability to operate in remote and isolated areas and respond to disasters or missions both at home and abroad.”

According to an independent analysis, this acquisition contract is expected to generate benefits for local economies and will provide approximately 5,500 jobs and an opportunity for up to 15,000 indirect jobs for Canadians across the country.

“The Government of Canada’s Industrial and Regional Benefits Policy is in place to ensure that prime contractors generate long-term and significant economic activity in Canada,” said Minister Clement. “Our Government is committed to generating the greatest amount of economic benefit for Canadian industry and the economy at large”

As a result of the industrial and regional benefits requirements within the CH-147F project contract, Boeing has committed to re-invest the full contract amount into the Canadian economy, creating jobs and stimulating regional markets. As part of this commitment, Boeing has awarded a contract to IMP Aerospace [Nova Scotia, eh, Mr MacKay?] to manufacture key components of Boeing’s Chinook cargo helicopters, including the 15 aircraft being purchased by the Government of Canada.

The purchase of the CH-147F Chinooks gives the Canadian Forces a new ability to reach remote locations in a wider range of geographic areas and challenging environments inaccessible by land transport or fixed-wing aircraft. These helicopters are invaluable assets in responding to natural disasters and while deployed anywhere in the world...
Note the Conservative government's warm and fuzzy emphasis on, good grief, disaster assistance as a mission for the aircraft.

At least there's this in the Backgrounder (with a silly, sloganeering title):
Canada First at home and abroad
The Canadian Forces’ commitment to defend Canada and contribute to global peace and security make this type of helicopter a very real need for the men and women of Canada’s military, perhaps now more than ever...
But then this follows:
The new CH-147F helicopters will be used to assist civil authorities in responding to emergencies such as floods, forest fires and earthquakes, helping to keep Canadians safe and secure.

Added robust capabilities, which are first and foremost designed to maximize the safety of passengers and crew, will mean that a fleet of 15 aircraft will meet the operational requirements of the Air Force to carry out their missions. These additional capabilities, such as long-range fuel tanks that will more than double the endurance and autonomy of a basic Chinook F-model [emphasis added], will expand the Canadian Forces’ ability to operate in remote and isolated areas, and increase their capacity to respond to disasters both at home and abroad.

The Boeing CH-147F Chinook aircraft is part of the Government’s implementation of its Canada First Defence Strategy. It features a newly designed, modernized airframe, a Rockwell Collins Common Avionics Architecture System cockpit, and BAE Digital Advanced Flight Control System. The advanced avionics provide improved situational awareness for flight crews with an advanced digital map display and a data transfer system that allows storing of pre-flight and mission data. Improved survivability features include a directional infrared countermeasures system, a laser warning system and updated infrared and radar detection systems.
At least do they do seem quite capable. The Boeing news release is here. The Liberal national defence critic has produced this typical nonsense:
Liberal MP Denis Coderre blasted the government for refusing to hold a full competitive bidding process for the helicopter deal. "This contract is full of holes and raises many questions," Mr. Coderre said...
The thing is that the only other new-build Western helicopter with similar capabilities is the bigger and more expensive Sikorsky CH-53K Super Stallion now under development (more here)--which is not even scheduled to enter US service until 2014-2015. Not that M. Coderre would know that.

The Air Force had four major aircraft aquisitions promised by the Conservative government; three--C-17, C-130J, and CH-47F have now been contracted (all four C-17s in service, bought off-the-shelf). As for the fourth:
Fixed-wing SAR aircraft balls-up


Anonymous Anonymous said...

It has been a long slow slog to get this far, but we are getting very, very capable, useful and veratile aircraft that are highly suited to the roles and geography.

Really can't compare the old and new numbers of cost unless we know what is included in that price . . . spares, life cycle options etc.

Just glad we got 'em.

11:01 a.m., August 11, 2009  
Blogger darcy mccannel said...

If you would have told me 4 or 5 years ago that we could see C-17 aircraft on the tarmac, or to be a year away from new Hercs and now the Chinook news about the F model signing-well the term would have to be gobsmacked. I could say the same regarding the Leo2s. And all with a minority government. We really have to congratulate our Conservative gov. on this.

2:00 p.m., August 11, 2009  
Blogger Mark, Ottawa said...

darcy mccannel: Well, in November 2005 the Liberals planned to buy C-130Js but lost the election. If they had won I expect they would have been delivered before 2010:

'The government confirmed Tuesday that it's shopping for about 16 military transport planes to replace the oldest of its Lockheed C-130 Hercules aircraft, and it wants them in a hurry.

The expected bill: $4 billion to $5 billion.

Defence Minister Bill Graham said aircraft companies will be invited to offer planes meeting a short list of performance requirements – "a document on one page that says, 'Here's what the troops need' " – rather than the thousands of pages of specifications normally issued in big military purchases.

He denied that the requirements are rigged to favour the latest Hercules model, the C-130J, at the expense of Boeing's much bigger C-17 Globemaster and the European-built Airbus A400 military transport.

But he acknowledged that not every plane fits the bill.

"If they're going to come forward with a Piper Cub, I'm sorry, that doesn't fit the requirements," he told reporters in Ottawa...'

This was the reaction (original link in post no longer works) of then-Conservative national defence critic Gordon O'Connor (kind of reminds one of M. Coderre, does it not?):

'O'Connor said he strongly supports streamlined military procurement practices, but he says the Liberal method will hurt competition and favour certain products - Lockheed Martin's C-130J transport plane, for example.

Prime Minister Paul Martin has said getting what the military needs takes precedence over regional and industrial benefits [that certainly doesn't seem to be the view of the Conservative government at this time].

O'Connor said he also supports what he calls the "sensible" Liberal concept of setting out requirements based on performance needs. But he said regional and industrial benefits are a must in any military procurement.'

But C-17s and Chinook Foxtrots would have been unlikely under the Liberals, I agree.


4:10 p.m., August 11, 2009  

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