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RCAF Aircraft Procurement – Maritime Helicopter Project – News Release – Jan 2014

Government of Canada proceeds with CH-148 Cyclone Procurement

On 03 Jan 2014, Public Works confirmed that Canada would proceed with the procurement of the CH-148 Cyclone Maritime Helicopters. Deliveries of  'interim'  Cyclones are now planned for 2015 to 2018. These Cyclones are to have sufficient capabilities to begin retiring the aged CH-124 Sea King fleet. So, the MHP deliveries will begin a full decade late, Canadians are on the hook for an extra $1B in costs, and the CH-148 Full Operational Capability is still wobbly.

The Public Works News Release claims that FOC will be achieved by 2018. Well, we will see. The Maritime Helicopter Project has had no shortage of 'firm' delivery dates and, so far, not a single one of those commitments has been met. If the citizenry have become unwilling to put much faith in these procurement announcements, the Government of  Canada has no one to blame but itself. Of course, the GoC doesn't help itself with its trickery or lame 'street theatre'.

The Public Works News Release came as another late Friday afternoon announcement – the standard bureaucratic method of intentionally missing the news cycle (and rapidly becoming an embattled Harper government procurement announcement trademark ). Prior to this latest flip-flop, the GoC was flirting with potential alternative Maritime Helicopter Project suppliers (like AgustaWestland). But Sikorsky seems to have seen right through that gambit. Worse, such tactics add to Canada's growing reputation as a waster-of-time on military procurement.

The Maritime Helicopter Project has been a nightmare for successive Canadian governments. When the Harper Tories force-of-will approach to MHP failed as miserably as earlier attempts to replace the aged Sea King shipboard helicopters, the GoC turned to outside consultants – the Toronto-based arm of the global Hitachi Consulting Corporation. It sounds very noble to say that the GoC "accepts the recommendations in the third-party report".  But, what it really translates into is: The Federal Government and its myriad bureaucratic layers have no idea of how to negotiate a major procurement contract or to wrangle with their corporate opposites.

Below is the 03 Jan 2013 Public Works News Release.

Government of Canada to continue with Maritime Helicopter Project and begin retiring Sea Kings in 2015

For immediate release

OTTAWA, Ontario, January 3, 2014 Given ongoing challenges with the Maritime Helicopter Project, the Government of Canada commissioned an independent third party, Hitachi Consulting, to determine the viability of the program. The Government accepts the recommendations in the third-party report, which found that the program would be viable with a different project structure and governance model. Today, the Government of Canada and Sikorsky Aircraft Corporation announced that a Principles of Agreement (POA), which will form the basis of formal contract negotiations to put those recommendations into place, was concluded on December 31, 2013.

"The decision to continue with the Maritime Helicopter Project is consistent with our goals of getting the Canadian Armed Forces the equipment they need while protecting the investments taxpayers have already made in this program," said the Honourable Rob Nicholson, Minister of National Defence. "The Royal Canadian Air Force has been providing guidance in determining operational priorities through the newly established Integrated Product Teams comprised of team leaders from Sikorsky and General Dynamics Canada, as recommended by the third party." Under the terms of the POA, Canada will see delivery of helicopters with operational capability sufficient to begin retirement of Sea Kings in 2015, and a program to enhance those capabilities culminating in a fully capable CH 148 Cyclone Maritime Helicopter in 2018.

"Under the new terms established in the Principles of Agreement, Sikorsky has committed to deliver the needed helicopter capability at no additional cost to Canada," said the Honourable Diane Finley, Minister of Public Works and Government Services. "In addition, the Government of Canada will only issue further payment to Sikorsky upon capability delivery. This is the right path forward for the Canadian Armed Forces and taxpayers." Sikorsky has agreed to pay Canada $88.6 million in liquidated damages for non-delivery.

"As the pre-eminent helicopter manufacturer in the world, we regret that we have not executed this program to the satisfaction of the Government of Canada and that no aircraft were delivered in 2013," said Mick Maurer, President of Sikorsky Aircraft Corporation. "We recognize that we and our sub-contractors must do better. We have completely restructured our approach, and added considerable new resources and technical expertise. As a result of the third-party review commissioned by the Government of Canada, we believe we have the right plan in place to deliver the most capable maritime helicopter in the world."

The restructured program will see the continuation of the initial training and testing of the Cyclone now underway in Shearwater, Nova Scotia. Hitachi Consulting will remain engaged in the project to ensure delivery of a fully capable maritime helicopter.

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