Byers and Webb op-ed: A government blunder teaches us how not to buy helicopters
The National Post
February 11, 2013
The botched procurement of F-35 stealth fighter jets has attracted much attention, and rightly so at $40-billion and counting. But the F-35s are not the ugliest example of Defence Department incompetence. That dubious honour belongs to the Sikorsky CH-148 Cyclone maritime helicopter, which, as Defence Minister Peter MacKay himself admitted last July, is “the worst procurement in the history of Canada.”
If and when they eventually arrive, the Cyclones are supposed to replace the Sea Kings that have operated off Canada’s naval ships since 1963. That’s right, the Sea Kings are half-a-century old. Their dilapidated condition poses a daily threat to the lives of Canada’s naval aviators.
The Sea Kings should have been replaced two decades ago. In 1990, the Mulroney government tried to do just that, signing a contract for European-made EH-101 Cormorants. But opposition leader Jean Chrétien labelled the high-performance Cormorant a “Cadillac” and cancelled the contract as soon as he became prime minister. Taxpayers were left with a $478-million penalty — and not a single new helicopter.
After that, Chrétien distanced himself from the file. It took until 1999 for a new “Statement of Operational Requirements” to be developed, and until Chrétien’s ouster by Paul Martin in 2003 before a new contract was signed for the Cyclone.
The first Cyclones were due to be delivered in 2005, but the Liberals made the mistake of choosing a helicopter that was still in the design phase. As auditor-general Sheila Fraser later concluded, the Department of National Defence (DND) had “underestimated and understated the complexity and development nature of the helicopters it intended to buy.”
The Department was also guilty of exploiting the as-yet-unfinished character of the helicopter to ask Sikorsky for the inclusion of additional electronics and armaments. Their guilt was magnified by the fact that, since the procurement had already been approved, the additional equipment escaped political and budgetary scrutiny.
The admirals and generals might have got away with it, except for the fact that the additional equipment exceeded the weight limit for the Cyclone. This necessitated the design and development of more powerful engines, which in turn required a full-blown re-engineering of the helicopter. All this incompetence and unaccountability pushed the delivery date back from 2005 to 2008, and then to 2010, 2012 and now, supposedly, 2013.
It also pushed up the costs. In 2010, Fraser reported that the “total indicative costs of the 28 maritime helicopters were estimated at $2.8-billion” in 2000 and “revised to $3.1-billion” in 2003. She estimated an actual cost of $5.7-billion over 20 years, not including “contracted Sea King support, new infrastructure, Canadian Forces personnel and ongoing operating costs.”
By loading more electronics and weapons systems onto the Cyclone after the contract was signed, DND made itself partly responsible for the delays. This likely explains why the Harper government has not sought to recover any penalties from Sikorsky. If it did, the manufacturer would probably sue, which would draw attention to the mess and delay the procurement yet further.
Adding insult to injury, no other country has selected the Cyclone. Canada’s NATO allies are instead buying NH-90s, AW-101s and EC-725 Super Cougars from European manufacturers and, in the case of the U.S. Navy, proven MH-60R Seahawks from Sikorsky. This means that many of the economic benefits foreseen for Canada, as a result of Canadian companies making parts for Cyclones sold elsewhere, have disappeared.
The parallels with the F-35 fiasco are striking: an early, highly politicized commitment to an unproven aircraft, the complexity and expense of which was greatly underestimated; ever-mounting costs and lengthening delays; and a loss of interest in the aircraft from other potential buyers. Worse yet, Canadian pilots are left without necessary new equipment.
The Harper government, which finds itself in the worst possible negotiating position with respect to a delinquent manufacturer, blames its Liberal predecessors. But to adopt military language, it is only since the Conservatives took power seven years ago that the maritime helicopter procurement has gone from SNAFU to FUBAR.
Cleaning up the mess now will not be easy. Like the F-35 fiasco, it involves urgently considering alternative aircraft — and standing up to a big American defence contractor.
Michael Byers holds the Canada Research Chair in Global Politics and International Law at the University of British Columbia. Stewart Webb is a visiting research fellow at the Rideau Institute. They are co-authors of a report entitled “The Worst Procurement in the History of Canada:” Solving the Maritime Helicopter Crisis, published this week at policyalternatives.ca.