"The worst procurement in the history of Canada" was how Defence Minister Peter MacKay described the effort to replace the Navy's Sea King helicopters in July 2012. He was right about that, and wrong not to accept some of the blame.
The effort to replace the Sea Kings began 23 years ago when Brian Mulroney's government signed a contract for EH-101 Cormorants. Jean Chrétien labelled the high performance aircraft a "Cadillac" and cancelled the contract on taking office in 1993, incurring $478-million in penalties.
A decade later, Paul Martin's government signed a contract for CH-148 Cyclone helicopters, with the first deliveries scheduled for 2005. Now, another decade later and with not a single operational helicopter received, the Harper government is reportedly renegotiating the contract with Sikorsky.
In 2010, then-auditor general Sheila Fraser reported that the Department of National Defence had underestimated the cost and understated the risks involved with the Cyclone. According to Ms. Fraser, in 2000 the "total indicative costs of the 28 maritime helicopters were estimated at $2.8-billion and revised to $3.1-billion in 2003". She estimated an actual cost of $5.7-billion over 20 years, with this estimate not including "contracted Sea King support, new infrastructure, Canadian Forces personnel, and ongoing operating costs." In short, the price of the helicopters had doubled, and is probably continuing to rise.
One reason for the escalation concerns the fact that the "statement of operational requirements" for the procurement is now 14 years old. The out-of-date nature of the document has enabled Canada's generals to engage in "requirements creep," adding new components onto an existing, already approved and budgeted project.
So much in the way of new electronics equipment and weapons systems has been added to Canada's demands that the Cyclone has grown too heavy for the originally planned engines. Adding more powerful engines has in turn required the redesign of many other aspects of the aircraft – a difficult, expensive and time-consuming process.
Adding to the problems, the Cyclone is based on a civilian variant, the Sikorsky S-92, which experienced a catastrophic accident off Newfoundland in 2009 after titanium studs in the main gearbox sheered off. The Transportation Safety Board later stated: "Both Sikorsky and the FAA [US Federal Aviation Authority] indicated that a loss of lubricant from the [main gearbox] oil filter bowl due to a failure of its attaching fasteners was not considered when performing the initial design assessment based on past service history."
Yet the FAA had stipulated that main gearboxes must remain operational for 30 minutes after a total loss of oil. The same requirement was included in Canada's statement of requirements for the maritime helicopter procurement, and in 2003 Sikorsky claimed the S-92 was capable of "30 minutes safe operation following an oil leak."
In 2009, Mr. MacKay said that Canada would not accept a Cyclone unless it met the requirements laid out in the contract. Sikorsky spokesman Paul Jackson responded that the Cyclone gearbox would be different from the S-92 gearbox, but gave no other details.
For more than five years now, the Canadian government has been in a position to collect millions of dollars in "liquidated damages" from Sikorsky for the delays. But no money has been sought or received, presumably because Sikorsky could lay the blame for the delays on Canada's added equipment requirements.
Canada thus finds has itself between a rock and a hard place, unable to secure new helicopters without pressuring Sikorsky, and unable to pressure Sikorsky for fear of being sued.
The first move towards breaking out of this bind is obvious: Identify an alternative, readily available helicopter. For if Canada is to have a strong and credible negotiating position vis-à-vis Sikorsky, it must have a credible Plan B.
The NH-90 NATO Frigate Helicopter is built by a consortium of Eurocopter, AugustaWestland and Fokker Aerostructures. It is in service with the Dutch, French and Italian navies and has been selected by Belgium. It has excellent range, is made of corrosion-proof composite materials, and has a useful rear ramp.
The production of EH-101 Cormorants has been taken over by AugustaWestland. Now that a problem of tail rotor-cracks has been resolved, the aircraft – now designated the AW-101 – is both proven and competitive. It would also bring cost-savings with respect to the training of mechanics and aircrews, as well as the stationing of aircraft, since the Canadian Forces already have a small number of EH-101s that they use strictly for search and rescue.
The MH-60R Seahawk is the most up-to-date helicopter used by the U.S. Navy. It has also been selected by Denmark. Like the Cyclone, the Seahawk is made by Sikorsky, which raises the possibility that the Cyclone contract could be transferred into a Seahawk contract – thereby saving face and perhaps costs for the Canadian government and the company.
It has been 50 years since Canada acquired the first of its Sea Kings. The crews of these ancient aircraft perform essential duties – including reconnaissance, sovereignty assertion, and search and rescue – at real and growing risk to their lives. It's time for Mr. McKay to step up, quickly, and deliver new maritime helicopters without further delay.
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 and a Research Associate of the Salt Spring Forum.