Defence Department under fire over $3B plane contract

The Defence Department has been forced to reconsider its requirements for choosing new search-and-rescue planes for the Canadian military amid accusations the process was rigged, CBC News has learned.

The department started searching for new aircraft to replace its aging fleet in 2002. Its requirements were so stringent that only one aircraft in the world — the C-27J by Italy's Alenia — could meet them, sources told the CBC.

That automatically excluded other credible competitors, they said.

For example, the C-295 — a plane made by the Spanish company EADS — was excluded because its cabin was 15 centimetres too short and its maximum cruising speed 12 knots too slow. Montreal-based Bombardier's Dash 8 was an option, but without a rear ramp it was out, too.

Industry Canada hit the brakes

However, the department is now re-examining those requirements after Industry Canada refused to let the procurement — worth $3 billion — proceed.

"So everyone is seized with that; what we're trying to do now is get everyone in the comfort zone as to how the bidding process will work, being as inclusive as possible without compromising on the requirements," Defence Minister Peter MacKay said Tuesday.

Typically, three government departments are involved in military procurement:

• Defence decides what it needs.
• Public Works designs the contracts.
• Industry Canada makes sure the deal is good for Canadian industry by ensuring that companies here benefit — either through direct contracts to build parts or the planes themselves, or through promises by foreign companies to spend the value of the contract in this country. 

A search of the government's lobbyist registry reveals the lengths some airplane companies went to push their case.

Turin-based Alenia, for example, hired several lobbyists who met 14 times with officials over the last year — including key staff in MacKay's office and other bureaucrats in charge of procurement. Lobbyists working for EADS recorded six meetings with government officials in the same time period.

Industry Canada's decision to call the requirements into question opens the door for Viking Air, a small aircraft manufacturer in Sidney, B.C.

Canadian contender builds updated classics

In 2004, the Vancouver Island company bought the rights to a series of iconic Canadian planes — the De Havilland Beaver, the Twin Otter and the Buffalo, among others. Now Viking is building updated versions of these planes and selling them around the world

"The biggest reason why these airframes have survived and people invest in them all the time is because they're so robust," said Robert Mauracher, Viking's vice-president.

The Buffalo, for example, has been one of the Canadian Forces' primary search-and-rescue aircraft for more than 40 years.

"The Buffalo is an excellent aircraft. It fits a certain market," Mauracher said. "It's a proven airframe. It's a good airframe, so we don't have to worry about that."

The redesigned Buffalo has modern engines, upgraded avionics and specialized search gear that ought to put it in the running for the lucrative defence contract, he added.

Mauracher is considering hiring lobbyists to help make the case for the Buffalo in Ottawa.

"They have a responsibility to make sure they get the equipment they need to do the job.  All I'm saying is give us a chance to show you that what we have [that] may meet your needs. That's really what the bottom line is," he said.