# Auditor General on CH-148 and CH-47F acquisitions (plus lessons/risks for F-35?)



## MarkOttawa (26 Oct 2010)

AG's very damning report is here:
http://www.oag-bvg.gc.ca/internet/English/parl_oag_201010_06_e_34289.html

Cyclone was sold by DND as off-the-shelf when in fact it was a completely new aircraft.  Won't have operational version until 2012.  Chinooks also supposedly off-the-shelf but turned, because of "Canadianization", into effectively a completely new version, won't be delivered until 2013.  Acquisition risks and capital costs of both greatly underestimated, and in-service support costs way off.

AG's summary:



> ...
> The total project cost of 28 Cyclone helicopters, together with initial set-up, training, provision of spare parts and long-term maintenance, is now estimated at $5.7 billion. Delivery of the first fully capable Cyclone, initially expected in 2005, was delayed to 2008 and is now expected to occur in 2012. The total project cost of 15 Chinook helicopters, together with initial set-up, training, and long-term maintenance, is now estimated at more than $4.9 billion. The first fully capable helicopter is scheduled for delivery in 2013, five years later than planned...
> 
> * National Defence underestimated and understated the complexity and developmental nature of the helicopters that it intended to buy. Both helicopters were described to internal decision makers and the Treasury Board as non-developmental, using “off the shelf” technologies. On that basis, overall project risks were assessed as low to medium. In each case, however, significant modifications were made to the basic models. For the maritime helicopter, this will result in an aircraft that never existed before. For the medium- to heavy-lift helicopter, this will result in a new variant of the Chinook. Ultimately, these modifications led to schedule delays and cost increases beyond original plans.
> ...



The ACAN sole-sourcing of the Chinook Foxtrot is criticized, though not that sternly.  Mainly for technical abuse of details in the ACAN process itself.

As for the F-35, a piece by the _National Post's_ John Ivison:

Helicopter shenanigans increase doubts on F-35 purchase
http://fullcomment.nationalpost.com/2010/10/26/john-ivison-helicopter-shenanigans-increase-doubts-on-f-35-purchase/



> ...
> This kind of Sir Humphrey Appleton-like manipulation of the politicians by public servants still has the power to shock. Ms. Fraser called the deliberate understatement of risk as “totally inappropriate”. But amid the mendacity, there was evidence of old-fashioned incompetence...
> 
> None of this inspires confidence in procurement at a department that is currently making the biggest military purchase in Canadian history. The Opposition is entitled to demand that the entire process for the new jets be laid bare before Parliament, not only to ensure that the Conservatives have been open and transparent but also to check the Department of National Defence has been giving the government the real goods this time. *As Ms. Fraser said in her press conference: “Let’s hope nobody is assessing them [the F-35s] as low risk* [emphasis added]...”



Mark
Ottawa


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## The Bread Guy (26 Oct 2010)

Coming up shortly - the CF's side of the story:


> Following the tabling of the Auditor-General report today, media representatives are invited to a technical briefing at 4:15 p.m. (EST). Government officials from the Department of National Defence and Canadian Forces (DND/CF) and Public Works and Government Services (PWGSC) will be available to answer technical questions regarding the Maritime Helicopter and the Medium- to Heavy-Lift Helicopter projects.
> 
> Today’s technical briefing is for background information only – there are to be no recordings (audio or visual) for broadcast purposes. Quotes can be attributed to senior officials from the Department of National Defence, Canadian Forces and Public Works and Government Services Canada.
> 
> ...


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## MarkOttawa (26 Oct 2010)

AG on CBC video here, search under "auditor":
http://www.cbc.ca/video/#/News


Mark
Ottawa


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## rnkelly (26 Oct 2010)

The Auditor General is making DND and Air Force acquisitions look very bad here.  I can't help but see all of her points.  In this case no-one is arguing about whether we need equipment but the actual acquisition process is being scrutinized.  CF acquisitions are obviously challenging with all the red tape but the CF looks like a bunch of amateurs here!  I can't help but think some of the responsibility should rest on the bureaucrats and politicians as well though.


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## Oh No a Canadian (27 Oct 2010)

CTV: Auditor General says the government was misled on chopper purchases.
CBC: Auditor General says the government was not truthful on chopper purchases.

 :


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## PuckChaser (27 Oct 2010)

Oh No a Canadian said:
			
		

> CTV: Auditor General says the government was misled on chopper purchases.
> CBC: Auditor General says the government was not truthful on chopper purchases.



Good catch. News is only as important as how you spin it.


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## Wookilar (27 Oct 2010)

I wish I had that kind of influence over an ACAN post. I'm having a hard time getting a $50k purchase through ACAN. PWGSC is waffling and wants it on MERX.

If $50k gets scrutinized like my stuff, how does $$millions/billions fly though PWGSC?

Wook


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## GAP (23 Dec 2010)

Firms rise, fall on chopper deals
  Article Link
A Tale Of Two Helicopter Deals
 By Bert Hill, Ottawa Citizen December 22, 2010

Helicopter contracts could be a major factor in the changing fortunes of two Ottawa defence contractors.

On the decline is General Dynamics, which has cut more than 300 jobs in Ottawa operations, with no apparent end in sight as the layoffs reach deeper into ranks of long-serving staff.

The big defence contractor has disclosed that it now has 1,150 Ottawa employees, down more than 20 per cent since a major realignment started a year ago.

With a new round of cuts underway, some think the numbers could drop below 1,000. The big culprits appear to be problems with GD's piece of a major federal government search-and-rescue helicopter project and a loss to Lockheed Martin in bidding for a military frigate upgrade project.

Some employees fear that jobs are being sacrificed to pay for potential penalties in delays in delivering 28 Sikorsky Cyclone helicopters to the Canadian military. The $6-billion project was originally supposed to cost half that and start delivery two years ago.

When GD, which provides the sophisticated software and electronics in the mission-guidance systems, first ran into trouble in March 2009, it replaced the leader of the Ottawa operation and laid off 100 employees. GD Ottawa employment then exceeded 1,500.

GD diverted some work on the Cyclone project to an Arizona operation to try to catch up.

Some employees say more work is being shipped south, including some Canadian contract wins.
More on link


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