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Friday » April 20 » 2007
Tories kill sole-source DND contract
$500-million deal for aerial drones from U.S. firm cancelled over optics
A Journalist
Citizen Special
Friday, April 20, 2007
A Defence Department plan to award a sole-source contract to a U.S. firm for aerial drones has been scuttled by the Harper government because of concerns over the optics of ministers pushing through yet another multimillion-dollar deal without competition.
The department wanted to purchase the Predator unmanned aircraft as part of a $500-million program for the surveillance of Canada's coasts as well as for use in Afghanistan, defence sources said.
Under DND's plan, there would have been no competition for the deal and a British Columbia company's proposal to provide the military with drones would have been sidelined in favour of that provided by a U.S. firm.
The timing of the Defence Department plan couldn't have been worse. It was presented last month to Public Works Minister Michael Fortier and other ministers the day after Auditor General Sheila Fraser publicly questioned the government's decision to purchase billions of dollars of military hardware over the last year without any competition.
Cabinet ministers balked at the drone proposal and told military officials they would need to come up with more solid reasons why a $500-million program would go to a firm without competition.
The Harper government has faced continuing criticism for its plans to direct billions of dollars worth of contracts to specific companies, bypassing the more traditional process of allowing firms to compete for such lucrative equipment deals.
Opposition members of Parliament, including Liberal Denis Coderre, Dawn Black of the NDP and Jack Layton, leader of the NDP, as well as Alan Williams, the former senior bureaucrat in charge of equipment purchases for the Defence Department, have raised questions about whether Canada is getting good value using such a non-competitive process to purchase more than $8 billion in new aircraft and helicopters. They argue that competition gets the right equipment at a good price and with maximum benefits to Canadian industry.
Bloc Quebecois MPs, including leader Gilles Duceppe, have questioned whether the contract arrangements have penalized Quebec's aerospace and defence industry.
The government, however, counters that the equipment is needed quickly and there is no time for what could be a drawn-out competitive process.
The Harper government has been relying on a process called an advance contract award notice to direct contracts to specific companies.
Mr. Fortier and Defence Minister Gordon O'Connor have denied the advance contract process is a form of sole-source contract. Under the process, the government identifies the specific product from a company that it believes will meet its needs. Other firms are allowed to put forward a case for their products, but defence industry officials readily acknowledge that the process is, in reality, awarding a contract without any competition.
The auditor general has said that advance contract awards are not competitive.
The Defence Department wanted to use the process to buy the Predators from General Atomics in the U.S., which has teamed with General Dynamics of Ottawa.
That proposal would have shut out a competing bid from the B.C. firm MacDonald Dettwiler and Associates, which has joined forces with an Israeli company.
Defence officials, however, are not giving up on the Predator and are readying another pitch for the government. The military prefers the Predator, since it is in wide use with U.S. forces.
Defence Department spokeswoman Krista Hannivan said the drone program remains a requirement for the Canadian Forces and it is currently in the development and approval stage.
"Interdepartmental discussions are ongoing in order to determine the best approach for DND, government and Canadians," she said.
Ms. Hannivan said it would be inappropriate to provide further details about the project at this time.
Sources say the failure of the Defence Department's proposal to the government last month on the purchase of the Predator could have been because of poor timing. On the same day, ministers approved the purchase of used Leopard 2 tanks -- a $650-million deal with few industrial benefits for Canadian companies, since the vehicles are being purchased from the Dutch government while other tanks are being borrowed from Germany.
The ministers, however, were reluctant to approve another $500-million deal that would have seen much of the spending directed to a foreign firm.
But some in the Canadian Forces and the defence community believe that since Canada is at war in Afghanistan, the previous methods of contracting for equipment should be altered. Military officials, they argue, know what equipment is best and industrial benefits for Canadian firms should be secondary.
The Defence Department wants the unmanned aircraft operating by the summer of 2009. At least 10 drones would be purchased, though the figure could go as high as 18. The program would also include ground stations and necessary support systems.
In the past, MacDonald Dettwiler officials have highlighted the fact that their aerial drone would carry some of the same types of sensor systems that the company built for the military's Aurora patrol planes. That could provide savings for the Defence Department in regards to training and the supply of parts.
© The Ottawa Citizen 2007
Copyright © 2007 CanWest Interactive, a division of CanWest MediaWorks Publications, Inc.. All rights reserved.
Friday » April 20 » 2007
Tories kill sole-source DND contract
$500-million deal for aerial drones from U.S. firm cancelled over optics
A Journalist
Citizen Special
Friday, April 20, 2007
A Defence Department plan to award a sole-source contract to a U.S. firm for aerial drones has been scuttled by the Harper government because of concerns over the optics of ministers pushing through yet another multimillion-dollar deal without competition.
The department wanted to purchase the Predator unmanned aircraft as part of a $500-million program for the surveillance of Canada's coasts as well as for use in Afghanistan, defence sources said.
Under DND's plan, there would have been no competition for the deal and a British Columbia company's proposal to provide the military with drones would have been sidelined in favour of that provided by a U.S. firm.
The timing of the Defence Department plan couldn't have been worse. It was presented last month to Public Works Minister Michael Fortier and other ministers the day after Auditor General Sheila Fraser publicly questioned the government's decision to purchase billions of dollars of military hardware over the last year without any competition.
Cabinet ministers balked at the drone proposal and told military officials they would need to come up with more solid reasons why a $500-million program would go to a firm without competition.
The Harper government has faced continuing criticism for its plans to direct billions of dollars worth of contracts to specific companies, bypassing the more traditional process of allowing firms to compete for such lucrative equipment deals.
Opposition members of Parliament, including Liberal Denis Coderre, Dawn Black of the NDP and Jack Layton, leader of the NDP, as well as Alan Williams, the former senior bureaucrat in charge of equipment purchases for the Defence Department, have raised questions about whether Canada is getting good value using such a non-competitive process to purchase more than $8 billion in new aircraft and helicopters. They argue that competition gets the right equipment at a good price and with maximum benefits to Canadian industry.
Bloc Quebecois MPs, including leader Gilles Duceppe, have questioned whether the contract arrangements have penalized Quebec's aerospace and defence industry.
The government, however, counters that the equipment is needed quickly and there is no time for what could be a drawn-out competitive process.
The Harper government has been relying on a process called an advance contract award notice to direct contracts to specific companies.
Mr. Fortier and Defence Minister Gordon O'Connor have denied the advance contract process is a form of sole-source contract. Under the process, the government identifies the specific product from a company that it believes will meet its needs. Other firms are allowed to put forward a case for their products, but defence industry officials readily acknowledge that the process is, in reality, awarding a contract without any competition.
The auditor general has said that advance contract awards are not competitive.
The Defence Department wanted to use the process to buy the Predators from General Atomics in the U.S., which has teamed with General Dynamics of Ottawa.
That proposal would have shut out a competing bid from the B.C. firm MacDonald Dettwiler and Associates, which has joined forces with an Israeli company.
Defence officials, however, are not giving up on the Predator and are readying another pitch for the government. The military prefers the Predator, since it is in wide use with U.S. forces.
Defence Department spokeswoman Krista Hannivan said the drone program remains a requirement for the Canadian Forces and it is currently in the development and approval stage.
"Interdepartmental discussions are ongoing in order to determine the best approach for DND, government and Canadians," she said.
Ms. Hannivan said it would be inappropriate to provide further details about the project at this time.
Sources say the failure of the Defence Department's proposal to the government last month on the purchase of the Predator could have been because of poor timing. On the same day, ministers approved the purchase of used Leopard 2 tanks -- a $650-million deal with few industrial benefits for Canadian companies, since the vehicles are being purchased from the Dutch government while other tanks are being borrowed from Germany.
The ministers, however, were reluctant to approve another $500-million deal that would have seen much of the spending directed to a foreign firm.
But some in the Canadian Forces and the defence community believe that since Canada is at war in Afghanistan, the previous methods of contracting for equipment should be altered. Military officials, they argue, know what equipment is best and industrial benefits for Canadian firms should be secondary.
The Defence Department wants the unmanned aircraft operating by the summer of 2009. At least 10 drones would be purchased, though the figure could go as high as 18. The program would also include ground stations and necessary support systems.
In the past, MacDonald Dettwiler officials have highlighted the fact that their aerial drone would carry some of the same types of sensor systems that the company built for the military's Aurora patrol planes. That could provide savings for the Defence Department in regards to training and the supply of parts.
© The Ottawa Citizen 2007
Copyright © 2007 CanWest Interactive, a division of CanWest MediaWorks Publications, Inc.. All rights reserved.
