The USMC needed this type of leadership on the V-22
Ottawa refuses to pay extra for helicopters
Sikorsky must live up to $5-billion contract, Public Works Minister says
DANIEL LEBLANC
From Thursday's Globe and Mail
May 1, 2008 at 5:03 AM EDT
OTTAWA — The Harper government refused yesterday to fork over any extra cash to Sikorsky Inc., which has asked for hundreds of millions in additional funds to deliver promised helicopters to the Canadian Forces.
Issuing a warning that applies to all federal suppliers, Public Works Minister Michael Fortier said Sikorsky has to live up to its $5-billion contracts to provide 28 Cyclone helicopters to replace Canada's 40-year-old Sea Kings.
"When the government signs a deal with a supplier for a specific good at price X, that's the price the government should pay for that good," said Mr. Fortier, a lawyer and former banker.
"Where I come from, a price is not an approximation, it's not an estimate. ... In this case, the price was set at contract signing."
Sikorsky won a competition in 2004 to replace Canada's aging fleet of Sea King maritime helicopters. At signing, the firm agreed to deliver the first replacement aircraft next January.
But Sikorsky told the government earlier this year that it will not meet the original deadline, invoking a delay of up to 30 months.
Senior government officials told The Globe and Mail this week that Sikorsky is also asking for $250-million to $500-million in extra funding to give additional power to its helicopter.
However, Mr. Fortier said the U.S.-based firm has to find a way to meet its contract. If that doesn't happen, he made a thinly veiled threat to cancel the deal and find another way to replace the Sea Kings, which are nearing the end of their life cycle.
"I gave clear direction to my deputy minister that he was to try and break the logjam and find a solution, but at the same time, we are working, as we should be, on alternative solutions if we can't come to an agreement with the supplier," Mr. Fortier said in an interview.
There is hope in government that a solution could flow from the fact that the newly installed chief executive officer at Sikorsky's parent company, United Technologies Corp., is Quebecker Louis Chênevert.
Sikorsky officials are refusing to comment on discussions with the government, except to say the goal is to reach an agreement by the end of the month.
Government officials have been told that the prototypes for the Cyclones are struggling to reach key requirements set out by National Defence, such as conducting a typical anti-submarine mission in two hours and 50 minutes.
There is speculation in the aircraft industry that Sikorsky wants to provide the Canadian Forces with a helicopter that has a more powerful engine, a bigger gearbox and a fifth rotor, which would allow it to meet all requirements.
However, such a helicopter would be more costly than the original four-bladed version proposed by Sikorsky.
The Conservative government of Brian Mulroney had ordered new helicopters to replace the Sea Kings in 1992, but former Liberal prime minister Jean Chrétien cancelled the purchase as soon as he came to office in 1993.
"If the previous government had respected the contract that had been signed, we wouldn't be here, because we would already have the helicopters. They made a decision and they'll have to live with it," Mr. Fortier said.
NDP MP Dawn Black said replacing the Sea Kings has been a "saga of ineptitude" involving both the previous Liberal and the current Conservative governments.