Auditor General slams helicopter buy
Auditor General slams helicopter buy | Canada | News | Toronto Sun
Bureaucrats in charge of replacing Canada's aging helicopters didn't follow their own rules or understand how complicated the projects were, making them more expensive and delaying delivery up to 7 years, Auditor General Sheila Fraser said Tuesday.
Fraser, a watchdog who reviews federal programs to make sure taxpayers get value for their money, says National Defence and Public Works and Government Services Canada, the department in charge of purchasing, didn't tell cabinet about the extensive changes the Sikorsky Cyclone maritime helicopter and the heavy-lift Boeing Chinooks needed to meet their needs.
Both were supposed to be “off the shelf” buys. Instead, they needed significant changes that cost more and delayed delivery by up to seven years.
The 28 Cyclones were initially estimated $3 billion. The costs have since been revised to include long-term service support and are now estimated at $5.7 billion. They're due to be delivered in 2012.
CBC News - Canada - FAQ: How Canada procured new military helicopters
The purchase of the Cyclone helicopters from manufacturer Sikorsky — dubbed by Defence Minister Peter MacKay as "the worst debacle in Canadian procurement history" — has been marked by missed delivery dates and amended contracts.
From the audit report:
6.22 A pre-qualification process was undertaken in March 2003, based on detailed technical specifications, and two manufacturers were deemed technically compliant. Each subsequently submitted a full bid in response to the request for proposals. The bids were evaluated based on compliance with the technical requirements, industrial and regional benefits, and lowest overall price. In July 2004, the government announced the winner as Sikorsky International Operations Inc. and two contracts (for the acquisition and the service support) were awarded shortly thereafter. Between 2004 and 2007, National Defence had regular progress meetings with Sikorsky on the status of the project.
6.23 In early 2008, Sikorsky informed PWGSC of a 30-month delay in the planned delivery of the helicopters, citing, among other things, additional work directed by or caused by the Crown (the departments) and the challenges associated with obtaining certification for a technical component in the new helicopter. This led to a contract amendment in 2008, which allowed for a delay in the delivery of the first fully capable helicopter to June 2012, 43 months after the original contract’s delivery date. PWGSC negotiated with the contractor for delivery of up to 19 interim helicopters starting in November 2010. These interim helicopters will not fully meet all of the operational requirements, in particular the mission endurance performance of two hours and 50 minutes, and will have to be retrofitted at a later date. While the interim helicopters will be suitable for testing, evaluation, and training, they will not be deployed on operations. The amendment extended the time period for providing in-service support by two years and amended the provisions contained in the original contract that set out damages associated with late delivery to coincide with the new delivery schedule.
6.24 The amendment also provided for additional “power reserve” (more powerful engines) to meet the mission endurance performance requirement and to accommodate a potential growth in performance in the future. According to PWGSC, this increased the cost of the contracts by about $84 million for the growth potential.
6.32 The developmental nature of the Cyclone helicopter, along with its novel features, also has implications for certifying its airworthiness. The selection process required airworthiness certification of the basic commercial helicopter at the time of the contract award and certification of the new aircraft when the first one was delivered. However, the complexity of the new aircraft has led to unanticipated certification requirements and a potential unforeseen role for National Defence in undertaking certain aspects of the certification.