the saga continues
U.S. firm racks up millions in fines
U.S. firm racks up millions in fines
BY DAVID PUGLIESE, POSTMEDIA NEWS JUNE 24, 2013
U.S. aerospace giant Sikorsky has racked up almost $86 million in penalties for failing to deliver Cyclone helicopters to Canada's military but has yet to pay the money.
There is also still no word when the helicopters, already more than four years late, will be delivered to the Royal Canadian Air Force.
But Public Works did confirm in an email that, "as of June 14, 2013, the total amount of liquidated damages accrued for late delivery is $85.7 million." The maximum amount of damages that Sikorsky could be hit with is $88.6 million, the email added.
"When the government signs a contract with a supplier, it expects their obligations under the contract to be met," the email noted.
Public Works, however, will not say why the penalties have not been paid. Sikorsky spokesman Paul Jackson said the company is in discussions with Public Works and the Defence Department about "contractual disputes" and will not comment.
The original contract called for the first Sikorsky Cyclone helicopter to be delivered in November 2008, with deliveries of all 28 helicopters completed by early 2011. But Sikorsky has yet to turn over a single helicopter to Canada under the $5.7-billion program. The Cyclone is supposed to replace the military's aging Sea King helicopters.
The Conservatives have laid blame on the Liberals for the problem-plagued program because Paul Martin's government awarded the contract to Sikorsky in 2004. Liberals have countered that the mismanagement has occurred under Conservative watch. Liberals have pointed out there are substantial penalties in the original contract the government has not enforced.