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Pole: Ottawa Perspective-Jan/Feb 06

The perception that the project is tailored to Lockheed-Martin is a persistent bone of contention, and possibly the focus of legal action by other manufacturers.


September 27, 2007
By Ken Pole

Confirmation that the Department of National Defence is finally going
to order new tactical airlift platforms was one of the last items of
business for Defence Minister Bill Graham before the latest federal
election campaign left the ramp. The proposed acquisition of at least
16 aircraft, with first delivery in the spring of 2010, and including
an initial 20-year service support contract, is expected to cost close
to $5 billion.

Flanked
at a Parliament Hill news conference by the Chief of the Defence Staff,
Gen Rick Hillier, and Public Works & Government Services Minister
Scott Brison, Graham said a replacement for the Canadian Forces’ fleet
of Lockheed Martin CC-130 Hercules is critical.

The current
fleet of 32, comprising 19 Emodels dating from 1964 to 1968 and 13
Hmodels dating from 1973 to 1992, is the primary CF platform for
tactical airlift, tactical air-to-air refuelling, and search and
rescue. Canada’s fleet has logged more flying hours than any other
country’s military Hercules fleet. One E model was taken out of active
service only recently after topping 50,000 hours, which works out to
more than five and a half years of continuous flight! All the other Es
have more than 40,000 hours on them, the equivalent of four and a half
years, and their average maintenance costs are rising inexorably, which
has implications for other military programs.

“We intend to buy
military equipment faster and more efficiently than in the past by
basing the competition on performance requirements such as range, speed
and the ability to operate in remote and hostile environments,” Graham
said.

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Asked why the government hadn’t relied on
performance-based procurement in the past (the most awkward example
being the politicallytortured process which eventually yielded the
Cormorant SAR helicopters), Graham suggested that while it was overdue,
it was simply evolutionary. “Everyone has been coming to new ways of
doing this,” he replied, explaining that he had had discussions with
his American, British, Dutch and other counterparts. “The attraction of
the performance-based is we get out of the business … of putting out
17,000 pages of specifications and we put out a document on one page
that says here is what the troops need.” He insisted that it “allows
industry much more flexibility in coming forward with imaginative
proposals.”

Hillier echoed the need for speed. “Without the
investments in our tactical airlift fleet, we cannot continue to
conduct operations either around the world or on behalf of Canadians
back home,” he said with characteristic bluntness, adding that the
current fleet “is rapidly going downhill” to the point where it will be
“almost completely inoperational” early in 2009. Without new aircraft,
“we will have to stop supporting operations or not be able to start
them.” Tactical airlift was “a commitment that we cannot ask any other
country to meet for the men and women that we put on the ground in
high-risk situations.”

Like Hillier’s candour, another sign of
the new times in Ottawa was Brison’s announcement that the government
would appoint an independent ‘fairness monitor,’ somebody with
demonstrated expertise in military procurement, to ensure that bidding
is open and competitive. This apparently is in response to criticism
that the performance specifications for the new aircraft are tailored
to Lockheed Martin’s J-model Hercules, effectively closing the hangar
door on Boeing’s C-17 Globemaster III or Airbus Industries’ A400M.

The
ministers’ insistence clearly didn’t forestall questions about how the
larger C-17 or the A400M, which won’t undergo its first flight until at
least 2008, would be rendered noncompetitive. “Performance requirements
are laid down not with a view of excluding anybody or directing it
anywhere else,” Graham replied. “They are performance requirements that
are dictated by our needs, not by what the market supplies.”

As
for a requirement that up-front certification is a must, Graham
insisted that this isn’t unusual. “In another situation, where one had
more leisure and more time, one might well take a different approach,
but … 36 months from when we sign the contract is stretching it and
we are going to work trying to get an aircraft earlier.”

When
and how all this unfolds remains to be seen. The perception that the
project is tailored to Lockheed-Martin is a persistent bone of
contention, and possibly the focus of legal action by other
manufacturers. There have been indications that aircraft delivery would
not begin, at a rate of four a year, until May 2010. That would be well
after Hillier’s “inoperational” threshhold and would not see final
delivery until late 2013. Airbus evidently has told Ottawa that two
A400Ms can be in Canadian hands by 2010 and the balance by 2014 and
that it is prepared to provide refurbished Hercs as a stopgap.

During
the news conference, Brison said that his department, as the federal
government’s procurement arm, would post a “solicitation of interests
and qualifications” in “probably another ten days or so.” The latest
word was that it was in “translation,” after which it would be posted
for at least 30 days to give prospective bidders a chance to understand
the operational requirement.” Industry Canada, he added, would “help
ensure … significant regional and industrial benefits” which Graham
said would “equal 100% of the contract purchase.”

The J-model
Hercules is the latest evolution of a production run of more than 2,200
aircraft. The Herc is flown by more than 60 countries in no fewer than
70 variations. The J is 21% faster at 360 knots than the E, cruising
altitude is 40% higher at 28,000 feet and non-stop range with a payload
is 40% longer at 2,100 nautical miles. All this and 15% better fuel
efficiency from its four Rolls- Royce AE2100D3 turboprops which
generate 29% more thrust.

The A400M is still a “paper airplane”
in that the first full testbench run of its Europrop TP400-D6 with
propellor is not scheduled to take place at Ludwigsfelde, Germany,
until sometime early in 2006. Sized between the C-17 and the C- 130J,
the A400M is designed to cruise at 0.68 Mach with a 37,000 feet ceiling
and carry 37 tonnes 3,000 nautical miles. Designed like the C-17 for a
flight crew of two and a single loadmaster, it would cost an estimated
US$4 billion for a fleet of 50 and Airbus says the 30-year life-cycle
cost would be US$10 billion.

Could Airbus Industries’ decision
to give the A400M contract to Europrop two years ago be a factor in the
competition? Pratt & Whitney Canada lost a bid to provide the
engines even though its price was 20% lower than the European
consortium’s. European governments and industry eventually forced
Europrop to match P&WC’s price. Airbus, backed by the French,
German and Spanish governments, is expected to protest that the
tactical airlift race is stacked against the A400M but their complaint
probably will fall on deaf ears.

The Globemaster, built at
Boeing’s plant in Long Beach, California, has an enviable track record.
A high-wing four-engine jet, it costs US$178 million each under the
current contract with the US Air Force, which expects its fleet to
reach the million-hour mark in the next few months. While costs vary
according to how aircraft are equipped and how many are purchased, it’s
generally held that although the C-17 is twice as expensive as a
C-130J, it can carry more than triple the load, 77.5 tonnes compared
with 19.9 tonnes. Its four Pratt & Whitney PW2040 turbofans give it
450 knots at 28,000 feet.

But the bare numbers don’t count with
Hillier, who suggested that if Canada bought the C-17, it could afford
only half the number of aircraft. “Quantity has a quality all of its
own,” he replied when the issue was broached. “We have a direction in
the defence policy statement to run two major missions abroad plus many
… smaller ones. We have to be prepared to respond to at least one
national disaster or tragedy … Let’s say one mission in Africa, one
mission in the Far East or the Asian perimeter such as East Timor and a
mission here in Canada, plus normal training and bringing forth the air
crews and the airplanes, you have got to have a number that allow you
to do that business and that number of course is what leads us to go
about 16 aircraft.”

An enhanced tactical airlift capability is
only one item in DND’s aviation shopping cart. It also needs new
medium-toheavy- lift helicopters and new fixed-wing SAR assets. Asked
why his department had not gone after the two other programs at the
same time, which clearly is Hillier’s preference as he pushes to
re-equip his commands, Graham disagreed that it had to do with the
timing of the election. He did allow that he would have been “much
happier bringing forward the whole package” but suggested that the
Hercules issue was more politically saleable. “It was felt that on the
eve of an election, given the complexity and size of that package, we
would be wiser to wait until after the election,” he said. “I think
that it was the right decision.”


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