Procurement: Coast Guard Helicopters

KEN POLE

Mar 15, 2014

Questions are being asked – yet again – about the federal government’s procurement processes after it was confirmed that Bell Helicopter Textron Canada (BHTC) of Mirabel, Quebec, has effectively been sole-sourced to supply one fleet of Canadian Coast Guard (CCG) light-lift helicopters, despite an ongoing lawsuit, and is likely to be awarded the contract to renew a second medium-lift CCG helicopter fleet.

The first contract, worth up to $172 million, for 15 light-lift twin-engine Bell 429s, was announced jointly on 13 May 2014 by Fisheries and Oceans Minister Gail Shea, whose portfolio includes the CCG, and Infrastructure Minister Denis Lebel, the government’s chief political minister in Quebec.

The 429s will replace the Coast Guard’s 14 remaining MBB BO-105-CBS helicopters, which were manufactured in Germany and assembled and delivered by Eurocopter Canada between 1983 and 1987.

First delivery of the new Bell 429s is expected to begin in June 2015, with the rest to follow at roughly one-month intervals to replace existing helicopters that had been delivered to Canada between 1983 and 1987.

The contracting process has been plagued by controversy. In 2012, at the beginning of the process, other contenders were the AgustaWestland AW109 and Eurocopter’s EC135 or 145. However, the Statement of Requirements specified fixed landing skids (which only the Bell product has) even though hydraulically-damped wheels are better suited to landing on a pitching and yawing ship. That “requirement”, prompted one industry source to describe the procurement process as a “sham” rather than a true competition.

AgustaWestland, a division of the Finmeccanica conglomerate, also challenged a Transport Canada decision in late 2011 – while Lebel was Transport Minister – to give Bell a 500-pound weight exemption for the 429. This effectively skewed the procurement toward Bell because without the weight exemption, the Bell platform would have been non-compliant. Both the U.S. Federal Aviation Administration and the European Aviation Safety Agency determined the application for weight exemption would provide an unfair exemption to a single platform, and refused to grant the exemption for their jurisdictions.

Rebadged as Airbus Helicopters last August, Eurocopter has filed a lawsuit in the Federal Court of Canada against the government’s decision. The company’s lawyer, Marc-André Fabien, a senior partner in Fasken Martineau’s Montreal office, said the government’s approach to the procurement had “clearly” been focused on Bell from the outset (meaning the requirements obviously favoured one product). He also suggested that the same is true of the medium-lift procurement now underway.

Fabien, whose specialties include litigation against all levels of government, expressed surprise that a contract would be awarded before a legal ruling is made on the merits of the law suit – arguments aren’t due to be heard until later this year.

Airbus Helicopters said in a statement from its headquarters in Fort Erie, Ontario, that it “deeply regrets that the federal government moved forward and awarded the [...] contract” while the legal suit is unresolved. “Airbus Helicopters Canada maintains that the government’s Request for Proposals […] was biased to favour one manufacturer and consequently resulted in a sole source tender. Furthermore, Transport Canada’s awarding of a special weight exemption to Bell Helicopter in 2011 created an unfair competitive advantage and contributed to this RFP attracting only one bid.”

Citing its “strong presence in para-public and defence markets around the world” and its status as “the civil market leader” in Canada, Airbus Helicopters pointed out that it has invested “heavily” in Canada for three decades and had expected “to compete in fair, open and transparent public tender processes.”

Neither Shea nor Lebel mentioned the court case in their joint announcement awarding the contract to Bell. Shea said the fleet renewal would “improve the Coast Guard’s air support capability from coast to coast and in Canada’s North” while LeBel focused on the contract’s economic benefits for his home province.

Next up, are eight new medium-lift helicopters to replace three late 1960s Bell 206Ls and five late 1970s Bell 212s, all manufactured in the United States. At the outset, the potential replacements included the Bell 412, AgustaWestland AW139, Airbus Helicopters EC175 and Sikorsky S76D. However, due to an 11,000-lb weight limit set by the Coast Guard, AgustaWestland, Airbus and Sikorsky are all disqualified. The two European-controlled companies advised PWGSC of their decision not to bid some months ago but neither they nor the government confirmed it at the time, and PWGSC has since declined comment.

When Sikorsky later confirmed its withdrawal, it disclosed that it had evaluated the H-60 it supplies to the United States Coast Guard as well as the S-76D, and although the S-76D “appeared to be the best fit”, it chose “after careful consideration” not to offer either aircraft.
Some 65% of CCG helicopter operations support construction and maintenance of navigation aids and telecommunications equipment, 15% support ice reconnaissance, and the rest involve personnel and cargo transfers, and support for scientific research and fisheries enforcement.