Features Military Procurements
Controversy continues to swirl around the troubled Cyclones

The eye-popping figure — about 30 per cent of the overall
$5.3-billion budget — could have meant a far worse political firestorm
for the Conservatives than the one that accompanied the ill-fated plan
to buy the F-35 stealth fighter.

In the aftermath of an independent report last fall on the
beleaguered plan to buy the CH-148 Cyclone choppers as replacements for
the Sea Kings, the government acknowledged it was looking at other
aircraft — even going so far as to meet with other manufacturers.

Documents obtained by The Canadian Press under the Access to
Information Act show the money went towards “acquisition progress
payments” and “in-service support set-up.” The nearly decade-long
program has delivered just four test helicopters that National Defence
has refused to formally accept.

The $1.7-billion figure is slightly higher than numbers that were
buried deep in federal public accounts records released last fall.

Only about one-third of the total has been spent on aircraft. The
bulk has gone towards developing mission systems, training facilities in
Nova Scotia and B.C., flight-simulation equipment and support.

The briefing notes, prepared for a committee of deputy ministers,
also paint a more detailed picture of the back room tug-of-war and
building frustration in the military as missed delivery deadlines
continued to pile up.

Cancelling the program was clearly not an option, say critics who
accuse the Conservatives of perpetrating a charade with its
consultations last fall.

Spending so much money and having virtually nothing to show for it
would have caused untold political damage, especially among a frustrated
Conservative base still reeling from the ongoing Senate expense
scandal.

“It would have been a bigger blow to them, to their base, than the F-35 situation,” said NDP defence critic Jack Harris.

“I am certain that politics was part of the calculations.”

The Conservative reputation for prudent management of the public
purse took a hit in 2012 when the auditor general slammed the F-35
stealth fighter program, even though no money had been spent.

Regardless of whether Ottawa could have recouped some of the costs,
cancelling the Cyclones would have triggered an ugly, protracted court
battle in the run-up to the 2015 election, said Michael Byers, a
political science professor and defence researcher at the University of
British Columbia.

“I think this is a big, dark cloud that hangs over the Conservative
government,” said Byers, who has argued publicly for the deal to be
scrapped.

“We saw some of this exposed during the scandal over the F-35, and
the Sea King replacement is another story that speaks very loudly to the
problems this government has managing multibillion-dollar military
procurements.”

Byers said the government is rolling the dice on an unproven,
developmental aircraft when it could have had an established maritime
helicopter by 2018 — the latest deadline set by Sikorsky, the Cyclone’s
manufacturer.

The Cyclones are meant to replace Canada’s 50-year-old CH-124 Sea
Kings. Conservatives often criticized Jean Chretien’s Liberal government
for cancelling the original program in 1993, to the tune of $478
million in penalties.

The Department of Public Works waited until after the close of
business Friday — “take-out-the-garbage day” in political communications
circles — to announce it would renegotiate the Cyclone contract, a
clear sign to many the government was anxious to mitigate the political
damage.

The government was sensitive to the bad optics even before last
Friday’s announcement. A briefing dated Dec. 13, 2012, noted that
officials had leaned on Sikorsky to paint their ongoing meetings as
“discussions,” not “negotiations.”

Ottawa’s relationship with the aircraft maker has been increasingly
strained, especially after former defence minister Peter MacKay
characterized the Cyclone program as the “worst procurement in the
history of Canada.”

The flight decks of a number of Canadian warships — notably HMCS
Regina — were reconfigured to accommodate the Cyclones, only to be
switched back because of the delays. Internal documents show National
Defence wanted the contractor to foot the $700,000 bill for the
modifications, a demand overruled by Public Works.

There was also table-thumping about who would pay for the fuel in the already-delivered test helicopters.

Eventually, National Defence decided to bill Sikorsky and tack on an
extra $250 per fill-up “to recover the direct personnel and equipment
costs associated with the refuelling process and administrative overhead
costs for accounting and invoicing.” The Aug. 28, 2012, briefing
insisted that the government wasn’t making any money off the deal.

The government has set a deadline of the end of March to negotiate
the new contract with the U.S.-based manufacturer and promises no
further cheques will be cut until fully completed helicopters are
delivered.

Flight training began in October on four Cyclones already at the
military air base in Shearwater, N.S., said Public Works spokesman
Pierre-Alain Bujold.

The air force is prepared to take ownership of up to eight test
helicopters before the Cyclones are declared capable, Bujold said in an
email.

That appears to be a concession; the government has said it would not
formally accept the aircraft until Sikorsky had delivered a helicopter
that’s up to snuff.

The government’s statement last Friday said it expected the Cyclones
to be fully operational by 2018 and that the Sea Kings would begin
retiring next year.

National Defence has not explained whether Canada would be short of
helicopters during the time between the retirement of the Sea Kings and
the arrival of the Cyclones.