Helicopters Magazine

Feds knew Coast Guard deal would have one bidder

June 11, 2014  By The Canadian Press

June 11, 2014, Ottawa - Federal officials overseeing the plan to replace Canada's coast guard helicopters were aware almost from the outset that only one bidder might come forward.

Documents from May 2013 also show that just weeks after the bidding
to supply 15 light helicopters got underway, officials looked for ways
to justify a de facto "sole source" outcome to the request for

The documents, which include minutes from that meeting,
were released as part of a legal action in Federal Court being brought
by a rival aircraft-maker.

During the meeting, bureaucrats from Transport
Canada, Public Works and the coast guard discussed the need to justify
why only one manufacturer would meet the contract's criteria.


The $172-million contract was awarded just a few weeks ago to the only bidder: Bell Helicopter Canada, based in Mirabel, Que.

Minutes from the meeting on May
23, 2013, show Transport Canada officials insisted that the requirements
were "not written to suit one aircraft; the requirements were written
to suit what (Canadian Coast Guard) is required to do."

But they also show the coast guard wanted
"detailed justification," and that the reasons could include not wanting
to upgrade existing infrastructure, such as landing pads.

No one from Public Works was immediately
available for comment Tuesday, but Fisheries Department spokesman Frank
Stanek said since "there is a legal proceeding before the courts it
would be inappropriate to comment."

By the spring of 2013, Airbus Helicopters Canada
had been waging a behind-the-scenes war over the decision by transport
safety officials to give Bell a weight exemption for its model 429
chopper, a decision that allowed the aircraft to qualify for the coast
guard tender.

The company, which has a plant in Fort Erie,
Ont., eventually filed suit against the federal government, claiming the
decision to grant Bell a waiver gave the company an unfair advantage.

Both the Federal Aviation
Administration in the U.S. and the European air safety authority
objected to the Transport Canada exemption, suggesting in writing that
there was no overriding safety concern and wondered if the rules were
being changed to please Bell Helicopter, a subsidiary of U.S.
conglomerate Textron.

Transport Canada and the coast guard both deny
the fix was in for the model 429. Bell has stated publicly that it is
received no leg up in the competition and is working with U.S. and
European regulators as well as the industry to modernize the regulations
related to the issue.

The plan to upgrade the coast guard's nearly
30-year-old fleet has been broken into two contracts — light and
medium-lift choppers.

Awarding of the medium contract is still
pending, but once again Bell is the only contender in the tender process
that closed at the end of May.

The minutes also showed that officials
recognized in May 2013 that in the tender for the medium-lift chopper,
"there maybe difficulty in obtaining more than one bid" for the program.

The awarding of the light helicopter contract has the potential to create some political pain for the Conservatives.

The Airbus factory, which has been in operation for roughly 30 years, is located in Defence Minister Rob Nicholson's riding.

Recently, Fort Erie Mayor Douglas Martin and
Gary Burroughs, chairman of the municipality of Niagara, penned a letter
of protest to two federal ministers.

They told Fisheries Minister Gail Shea and
Infrastructure Minister Denis Lebel they were disappointed with the
decision, which essentially shut out a company they described having had
success all over the world.

"The potential exists for unintended
consequences to result for companies like Airbus who, despite their
reputation, record of achievement and global reach, may find themselves
restricted from access to both government programs and contracts," said
the letter dated May 14, 2014, which was copied to Nicholson.


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