Ottawa has signed a deal to replace the aging and trouble-prone fleet of Sea King helicopters.

Sikorsky Aircraft of Connecticut has been awarded two contracts worth a total of $5 billion for 28 Cyclone helicopters. The aircraft will be delivered one per month beginning in November 2008.

"The CH-148 Cyclone will provide our men and women in uniform with a helicopter that can perform the diverse and difficult roles required in today's global security environment," said Defence Minister Bill Graham in a news release.

"This acquisition is one that will provide significant economic benefits to Canadian companies from coast to coast for decades to come."

The first contract, worth $1.8 billion, covers the purchase of the helicopters. The remaining $3.2 billion is for a 20-year service, training and support contract.

The losing bidder, the British-Italian consortium led by AugustaWestland Inc., which builds the three-engine EH-101 Cormorant, says it will challenge the deal. That company claims Sikorsky can't deliver the helicopters within the promised six years.

Under the terms of the contract Sikorsky will be billed $100,000 per day, to a maximum of $36 million if it doesn't meet the deadline.