Airbus search plane contract faces court challenge from losing bidder
Leonardo S.p.A. says decision to award rival Airbus the $4.7B contract should be tossed out
The losing bidder in the race to replace Canada's fixed-wing search and rescue fleet is asking a Federal Court judge to toss out the multibillion-dollar contract, CBC News has learned.
Leonardo S.p.A., which offered its C-27J transport for the competition, filed notice of legal action in January, but only delivered supporting arguments and affidavits to the court on Tuesday.
The company is challenging the Liberal government's decision last fall to buy 16 new C-295W transports manufactured by rival Airbus Defence and Space.
The Italian aircraft-maker says the bid by Airbus should be disqualified and the court should cancel the contract.
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The company cites a number of grounds, including a claim the C-295W does not meet the specifications originally set out by the Royal Canadian Air Force, notably the ability to "perform mandatory long-range missions stipulated" in the request for proposals.
Leonardo's court filing also raises alleged safety concerns related to the absence of a redundant power system in the aircraft.
"The necessary consequences of this inadequacy should have been the disqualification (if no modification was proposed) or rating penalization (if a modification was proposed) of the Airbus proposal," said the filing.
A decision has been made and it's a really good thing for Canadians.- Minister of Defence Harjit Sajjan
Separately, Leonardo argues that the Airbus bid should have been disqualified at the outset because of cost.
In late November, the Liberal government announced it was buying the C-295 in a two-step procurement for a total price of $4.7 billion over the next two decades.
The first step — at a cost of $2.4 billion — involves the purchase of aircraft, simulators and 11 years of support.
The second step involves a future in-service support program that will have to be negotiated with Airbus, at an estimated cost of $2.3 billion.
However, in the request for proposals, which was filed in court as part of the supporting documents, all bidders were told their package could not exceed $3.4 billion, including in-service maintenance support.
Silence from Public Works
Officials with Leonardo have sought an explanation from Public Works, but have been met with silence, said a source familiar with the file, but who was not authorized to speak with the media.
"The applicant's proposal to supply Canada with FWSAR aircraft and related services … was evaluated as being fully compliant with the requirements of the (request for proposals) and substantially less costly than the aircraft and services proposed by Airbus," the court filing said.
Federal lawyers have indicated the government intends to fight the claim, but has not filed a statement of defence.
The announcement last December by Defence Minister Harjit Sajjan, Public Works Minister Judy Foote and the commander of the Royal Canadian Air Force, Lt.-Gen. Michael Hood, was supposed to end a frustrating 12-year procurement odyssey that spanned three governments.
It was former prime minister Paul Martin's Liberal government in 2004 that first proposed replacing the fleet.
The former Conservative government, which put the program on hold over allegations the air force had calibrated the specifications in favour of Leonardo's C-27J, eventually asked the National Research Council to evaluate the requirements.
The Air Bus C-295, which is in service in 15 countries, is supposed to speed along the retirement of the air force's nearly 50-year-old C-115 Buffalos and older model C-130 Hercules transports, which were assigned to search and rescue duties a number of years ago.
The government said last fall that the first C-295 is expected on the tarmac in 2019, with the final delivery slated for 2022.
It is unclear how the court challenge will affect that timetable.
Sajjan defended the government's choice late Wednesday, saying he's confident the appropriate steps were followed and doesn't see any need for a delay.
"A decision has been made and it's a really good thing for Canadians," Sajjan told CBC News. "If somebody has any concerns about that decision they have the right to be able to have a look at that decision and use the various processes within our court system."
He described the C-295 as a "game-changer" for the air force.