Botched procurement delays inflatable boats for military

It seemed a straightforward deal — an order for 350 inflatable boats for the military. But Public Services and Procurement Canada has had to cancel a $6.4-million deal and start from scratch after bureaucrats twice messed up the tendering process.

Deal for inflatable boats deflates as federal bureaucrats mishandle tendering process – twice

Then Prime Minister Stephen Harper, second right, rides in a Zodiac in front of a large iceberg on Eclipse Sound, near the arctic community of Pond Inlet, Nunavut, in 2014. A memo obtained by CBC shows the department's attempts to buy new inflatables have stalled. (Chris Wattie/Reuters)

Call it the case of the delayed dinghies.

The Canadian military wants to replace its fleet of inflatable landing craft, which is more than a quarter-century old, with 350 new inflatables designed for rapid deployment of up to a dozen infantry or engineers in each boat.

Public Services and Procurement Canada has flubbed the order twice since last year – and will be trying to place an order for a third time later this year.

The first request for competitive bids was issued May 30, 2016, revised that July, and was cancelled soon after "following questions from industry regarding the performance specifications," says a memo to then Public Services Minister Judy Foote.

The department reissued the tender Nov. 23 and attracted four bidders. One of the bids was eliminated because it didn't meet the technical requirements.

Public Services and Procurement Canada plans to put out for tender an order for 350 inflatable landing craft later this year - the department's third try to get the deal done. (Zodiac Hurricance Technologies Inc.)
On Jan. 27, 2017, the contract went to Zodiac Hurricane Technologies Inc. of Delta, B.C., a leading builder of inflatables, for almost $6.4 million – described as the lowest-cost bid.

But the deal started to deflate almost immediately.

"The department became aware of an irregularity regarding the conduct of the bid evaluation," says the March 23 Foote memo, obtained by CBC News under the Access to Information Act.

Efforts to fix the problem just let more air out of the balloon. The bureaucrats' request for more information from one of the bidders "was unclear" and "contrary to standard process," says the heavily censored document.

No operational impact

The department decided to cancel the deal and start over again – with a new team of bureaucrats.

"The government of Canada will work to cancel the current contract with Zodiac and seek to re-tender for this requirement," says the memo. "Steps will be taken to ensure fairness in the upcoming procurement, including assigning of a new technical and contracting team."

The document says there has been no "operational impact" on the military so far.

A spokesperson for Public Services and Procurement Canada, Jessica Kingsbury, says the third tender will be posted "in the near future."

The bateau boondoggle is the latest in a series of problem military procurements, both big and small, in recent years.

The department cancelled a $55-million, five-year deal with Thales Canada Ltd. in July 2015 for two mobile radar units for Canada's CF-18 fighter jets. The government has never explained the cancellation, and has not yet put the deal out for another tender.

The inflatables the military requires would replace a fleet that is more than 25 years old. (Zodiac Hurricane Technologies Inc.)
Replacing Canada's fleet of CF-18 fighter jets has been fraught for years, under both Conservative and Liberal governments, with the potential purchase of expensive F-35 Stealth Fighters still a political football.

Navy supply ships, fixed-wing search and rescue planes, and armoured patrol vehicles are among other military procurement projects with significant problems and delays.

But National Defence also points to success stories, including:

  • The acquisition of five C-17 heavy-lift transport aircraft.
  • 17 Hercules C-130-J tactical transport aircraft.
  • 15 new Chinook helicopters.

Follow @DeanBeeby on Twitter


Dean Beeby

Senior reporter, Parliamentary Bureau

Dean Beeby is a CBC journalist, author and specialist in freedom-of-information laws. Follow him on Twitter: @DeanBeeby


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