Yahoo Finance 'A scandal': Bombardier CEO calls for open bidding process to replace military jets
Bombardier chief executive Eric Martel continued to push Ottawa to consider its planes for a new military contract this week, telling a government committee that it would offer a cheaper option than rival Boeing and would create 22,000 jobs in Canada.
The Canadian government is set to spend billions for new reconnaissance aircraft to replace the military's aging fleet of CP-140 Aurora maritime patrol planes. Bombardier wants the government to launch an open procurement process for the contract, something Industry Minister François-Philippe Champagne said Ottawa has yet to decide on. However, the government had said Boeing's P-8A Poseidon is the only aircraft available that meets operational requirements for the replacement.
Speaking before the House of Commons defence committee on Tuesday, Martel said the procurement process for the new aircraft is "deeply flawed and lacking transparencies" and that there has "clearly" been a violation of proper protocols.
"Too often, our current procurement approach starts too late, is not strategic and results in the acquisition of equipment that is just good enough, rather than the most cutting-edge solution," Martel said, adding that Bombardier has "a more capable solution" with aircraft that can fly faster, higher and further than the alternative options being considered.
"We're capable, we can do it. We've done it for other people and we're not even being considered? This is a scandal."
Provincial support
Earlier this year, Bombardier announced it would team up with General Dynamics to deliver an aircraft that could meet the government's replacement needs. The collaboration would equip Bombardier's Global 6500 aircraft with General Dynamics' mission system technology and sensors.
Martel says the cost to operate the Bombardier aircraft will be 30 to 40 per cent less than the Boeing option, and that its planes are more efficient, burning 40 per cent less fuel. He also says the contract would create 22,000 jobs in Canada, as the planes would be produced in Ontario and Quebec.
Ontario Premier Doug Ford and Quebec Premier Francois Legault issued a joint statement on Tuesday calling on the federal government to allow an open procurement process that lets Canadian companies compete.
"Should the federal government maintain its intention to grant a sole-source contract, we’re calling on the House of Commons to request that the Parliamentary Budget Officer review the costs and consequences related to this decision," the premiers said in the statement.
"We understand that all governments need to be able to deliver on their priorities while ensuring the best value for taxpayer dollars. Allowing Canadian companies and their workers every opportunity to compete only supports this goal."
Champagne did not say whether the process to replace the fleet of aging military patrol planes will be an open-source bid.
“There is no decision made,” Champagne said in French. "In military acquisitions, it is rarely very, very fast. It's complex, too."
Bombardier has been the recipient of significant government assistance in the past, receiving $372.5. million in interest-free loans in 2017 for its business jet and CSeries commercial jet programs. Airbus acquired a majority stake in the CSeries program in 2017, rebranding the commercial jet to the A220. Bombardier exited the partnership in 2020 and is now focused on producing private jets and expanding its defence division.
With files from The Canadian Press
Alicja Siekierska is a senior reporter at Yahoo Finance Canada. Follow her on Twitter @alicjawithaj.
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