John Ivison, Jake Edmiston
A Conservative MP has questioned his own government’s decision to sole source a multi-million-dollar contract for 21 new coast guard helicopters from a Montreal-area company over safety concerns and fears that the process was rigged so that the Quebec firm would win.
In a letter to Transport Minister Denis Lebel, obtained this week by the National Post, Tory MP Rick Dykstra questioned a decision to grant Bell Helicopters of Mirabel, Que., a weight exemption that its rivals claim gave the firm an unfair advantage.
The two other firms competing for the contract – Eurocopter Canada and Augusta-Westland – subsequently withdrew their bids before the June 3, 2013, closing date.
Mr. Dykstra said the exemption decision would “undermine our commitment to a fair procurement environment … [and] risk damaging the integrity of Transport Canada, due to the perception of collusion with a Canadian company in the absence of any clear public interest.”
The decision by Mr. Lebel, who is also the Economic Development Minister for Quebec, means any additional jobs from the up to $200-million contract will be in Mirabel, not Fort Erie, near Mr. Dykstra’s St. Catharines riding in Ontario, where Eurocopter has a plant. The price tag could reach $1-billion over 20 years when maintenance is factored in.
Mike Winterburn, director of communications for Mr. Lebel, said the Transport Minister is not in a conflict situation because he “has no personal interest in this company and Transport Canada made the decision based solely on safety.”
He said the decision to grant the exemption was made “at the technical level by safety experts.”
The controversial purchase of the coast guard helicopters is just the latest procurement snafu to hit the Harper government in the wake of the decision to sole source the F35 fighter jet in 2010.
In 2011, the Transport ministry granted Bell Helicopter Textron Ltd. an exemption from aviation regulations, allowing their B429 light-lift helicopters to exceed the 7,000-lb weight limit by 500 lbs. — a move criticized by the international aviation community as a thinly veiled attempt at giving the Quebec-made B429s a competitive edge.
The U.S. Federal Aviation Agency and European Aviation Safety Agency both denied the weight exemption granted by Transport Canada, which said the B429 would be no less safe with the extra 500 lbs. According to emails obtained by the National Post, the FAA said the exemption was “not in the public interest,” while the European regulator said Transport Canada’s safety argument is “flawed.” Prior to Transport Canada’s move, all three regulators imposed a 7,000 lb. weight limit on “normal” or “light-weight” helicopters.
Mr. Dykstra also raised safety concerns. Allowing the B429s to carry an extra weight set “a dangerous precedent in the helicopter industry, with a safety driven certification standard being bypassed at the request of a single manufacturer,” he said. The Tory MP would not comment further when contacted this week.
In the event, Mr. Lebel decided to sign off on the exemption, which gave Bell’s helicopter a bigger payload capacity. Eurocopter has been fighting the exemption for more than two years, arguing having a bigger payload capacity affords the B429s an “economic advantage.”
The company said it is “reviewing its options” on whether to pursue legal action over the way Transport Canada handled the tender.
According to emails obtained by the Post, the exemption was approved by at least seven Canadian government staff, following a slew of risk analyses and strategic environment assessments that determined that the B429 would be no less safe at 7,500 lbs.
In its review, the FAA said the extra weight would allow “the installation of certain equipment … [that] may increase the operational level of safety” but in its denial of exemption noted that rotorcraft that exceed 7,000 lbs are expected to meet higher levels of safety than lighter craft.
The EASA suggested Transport Canada’s argument is “flawed,” and scolded that “granting this exemption to one manufacturer only would give an unfair commercial advantage over other manufacturers’ aircraft of a comparable weight.”
In their proposal, quoted by the U.S. aviation agency, Bell Helicopters said the exemption would allow the B429s to “carry more fuel or additional equipment, which would increase the safety level.”
The proposal also stated that the weight exemption would create 400 jobs, 75% of which would be in the U.S., and boost sales from 150 to 500 annually, generating more than $150-million.
The exemption has been in the works since at least April, 2011, when Eurocopter staff expressed concerns.
“I had tried to avoid this question,” read an April email written by Andrew Stirzaker, a senior project manager at Transport Canada, following a letter from Eurocopter.
“But evidently, Eurocopter [parent company] has told ECL [Eurocopter Canada Ltd.] to make a response to TCCA with regards this exemption.”
Although Transport Canada did not heed Eurocopter’s calls to cancel the exemption, the Fort Erie manufacturer still submitted a letter of interest in August, 2012, when the Coast Guard announced their tender for light-lift helicopters. A source confirmed that Augusta-Westland also expressed interest, however both bids were withdrawn before the June, 2013, closing date.
“Public Works and Government Services Canada proceeded through an open, fair and transparent procurement process,” Public Works said in a statement. “An independent third party fairness monitor has overseen the entire process.”