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The Canadian Press - ONLINE EDITION

Fixed-wing search plane program almost short-circuited by RCAF proposal

OTTAWA - The Canadian air force wanted to pursue the direct purchase of surplus fixed-wing U.S. planes for search-and-rescue despite almost a decade of complaints that it had rigged specifications in the current, long-delayed procurement project.

Internal documents, obtained by The Canadian Press, show military planners pitched the notion of acquiring C-27J transports that were expected to be sold by the Pentagon two years ago as part of a massive budget-cutting exercise south of the border.

Planners were interested even though they had been accused of favouring the Italian-built aircraft from the beginning, an apparent bias that has contributed to the inability of two successive governments to deliver replacements for the existing fleet of 50-year-old C-115 Buffalos and nearly 30-year-old C-130-H Hercules.

The potential sale represented "a unique, time-sensitive investment opportunity" and air force staff developed three options for National Defence and the Harper government to consider knowing a direct buy would meet "significant resistance" from aerospace contractors "given the level of industrial expectations" that had been raised.

It was also acknowledged in the analysis there were would be fewer industrial benefits for the country.

"Although significant cost savings are anticipated, there will potentially be resistance to a direct buy," said the Feb. 12, 2012, presentation.

The question of whether Canada would even be allowed to buy them hung in the balance until late last fall when U.S. Special Operations Command, the U.S. Coast Guard, and the U.S. Forest Service expressed interest in dividing up the 21 planes, some of which hadn't even come off the assembly line.

The air force went as far as to formally ask the U.S. for price and availability through the materiel branch of National Defence.

The thinking was that up to 17 planes could be acquired at a bargain and before 2015 when the Buffalos are slated to reach the end of their serviceable life.

Without a replacement aircraft soon, the air force would be forced into costly upgrades for both the C-115 and the C-130s, the analysis said.

The fact the fixed-wing search plane replacement — first started in 2004 under Paul Martin's Liberals — has not been pushed through has been a procurement black eye for the Harper Conservatives, especially since the program was declared "a top priority" by former defence minister Peter MacKay in 2008.

The air force's proposal would have effectively blown up years of careful bridge rebuilding between Public Works and the aerospace industry, which complained loudly that the original specifications were wired to favour the Alenia Aeronautica-built C-27J.

The protests were so deafening that MacKay ordered the National Research Council to examine the plan. It agreed the military's specifications were far too specific and needed to be broadened in order to ensure competition.

Years of industry consultations have followed the research council report and the government has yet to release a formal tender call. Federal budget documents don't anticipate replacements to arrive until 2018.

Companies looking to bid on the program, which was originally valued at $1.3 billion under the Liberals, were jockeying for position this week at a defence industry trade show in Ottawa.

Airbus Defence and Space announced it had teamed up with Newfoundland-based Provincial Aerospace to bid on the contract. Both Lockheed Martin and Alenia are also expected to enter the fray.

None were prepared to comment on the air force proposal.

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