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Tories face de facto sole-source deal in second coast guard chopper contract

OTTAWA - Only one aerospace company has decided to bid on the second instalment of the Harper government's plan to replace the coast guard's fleet of aging medium-lift helicopters.

The Canadian subsidiary of U.S. defence contractor Bell Helicopters, which this week won the first round in a $127-million deal to furnish 15 light helicopters to the federal agency, is expected to be the lone contender in a new contract to supply eight choppers for operations along both coasts and in the Far North.

The request for proposals closes on May 27, but rivals AgustaWestland, Airbus Helicopters Canada and Sikorsky have all signalled they won't be submitting bids, leaving Bell and its model 412 chopper as the only contender.

Sebastien Bois, a spokesman for Public Works, said the department would not comment because the procurement is still underway.

Bell ended up the only bidder in the light helicopter contract in a process that's being challenged in Federal Court by Airbus, which claims the winner was given an unfair advantage.

The crux of the allegation is that Transport Canada gave Bell a leg up by granting a weight exemption for its model 429 helicopter, allowing it to enter a slightly heavier aircraft than the category permits.

It's a claim the federal department denies.

Industry analysts have said the exemption, granted in December 2011, allows the company, with its factory in Mirabel, Que., to slip around the more rigorous safety evaluations that are part of certification for heavier aircraft — something the Transport Department also rejects.

"Transport Canada conducted a safety risk assessment and concluded that granting the exemption would be acceptable provided certain design and operational conditions are imposed," said spokeswoman Karine Martel, in an email.

"The department concluded that this helicopter can work at the increased weight threshold to a maximum of eight occupants while meeting the current high safety standards."

The first light helicopter is slated to be delivered in a year, starting the process of replacing a 25-year-old fleet of Airbus helicopters, which were manufactured in Fort Erie, Ont.

It's unclear when the government will decide on the second contract for medium-lift choppers, but it could come as early as the fall.

Sikorsky spokesman Paul Jackson confirmed the company declined to bid on both tenders, but underscored that unlike Airbus it had no issue with the procurement process.

AgustaWestland says it won't submit a proposal either, but declined further comment.

The dearth of bidders for contracts raised some eyebrows among the Opposition, including NDP defence critic Jack Harris who said he has questions but will reserve judgment until the bids close in 13 days.

"There is some uncertainty to say the least," he said Wednesday.

Like the just-closed tender, weight restrictions are at the heart of the medium-lift helicopter bid. The companies declining to take part are doing so because their aircraft are heavier than the maximum of 4,989 kilograms (11,000 pounds), a safety limit established for the decks of coast guard ships in the 1970s.

Industry sources said at least one potential bidder expressed concern that the standard was outdated and asked the federal government for data on how the weight restriction was calculated. The intention was to prove the decks could handle higher ratings, but officials just came back and said the standard was the standard.

Unlike the light helicopter contact, the government wasn't prepared to move on the specifications, the sources said.

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