OTTAWA – The Harper government has awarded a $73.5-million contract for extra hard-top army shelters to an Ottawa firm, but remains mum on the future of a long-promised, $2-billion armoured-vehicle program.
The original deal for shelters was announced in 2009 as part of a logistics truck program, but Public Works Minister Diane Finley says the government has decided to order 99 more — to be used as field command posts and work spaces — on top of the 895 that were part of the first contract.
She wouldn’t comment on the fate of a separate, hotly debated plan to buy 108 close-combat vehicles, meant to accompany army’s Leopard 2 A6 and A4 tanks into battle.
Bids by three defence contractors — Nexter, BAE Systems Inc. and General Dynamics Land Systems Inc. — are set to expire Dec. 23.
The program has hung in the balance for months after the army signalled it was worried whether it could afford to train, operate and maintain the new set of vehicles in a time of tight budgets.
Finley was non-commital when asked whether the government intended to let the bids expire, which would effectively kill the program for a second time.
“We continue to work the Department of National Defence on that file,” she said Friday.
Having yet another major military purchase go down the drain would be a political black eye for the Conservatives, who’ve struggled to deliver on an extensive list of military equipment.
In addition to the uncertainty about the armoured vehicles, National Defence and Public Works in the summer of 2012 cancelled and subsequently restarted a program to buy 1,500 logistics trucks for the military.
The defence industry would be infuriated if the combat vehicle program fails, especially since each contractor has spent millions of dollars to take part in the bidding. The companies were required to hand over vehicles for testing, which included subjecting them to blasts and other extreme measures to determine whether they met Canadian requirements.
But a declining defence budget, particularly cuts to training and national procurement, have caused the army to reconsider whether bringing a new vehicle into service is possible.
Among other things, the army was worried about having to construct new buildings to house the specialized 36-tonne vehicles, which were conceived during the Afghan war as a necessary addition to protect troops from increasingly powerful roadside bombs.
“The indicative cost estimate for infrastructure to support the fielded (close combat vehicle) is greater than was expected or planned for,” say documents released to The Canadian Press under access-to-information legislation.
“There is a risk that some of the requirements identified for infrastructure may be unaffordable, and that the (close combat vehicle) may be fielded with insufficient or less-than-ideal infrastructure.”
The army was also concerned about price tag of an electronic information exchange system between the contractor and defence staff, and the cost of an extended maintenance contract, at a time when the branch is facing a 22 per cent budget cut.