Feds expected de facto sole-source coast guard chopper deal

Newly released documents show officials knew only one bidder was likely

OTTAWA — Federal officials overseeing the plan to replace Canada’s coast guard helicopters were aware almost from the outset that only one bidder might come forward.

Documents from May 2013 also show that just weeks after the bidding to supply 15 light helicopters got underway, officials looked for ways to justify a de facto “sole source” outcome to the request for proposals.

The documents, which include minutes from that meeting, were released as part of a legal action in Federal Court being brought by a rival aircraft-maker.

During the meeting, bureaucrats from Transport Canada, Public Works and the coast guard, discussed the need to justify why only one manufacturer would meet the contract’s criteria.

The $172-million contract was awarded just a few weeks ago to the only bidder: Bell Helicopter Canada, based in Mirabel, Que.

Minutes from the meeting on May 23, 2013, show Transport Canada officials insisted that the requirements were “not written to suit one aircraft; the requirements were written to suit what (Canadian Coast Guard) is required to do.”

But they also show the coast guard wanted “detailed justification,” and that the reasons could include not wanting to upgrade existing infrastructure, such as landing pads.

No one from either Public Works or the Department of Fisheries and Oceans, which oversees the coast guard, was immediately available for comment Tuesday.

By the spring of 2013, Airbus Helicopters Canada had been waging a behind-the-scenes war over the decision by transport safety officials to give Bell a weight exemption for its model 429 chopper, a decision that allowed the aircraft to qualify for the coast guard tender.

The company, which has a plant in Fort Erie, Ont., eventually filed suit against the federal government, claiming the decision to grant Bell a waiver gave the company an unfair advantage.

Both the Federal Aviation Administration in the U.S. and the European air safety authority objected to the Transport Canada exemption, suggesting in writing that there was no overriding safety concern and wondered if the rules were being changed to please Bell Helicopter, a subsidiary of U.S. conglomerate Textron.

Transport Canada and the coast guard both deny the fix was in for the model 429. Bell has stated publicly that it is received no leg up in the competition and is working with U.S. and European regulators as well as the industry to modernize the regulations related to the issue.

The plan to upgrade the coast guard’s nearly 30-year-old fleet has been broken into two contracts — light and medium-lift choppers.

Awarding of the medium contract is still pending, but once again Bell is the only contender in the tender process that closed at the end of May.

The minutes also showed that officials recognized in May 2013 that in the tender for the medium-lift chopper, “there maybe difficulty in obtaining more than one bid” for the program.

The awarding of the light helicopter contract has the potential to create some political pain for the Conservatives.

The Airbus factory, which has been in operation for roughly 30 years, is located in Defence Minister Rob Nicholson’s riding.

Recently, Fort Erie Mayor Douglas Martin and Gary Burroughs, chairman of the municipality of Niagara, penned a letter of protest to two federal ministers.

They told Fisheries Minister Gail Shea and Infrastructure Minister Denis Lebel they were disappointed with the decision, which essentially shut out a company they described having had success all over the world.

“The potential exists for unintended consequences to result for companies like Airbus who, despite their reputation, record of achievement and global reach, may find themselves restricted from access to both government programs and contracts,” said the letter dated May 14, 2014, which was copied to Nicholson.