Canada has extended an earlier contract by inking $500 million agreement with Lockheed Martin to provide maintenance support and training for one of the military’s transport plane fleets.
The agreement, which extended an earlier contract to 2021, was never publicly announced or put to a competition. This was despite Defence Department auditors flagging a lack of transparency and raising questions about value for money in the original contract, Ottawa Citizen reported Tuesday.
The government has cited national security to justify why other companies were not allowed to compete. It also says the new contract addresses the auditors’ concerns.
One former Defence Department official says it’s no surprise Lockheed and the government have continued to do business while wrangling over the F-35. “There are only so many big players out there,” said Alan Williams, former head of procurement at National Defence was quoted as saying by the news daily.
However, Williams said the way the deal was concluded doesn’t pass the smell test, and that it raises fresh concerns about waste.
“National security exemptions should be used in really exceptional cases where there really is a national security risk to Canada,” he said. “You shouldn’t use it to get around poor planning.”
The new deal was signed the same month Defence Department auditors raised concerns with the original contract. In particular, Lockheed received full payment but only did half the work originally expected because a shortage of pilots and mechanics meant the Hercules were only flown half as much as planned.
In December 2007, the Conservative government inked a $1.45-billion deal for Lockheed to sell 17 Hercules military transport aircraft to Canada.
Two years later, the contract was amended to include seven years of maintenance support and training at a cost of $800 million. The support work was not put to a competition because National Defence had implemented a policy that year to award support contracts to the company that provided the equipment.
Then last June, Lockheed proposed extending the contract another five years. Public Procurement spokesman Pierre-Alain Bujold confirmed an extension was signed on Dec. 15 for $504.3 million. He said the contract was not put to a competition because it was “subject to a national security exemption.”
Defence Department spokeswoman Ashley Lemire said Tuesday that the new contract includes enough flexibility to meet the military’s current and future needs. Williams, however, said the only way to truly ensure the government and Canadians are getting value for their money would be to run a competition.
“I don’t know if the deal with Lockheed was the best one,” he said. “I worry when you sole-source any type of contract, you’re wasting taxpayers’ money. And there may have been other players out there, equally capable, that would be in our best interest.”
In addition to the Hercules maintenance contract and the F-35, Lockheed is also hoping to secure billions of dollars of work as part of the federal national shipbuilding plan.
Canada intends to buy F/A-18E/F Super Hornet fighter jets as an interim measure for replacement of their CF-18s before making a decision on F-35 fighters. Rather than a full replacement of the air forces aging CF-18 fighter fleet, its believed the purchase will be labelled an interim measure to fill what Defence Minister Harjit Sajjan is a pending “gap” in Canadas military capabilities,
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The Canadian International Trade Tribunal (CITT) ruled in the Oshkoshs favor regarding its legal challenge to the Medium Support Vehicle System (MSVS) Standard Military Pattern (SMP) contract award decision. CITTs ruling recommends that Canadas Department of Public Works and Government Services take action, including re-evaluation of Oshkoshs bid and physical re-evaluation of vehicles, and/or monetary compensation to Oshkosh, the company said in a statement Wednesday
Amidst reports that Lockheed Martins F-35 stands at an advantage in Canadas fighter aircraft competition, the Canadian MoD has issued a document stating “all procurement options are being considered,” Defence Minister Harjit Sajjan was quoted as saying by the Globe and Mail earlier this month. Canada has issued a request for information to Boeing, Lockheed-Martin, Saab, Dassault and Eurofighter earlier this month seeking information by the end of July in order to design an acquisition process to replace the Canadian Air Forces CF-18 fighters
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Lockheed Martin built, US Navys fifth Mobile User Objective System (MUOS-5) satellite is ready for launch on Atlas V 551 on June 21 this year from Space Launch Complex-41 at Cape Canaveral Air Force Station, Florida. The fifth Mobile User Objective System (MUOS-5) satellite is the latest addition to a network of orbiting satellites and relay ground stations that is revolutionizing secure communications for mobile military forces
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