Two European aerospace groups have launched vigorous lobbying campaigns to thwart alleged plans by the Canadian government to shut them out of three of Ottawa’s biggest military equipment orders in recent years.
EADS submitted an unsolicited bid to the department of national defence last week for 16 Airbus A400M military transport planes after reports that the Canadians were about to order four C-17 Globemaster aircraft from Boeing of the US without calling for competitive tenders. The Globemaster order would be worth about C$2.5bn ($2.2bn).
Speculation is also rife that Ottawa will favour another US group, Lockheed-Martin, to replace its ageing fleet of smaller C-130 Hercules transport aircraft.
Meanwhile, AgustaWestland, the helicopter group, is worried that Ottawa is set to give Boeing’s Chinook heavy-lift helicopters a head-start over Agusta’s Cormorant Mark II.
“We’re slightly concerned that we’re being frozen out of a competitive process that is open, fair and where the playing field would be level”, said Richard Thompson, senior vice-president at EADS’s military division.
Agusta-Westland is currently claiming C$1bn in damages from the Canadian defence department relating to a big helicopter contract awarded to US-based Sikorsky in 2004. The European group contends that the tender requirements were written in such a way to exclude rival bidders.
The minority Conservative government, which took office in February, has earmarked an extra C$5.3bn for military spending over the next five years.
According to the Tories’ first budget, tabled last month, “the international missions now being undertaken call for a new concept, with different force structures, different equipment and different operational requirements”.
The defence department confirmed on Monday that “a number of major defence procurement initiatives are being considered”. The Conservatives are also moving to repair relations with the US which, the Europeans fear, could include favouring US defence suppliers.
Boeing’s chief lobbyist in Canada, Al De Quetteville, is a former head of the Canadian air force. Boeing officials were not available for comment on Monday.
The government has come under political pressure to order heavier transport aircraft than the existing Hercules fleet, so that it does not have to rely on the Americans or others to carry Canadian troops and equipment abroad.
The Airbus A400M, which is due to go into service with the French air force in 2009, is roughly midway in size and cost between the Hercules and the Globemaster.
EADS contends that Ottawa does not need aircraft as big as the Globemaster. Like several other Nato members, Canada currently subscribes to a chartering service known as the Strategic Airlift Interim Solution (Salis).
The European groups also maintain that Canada is depriving itself of valuable industrial benefits by opting out of a competitive bidding process.