Canadian Packaging

Feds sole-source fighter jet deal


July 16, 2010
by Purchasingb2b Staff

The federal government has confirmed a major purchase of fighter jets from Lockheed Martin.

The deal is for 65 state-of-the-art fifth-generation Joint Strike Fighter (JSF) F-35 aircraft. Including a maintenance contract, it is worth $16 billion, making it one of the largest military purchases in Canadian history.

The government did not put the contract out to tender.

Under scrutiny

The purchasing practices used to seal the deal are coming under significant scrutiny.

According to the Canadian Press (CP), detractors are criticizing the decision to make the purchase without competitive bids.

CP says the Liberals are calling on the House of Commons defence committee to reconvene and question other potential bidders and procurement experts to find out whether a sole-sourced contract is the best option.

And Alan Williams, former assistant deputy minister of material in the Department of National Defence—who oversaw the federal government’s involvement in originally developing the JSF more than 10 years ago—says the government is abusing the sole-source procedure.

“Don’t get me wrong, I think JSF is a marvellous aircraft, absolutely state-of-the-art, but there needs to be an open competition,” he told CP.

Industry praise

But not everyone is unhappy with the purchase.

Aéro Montreal, Quebec’s aerospace cluster, says the deal will generate significant economic benefits for Canada and Quebec.

“This is a historic procurement for Canada and excellent news for the Quebec aerospace cluster and the entire Canadian aerospace industry,” said Gilles Labbé, chairman of Aéro Montréal and president and CEO of Héroux-Devtek.

“Canada’s participation in this multinational project, ending with the purchase of F-35 fighter aircraft, is a structuring contract for our industry spanning more than 25 years and will enable our companies to continue to demonstrate their capabilities and competitiveness internationally.”

And according to CP, Toronto, Ontario-based Magellan Aerospace said the deal will boost the ability of Canada’s aerospace industry to produce aircraft of superior capability, interoperability with allies and economies of scale.

Photo courtesy of Lockheed Martin.