Bombardier calls for 'fair competition' as Ottawa eyes sole-source contract for surveillance planes

The Quebec-based jet manufacturer Bombardier is calling on the federal government to launch a "fair competition" to replace the Royal Canadian Air Force's surveillance planes.

The federal government signalled in March it's considering sole-sourcing the contract to American aviation giant Boeing.

Public Services and Procurement Minister Helena Jaczek told a parliamentary committee this week that while the project is not a done deal, the Department of National Defence has said the Boeing P-8A Poseidon is the only aircraft available that meets its needs.

Bombardier says it wants an open competition that would allow it to compete directly with Boeing for the contract.

'May the best win'

"I have a very specific message for Boeing," Jean-Christophe Gallagher, Bombardier's executive VP for aircraft sales and defence, told CBC News.

"They claim they have the best aircraft, so I'm sure they're not afraid to go into competition. So we welcome the competition with Boeing and may the best win."

Sean Liedman, Boeing's director of international business development for mobility and surveillance aircraft, said a competition seems unnecessary because Boeing's plane "is the only aircraft that meets the requirements."

"I'm not sure there's a need for competition," he added.

This isn't the first time the two aerospace companies have butted heads over market share.

Six years ago, Boeing launched a trade challenge against Bombardier with the U.S. Department of Commerce claiming Bombardier's CSeries jets were heavily subsidized by Ottawa. The department hit Bombardier with heavy anti-dumping duties that were later overturned by the United States International Trade Commission.

The ensuing battle prompted a frustrated Liberal government to later shelve a plan to sole-source the purchase of Boeing Super Hornet jet fighters.

Canada made a formal request to the U.S. in March for an offer for "up to 16 P-8A Poseidon aircraft and associated equipment and initial servings, as well as access to intellectual and technical data."

Jaczek told a parliamentary committee this week the project is in the "options analysis" stage and the government hasn't committed at this point to purchasing the P-8A Poseidon.

"Having said that, the Department of Defence has told us that at this point in time the P-8A Poseidon is the only currently available aircraft that meets all of the Canadian multi-mission aircraft operational requirements," Jaczek said Monday. "That's what they're telling us."

CBC News asked Boeing if it was worried about Bombardier derailing a sole-source contract. Boeing didn't answer directly, saying instead that Canada has an "opportunity" to "capitalize on an off-the-shelf airplane."

Boeing flew one of its P-8A Poseidons to Ottawa to put on display this week outside CANSEC, Canada's global defence and security trade show.

Boeing has delivered 160 P-8A Poseidons to six customers around the world, and those aircraft have logged more than half-a-million flight hours in a decade of service, said Liedman.

"We also think it's an affordable option for Canada as well," he said. "This is truly a proven, off-the-shelf platform that requires no investment in development."

Bombardier said Boeing's plane comes from a 1970s design and argues that its proposed rival  — the Global 6500 — would contain cutting-edge technology.

Bombardier and its partner General Dynamics threw a press conference at CANSEC this week to unveil a mock-up of that proposed surveillance aircraft and its submarine-hunting technology.

"This plane burns 30 per cent less fuel than its closest competitor," said Gallagher. "It flies higher, it flies faster, it stays longer on target."

Bombardier and General Dynamics said their pitch would keep jobs in Canada. The planes would be largely built in Toronto and then head to Montreal for final assembly, said Gallagher.

"If they go and move that work outside of Canada through a sole-source competition, some of those jobs will actually disappear. And this work will actually generate thousands of jobs in Canada as a result of it being awarded here and built in Canada." said Joel Houde, vice president and general manager of General Dynamics Mission Systems-International.

Boeing said its aircraft also would create spinoff employment in Canada because the planes require commercial services for training and maintenance, along with repairs that would be beyond the capabilities of air force technicians. 

Defence procurement expert Dave Perry said there's an "interesting dynamic" at play here.

On one hand, he said, the P-8A Poseidon is "so mature the production line is apparently close to the end." On the other hand, he said, the military has talked about enhancing its "interoperability" and "interchangeability" with close allies — and several of Canada's key defence partners, including the U.S. and Australia, use the Poseidon.

"If you were to buy the same platform that many of your allies are operating, you would get not just interoperability and an ability to work closely together, but you would get genuine interchangeability," said Perry, vice president of the Canadian Global Affairs Institute.

Bombardier is proposing to build a plane with sensors and integrated systems it has yet to "fully assemble" together in one of its products, Perry said.

"So there's an interesting juxtaposition between desires for interoperability on one hand and past Canadian economics and industrial strength and focus on the other," Perry said.

The government has said its final decision will be based on price, availability and impact on Canadian industry.