2017-01-19 By Danny Lam
The Canadian Fixed Wing Search & Rescue Aircraft Replacement procurement began in 2010 with the creation of a Statement of Requirements by the National Research Council (NRC).
This then resulted in a draft RFP by 2013 and its issuance in 2015, leading to a contract award in December 2016 to Airbus valued at CA$2.4 billion.
This price includes setting up an infrastructure for support, maintenance, the first lot of spares, text equipment, etc. and the initial 5 years of support and maintenance.
Entries into the competition included Alenia’s C-27J Spartan, Lockheed Martin’s C-130J, Bombardier’s Q400, Viking Air entered DHC-5NG, and Boeing/Bell offered the CV-22 Osprey while Embraer put forward the brand new KC-390.
Airbus Defence and Space, the winner of the competition, will deliver 16 C295W Search and Rescue Aircraft to replace Canada’s fleet of CC115 Buffalo (DHC-5) and CC130E/Hs.
Competition narrowed down to the Airbus C295W and Embraer’s KC-390 very quickly.
Compared to the turboprop C295W, both the Embraer and the longer range Alenia C-27J had higher maintenance and fuel costs.
The C295W has in-flight refueling capabilities which overcame its shorter range and offered the capability to refuel / support other aircraft.
The procurement was notable for its non-controversial and low profile nature.
Billed as a Search and Rescue platform, it did not attract opposition from social democratic / pacifist elements in Canada even though it is a multi-mission platform for military transport, equipped for self-protection, capable of ISR configurations from ASW, AEW&C, AESA, plus close air support, etc.
Delivery is expected by 2019 ending 2022 — lighting fast by Canadian standards.
Going forward, the C295W is a versatile platform that is readily reconfigured and / or upgradeable for additional missions.
With the development cost and debugging of other versions mostly paid for and absorbed by other operators and a large number “in service” to spread costs, it de-risk the platform from premature obsolescence.
Long term risks of escalating support and maintenance costs and parts availability issues are also minimized.
Although the procurement was initiated during the Harper government, opposition parties paid little attention to it and the Trudeau regime permitted the process to continue with few changes after their electoral victory in October 2015.
A prior good fit between the existing Canadian industrial base and the top technical candidate was a key factor in keeping costs from spiraling out of sight to meet unique Canadian ITB requirements.
The option for 20 years of maintenance at a bargain price of CA$2 billion would not have been possible otherwise.
Since the A295 line used Pratt & Whitney Canada PW127G engines manufactured in Quebec, it also made it simple for Airbus to meet Canada’s stringent Industrial and Technological Benefits (ITB) requirements.
Airbus teamed up with CAE (Montreal) for crew training, L3 Wescam (Ontario) for FWSAR, and the creation of AirPro SAR Services , a new joint venture with PAL Aerospace (Newfoundland) for maintenance and support.
Looking ahead, there are future opportunities for Canadian industry from the C295 program. Canada is one of 21 nations operating C295s.
Three current operators – Canada, Finland and Chile – have Arctic climate conditions. Potentially, there is demand to support the development of C295s with skis for the Arctic, or pontoons for water landings by Canadian firms.
Furthermore, the platform has growth potential with ample exportable power that is already proven on the AEW&C & AESA models.
Integration of the platform into future ISR needs such as cueing for ballistic or cruise missile defense systems is an opportunity to be considered to augment Canada’s limited defense infrastructure in the Arctic.
The Canadian S&R Replacement Aircraft procurement illustrates key factors behind successful acquisitions that Canadians can be proud of.
First, a relatively short cycle time of six years from initiation to completion, with less than 2 years from RFP to contract award, ensured that SORs that are written are not out of date as requirements and technologies advance.
A short cycle time ensure that vendors can bid with smaller safety margins.
Second, the selection of a platform that is widely used in that specific application: S&R, Military rather than civilian, ensure that a large installed base of users with similar needs and operational considerations are there to both finance new developments as well as to work with the manufacture for debugging, long term maintenance and support.
Quantity in service ensures quality, so to speak.
Third, the inherent versatility of the platform selected make it possible for a modest “kit” to be selected and additional upgrades and features added in future at modest cost. Even if the upgrades are added to additional aircraft rather than the existing fleet, economies from sharing training, maintenance, support lower the fleet lifecycle cost.
Large international user groups enable sharing of knowhow and experience across a range of operating conditions which has also been the case with the Airbus tanker as well.
That, plus a versatile open-architecture platform like the original IBM PC, plays dividends for both the vendor and users.
Finally, a good fit between the best technical proposals with the existing industrial base reduce the burden on the vendor under existing Canadian ITB regulations.
The platform with many existing and potentially many more future customers ensures that there will be a good market for Canadian firms to develop upgrades and spread the development costs over many units beyond the small Canadian market.
Airbus, the Canadian Forces, the Harper Government and the Trudeau Regime are commended for the execution of an excellent procurement program.
And in this case, defense procurement done economically and well is not an oxymoron.
Danny Lam is an independent analyst who lives in Calgary, Canada and writes regularly for Second Line of Defense.