Boeing poised for sole-sourced military patrol plane deal worth billions: report

Click to play video: 'Canada reaches $5.9B USD deal to replace aging Aurora military fleet with Boeing aircraft: Blair'
Canada reaches $5.9B USD deal to replace aging Aurora military fleet with Boeing aircraft: Blair
WATCH: Canada reaches $5.9B USD deal to replace aging Aurora military fleet with Boeing aircraft: Blair – Nov 30, 2023

The federal government is expected to announce as early as Thursday that it has selected Boeing to replace the military’s aging patrol planes in a multibillion-dollar deal, according to three sources familiar with the matter.

The decision to go with a sole-source contract would close the door on Quebec-based business jet maker Bombardier, which has been pushing for an open bid.

The sources, who were not authorized to speak publicly on the matter, said that last week cabinet green-lit the purchase of 16 P-8A Poseidon surveillance aircraft to replace the half-century-old CP-140 Auroras.

Two of the sources, including a senior government official, said the Treasury Board held a special meeting Tuesday night and approved the contract, which a U.S. agency has listed at US$5.9 billion (C$8 billion).

The procurement department has stated that Boeing’s off-the-shelf reconnaissance plane is “the only currently available aircraft that meets all of the CMMA (Canadian Multi-Mission Aircraft) operational requirements” — particularly around submarine-hunting technology.

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The government’s decision to bypass Bombardier by foregoing an open bid stands in contrast to a recent move by the Canadian Commercial Corporation. The Crown agency, which is mandated to help domestic companies access foreign government procurement markets, signed a memorandum of understanding last week to support export opportunities for the Bombardier plane.

Earlier this month, a parliamentary committee also demanded that Ottawa ensure an open bidding process for the new planes, passing a motion that asks the government to put out a request for proposals.

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Ottawa will replace Canada’s aging version of Air Force One

Bombardier CEO Eric Martel has argued that its aircraft — currently a prototype, and slated to roll off the line in the early 2030s — would offer a cheaper and more high-tech alternative that’s made in Canada.

The company joined forces earlier this year with a Canadian subsidiary of U.S.-based General Dynamics Mission Systems on a patrol aircraft, a modified version of its Global 6500 business jet with submarine-detection gear. The Global 6500 is in use by several militaries, including in the United States and United Arab Emirates, but not yet for maritime patrol.

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Prime Minister Justin Trudeau declined to confirm whether a decision to bet on Boeing had been made.

“The ministers will address that issue in time,” he told reporters in Ottawa on Wednesday.

Bombardier and Boeing declined to comment.

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Some Canadian aerospace companies have pushed back against the idea that a Bombardier contract win would be best for the sector, saying that a deal between Ottawa and Boeing could be at least as lucrative for suppliers.

But Michael Hood, the former commander of the Royal Canadian Air Force who Bombardier has hired as an adviser, said it’s “baffling” that the government would rule out a Canadian firm by shutting the door on proposals.

“Everything’s going to be engineered, built and maintained in Canada. And all of the salaries that go with it are going to be maintained,” he said of a hypothetical Bombardier selection. In contrast, Boeing planes would be engineered and assembled in the U.S.

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“France, the U.S., Brazil, they make no pretense about supporting their domestic aerospace industry.”

An open bid could also bring down the price tag on the Boeing planes.

“When you buy through a foreign military sale — the FMS — you don’t get the benefit of people sharpening their pencils for a competitive price,” he said. “On the FMS, it’s a take-it-or-leave-it.

“At the end of the day, maybe the P-8 is the best aircraft. But we’ll never know without a competition,” Hood said.

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