Replacing Canada’s Failing CC-130s: 17 C-130Js

CC-130 over BC
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The US military has been coming to the realization that its aging aircraft fleet will begin posing serious challenges in the coming years. Canada is experiencing similar problems. In 2005, Chief of the Defence Staff Gen. Rick Hillier said that:

“Our [CC-130 E/H] Hercules fleet right now is rapidly going downhill. We know that three years and a little bit more than that, the fleet starts to become almost completely inoperational and we will have to stop supporting operations – or else, not be able to start them.”

This Spotlight article offers additional details regarding the Canadian CC-130 recapitalization program, and the thinking behind it; some background that points up the parallels between the issues faced by the Canadians, and the experiences of other air services; and some insight into why the buy took so long, after the C-130J was declared Canada’s preferred choice in an “expedited” process. Canada has begun using the new planes on operations, and is preparing to accept the last “CC-130J.” This will shift its focus to issues of long-term support costs.

The Transports and the Damage Done: Issues With the Fleet

Time to bail
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EADS tried to remain in the running with its Airbus A400M, and other alternatives were proposed, but the specific requirements set by Canada’s Department of National Defense (DND) tended to exclude alternatives. In December 2008, a program worth almost C$ 5 billion got underway to buy 17 of Lockheed’s privately-developed C-130J “Super Hercules” planes.

The older CC-130s are used in a wide variety of roles, from tactical transport to aerial refueling and even search and rescue. The Canadian Forces do not own any other aircraft in a similar class, which makes replacement essential. The new tactical airlift aircraft will replace at least 13 (and very probably more) older CC-130 Hercules planes, which serve as the workhorses of the Canadian Forces’ transport fleet. Alas, airframes come with expiration dates, and those expiration dates are measured in flying hours. How bad is the situation, and how urgent the need?

Canada’s existing Hercules aircraft fleet has logged more flying hours in total than any other military Hercules fleet in the world. The surviving CC-130 fleet totaled 32 aircraft in 2006, of which 19 are CC-130Es bought between 1964-1967. During the original program announcement, Gen. Hillier noted that one CC-130E aircraft had to be retired because it had put in over 50,000 flying hours, and that all of Canada’s E models were over 40,000 flying hours. When one considers the rough usage to which tactical airlifters are accustomed, those are extraordinary numbers. He later added:

“When I was with our Team Canada a while ago, we experienced that and you get into one aircraft, it won’t start. You get into a second aircraft, it won’t go and you get into a third aircraft, and finally execute the mission. So that is the kind of stage that we find ourselves with the C-130 E model particularly because of their age, because of their use and now because of the difficulty of keeping them flying and operational.”

CC-130 at work

The number of retired aircraft rose 3 as of December 2007, and will rise still further in the coming years. Increasing flight restrictions on older CC=130 airframes are also likely, and some of those flight restrictions will limit the missions they can undertake.

So, what’s the target, and what will the overall future force look like as opposed to the 32 available CC-130E/H aircraft at present? Gen. Hillier again:

…we figure with the ones that we have, the C-130H models that we have, that are the more modern ones, nine of those with 16 new aircraft that give us the capabilities that we need for the fleet therefore of about 25. We will have sufficient and that quantity is a quality all of its own to allow us to the two major international operations, support one major domestic operation, support routine force generation of the aircraft and air crews and do our normal business.

Defense analyst Mark Romanow notes that this proposed buy would leave the Canadian Forces with these new aircraft, plus 2 stretched civil C-130H93-30s upgraded/delivered in 1994, 5 KC-130H90 tankers delivered from 1991, and 2 C-130H84s. Canada also has 4 C-130H73s; 2 were acquired in 1973, and the other 2 were bought used from Abu Dhabi in 1986. Those C-130H73s may be slated to be retired along with the CC-130Es, if Hillier’s final numbers are correct. With the buy now confirmed at 17, the Canadian Forces would be replacing 23 CC-130s with 17 new aircraft, and keeping 9, for a total tactical airlift fleet of 26.

Live Rust: What To Do Until the New Planes Arrive?

CC-130 Arctic flight
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The waiting period for the CC-130Js was never expected to be smooth sailing. Back in November 2005, Canada’s Chief of the Defence Staff Gen. Hillier described what’s next for Canada’s aircraft, and the Canadian Forces:

“So we have not had to either not accept a mission and we have not failed at a mission or set any conditions for failure. We have been on the cusp several times of being able to say, you know, we are at the edge, we are not sure if we can, but we manage to come through. That will get increasingly difficult as we go forward here. The longer we go out, obviously the more certainty will add to the fact that we won’t be able to succeed.

Obviously what it means right upfront is that we put an increasing number of dollars in maintaining the C-130Es and making sure of course the C-130Hs and relatively newer models of the C-130s can continue to do their job. So we are going to have to make sure we put the money into the continuing maintenance of it, make sure that we have got the people on the ground and take them from the rest of the forces if necessary to make sure all of our maintenance technician slots are filled and do all those things and continue to monitor what we are doing around the world, what the demands are from that and perhaps have, to try in the shorter term, innovative solutions to make sure we are going to be successful. We are going to have to watch it and walk through it very carefully. It is a declining fleet and it is declining rapidly. So we are walking through it. Many of those steps are already in place. We have got a whole bunch of men and women in blue who have been looking after that for us for some months and years now. So we know what we have to do to keep the operational level as high as possible and we are going to do that obviously.”

The South African Air Force, who are trying to keep their own C-130 Hercules flying until their Airbus A400M aircraft enter service between 2010-2014, know this story well.

South Africa and Canada aren’t the only nations confronting this dilemma. Many C-130 Hercules customers are operating aircraft that will face Canada’s problems in due course. Welcome to the cycle that the USA’s P-3 Orion fleet (and 15 other countries’, including Canada), C-5 Galaxy fleet (readiness rate around 50%), 707-based fleet (E-3 AWACS, E-8 J-STARS, KC-135 Stratotankers, et. al.), and even some of its C-17s are either confronting already, or will be confronting soon. Not to mention an inventory of US fighter aircraft whose average age will continue to rise over the next two decades.

Because of their aging aircraft, American defense planners are faced with average airframe ages that continue to rise. Addressing the related issues becomes more and more important in order to maintain acceptable force numbers, readiness levels, and aircraft maintainability. All in spite of personnel turnover as experienced hands retire. Somehow, one must also keep maintenance costs in line so they don’t devour the very budgets needed to finance replacement aircraft – even as many global military budgets continue to fall, or face future demographics-related entitlements crunches.

Canada may be an especially egregious example, but it is not alone.

Comes a Time: Key Developments and Contracts

CC-130J flyout
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July 21/14: Training. An C$ 32.5 million amendment to the CC-130J Operational Training Systems Provider contract (q.v. Feb 13/09) is signed to align the CC-130J training system with ongoing upgrades to the aircraft themselves. The fleet

“Upgrades to the fleet will include significantly improved navigation, communication, and maintenance capabilities to allow the CC-130J to operate effectively in civil and military airspace for the next five to 10 years.”

That was very forseeable before the acquisition contract was signed, but regardless, the training environments must be upgraded to correspond with the fleet modernization. All training simulators and courseware need to be examined, and in some cases fully developed. Lesson plans, publications, training devices, and spares processes will be updated to match the fleet upgrades, with training delivered by military instructors at 426 Squadron at CFB Trenton, ON. Sources: Canada DND, “Modernizing the CC-130J Training Environment”.

May 8/12: Final delivery. The Royal Canadian Air Force formally accepts the 17th CC-130J Super Hercules at a Marietta, GA ceremony, completing the order placed in December 2007. The aircraft will be flown to Canadian Forces Base Trenton later this week.

Lockheed Martin’s release cites more than $350 million so far, in Industrial and Regional Benefits (IRB) to Canadian industry. That figure will grow as ongoing maintenance agreements add to it. The CC-130J contract called for equivalent value industrial offsets, and for all 17 aircraft to be delivered by the end of 2012. Lockheed Martin.

April 5/12: #16 leaves. The 16th and penultimate Royal Canadian Air Force CC-130J leaves the Marietta, GA factory for CFB Trenton. The 17th and final CC-130J will be delivered in early May 2012, with ceremonies at both Marietta, GA and CFB Trenton, ON. Lockheed Martin.

Jan 26/12: Canada’s 17th and final CC-130J completes final painting. Following acceptance flights, the aircraft is scheduled for delivery in early May. Lockheed Martin.

Jan 1/11: Canada’s DND announces that “The Canadian Forces are proud to welcome today their first deployed CC-130J Hercules tactical aircraft into operational service at Kandahar Airfield”, ISAF’s main aerial hub in Afghanistan.

CC-130J: just painted
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July 20/10: Engine support. Rolls Royce announces a contract from Lockheed Martin. The base contract to support the CC-130Js’ AE 2100D3 engines is worth USD $70 million, and the entire contract could be worth up to $260 million over the CC-130J fleet’s lifetime.

Under this contract, Rolls-Royce will be providing all engine management and repair, logistics support and on-site technical support for the engine. Rolls-Royce will partner with StandardAero of Winnipeg, Manitoba, to provide engine depot-level repair services to the Canadian Air Force. This partnership supports Lockheed Martin’s commitment to provide industrial offsets equal to the planes’ sale price. Rolls Royce adds that:

“Rolls-Royce has committed to providing a number of high technology Industrial and Regional Benefit (IRB) projects in Canada. A number of Canadian companies based across Canada will participate in these projects, which represent a diverse cross section of Aerospace technologies involving engine repair, testing and manufacture, as well as leading edge research and development activities.”

June 4/10: Acceptance. Canada formally accepts the first of 17 CC-130J Super Hercules aircraft, into the Canadian Forces 8 Wing in Trenton, ON. That’s 6 months ahead of the original delivery schedule, but in line with the reported December 2009 early delivery contract. The remaining 16 aircraft will begin delivery in winter 2010 as planned, with deliveries running into 2012. Canadian DND | Lockheed Martin.

March 3/10: 1st flight. The first CC-130J Super Hercules aircraft completes its first flight. Lockheed Martin release.

Jan 13/10: The 1st Lockheed Martin C-130J Super Hercules produced for Canada leaves the company’s paint facility in Marietta, Georgia. Lockheed Martin.

Dec 18/09: Initial support deal. The Government of Canada signs a C$ 723 million (currently $698 million) contract amendment with Lockheed Martin. This initial C-130J fleet support funding covers an initial 5 1/2 year period ending June 30/16, but the contract also includes a mechanism to extend the period of in-service support throughout the fleet’s service. Public Works Canada release.

Subsequent reports indicate that all is not as rosy as it seems, however. A June 2010 article in the Winnipeg Free Press states that:

“The Defence Department got into a similar situation with Lockheed Martin when it agreed two years ago to the sole-source purchase of 17 C-130J Super Hercules cargo planes. The deal was inked without a firm in-service support contract and federal officials reportedly went through the roof when the aircraft-maker presented a proposal much higher than budgeted. In the end, Ottawa settled for an $723-million maintenance package that covers the first seven years of the cargo plane’s life – the period of time critics say is the least expensive for repairs and spare parts.”

USAF C-130J takeoff
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Dec 3/08: Early delivery contract. The Ottawa Citizen’s defense reporter David Pugliese reports that Canada has signed a contract for early delivery of 2 C-130Js. One aircraft will arrive in June 2010, and the other will arrive in July 2010.

This still misses the original must-deliver date of early 2009, but that goal was based on a contract being signed in 2006, instead of 2008. Under the signed contract, the delivery deadline for the 1st aircraft would have been January 2011.

Nov 27/08: The Ottawa Citizen’s defense reporter David Pugliese reveals that the USAF and Lockheed Martin have offered Canada early delivery of 2 C-130Js, in a manner similar to Norway’s recent expedited order. His sources confirm that the US government gave its blessing several months ago at least, and that the paperwork has been ready to go for Canada’s approval, but Canada’s Defence Department has still not moved on the offer.

Jan 23/08: Rolls-Royce announces that Canada has selected their AE2100D3 advanced turboprop engine to power the news fleet of CC-130J Hercules transport aircraft. The 6,000shp AE2100 is the standard engine for the C-130J (17 aircraft x 4 = 68 engines), and variants also power the twin-engine Alenia C-27J Spartan/ “Baby Herc” and the unique V-22 Osprey tilt-rotor. Rolls Royce recently delivered their 1,000th AE2100 to Lockheed Martin, where it awaits installation on a C-130J aircraft.

Rolls-Royce values the business at more than $135 million over the life of the20-year program. This includes maintenance and testing at Rolls-Royce Canada Limited, which occupies over 500,000 square feet of space near the Montréal International Airport at Dorval. That maintenance work will help Rolls Royce meet the government’s “Canada First” targets, which demand industrial value equal to 100% of the purchase price for new equipment.

Rolls-Royce has had a long relationship with the Canadian Forces, stretching back many decades. Their engines currently power Canada’s 4-engined CP-140 Aurora (P-3 Orion variant) maritime patrol aircraft fleet, and the Hawk jet trainer fleet at the NATO Flight Training in Canada Program.

Jan 21/08: Industrial. Lockheed Martin announces initial contract commitments to companies in Quebec that will lead to placing work with at least $241 million of Canadian content value in the region. Winning firms include: Heroux Devtek (landing gear assemblies) and CAE (flight simulators), who are already part of C-130J production, as well as Avro Tools (aerospace assembly tools and accessories), Rolls-Royce Canada (enhancement of engine repair activities at Rolls-Royce Canada), and CEL Aerospace – (aircraft engine test cells & equipment). Lockheed Martin’s release points out that:

“Lockheed Martin has worked with more than 300 Canadian companies across all regions providing them with contracts worth more than $266 million USD in the last two years alone – outside industrial benefits obligations… Today’s announcement is one of four regional announcements which combined will total the first 60% of the industrial benefits obligation under the contract. Lockheed Martin will continue to work closely with Industry Canada and Regional Development Agencies to identify Canadian capabilities for the remaining 40%.”

Jan 16/08: Purchase Contract. Lockheed Martin Corp receives an initial $1.4 billion contract from the Canadian government for 17 C-130J-30 stretched Hercules medium tactical airlifters and related equipment and services, with deliveries to begin in “winter 2010.” Technically, the purchase contract was awarded on Dec 20/07. The first aircraft is thus to be delivered within 36 months of contract award (by Dec 20/10), and the last aircraft within 60 months of contract award (by Dec 20/12). The aircraft will likely be based at CFB Trenton.

An additional, undetermined contract will be added in 2009 for at least 20 years of in-service support, and the total program is estimated to be worth some C$ 4.6-4.9 billion (about $4.5-4.8 billion with the dollars near parity now). The government release also implied very strongly that Lockheed Martin would receive both the build award and the maintenance award, and Lockheed Martin’s announcement confirmed it:

“This contract begins the process for working with Canadian industry to establish a 20-year In-Service Support (ISS) program for the new fleet,” said Grant. Under the terms of the agreement, Lockheed Martin is required to conduct a series of competitions to select the Canadian companies that will make up the ISS capability in Canada.”

The government release added that:

“Under the contract, Lockheed Martin Corp. is required to invest in the Canadian economy, dollar for dollar, what the Government of Canada spends in procuring and maintaining the aircraft over the life of the contract… Under the in-service support portion, the contractor will be required to spend in Canada 75 per cent of the total cost in direct industrial regional benefits – well above the 60-per-cent ratio negotiated by the previous government for purchases of this magnitude.”

A National Security Exemption was used to exclude this award from the North American Free Trade Agreement (NAFTA), the World Trade Organization – Agreement on Government Procurement (WTO – AGP) and the Agreement on Internal Trade (AIT). Government release | Lockheed Martin release | National Post | FOX Business | Trenton Intelligencer.

Jan 16/08: The Aerospace Industries Association of Canada (AIAC) supports the purchase, but serves notice that they will continue to advocate that key in-service support (ISS) capabilities integral to the C-130J fleet are carried out by the Canadian-based industry, and that the procurement of new C-130Js be leveraged to position Canadian companies to “fully participate” in Lockheed Martin’s new aerospace and defence programs.

“Aerospace procurements of this size and scope come once in a generation,” the release announced. “Our aim is to ensure that this substantial defence investment enhances the global competitiveness of Canada’s aerospace firms operating across the defence, space, and commercial sectors.” Canada’s aerospace industry is actually quite large, with annual sales of $22 billion, 80% of which are exports. AIAC release

Dec 20/07: The Canadian Press news agency reports that a $4.6-billion purchase of 17 C-130Js has received Treasury Board approval. No contract has yet been signed with Lockheed Martin, however, and the in-service support portion of the deal will be the subject of further discussions. Source.

Chief of Staff Rick Hillier gets the best quote:

“With the old C-130s, we’re spending more to keep them flying but their operational availability is going down. You spend … to keep it running, take it back out and some thing else breaks and you put it back in… I know this … I had a Ford Taurus.”

August 2007: Fixed. Lockheed Martin’s C-130J is deemed the only compliant bid, and an RFP is sent to that firm as the preferred vendor.

SAI C-130M
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Dec 12-13/06: Airbus lobbies. Airbus Military senior vice-president Richard Thompson took the A400M’s case directly to the Canadian press corps and voters. “We’ve had opportunities to talk to decision makers within DND (Department of National Defense), but we have felt all along that our message hasn’t been heard… As a group of companies, EADS has had trouble getting its voice heard… So, we’re here to get our message across… We’re of course very disappointed that the government’s response to the solicitation of interest and qualification process was to enter sole-source negotiations with Lockheed Martin regarding the C130J… We are hopeful that in the coming months, as negotiations proceed, the government will reconsider its decision and at least look at the alternative offered by the A400M” he said, not ruling out legal action to ensure a fair bidding process. Thompson cited:

Greater cargo capacity and cross-loading compatibility with the C-17, plus the ability to carry all versions of the LAV III vehicles in roll-on, roll-off combat ready condition rather than partially disassembled.

Sufficient size and range to provide strategic airlift support if necessary (with aerial refueling). “In fact, Airbus Military earlier this year offered to provide a single fleet of A400M to meet Canada’s strategic and tactical airlift needs at a savings of $3 billion over the cost of purchasing separate fleets, but received no response. This option still remains available.”

“The A400M also offers superior options for industrial benefits to Canada, where EADS and its business units, which includes Airbus Military, already do more than $700 million worth of business a year.” See AFP article | Airbus Military release.

Dec 27/06: C-130M? CanWest News Service – Canada missed chance for cheaper aircraft upgrade:

“Snow Aviation officials say Canada missed an excellent opportunity to get a plane capable of working in Afghanistan and on other counter-insurgency operations while saving more than a billion dollars that could be used to buy other needed military gear… Each plane would cost about $40 million US, said company president Harry Snow, a C-130 pilot with combat experience. Defence Minister Gordon O’Connor has told the Commons that Canada will be paying Lockheed about $85 million US for each C-130J.”

See also CASR: Background – Airlifter Comparisons – Snow (SAI) ‘C-130M.’ CASR details Snow’s upgrade set, including new engines and 8-blade NP2000 propellers, and discusses.

Nov 22/06: C-130J picked. Ottawa Citizen – Lockheed wins $4.9B contract. The story contends that DND representatives did not seriously examine Airbus’ bid, and gives these details:

“The Conservative government has quietly named Lockheed Martin’s C-130J aircraft as the winner of a $4.9-billion bid to replace the military’s aging Hercules transport planes… The Canadian government will spend $3.2 billion to buy 17 of the aircraft and another $1.7 billion for a 20-year service contract for the planes. Lockheed, as the prime contractor, will be responsible for the maintenance contract as well. The contract for the planes is expected to be signed by the summer of 2007. The first aircraft will be required to be delivered three years after that.”

June 26/06: Canadian DND: “Canada First” Defence Procurement – New Strategic & Tactical Airlift Fleets; see also Backgrounder: “Canada First” Defence Procurement – Tactical Airlift

Dec 26/05: DID – Airbus A400M Back in the Canadian Race? Via an offer to refurbish and provide Hercules aircraft as an interim solution.

Nov 28/05: Defence News – Critics: Canada ‘Fixed’ Contest for C-130J. “Canada will purchase 16 new tactical transport aircraft, but Defence Minister Bill Graham is already fending off accusations that the multibillion-dollar program is rigged in favor of Lockheed Martin’s C-130J…”

Nov 22/05: Project kickoff. Canadian DND: Government of Canada Announces New Tactical Airlift Project and also Transcript: Tactical Airlift Fleet Announcement

Aug 3/05: Fraser Institute – New Study Recommends that Canadian Forces Replace Ageing Hercules Fleet. The Fraser Institute is a right-wing Canadian think tank. “The authors recommend that the Canadian Forces’ airlift needs can best be met by purchasing a mix of C-17 Globemaster III and C-130J Hercules aircraft.”

Appendix A – Someday: Facing the Future, At Last?

CC-130, CFB Trenton
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In 2005, DID opined that “The C-130 replacement program may even be a harbinger of additional efforts to shore up the severely weakened Canadian armed forces.” This turned out to be true, but the players changed in the interim.

Former Canadian Minister of Defence Bill Graham promised in November 2005 that:

“Other militaries around the world are also embarking on fundamental changes the way in which they purchase equipment. This acquisition will begin to point the way towards a new direction in defence procurement in Canada… Last spring [2004], through the defence policy statement and the $12.6 billion in additional funding provided to Canadian Forces in the federal budget, this government outlines a bold new vision for the Canadian Forces. General Hillier and I have been working on implementing this, in effect moving from vision to mission. New equipment is central to the vision. It is absolutely essential to the mission. You will see more significant defence procurements in the near future, but we start today.”

Documents like the 2003 National Defence Strategic Capability Investment Plan, the 2005 defence budget increases, and recent Canadian defence policy statement also suggested that this trend just might be real.

Stephen Harper’s government was a minority government when the decision was made, and further changes in government were certainly possible. As we’ve seen with the 20-year long maritime helicopter procurement fiasco to replace Canada’s ancient Sea Kings, those changes can and do play havoc with defense requirements. As such, our conclusion in November 2005 still holds:

“Watching the progress and execution of the CC-130 replacement program will offer Canadians – and the broader world – a useful indicator of just how real [these intentions are].”

Bite the Bullet – Canada’s Procurement Approach and Process

CC-130 Refuels CF-18s
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With Canada’s 2006 election imminent, the minority-government Liberal Party of Canada suddenly announced a C$ 4-5 billion program to procure at least 16 replacement tactical airlifters for the Canadian Forces. The Liberals went down to defeat, and the program was withdrawn pending consideration by the incoming Conservatives, who were thinking of C-17s. In June 2006 they made up their mind – buy both. A new Strategic Airlift RFP ended up buying 4 C-17s, and the CC-130 replacement program was on again. A C-130J deal wouldn’t be announced until January 2008, however, despite a procurement process designed to speed up the buy.

Why is that, and what process was used?

The Canadian Department of National Defense (DND) had a November 2005 preliminary release out about the upcoming competition, that adds some useful information, as well as a much more in-depth transcript – and of course the recent June 29 Ministerial Statement and formal (renewed) program announcement from Canada’s new Conservative Party government. To give our readers a full-scope overview, we’ll present the highlights here, mixing, matching, and adding additional relevant commentary – but always letting the participants speak fully for themselves.

Bill Graham, Canada’s former Minister of National Defence under Paul Martin’s previous Liberal Party government, noted how the extent of existing wear on Canada’s CC-130s was changing that government’s traditional mindset and approach:

“In another situation, where one had more leisure and more time, one might well take a different approach, but what – as the general pointed out, in this particular case, 36 months from when we signed the contract is stretching it and we are going to work trying to get an aircraft earlier than the 36 months. That is the furthest out date. Our object is to go and see if we can get a few aircraft even earlier than that to replace particular the nature of the E model. I never can — the E models which is the older models. You will appreciate the older ones, some of them are now about 36, 38 years old. So they will go first, you know, we will get them staged.”

Full speed ahead…
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Canada’s CASR defense think-tank reports that this extreme situation is a direct result of past foot-dragging in this area, despite a number of golden replacement opportunities as well as airframe life warnings. Prime Minister Harper’s new 2006 Conservative Party government and Minister of National Defence Gordon O’Connor continued with this timeframe:

“Delivery date of the first aircraft to be no later than 36 months after contract award and final aircraft delivery no later than 60 months after contract award… The requirement for this equipment is urgent. Delivery is expected as soon as possible…”

The competitive procurement of these aircraft will use performance-based specifications based upon a very small number of minimum performance requirements established by the Canadian military. That performance-based aspect is worth some explanation and illustration. Former Minister of National Defence Bill Graham:

“…I mean my talking to other ministers of defence, Jeff, around the world, everyone has been coming to new ways of doing this. The Americans clearly have been moving more towards procurement, the British, the Dutch, other ministers that I have had an opportunity of discussing this, but nobody was doing this 15 years ago. The performance-based, the attraction of the performance-based is we get out of the business like, and the example I gave was the last helicopter purchase of putting out 17,000 pages of specifications. And we put out a document on one page that says here is what the troops need, the reasons the general said, that can get our — move our equipment and our troops within certain theaters, with certain capacities, come forward and give us your plan as to how you can fulfill that need. It is a much – it allows industry much more flexibility in coming forward with imaginative proposals. That is the purpose of performance-based and that is what we are doing here.”

That’s still the overall approach. In addition to the 17 aircraft minimum and delivery time requirements, key requirements included:

• Range and payload capacity of 4,630 km (2,875 miles) and 8,165 kg (18,000 pounds).

• Take off and landing from unpaved, short runways (914 meters x 27 meters, or 3,000 feet x 90 feet).

• Cruise speed and cargo compartment size/ carrying capability no less than existing CC-130s. Must also have the ability to load and unload palletized cargo at austere operating locations without the use of specialized loading equipment.

• Survivable in a threat environment, allows tactical flight profiles like corkscrew descents and maneuvers at low-level altitudes (61 metres).

• Must be certified to aviation certification standards recognized by Canada by the contract award date – not the delivery date.

• The manufacturer must deliver industrial offsets to Canada. As “Canada First Defence Procurement – New Strategic & Tactical Airlift Fleets” notes:

“Benefits for Canadian industry will be considerable as both acquisitions require contractors to provide full economic benefits. This means that for every contract dollar awarded, the contractor will commit a corresponding dollar in economic activity in Canada.”

Did this short list of specifications actually call forth creativity, or just provide cover for expedited purchase of a single option? That question brings us to the other key change: “solicitation of interest and qualification,” a new approach to procurement for Canada’s DND. Given the CC-130 fleet’s age, the 20-year long procurement fiasco of Canada’s Maritime Helicopter Competition was not an option.

CH-148 Cyclone [H-92]

“Solicitation of interest and qualification” invited potential suppliers to indicate their interest, and demonstrate why and how their choice is able to meet the mandatory performance-based criteria. The 2006 announcement adds another fillip designed to speed up the process, noting that “if [DID: and only if] more than one potential supplier [is deemed to] meets the mandatory requirements, a formal request for proposal will be issued.”

Though born in part of grim necessity given the rapidly-waning life of Canada’s Hercules aircraft, this approach also dovetails with wider international defense procurement trends toward performance-based contracting and with Gen. Hillier’s vision for Canada’s own military transformation efforts.

Of course, this addition, and the crafting of the specifications, could also mean a closed procurement conducted under the false guise of open competition. In the end, despite submissions from Airbus Military (A400M) and Snow Aviation (C-130M STOL), and an offer from the Russian government (IL-76s), DND’s original choice of the C-130J Hercules was deemed to be the only compliant bid. A request for proposals was issued to Lockheed in August 2007, as the preferred vendor.

Negotiations with Lockheed Martin proceeded very slowly, in large part because of the government’s stated requirement for industrial offsets. Heroux-Devtek Inc. in Longueuil, Quebec, builds landing gear for the planes while CAE Inc. in Montreal, Quebec provides the aircraft’s training simulators. Moving from that level of involvement to 100% offsets is not easy. Lockheed Martin vice-president Jack Crisler has said that there might be opportunities for painting and finishing the aircraft in Canada, and the maintenance contract is almost certain to go to a Canadian firm, but that isn’t the same as 100% industrial offsets, either.

The end result was a delay of 1 1/2 years, and the slippage of the “critical” early 2009 delivery date to December 2010 – almost 2 years.

Are You Ready for the Country: Possible Competitors

UK C-130J C5
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Whether it was done deliberately or inadvertently, the requirements as written dictated Canada’s choices. The required aircraft numbers and delivery time requirements were especially restrictive. How serious were those requirements? Gen. Hillier has certainly spoken to the hard operational limit of the current force, which leaves very little wiggle room in the timeline. The question of numbers also came up in the November 2005 briefing, and was answered thus:

Question: (Inaudible) to do the job of three or four Hercules, why not take one Boeing C-17?

Gen. Rick Hillier: Quantity has a quality all of its own. We have a direction in the defence policy statement to run two major missions abroad plus many of course smaller ones

[DID: note to American readers – what they consider a mission and what you consider a mission are very different scales]. We have to be prepared to respond to at least one national disaster or tragedy and in order to be able to do that in various places around the world, let’s say one mission in Africa, one mission in the Far East or the Asian perimeter such as East Timor and a mission here in Canada, plus normal training and bringing forth the air crews and the airplanes, you have got to have a number that allow you to do that business and that number of course is what leads us to go about 16 aircraft right now. So it is quantity as a quality all of its own in this case.

While the issue of choosing between the Hercules and C-17 no longer arises thanks to Canada’s new Strategic Airlift RFP, these answers offered good insight into the ongoing Tactical Airlift competition. Plotting the potential contenders against these simple requirements, we find that:

C-130J vs. C-130J-30
courtesy of CASR
(click to view full)

Lockheed Martin can offer the C-130J Hercules or even the stretched C-130J-30. Indeed, that option has been dangled in front of the Canadian Forces before. CASR notes that:

“On 28 March 2005 it was reported that Lockheed Martin is now also offering Canada a Hercules lease arrangement – this time on brand-new ‘Js straight from the factory. LM claims that the lease would cost the same amount that maintaining the current fleet does. The LM spokeperson was quoted saying ‘How the lease is structured is entirely up to Canada’. So a lease-to-own deal on ‘Js is a possibility.”

In another potential deal, Britain had also offered to lease Canada its nearly-new C-130Js, which would have left the RAF with stretched C-130J-30s and freed up funds for more C-17s. Canada declined the deal.

To date, the C-130J Hercules has been bought by Australia, Britain, Denmark, Italy, Norway, and the USA (US Air Force, Air National Guard, Marine Corps and Coastguard). C-130J production began in 1999, and at approximately USD $66 million per plane, it is also an affordable option given Canada’s numbers requirements.

The delivery deadline has now slipped to 2010, however, which may pose a problem given the age of Canada’s CC-130 fleet and the possibility of forced groundings. How this is handled by Lockheed Martin and by Canada’s DND will make a big difference to the deal.

Snow C-130M
(click to view full)

An alternative package that promised earlier delivery was apparently offered by US-based Snow Aviation International.

The company’s C-130M Hercules modernization package, developed with funding from the U.S. air force, involves installing new wings, new engines, Hamilton-Sundstrand NP2000 8-bladed propellers, an enlarged dorsal fin and rudder to counteract the stronger engines and propellers, dual-mode (boom, and drogue) air-air refueling, and a modern digital “glass” 2-person cockpit instead of the present 3-man cockpits. The length of the Hercules would be extended to allow it to carry more equipment, and the modifications would allow it to land and take off on short austere runways. The cockpit would also be modernized. Snow claims that the result would be new, certified planes with 25-year plus service life – at about half the price.

The proposal did not appear to receive consideration. There are potential issues with refurbishing aircraft as old as Canada’s, which may properly bear on the choice of option. Nonetheless, the Canadian-American Strategic Review points out that:

“The SAI proposal is not really at issue – Canadian procurement practices are. DND sets its cap at its chosen product, then must accommodate internal trade regulations and every international trade treaty signed by Canada. The end result is procurement deadlock and/or litigation. Harry Snow, SAI president also acknowledged that DND prefers to deal with large firms. There are reasons for that – not all of them honorable. [6] SAI’s timing was not the best but it illustrates a cultural problem.”

Airbus A400M concept
(click to view full)

The multi-national EADS Airbus A400M was due to enter service in late 2008 at the very earliest, a date that has since slipped to late 2009. In order to qualify for the Canadian contract, multiple deliveries would be required by 2009. Because there are no flying A400Ms, its ability to meet the stated requirements is unproven and its certification nonexistent. In addition, its USD $90-120 million basic cost per aircraft (exclusive of training, support, and other full procurement costs) put it at risk under the requirement for 17 aircraft, and most of the industrial offsets were already allocated among the member countries.

However Airbus floated a trial balloon around acquiring and refurbishing C-130Hs, then offering them as an interim bridge solution to the Airbus A400M with some trade-in value. The A400M has the virtue of being designed to carry all of the Canadian Forces’ future vehicles, something the C-130J is unable to promise. A follow-up December 2006 release notes that Airbus Military was still promoting the A400M to Canada as the superior choice on both the tactical and industrial levels.

Size comparison,
courtesy of CASR
(click to view full)

There was another potential contender for this requirement, one already suggested years ago by a Canadian defense think tank. The aircraft are currently in production and are still being purchased around the world, offering a capacity that exceeds the A400M’s and approaches the C-17’s, but at an acquisition price similar to the C-130J. They are proven cold weather performers, satisfying an important criterion for Canada. A tanker version exists, as do firefighting conversions that could play an important reserve role given Canada’s vast boreal forests. The aircraft even boasts some rough field performance capability.

That aircraft is the Russian Ilyushin IL-76MD/TD Candid, which also comes in a stretched IL-76MF version. Over 900 of these aircraft have been purchased by civil and military operators in many countries, including Algeria, Belarus, China, Cuba, India, Iran, Jordan, Libya, Poland, Russia, Syria, Ukraine, and Yemen, and have been used as chartered airlift to move Canadian Forces equipment. CASR notes that they have also been manufactured with Western avionics (vid. Jordan, also Volga Dnepr fleet upgrades). CIL-76s might even receive final assembly in Canada, satisfying offset requirements and quality assurance. To reach its 100% value total, the industrial package could also be augmented with an avionics suite from Canada’s 1995 CC-130 Avionics Upgrade Program, and Western engines for the aircraft. Rolls Royce RB211s and Pratt & Whitney PW2000 have apparently been tested already, and GE’s ubiquitous CFM-56 has also been suggested.

courtesy of CASR
(click to view full)

Even Canadian civil certification may have been manageable. Chapter 3 of the ICAO (International Civil Aviation Organization) 2002 Chicago Convention in 2002 regarding ground noise level restrictions had the effect of banning IL-76TD aircraft in western Europe, North America [excluding Gander], Australia and Japan. A 4-year program launched in 2002 by Volga-Dnepr Group to upgrade the IL-76 and conform to current and future ICAO regulatory requirements finally bore fruit in May 2006, when the Il-76TD-90VD model’s certification re-established the freighter for worldwide operations.

What may not be manageable are the specific requirements in the new RFP for short-field performance from unpaved runways. While Russian aircraft tend to be designed for operation from unimproved runways, the specifics of takeoff distance are what they are. A May 2006 Russian trade delegation touted the aircraft, but the specifics of that requirement, plus its uncertain tactical/strategic designation, may have had the effect of excluding the IL-76 from consideration. So, too, did consistent disinterest in a Russian option of any sort within Canada’s DND.

Walk On – Additional Readings & Sources

• Canadian DND – CC-130J Hercules – Tactical Airlift. Project page.

• Canadian DND (March 22/10) – Tactical Airlift – A New Generation of Aircraft.

• Canadian DND (June 29/06) – Backgrounder: “Canada First” Defence Procurement – Tactical Airlift.

• Canadian DND (June 29/06) – “Canada First” Defence Procurement – New Strategic & Tactical Airlift Fleets.

• Canadian DND (Nov 22/05) – Government of Canada Announces New Tactical Airlift Project.

• Canadian DND (Nov 22/05) – Transcript: Tactical Airlift Fleet Announcement, 12h45.

• Canadian DND (April 19/05) – Defence Policy Statement.

• Canadian DND (2003) – National Defence Strategic Capability Investment Plan.

Aircraft & Options

• Canadian DND, Air Force – CC-130 Hercules

• C-130J.ca – Lockheed Martin’s site promoting their aircraft. The section re: “Canada’s Current Fleet” has been removed, however.

• DID FOCUS Article – The C-130J: New Hercules & Old Bottlenecks

• Snow Aviation International – SAI C-130M Herk “Plus”. See also STOL Herk Program. Site no longer up, these are 2011 snapshots.

• CASR – Background – Airlifter Comparisons – Snow (SAI) ‘C-130M’. “US Snow Aviation International offered to rebuild CF Hercules “for less than half of the price” of new C-130J Hercules. Details of this proposal will not be made public “because of privacy regulations” but, we are assured, the process was “transparent.” The technical merit of SAI’s proposal get lost in all this…”

• Airbus Military – A400M.

• Air Force Technology – A400M (Future Large Aircraft) Tactical Transport Aircraft, Europe Updated Project.

• Air Force Technology IL-76 .

• CASR – CASR Background ~ Airlifters.

• CASR (May 2006) – BG Archive -Airlifter Comparisons – IL-76 [VDG News Release]. Chapter 3 of the ICAO(International Civil Aviation Organization) 2002 Chicago Convention in 2002 regarding ground noise level restrictions had the effect of banning IL-76TD aircraft in western Europe, North America [excluding Gander], Australia and Japan. A 4-year program launched in 2002 by Volga-Dnepr Group to upgrade the IL-76 and conform to current and future ICAO regulatory requirements finally bore fruit in May 2006, when the Il-76TD-90VD model’s certification re-established the freighter for worldwide operations.

• CASR – Alternatives for Canadian Strategic Airlift Capability. Includes:
  
• Part 1: A Modest Proposal – Canadian Strategic Airlift – One Alternative
  
• Part 2: A Modest Proposal – Perfectly Candid Canadian Strategic Airlifter
  
• Part 3: Background – Airlifter Comparisons – Ilyushin IL-76 [Cargo Hold]
  
• Part 4: Background – Airlifter Comparisons – IL-76 [Western Certification]

• DID FOCUS Article – Aging Array of American Aircraft Attracting Attention.

News & Developments

• The [Trenton] Intelligencer (Dec 22/07) – Base a hive of activity [dead link]. Describes efforts at CFB Trenton, which flies many of Canada’s transport aircraft.

• CASR (December 2007) – The Rumour Mill and On Again/Off Again Hercules.

• CASR (June 2006) – BG Archive – Canadian Forces Airlifter Contest – Skylink Offer. Included IL-76TDs and AN-124-100s under guaranteed charter, similar to the set of aircraft chartered by Canada’s DND under NATO’s SALIS program.

• CASR (May 2006) – BG Archive – Canadian Forces Airlifter Contest – Russian Offer. IL-76s and Mi-17s. Helicopter support is another critical gap for Canadian forces in Afghanistan.

• DID (Dec 26/05) – Airbus A400M Back in the Canadian Race?

• Fraser Institute (August 2005) – The Need for Canadian Strategic Lift.