On The Verge: $4B+ for Canada’s Medium-Heavy CH-147 Transport Helicopters
Final CH-147 delivered – Happy Canada Day!; Additional Readings sections updated.
June 30/14: Final Delivery. Boeing and the Royal Canadian Air Force celebrate the delivery of the 15th CH-147F Medium-to-Heavy-Lift Helicopter. The final CH-147F will join the Royal Canadian Air Force’s 450 Tactical Helicopter Squadron, under command of 1 Wing Kingston, Ontario, and will be based at CFB Petawawa. Sources: Boeing, “Boeing Completes Delivery of Canadian CH-147F Chinooks”.
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Back in 1991, Canada’s Mulroney government sold the country’s CH-47 Chinook medium-lift helicopter fleet to the Dutch. They cost a lot to maintain and operate, and Canada didn’t need them anyway. Or so they thought. Fast forward to 2002, then 2006. Canada has had boots on the ground in Afghanistan for several years now, but doesn’t have any helicopters capable of operating in the hot and/or high-altitude environment of southern Afghanistan. To support its 2,000 or so troops in Afghanistan, Canada had to rely on favors from US, British, Australian, Polish, and – irony of ironies – Dutch pilots flying CH-47 Chinooks.
Even so, Canada’s “emergency” purchases for Operation Archer never included helicopters. It should have come as a relief, therefore, to learn in June 2006 that the Canadian government had announced a CDN$ 4.7 billion program to purchase 16 “medium-heavy” helicopters for military and “disaster response” roles. It should have, but it didn’t. It took 21 months after this helicopter program was announced before a sole-source RFP was even issued. DID explains the Afghan situation on the ground for Canadian forces, the RFP, the options, the problems, the ultimatum issued by Canada’s Parliament, and the contract(s) for new CH-47F/ CH-147 helicopters.
Cemetary Sideroad: On the Ground in Afghanistan
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When the program was announced in 2006, Canada was still operating as part of NATO’s ISAF force, within a group under British command tasked with the south-western provinces of Kandahar, Helmand and Uruzgan. Canadian Task Force Orion is based in Kandahar, and in 2006 its commander Lt. Col. Ian Hope was quoted by Canadian defence think-tank CASR as saying that:
“It is quite possible [this lack of transport helicopters] has cost limbs, if not more, because we have had to sustain [resupply troops in remote areas using vehicles] on the ground,” said Lt-Col Ian Hope, who commands [Task Force Orion]. “That has produced a risk that would be reduced if we could take helicopter flights. It does not take a military tactician to know this. We have mitigated the risks. Losses have been reduced, but not yet to zero.”
Canada’s senior logistician in Kandahar Lt. Col. John Conrad added that Canada’s Forward Operating Bases (FOBs) are located along roads and dirt tracks where the Taliban and its commanders in Quetta, Pakistan often send suicide bombers, or places mines and other explosives because American, British, and Dutch Chinook transport helicopters are seldom available for such missions:
“The convoys are now in harm’s way almost daily because supplies have to follow the infantry and we have had to send those supplies by land… We bid on [available coalition helicopter support], but it is like coming to a potluck. Everyone brings a dish and, instead of potato salad, we come with a jug of water. [our allies] help us when they can, but we are at the end of [their priority] list [unless the requirement is close air support or MEDEVAC].”
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Indeed, the government’s own June 2006 announcement recognized this when it stated that:
“To date Canada has relied on allied or coalition forces to provide this type of helicopter transport while deployed. This limits the Canadian Forces’ ability to conduct independent operations, and also means when unavailable, troops must opt for ground transportation, placing them at greater risk of ambushes, land mines and improvised explosive devices.”
This problem eventually came to a head in Parliament, where Canada’s Conservative Party runs a minority government. The January 2008 Manley Report was an independent panel called by the Parliament of Canada, and a key part of their report minced few words:
“Despite recent indicators of imminent reinforcements, the entire ISAF mission is threatened by the current inadequacy of deployed military resources. As well, to improve the safety and operational effectiveness of the Canadian Forces in Kandahar, the Government should secure for them, no later than February 2009, new medium-lift helicopters and high-performance unmanned aerial vehicles. Canadian soldiers currently must rely too much on allied forces for both of these necessary assets. If no undertakings on the battle group are received from ISAF partner countries by February 2009, or if the necessary equipment is not procured, the Government should give appropriate notice to the Afghan and allied governments of its intention to transfer responsibility for security in Kandahar.”
In other words, to leave Afghanistan. That ultimatum kick-started a stopgap CH-47D buy from US Army stocks, while providing added impetus to get the CH-47F buy moving.
Bring It All Back: The New Helicopter Competition
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According to the broad DND announcement in June 2006, The estimated total project cost for this aircraft acquisition was C$ 2 billion (USD $ 1.78 billion then), plus an estimated contract value of C$ 2.7 billion (USD $2.4 billion then) for 20 years of in-service support – a contract to be competed by the winning contractor, with work largely to be done in Canada by Canadian mechanics and contractors. As with other contracts in the series, the winning contractor was expected to provide total industrial offsets equal to at least 100% of the contract value.
The Canadian DND also had a specific platform in mind, as they’re using a competitive process known as an Advance Contract Award Notice (ACAN):
The ACAN process permits the Government to identify an intended contract award winner (in this case, the Boeing CH-47F Chinook) based on the mandatory capabilities and detailed market research conducted by the Department. Industry is then given the opportunity to respond, should they feel they have an aircraft that meets this criteria. If no supplier submits a statement of capabilities that meets the requirements set out in the ACAN during its posting period of 30 calendar days, then the competitive requirements of the government’s contracting policy have been met and the government’s choice is bought. If a valid statement of capabilities is received then a fully competitive process will be run.
So, what are those required capabilities?
- Internal – Cabin space to accommodate an infantry platoon (30 soldiers) with full combat equipment, including weapons, body armor, rucksacks, rations and communications (4,763 kg/ 10,550 lbs.).
- External – Lift multiple loads, including a lightweight field howitzer (Canada recently bought the M777) and associated equipment (minimum of 5,443 kg/ 12,000 lbs.).
- Hot and High – Accomplish the lift and range parameters defined above, at altitudes and temperatures up to 1,220 m/ 4,000 ft above sea level and 35 C / 95 F degrees.
- Range – Minimum of 100 km/ 60 miles with either the internal or external load described as above and at the temperatures and altitudes defined.
- Aircraft certification – Aircraft must be certified to aviation certification standards recognized by Canada by the contract award date.
- Fleet size – Minimum fleet of 16 aircraft, sufficient to sustain a minimum of three deployed helicopters in addition to maintenance, test and evaluation, and training at two main operating bases.
- Delivery – Delivery date of first aircraft must be no later than 36 months after contract award and final aircraft delivery no later than 60 months after contract award.
The Canadian Department of Public Safety is also part of the purchasing process, as they expect the aircraft to be used to respond to natural or man-made disasters. This is not exactly a vote of confidence in their current EH101/CH-149 Cormorant Search and Rescue helicopters, though the current fleet of 15 Cormorants is a small number for a country Canada’s size.
The ACAN expected to award a contract by July 2007. The problem arose when DND worked with Boeing to develop a detailed statement of work. That’s very difficult if DND isn’t sure which types of operations are to be supported (land? maritime? special operations?), and what mission systems would be needed.
Those continued to change, and by March 2007, Boeing informed DND that the additional requirements would create both a delivery delay of 12 months, and cost increases of about USD 360 million in one-time engineering costs. CH-147 changes from the standard CH-47F included enlarged ‘fat tanks’ developed to give US Special Forces Chinooks longer range; a new electrical system based around twin 60KvA generators, producing 2x the electrical power; a new cockpit avionics suite; and “standard” special forces additions like a rescue hoist, surveillance and targeting turret, etc.
DND responded by trying to stay within its authorized spending limits, and didn’t finalize its requirements until 2009, when the contract with Boeing was signed. That contract includes a provision for Canada to receive some royalties, if a future customer purchases the Canadianized CH-47F version.
Once the final contracts were signed, estimates of C$ 4.7 billion in 2006 had risen slightly to C$ 4.9 billion by 2010, for the helicopters and their accompanying support contracts.
We’ll Go Too: Updates & Timeline
2013 – 2014
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June 30/14: Final Delivery. Boeing and the Royal Canadian Air Force celebrate the delivery of the 15th CH-147F Medium-to-Heavy-Lift Helicopter. The final CH-147F will join the Royal Canadian Air Force’s 450 Tactical Helicopter Squadron, under command of 1 Wing Kingston, Ontario, and will be based at CFB Petawawa. Sources: Boeing, “Boeing Completes Delivery of Canadian CH-147F Chinooks”.
Final delivery
June 27/13: #1 arrives. Boeing officially hands over the 1st CH-147F Chinook helicopter to the Royal Canadian Air Force’s 450 Tactical Helicopter Squadron, following formal delivery at the plant in Ridley, PA on June 21st. The Canadian government acceptance ceremony takes place on the 27th, at the Canada Reception Centre in Ottawa International Airport.
This helicopter will be followed by 6 more in 2013, and then another 8 by June 2014, at which point Canada will have all 15. Canada DND | Boeing.
2010 – 2012
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Nov 19/12: Sub-contractors. Canadian landing gear specialist Heroux-Devtek Inc. in Longeuil, PQ receives a multi-year contract from Boeing to manufacture the landing gear for all US Army CH-47F helicopters bought under MYP-II. Deliveries are scheduled to begin in the first half of 2014 and run into 2019. Current MYP-II contract expectations will involve 155 helicopters, but this sub-contract also includes options for up to 150 additional landing gear sets to 2019. America isn’t likely to order another 150 CH-47Fs, but foreign buyers might, and MYP-II lets them benefit from the same bulk-order prices negotiated by the US government.
Heroux-Devtek is already an incumbent landing gear supplier for the CH-47F, thanks to the Sept 24/09 MoU that let them bid to supply all H-47F aircraft delivered to customers outside the United States. In September 2012, they received a license to fabricate replacement parts, and to carry out repair and overhaul services, for the landing gear of all Chinook variants. This agreement completes the trifecta. Heroux-Devtek release [PDF].
Sept 21/12: Support. Boeing adds General Dynamics Canada in Ottawa, ON to its CH-147 in-country In-Service Support program, twice. This final subcontract is for Engineering Support Services, which include reliability, availability and maintainability support; systems and support engineering; integrated logistics; and structural integrity engineering services.
This is actually General Dynamics Canada’s 2nd CH-147 support contract, alongside a July 2012 maintenance training suite and contractor maintenance support contract. Boeing has said (q.v. Jan 31/10) that it expects all of its in-service support contracts to be worth a total of about C$ 2 billion over 20 years. Boeing | GD Canada.
June 24/12: Flight. Boeing new “CH-147F” helicopter makes its inaugural flight, testing airworthiness, the new electrical system and the Common Avionics Architecture System cockpit. Boeing.
1st flight
Feb 1/12: Support. Boeing announces some of the maintenance sub-contracts for Canada’s CH-147F helicopters. The recipients all count as Canadian firms, so their contracts can be counted toward Canada’s 100% industrial offsets requirement for the buy. Boeing has said (q.v. Jan 31/10) that it expects all of its in-service support contracts to be worth a total of about C$ 2 billion over 20 years.
Competitions are still in progress for Support and test equipment; Contractor maintenance support for the maintenance training suite; and Engineering support services sub-contracts. Boeing expects to announce those selections later in 2012. The initial winners, and their domains, are:
- L-3 Communications MAS in Mirabel, Quebec: Technical publications.
- L-3 Electronic Systems in Enfield, Nova Scotia: Logistics support analysis.
- Raytheon Canada Limited in Calgary, Alberta: Supply chain support.
Oct 21/11: Associate Minister of National Defence Julain Fantino is present in Ridley Park, PA to officially launch final assembly of the 1st CH-147F. The project is described as on-schedule and within budget (but see Oct 28/10 entry).
The first CH-147F is set to come off the assembly line for tests and evaluation flights in June 2012. In June 2013, the new squadron at CFB Petawawa is scheduled to receive the first deliveries. Canada DND.
Dec 13/10: Infrastructure. Sod-turning for CFB Petawawa’s CH-147 hangar, mentioned in the Oct 22/10 entry. DND.
Oct 28/10: OAG critical. Canada’s Office of the Auditor General (OAG) releases their 2010 Fall report. The report’s main focus is on Canada’s C$ 61 billion economic stimulus program, which rates an unusual verdict of being well managed. Canada’s CH-147 program, on the other hand, rates a far more negative verdict. Most important, they contend that the procurement process itself was unfair, and that DND kept senior decision makers in the dark about major changes to the project and its costs. Key excerpts:
“We found that National Defence’s needs and priorities were not precisely defined at the outset and… were not finalized until the contract with Boeing was signed in 2009…The [June 2006] statement of operational requirements was not reviewed or endorsed by the Senior Review Board or by the Joint Capability Requirements Board until October 2006 and, consequently, did not benefit from the rigorous challenge these bodies are expected to provide… The intended configuration of the Canadianized Chinook evolved as decisions were made… According to National Defence, the seven high-level mandatory requirements could have been met by a basic Chinook model. However, in the process of detailing its specifications with Boeing, National Defence also drew from the set of rated operational requirements, effectively treating extended-range fuel tanks, an upgraded electrical system, and aircraft survivability equipment as mandatory requirements, though none had been originally identified as such. These additional modifications resulted in significant changes to a basic Chinook model and also had an impact on the timing and complexity of certification for airworthiness…
The full extent of modifications were not initially presented to decision makers.… We disagree with the characterization of this helicopter as being off-the-shelf. It is evident that from the beginning, National Defence did not intend to procure an off-the-shelf Chinook but rather a modified one… So significant were the modifications to the basic Chinook helicopter that Boeing’s estimate included nearly US$360 million for one-time engineering costs… National Defence knew, prior to seeking preliminary project approval from the Treasury Board and issuing the ACAN, that significant modifications to a basic Chinook were desired and planned. It knew also that these would increase the risks to cost and schedule. However, this was not presented to the Treasury Board when seeking preliminary project approval… Ultimately, Canadian-required modifications increased the cost of each aircraft by 70 percent more than initially quoted by Boeing in early 2006. This prolonged the negotiation of the contract by over two years and delayed the delivery of the aircraft.”
…Overall, in our opinion, the manner in which PWGSC used the 2006 ACAN did not comply with the letter or intent of the applicable regulations and policies and, consequently, the contract award process was not fair, open, and transparent. In addition, we believe a second ACAN should have been issued in 2009 and should have included the final helicopter requirements and specifications, the revised delivery and certification schedule, an indication of willingness to pay one-time engineering development costs, and other significant changes made to the project scope.”
The OAG report compares the C$ 2 billion advertised cost for 16 helicopters with the current C$ 4.9 billion, but it’s not an even comparison because the current program total includes long term support contracts, and the original cost did not. They do note, correctly, that planned delivery of the first fully capable CH-147 has been delayed from 2008 to 2010, and then again to 2013, while the buy was cut to 15, due in part to poor decision making within DND. Canadian OAG Release re: military helicopters | Media Statement | Full report || Parliamentary Hansard transcript re: defense questions | Canadian Press | CBC | Global News timeline | National Post | National Post op-ed | Toronto Sun | Vancouver Sun || Agence France Presse | China’s Xinhua || Defense News.
OAG Report: sharply critical
Oct 22/10: Infrastructure. The DND awards well known Canadian construction firm EllisDon Corp. C$ 134.8 million (currently $131.5 million) to to build infrastructure for 15 CF-147F Chinook helicopters at CFB Petawawa.
It’s a bit more than just a 50,000 square meter hangar, and will also include 1st and 2nd line maintenance bays, CAE and Boeing training schools, a backshop and warehouse, and a Department of National Defence Command Suite. DND release | DND backgrounder.
Sept 15/10: The US DSCA announces Canada’s formal request to buy up to 8 AN/AAQ-24v Nemesis Directional Infrared Countermeasure Systems (DIRCM), worth up to $72 million, for its CH-47F fleet. The AAQ-24 is closely related to the larger LAIRCM, which generally equips large aircraft like C-130s. It detects incoming missiles, then uses laser pulses to overwhelm and confuse infrared seeker heads.
The entire order includes 11 AN/AAQ-24v Processors, 12 AN/AAQ-24v Control Indicator Units, and 21 AAQ-24(V) Smart Cards; 16 Small Laser Transmitter Assemblies (SLTAs); 54 AAR-54v Missile Approach Warning Sensors (MAWS). Additional spare components requested include 2 SLTAs, 6 AAR-54v (MAWS), 1 AN/AAQ-24v Processor, 1 AN/AAQ-24v Control Indicator Unit, and 4 AN/AAQ-24v Smart Cards; plus support and test equipment, spare and repair parts, publications and technical documentation, personnel training and training equipment, ad other forms of U.S. Government and contractor support. Canada already operates these systems on its C-17s, so the sale doesn’t require any additional support staff. Oddly, the DSCA adds that:
“The upgraded CH-47F helicopters will be used during deployments into Afghanistan supporting coalition goals and U.S. national objectives.”
Canada is set to leave Afghanistan in 2011, before its CH-47Fs are delivered. The DSCA is either speaking in the hopeful tense about future deployments, or confusing the target vehicles with Canada’s 6 second-hand CH-47Ds that are currently deployed in Afghanistan.
ECM request
June 1/10: Industrial. As part of the CH-147’s industrial offsets program, Boeing and Canadian industry partners today launch the Canadian Composites Manufacturing Research and Development consortium (CCMRD). CCMRD will act as a virtual R&D center for a growing sub-sector in the global aerospace industry, with projects to be carried out at member companies across Canada. In addition to financial support, Boeing will provide technical expertise and project guidance through Boeing Research & Technology.
CCMRD will operate in cooperation with the existing Composites Innovation Centre (CIC) in Winnipeg, MB, and the National Research Council Canada’s Institute for Aerospace Research (NRC-IAR) in Ottawa, ON will act as a technology adviser. Beyond Boeing, Canadian member companies include Bell Helicopter and Avior Integrated Products in Quebec; Comtek Advanced Structures in Ontario; Convergent Manufacturing Technologies and Profile Composites in British Columbia; and Bristol Aerospace, a division of Magellan Aerospace Ltd. and Cormer Group Industries Inc. in Manitoba. Boeing.
April 11/10: The US DSCA announces [PDF] Canada’s official request to buy up to 36 Honeywell T55-GA-714A engines, plus spare and repairs parts, support and test equipment, personnel training and training equipment, publications and technical data, engine qualification review, and other forms of government and contractor support. The estimated cost is $71 million.
Observant readers will note that there is no DSCA request for the helicopters themselves, which were concluded as a direct commercial sale in August 2009. The DSCA request for the engines must take place for items classified as military technology, and sourced from the USA. The prime contractor will be Honeywell International in Phoenix, AZ, and the DSCA request adds that “there are no known offset agreements proposed in connection with this potential sale.” This is in contrast with the 100% offset provisions for the helicopter sale itself, which must be met by Boeing.
Engines request
March 23/10: Training. Canada’s signs a C$ 250 million (about $245 million) contract with CAE of Montreal, QB, to supply simulators for the new CH-47 helicopters, under the Operational Training Systems Provider (OTSP) program. During OTSP Phase 1 (acquisition), CAE will lead the design and development of a CH-147F training suite: a weapon system trainer (WST), a tactical flight training device (TFTD), a deployable TFTD, an integrated gunnery trainer, plus laptop and desktop-based CAE Simfinity virtual simulators (VSIM), and courseware.
Following delivery of the CH-147F training suite in early 2014, OTSP Phase 2 will have CAE leading the 20-year in-service support phase, along with a pan-Canadian team of simulation and training specialists. CAE will be responsible for providing a range of training services, including training device upgrades and maintenance, hardware and software engineering, courseware updates, technology insertion and obsolescence management, and database modeling and generation.
The reality is that Canadian military simulator contracts are almost certain to go to CAE. Having said that, CAE will be leveraging technologies and capabilities such as the training management information system, tactical control center, and common databases across both the CC-130J Super Hercules and CH147F aircrew training programs during OTSP Phase 1. Public Works Canada | CAE release.
Contract: Training & Simulators
Jan 31/10: Support. Boeing uses an industry conference in Ottawa to review the initial structure of their 20-year CH-47F/ CH-147 in-service support (ISS) plan, including the schedule and the process to competitively bid work packages.
Through the performance-based ISS program for the CH-147 fleet, Boeing says that it could provide industry benefits of approximately $2 billion over 20 years. The ISS program provides local bidding options for work packages in areas including engineering support; logistics support analysis; supply chain support; aircraft maintenance training systems and services; technical publications; ground support equipment; and maintenance site operations. Boeing.
2006 – 2009
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Dec 14/09: Basing. In an unsurprising announcement, CFB Petawawa will be home to Canada’s CH-47F fleet, once they begin arriving in summer 2013. The reason for the lack of surprise is explained by Chief of the Defence Staff General Walt Natynczyk, who connects the deployment to the features Canada requested:
“Petawawa was chosen because it provides the best support to army and special operations forces, many of which are co-located there, while minimizing the associated infrastructure costs for the new fleet. From this location, the Chinooks will maintain a high-readiness posture for rapid deployment.”
CFB Petawawa will see various infrastructure projects to accommodate the Chinook helicopters, including new hangars for an array of related functions, a new ramp, a refueling facility, and a fenced-in parking area. Approximately 440 new positions are planned at CFB Petawawa as a result of the Chinooks’ arrival.
Oct 27/09: Sensors. L-3 Wescam in Burlington, ON, Canada announces a Boeing contract to supply 15 of its MX-15 EO/IR surveillance turrets between 2011-2014, for installation on Canada’s new CH-47Fs.
L-3 WESCAM is under contract to Boeing to deliver similar turrets for the Dutch CH-47F order, and supplies Canadian programs like the INGRESS CH-146/Bell 412 conversion and CP-140/P-3 Aurora refit. Those credentials made it a logical supplier, and the value of the contract (which is not disclosed) will count toward Canada’s IRB industrial offsets requirement due to the firm’s location near Toronto.
Sept 24/09: Sub-contractors. Canadian landing gear specialist Heroux-Devtek Inc. in Longeuil, PQ signs a 4-year Memorandum of Understanding with Boeing. It makes them eligible to provide landing gear for all H-47F aircraft scheduled to be delivered to export customers over the firm’s FY 2012-2016 period. Héroux-Devtek may also be considered for an intellectual property license to service variants in the worldwide fleet of over 1,000 Chinook helicopters, and the firm is especially interested in that aftermarket services opportunity.
This MOU follows the Canadian government’s Aug 10/09 announcement to order 15 new “CH-147” Medium to Heavy Lift Helicopters, and supports Boeing’s Industrial & Regional Benefits commitment for the MHLH program. Heroux-Devtek release [PDF].
Aug 25/09: ECM. Danish defense firm Terma A/S announces that Boeing has picked its AN/ALQ-213V Electronic Warfare Management System (EWMS) for Canada’s CH-47Fs, pursuant to a March 2009 Memorandum of Agreement on industrial cooperation. The development and subsystem integration work will be lead by Terma’s U.S.-based Airborne Systems team in Warner Robins, Georgia and supported by Terma in Denmark.
The AN/ALQ-213V will integrate the helicopter’s warning systems against radar, infrared, and laser guided missiles, then feed combined threat awareness displays and coordinate countermeasures. The firm’s AN/ALQ-213 family and related Advanced CounterMeasures Dispensing System (ACMDS) products are installed and are operational on over 1,000 U.S. A-10 and F-16 aircraft and more than 700 international F-16s, C-130s, AH-64s, F-111s and CH-47s.
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Aug 10/09: The Canadian government signs a US$ 1.15 billion contract with Boeing for 15 new CH-47F Chinook heavy-lift helicopters, “modified to meet Canada’s local requirements,” and able to transport more than 21,000 pounds/ 9,525 kg of cargo. These CH-147s will be produced at the Boeing Rotorcraft Systems facility in Ridley Township, PA, with deliveries expected to begin in July 2013 and extend into 2014.
In addition to purchasing 15 helicopters, this project will involve a 20-year in-service support and maintenance contract valued at approximately C$ 2.2 billion, with an option to extend the contract all the way through the helicopters’ service lives. This performance-based in-service support is expected to include aircraft maintenance, training systems and services, engineering support, supply chain management, and other expertise. A full through-life support contract is estimated to be worth up to C$ 5 billion.
In line with Canada’s Industrial & Regional Benefits policy, Boeing will match every dollar spent by the Canadian government in acquiring its CH-147 fleet by partnering with and issuing contracts to companies in Canada, where Boeing is already a major aerospace presence. Contracts worth more than C$ 500 million have been signed against this commitment, and are being implemented by companies across Canada. Canada’s DND cites an independent analysis that cites about 5,500 direct jobs and an opportunity for up to 15,000 indirect jobs across the country. Canada’s DND: Backgrounder | Announcement || Boeing | Globe and Mail | Ottawa Citizen | Halifax Chronicle Herald re: industrial offsets | Seeking Alpha re: Canadian aerospace.
Contract: 15 CH-147s
Dec 15/08: Quebec’s Le Devoir reports [Google translation from French] that negotiations are nearly complete, and a Canadian contract for CH-47F helicopters can be expected early in 2009.
The report mentions the strong support for this purchase within the Canadian Forces, but the delays have created a situation in which political problem may kill the deal. Canada has committed to leave Afghanistan by 2011, but the helicopters would not arrive until 2012. This removes one of their biggest raisons d’etre, and makes them vulnerable to cancellation. The other issue is the status of Parliament, which is currently prorogued until January 2009. When it returns, it may dissolve on a motion of no confidence, a move that is very likely to precipitate another election. Parliamentary dissolution would be likely to stall any contract until mid-2009, and if the government changes, it could easily decide to cancel the purchase altogether.
Sept 24/08: Canada’s Globe and Mail newspaper adds to reports that Canada’s Chinooks will not be standard CH-47Fs, and claims Canada is offering Boeing a limited risk-reduction contract to build a couple of prototype aircraft. A contract is expected by the end of 2008.
The helicopter variant Canada wants will reportedly add more armament, defensive systems, additional range via larger tanks and/or aerial refueling, and combat search and rescue equipment. The result would be a mix and match between the CH-47F, the special forces MH-47G, and the HH-47F that initially won the USA’s first CSAR-X combat search and rescue competition. Globe and Mail via The Torch.
April 21/08: CH-47Ds. Canada makes a separate official request for 6 CH-47D Chinooks from the USA, with a total price tag of up to USD$ 375 million.
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April 7/08: RFP. Canada’s Ministry of Public Works and Government Services announces a March 2008 RFP to Boeing for 16 CH-47F Chinook helicopters, plus 20 years of associated in-service support (ISS), with an extension option for the life expectancy of the aircraft. The Government expects to award a contract for the medium-to-heavy lift helicopter in fall 2008, and the usual rules concerning 100% industrial offsets apply.
In the wake of Parliamentary reports and political pressure, Canada’s ongoing involvement in Afghanistan is predicated in part on the acquisition of medium battlefield support helicopters. The CH-47F Chinooks’ delivery time will not meet that need, however, and so the release adds that:
“This procurement is not being undertaken to meet the government’s short-term requirements in Afghanistan – this is being done through a separate process – but rather to re-equip the Canadian Forces over the longer-term… “
Sole source RFP
April 1/08: Flight International reports that:
“A contract is expected to be signed with Canada by year end for 16 new-build helicopters. These are expected to be a unique configuration combining features of the F and the G, although Canada is negotiating for accelerated delivery of an initial six aircraft by taking US Army-standard CH-47Fs straight off the assembly line. These are urgently needed for operations in Afghanistan.”
On April 21/08, it became clear that the initial 6 aircraft would be taken from serving US Army CH-47Ds. Conversions to Canada’s CH-47F/G configuration may be possible later, as the US Army’s CH-47F orders are a mix of new-build and remanufactured helicopters.
March 20/08: CH-47Ds. Jane’s Defense Weekly reports that Canada has negotiated the purchase of 6 ex-US Army Boeing CH-47D Chinook medium-lift helicopters for use in Afghanistan, but has no way of supporting the aircraft in theatre. “The Canadian Department of National Defence (DND) declined to comment on the acquisition negotiations, stating only that “the department is currently examining a number of options.”
July 16/07: Defense Minister O’Connor is interviewed on CFRA radio, and sates that he expects a contract for CH-47Fs within a couple of months. The Torch.
June 28/06: Canada’s government announces the Medium-to Heavy-Lift Helicopter initiative. DND release.
Formal MHLH start
Appendix A: Looking for a Place to Happen – The Problem, and the Options
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The need for the CH-47 was simple: none of Canada’s existing helicopters were up to the job. Its CH-146 Griffons (Bell 412s) can’t carry useful loads in that environment, though they were repurposed and deployed as light armed reconnaissance helicopters. Its ancient CH-124 Sea Kings are falling apart, its CH-148 Cyclones (H-92 Superhawks) are ordered but not yet manufactured, and its 14 new search-and-rescue CH-149 Cormorants are few in number, are based on the EH101’s civil model rather than its military model, and were consuming spares at a torrid rate before suffering through a fleet-wide grounding period due to maintenance & safety issues.
The big issue for the CH-47F was also simple – the RFP’s clause re: delivery. With troops on the ground who need these capabilities right now, delivery in 36-60 months will not meet the needs of Canada’s fighting men and women in harm’s way. A need their commanding officers have openly stated as a priority. Contrast Canada’s approach to Australia’s more proactive stance, for instance.
Worse, the DND found that delivery of the CH-47F Chinooks would not arrive until 2012 at the earliest, after Canada’s Afghan mission is supposed to end in 2011. That date has now slipped to 2013.
Shortly after the RFP’s release, Canadian defense think-tank CASR began pointing out 2 potential solutions to this dilemma. One is the possible solution discussed during November 2005 coverage of Canada’s “emergency” purchases for Operation Archer: buy Mi-17 helicopters, the same type flown by East European NATO allies and by the Afghan Air Force. A Russian trade delegation made that precise offer during their March 2006 visit to Canada, and a Canadian company named Kelowna Flightcraft is already cooperating with the Mil factory in Kazan, producing Mi-17KF “Kittiwakes” with fully Westernized avionics and rear loading ramps.
Mi-17s wouldn’t be a substitute for the Chinook. Their load is 24 fully-equipped troops at best, with an external sling load of 3,000 kg, vs. the stated Canadian requirement of 30 troops and 5,443 kg. Hot and high altitude conditions will reduce those totals further. On the other hand, their cost is about 1/8 that of a new CH-47 Chinook, and deliveries would have been rapid. They would create a temporary solution, one which could be repurposed later to other military roles, given away to the Afghans, or even given civilian rescue or disaster-related roles as Chinooks become available.
The second potential solution is advocated by Lt-Col James Dorschner (US Army Reserve, Ret.), a Special Correspondent for Jane’s Defense Weekly, in 2006. The deal involves Boeing’s CHAPS (Cargo Helicopter Alternate Procurement Strategy) program, which is associated with the US Army’s new CH-47F buy:
“…the CHAPS program allows third parties to buy US Army CH-47Ds (already earmarked for ‘remanufacture’ into advanced CH-47Fs) for roughly US $15 M each. This amount is about half the price of a new-build CH-47D and much less than a ‘new-build’ CH-47F. This more modern Chinook, is selling for about US $35 to 40 million each.
Under the CHAPS arrangement, the money from US Army CH-47D-model aircraft, sold by Boeing, can be used to ‘top up’ the Army funding which has already been budgeted for CH-47F remanufacture. The added revenue will allow the Army to buy a brand new CH-47F for each ‘D sold. An aircraft purchased under CHAPS will, of course, be overhauled and upgraded to the latest CH-47D-model standards by Boeing prior to delivery… all ‘Third Party’ purchases are handled as a Direct Commercial Sale (DCS), rather than the usual Foreign Military Sale (FMS).”
(click to view full)
In other words, much faster, less complicated, win/win for both militaries. Dorschner notes that Egypt was the first customer to sign up for CHAPS CH-47s, with Australia
- expected to follow shortly. The Netherlands*, Spain, Italy*, and Great Britain may follow (countries with asterisks have ordered the CH-47F as of August 2010).
Using CHAPS as a starting point, Dorschner contended that Canada could field a small force of 4-5 Chinooks to Afghanistan before the end of the current NATO deployment, eventually growing its CHAPS fleet to 9-12 aircraft before the new Chinooks arrive in numbers. At that point, the CHAPS Chinooks could be sent back to be refurbished as CH-47Fs themselves. The question was, could CHAPS be invoked by a country that doesn’t already have earlier-version CH-47s – and if they don’t, are any airframes available on the global market?
Either near-term option could work. As Canada’s Manley Report issued an ultimatum to either deploy helicopter support or leave Afghanistan, it became clear was that the usual bureaucratic response of “an inch an hour” progress or snarling at critics wouldn’t be enough. Unless some kind of near-term option was found and implemented, Canada’s Afghan mission and the USD $4.2 billion CH-47F program both faced the inevitability of death.
In the end, Canada worked out an arrangement for 6 US Army CH-47Ds, which were deployed to Afghanistan in early 2009. Whether they return for CHAPS conversion at the end of Canada’s Afghan mission in 2011 remains to be seen.
Escape Is at Hand for the Travellin’ Man: Additional Readings
Background: Program
- DID FOCUS – US Army in Flight on Production of (Re)New H-47 Chinooks. Covers the CH-47F.
- Canada DND – Medium-to-Heavy Lift Helicopter Project: Status. 2013 snapshot.
- Canada DND (June 26/13) – Canada’s new CH-147F Chinook Helicopter.
- Canada DND (Dec 13/10) – Government Of Canada’s Acquisition Of Chinook Helicopters For The Canadian Forces.
Official Reports
- Canadian Office of the Auditor General (Oct 26/10) – 2010 Fall Report of the Auditor General of Canada: Chapter 6 – Acquisition of Military Helicopters.
- “The Manley Report” (January 2008) – Independent Panel on Canada’s Future Role in Afghanistan [PDF]. This was an independent panel, but it was called by the Parliament of Canada.
- Canadian Parliament (June 2007) – CANADIAN FORCES IN AFGHANISTAN: Report of the Standing Committee on National Defence [PDF, 174 pages].
News & Views
- Rotorhub (Oct 23/12) – AUSA 2012: Boeing preparing for next steps on Chinook roadmap.
- CASR (April 6/08) – The Burden-Sharing Summit Begets a NATO Helicopter Trust Fund: Gordon Brown’s Dating Service for Available Medium-Lift Helicopters. Britain and France propose a scheme where allies who aren’t sending troops or equipment pay money to refurbish and send other medium helicopters instead, which would be a NATO pooled asset. The target machines are believed to be East Bloc Mi-8/17s in storage, and 10 nations have apparently signed on.
- CP (March 28/08) – Harper plays down Afghan expectations ahead of NATO Summit in Bucharest. Includes notes re: the need to have battlefield transport helicopters in theater by February 2009, per the Manley Parliamentary report.
- StrategyPage (March 5/08) – Chinook Replaces Blackhawk in Combat. “For the last two decades, the U.S. Army used the its UH-60 “Blackhawk” helicopter for combat assault missions, while the larger CH-47 “Chinook” was used just for moving cargo. But the army found that, in the high altitudes of Afghanistan, the more powerful CH-47 was often the only way to go in the thin mountain air. While doing that, the army found that the CH-47 made an excellent assault helicopter. In many ways, it was superior to the UH-60, mainly because the CH-47 carries more troops and moves faster and farther.”
- CASR (March 2008) – Canadian Soldiers need Transport Helicopters This Summer Not Next Year – Time to Chat with Our New Czech Mates? Mi-17s in exchange for help with Challenger jets?
- CASR (March 2008) – Afghan Medium-Lift – Searching for Available NATO Mil Helicopters.
- CASR (February 2008) – Poland will deploy Helicopters, UAVs, and Troops to S. Afghanistan. They have offered to make 2 Mi-17s available to Canada.
- National Post (June 26/06) – Allies stunned Canadian troops lack helicopters — Choppers save lives, insists U.S. commander.
- CTV (March 14/06) – Canada loans Dutch comrades armoured vehicles. Canada has loaned its Dutch comrades five heavily-armored Nyala patrol vehicles for use in southern Afghanistan… While there is no specific exchange outlined in the memorandum between the two countries, the Dutch Defence ministry noted Canadian troops need help getting around the far-flung desert battlefield and have put forward routine access to CH-47 Chinook helicopters. [Maj. Luc] Gaudet was asked whether it was a formal exchange. “Yes and no,” he replied.
