A defence department project to extend the life of the air force's search and rescue helicopters has hit a major snag, forcing senior officials to go back to the drawing board.
Three years ago, the Liberal government announced plans to refurbish the CH-149 Cormorant fleet to keep the 14 aircraft flying and saving lives until 2042.
It chose to sole-source the project with European aircraft manufacturer Leonardo.
Two years ago, on the eve of the last election, Defence Minister Harjit Sajjan announced that an additional two helicopters would be added to the fleet.
But newly-released Department of National Defence (DND) procurement documents show that the company came back with a sky-high cost estimate last fall.
"Negotiations with the contractor were put on pause due to the proposals being unaffordable," says a one-page internal presentation used to update senior officials.
The document did not cite the cost estimate. Just over $1.03 billion had been set aside by defence planners for the modernization.
"The project office and the RCAF are investigating alternate solutions to address emerging obsolescence with [the] approved budget," says the document.
In a statement released over the weekend, DND said it is focusing at the moment on the possibility of extending the life of the CH-149 by replacing obsolete parts.
"One option is a life-extension of the existing helicopters to meet regulatory requirements and upgrade obsolete parts," said Dan Le Bouthillier, DND's manager of media relations.
"This would extend the life of the aircraft and leverage its existing capabilities."
It's not clear whether the department is looking at other solutions — such as returning the upgrade project to public tender.
Department awarded contract before negotiating price
DND's original goal was to upgrade the aircraft to the equivalent of what the Royal Norwegian Air Forces uses, but that has been deemed too costly.
LeBouthillier defended the decision to negotiate the cost after the sole-source contract was awarded, saying a detailed analysis — including cost estimates — was conducted prior to signing of the contract.
"After more in-depth work in the definition phase, including refined costing based on a detailed statement of work and performance specification, it was determined that the solution proposed by Leonardo is more expensive than previously thought and outside the project budget," he said.
The changes to the project's scope leave the government's decision to buy two more helicopters in limbo; Le Boutihillier said the focus now is on upgrading the current fleet.
The air force had planned to return the Cormorant to service out of CFB Trenton, Ont. after the purchase of two additional aircraft. That search-and-rescue sector is now serviced by the CH-146 Griffon, which has a shorter range.
"Replacing the CH-146 Griffon in the search and rescue role in Trenton is still a consideration while we are exploring other options for life extending the CH-149 Cormorant fleet," said Le Bouthillier in a media statement.
The CH-149 Cormorant fleet flew its first missions in 2001. Fifteen aircraft were purchased originally; one crashed off Nova Scotia in 2006.
The Cormorants, which are powered by three engines, are known for their long range, large cargo space and rear ramp.
The CH-149's refurbishment and the addition of the reconstituted aircraft was supposed to be one of the more straightforward defence procurement projects, set to complete in 2025. But the document said all timelines are now in question and the air force might not have a solution until this time next year.
And that solution, when it comes, could be more costly.
"Project will need additional [project definition] funds should the definition phase extend past June 2022, which is possible given the need to investigate alternate solutions," the document said.