ARCHIVED - Canada's New Government Delivers for Canadian Forces: Awards Contract for Strategic Airlift

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News Release / February 2, 2007 / Project number: Government of Canada / Gouvernement du Canada

OTTAWA — The Honourable Gordon O'Connor, Minister of National Defence, together with the Honourable Michael M. Fortier, Minister of Public Works, and the Honourable Maxime Bernier, Minister of Industry today announced The Boeing Company has been awarded the contract to supply strategic airlift aircraft to the Canadian Forces.

The agreement fulfills a commitment by Canada's New Government to pursue defence procurement initiatives that equip and strengthen our military and provide economic benefits across the country.

“Canada's New Government is dedicated to meeting the urgent needs of our Canadian Forces,” said Minister O'Connor. “Today's announcement is the first step to ensure that our dedicated men and women in uniform have the equipment they need.”

“Our government has delivered on our commitment to fair and open procurement and to our Canadian Forces,” added Minister Fortier. “While ensuring a win for the Canadian Forces, we have done that in a way that ensures Canadian taxpayers get the best value for their money.”

“We have worked hard to deliver real benefits to Canadian industry as a result of our defence procurements,” said Minister Bernier. “This agreement represents tremendous opportunity for Canadian companies to compete and stay at the forefront of the global industry.”

Canada's New Government is purchasing four strategic lift aircraft to provide rapid, reliable and flexible transport of large amounts of passengers and equipment over long distances in response to domestic emergencies and international crises. This strategic lift capability will be a “Canada First” asset – to be used on our own terms and at times of our own choosing. Canada will no longer have to join the international queue, negotiating against other countries for scarce commercial options, to fulfill its responsibilities. At home, Canada will be better able to protect Canadians from coast to coast to coast, including domestic response capabilities and reaching out to all our communities, including in the Arctic.

Strategic airlift will also enhance Canada's ability to provide humanitarian assistance in any part of the world, as well as increase our disaster assistance response capability. It will ensure that our Canadian Forces in Afghanistan receive the supplies and equipment they need to get the job done.

“These new aircraft will have an immediate impact on how we can support operations,” said General Rick Hillier, Chief of the Defence Staff. “They will increase our capacity to cover vast distances with bigger loads, fewer crews and less stopovers. In addition, they will alleviate some of the workload carried out by our aging Herc fleet and that which we paid to lease.”

The acquisition of these aircraft has been conducted through a competitive process known as an Advance Contract Award Notice (ACAN), which identifies the Government's intention to contract with a specific supplier and also gives all potential suppliers the opportunity to demonstrate that they also can meet the Canadian Forces' mandatory capabilities for strategic airlift.

Under Canada's procurement policy, contractors must undertake quality economic activities in advanced technology sectors of the Canadian economy. These activities must be an amount equal to 100% of the contract value. Boeing has already identified more than $570 Million in contracts and in late-stage negotiations with Canadian companies from coast to coast, and the company will announce details of these contracts in the coming weeks.

Canada's New Government is working to ensure that these procurements deliver maximum, high-quality economic benefits to Canada, and that Canadian firms are well positioned to play significant roles as these projects progress. The estimated total cost for this strategic lift aircraft project acquisition is $1.8 billion, plus an estimated contract value of $1.6 billion for 20 years of in-service support.

After following the proper procurement process, future contracts will also be awarded for tactical airlift, medium-to-heavy-lift helicopters, joint support ships and medium-sized logistics trucks. For each of these contracts, companies will be required to invest in the Canadian economy dollar for dollar what they receive from procurement contracts, resulting in approximately $13 Billion in opportunities for Canada's aerospace and defence industry.

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For more information, please contact:
National Defence
Office of Minister O'Connor
Isabelle Bouchard
Director of Communications
(613) 996-3100

Public Works and Government Services Canada
Office of Minister Fortier
Jean-Luc Benoît
Director of Communications
(819) 997-5421

Industry Canada
Office of Minister Bernier
Isabelle Fontaine
Director of Communications
(613) 995-9001

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