National Defence Committee on March 29th, 2007

[Philip E. Coyle]

The American Congress reviews each of these programs, especially the bigger ones, the ones involving the most money, of course. The U.S. Congress reviews that. If they approve of it, they authorize the program in the authorization committees. And then in a separate set of committees called the appropriations committees, they actually appropriate the dollars for obligation, for expenditure.

So there is actually a double review: first in an authorization committee and then later in an appropriations committee. Those committees themselves have oversight and investigative staff who will also look at these programs, sometimes in great detail.

[Steven Blaney, Conservative, Lévis—Bellechasse, QC]

Would you say it's an added value to the procurement process to have this involvement of Congress at both levels?

[Philip E. Coyle]

I would. As I say in my prepared statement, I cannot think of an example in which the U.S. military didn't get something faster, better, and cheaper because of this oversight. You can see it in Iraq today. Soldiers are getting armoured Humvees and body armour and radios and other things that they would not have gotten as quickly if it hadn't been for the involvement of the Congress.

[The Chair, Conservative, Rick Casson]

Thank you.

We've just got a few minutes left, and I'm a little hesitant to start a second round.

I know Mr. McGuire is chomping at the bit to ask a question. Mr. McGuire, if you could share your time with me, I have a question I'd like to ask as well.

Please go ahead.

[Joe McGuire, Liberal, Egmont, PE]

You're the boss.

I would just like to follow up.

In this country we have a regional development program; the work is shared in the regions. You were starting to allude to that in saying that every state in the United States has a piece of the action. We're talking about taxpayers' money and the official use of taxpayers' money. Is this an appropriate way to deal with it? I imagine it is done because politicians want to see it done this way, because they represent people and they're responsible for the economic development in their provinces or their states or whatever.

It seems that misery loves company, and almost every country in the world is experiencing these cost overruns in a very inexact process of defence procurement. The only ones that really seem to be benefiting here are probably the companies designing these systems and materiel that we need to defend our soldiers or to help our soldiers do the job we ask of them.

Do you feel that all the states in the United States should be benefiting by these contracts, as we do here? How does that work, actually, in the United States?

[Philip E. Coyle]

I wouldn't say that there should be any rule that every one of the states should get a piece of the action. There may be good and sufficient reasons for geographic diversity. For example, wage rates are lower in some states than in others, so it's advantageous to the taxpayer to have a piece of equipment built in a place where the wage rates are lower. But with the exception of things of that sort, to have it spread all across the country is probably not the most efficient way to do things. When it is done that way and produces such a strong political constituency, that's very good for the program; the program is more likely to go forward given that kind of political constituency.

[Pierre Lagueux]

Could I comment on that, Mr. Chairman?

[The Chair, Conservative, Rick Casson]

Go ahead.

[Pierre Lagueux]

When I was in the Department of National Defence, I continually reminded them--particularly to my military colleague--that the Department of National Defence is a department of government, and as such, while it has primary responsibility to support the armed forces, it must look at all the objectives of government and be seen to participate in all those objectives of government.

Obviously it must do that not at the expense of providing what the Canadian Forces requires and needs and so on, but objectives of the Canadian government include regional development, economic development, official languages, and the environment. All those things are objectives of the Government of Canada. The Department of National Defence must not only participate, but must be seen to participate, in those objectives of government. If the government wishes to change its objectives, fine. As I said, those objectives will not be seen to such an extent that the armed forces get second-rate equipment, for example, but regional and industrial benefits are objectives of the Government of Canada; therefore, the Department of National Defence must participate in them.

[The Chair, Conservative, Rick Casson]

Thank you very much.

Mr. Coyle, would you have a comment on ITARs? Are you familiar with that? How do you feel? Is it something that needs to be reworked a little bit, or is it fine?

[Philip E. Coyle]

Candidly, my impression is that when the U.S. government wants to sell military equipment overseas, it's quite able to do that, and to involve overseas partners. For example, we're selling Patriot missile systems all over the world. You could argue that this is a missile defence system, and you wouldn't want adversaries of the United States to get a hold of it in any way and find out how it works, and all of that--it could add to new vulnerabilities--but we're not having any difficulty selling Patriot missile systems all over the world, because we want to do that.

My general comment would be that when we want to do it, we seem to be able to find ways, and when we don't want to do it, we don't want to do it.

[The Chair, Conservative, Rick Casson]

Very good.

I want to thank you very much. As we go through our report and prepare it, your contribution will help very much.

We have another large panel to come forward. We'll quickly make the change.

Again, thank you very much for being here.

[The Chair, Conservative, Rick Casson]

Thank you very much.

I'd like to get started, because we have a large panel and another committee is coming in at 11.

I'd like to welcome, from the Quebec Aerospace Association, Mr. Stewart Bain, board member and president, board of directors; from Lockheed Martin Aeronautics Company, Mr. Simmons, and Jack Crisler, international vice-president, business development, air mobility; from EADS CASA, Antonio Rodriguez-Barberán, vice-president; and from Pratt & Whitney, Richard Bertrand, vice-president.

I understand that Quebec Aerospace will go first, then Lockheed Martin, and then EADS CASA.

The floor is yours.

Hopefully we can leave half an hour to get in one round of seven minutes for each party after you're done. Perhaps you can be very quick and to the point.

Thank you.

[Stewart Bain, Board Member and President, Board of Directors, Quebec Aerospace Association]

First of all, I'd like to extend the regrets of Madame Dabrowski, the general manager of the AQA, who could not be here today.

Mr. Chairman and honourable members, it is a great privilege to be before you today to present the interests and concerns of over 200 SMEs of the Quebec aerospace industry which we represent through our association, the AQA. Thank you for this opportunity.

The AQA urges the government to work more collaboratively with industry and all stakeholders well in advance of the procurement process and throughout the entire life of the aircraft in a manner that will support an existing and established Canadian aerospace industry and help take our Canadian troops bravely and confidently into the 21^st century.

The Quebec Aerospace Association and its members are pleased with our federal government's intentions to invest in new aerospace equipment to serve the fundamental and growing needs of our Canadian Forces at home and abroad. We applaud this bold effort to bring our forces strongly into the 21^st century.

The members of the AQA are based in the region of Montreal and its surrounding areas, which hosts the third largest aerospace centre in the world. This is the only aerospace centre in North America that comprises all the necessary elements to build an entire aircraft and service it throughout its life. This is a jewel for Canada that is to be respected and promoted for the benefit of all Canadians working in the high technology industry. This centre of excellence is also the envy of our international competitors and if our Canadian government is not strategic in its apportionment of business flowing from these major military procurements that will essentially define the shape of our aerospace industry in Canada for the next 20 to 30 years, then Canada risks losing our hard-earned market share and the 40,000 jobs that it supports.

Defending the interests of the SMEs that provide the working backbone to this great centre should never be misunderstood as a notion of historical entitlement. Rather, it has taken many years and a formidable level of government investment of Canadian taxpayers' dollars to create and nurture this centre. Canada has great reason to be proud of this achievement and must support a military procurement policy that leverages this expertise and capability to maintain our market and technical position.

Aerospace is a strategic element of Canada's overall industry. This industry must be properly nurtured, or else Canada risks losing its leadership position in the world aerospace market. It is not acceptable to allow a sole-sourced bidder to arbitrarily decide where the work should go in accordance with their agenda. Canada's agenda for aerospace must be respected and defended by the Canadian government. The CIBs from military procurements are seen as key strategic opportunities to leverage Canadian R & D investments and leapfrog our Canadian know-how and expertise to maintain a competitive advantage versus our U.S., European or Asian competitors. Our international competitors are doing everything possible to develop their own centres of excellence. Canada must do the same or lose market position, lose market share and lose jobs. It is inconceivable for the government to turn its back on these investments and risk losing its current position as one of the largest and possibly the most dynamic aerospace centres in the world.

More specifically on the subject of CIBs, the notion of the Canadian aerospace industry competing for downstream contracts after the bidders are handed multi-billion dollar contracts without any competition is inconsistent. In fact, under the current conditions, the Canadian aerospace industry as a whole, and particularly the SMEs of Quebec, have little to no visibility or control into how a sole-sourced bidder will decide who will get contracts, as there is no indication of a formal competitive process for deciding how contracts will be allocated. The only regulations that can govern these allocations are the guidelines of the CIB agreement that put demands on how the bidder is to distribute the potential work.

Without a strong and focused CIB plan, a sole-sourced bidder has essentially been awarded full power of decision on how the Canadian industry will participate. This is completely unacceptable as it jeopardizes our entire aerospace industry in Quebec with an impact that will be felt for the next 20 to 30 years a legacy that the AQA firmly believes it must protect and defend.

In the opinion of the AQA, there is an inherent partnership that exists through the best and worst of times between Canada's military and the industry that supports it through innovation, investment and perseverance. The AQA supports a coherent and collaborative procurement approach that considers the benefits to all stakeholders when making major procurement decisions. The stakeholders include and are not limited to the Department of National Defence and the brave troops that rely on state-of-the-art equipment, Public Works and Government Services Canada, the industrial players and the associations that represent them at all levels, the institutions that work collaboratively with industry in R&D efforts, and Industry Canada which plays a critical role in understanding and preserving the fabric of our vast aerospace industry. There has been a serious lack of transparency throughout this recent military procurement process on behalf of the federal government. The decision to go sole-source, the fragmented CIB plan, and the lack of support from our government for strategic CIB distribution leaves our aerospace industry and our SMEs in Quebec at grave risk.

The AQA recommends that the Canadian government implement a traceable small business set-aside of at least 20% stemming from each contract awarded to a foreign firm to ensure that our SME aerospace industry is well maintained in Quebec. Similar programs already exist elsewhere and in particular in the United States. This type of initiative will ensure that the grassroots of our industry is included in the successes of our procurement endeavours.

The AQA firmly believes the only way to ensure the best deal for all Canadian stakeholders in a military procurement is through an open and competitive process that begins well in advance of the procurement target date, with transparent consultation involving all stakeholders, to consider each important perspective in delivering the best equipment to our troops. This process should be designed to address the overall collection of military mission requirements while considering how the procurement process can leverage Canadian expertise in delivering state-of-the-art solutions to the end-users.

The objective will be to ensure the highest quality of support to our troops and provide vital incentives to our aerospace industry to step up to the challenge of meeting these needs. This process is a vital and necessary step that must be taken if Canada is to fully benefit from major military procurements. To achieve this will require much effort, careful consideration, and planning, but the alternative is a divided and fragmented strategy that leaves the industrial stakeholders largely disenfranchised from the military procurement process and a procurement policy that is deleterious to the maintenance of our global industrial prowess in aerospace.

The SME members of the AQA are more than industrial players in the aerospace industry. They are family-run businesses that have been built through sacrifice and dedication to a craft or a vision of making a contribution to Canada's success. The only way to protect these visionaries and dedicated people is to quickly establish a more competitive and transparent military procurement strategy that includes the collaboration of all stakeholders to guarantee that Canada is well defended and remains at the leading edge of aerospace technology. Together we stand.

Thank you. Merci beaucoup.

[The Chair, Conservative, Rick Casson]

Thank you very much.

Mr. Simmons, will you be making the remarks?

[Peter Simmons, Communications Director, Air Mobility, Lockheed Martin Aeronautics Company]

Yes, I will.

[The Chair, Conservative, Rick Casson]

Go ahead, sir.

[Peter Simmons]

Good morning, ladies and gentlemen.

Mr. Chairman, thank you for the opportunity to address the Standing Committee on National Defence.

I apologize for the slight hoarseness. I will do my best to maintain volume and clarity throughout.

Lockheed Martin is proud to be again supporting Canada and the Canadian Forces, this time by being selected to provide a new fleet of tactical transport aircraft through a clearly defined and demanding qualification process. The C-130J is a mature, operationally proven aircraft and an excellent choice to replace Canada's aging C-130 fleet. The older C-130s have long been the tactical workhorse of Canada and most western allies.

The new workhorse has already proven its operational capability. In recognition of this capability, during recent testimony in Washington, United States Air Force Secretary Michael Wynne said:

If you gave me another dollar, I would know exactly where to spend it...it would be on C-130Js. Using the C-130J Hercules to move equipment and supplies takes ground-force convoys off the roads...and the plane has therefore become the workhorse in the war against terrorism.

With a large procurement such as this, Lockheed Martin recognizes the requirement to provide best value and return on investment to the Crown. In accordance with Canadian acquisition terms and conditions, the aircraft price can be easily validated as fair and reasonable. In addition, we also recognize the requirement to provide robust industrial regional benefits, and I will address those later.

In the short time I have this morning, I would like to describe to you the evolution of the C-130J and the success that operators are having.

As is often the case in evolving advanced weapons systems, some critics continue to belabour developmental issues resolved long ago. Today I will give you a balanced, factual report on the C-130J's real-world status.

The C-130J, as any sophisticated weapon system, took time to develop, refine, and ultimately deploy. No new aircraft is immune to developmental risk. Optimism, no matter how professionally packaged, is no substitute for this reality. At Lockheed Martin we have been designing and building military transport aircraft for over 50 years, and we pride ourselves on our ability to resolve technical and performance challenges.

The C-130J first flew in 1996. The aircraft received Federal Aviation Administration certification in 1998 and deployed operationally with the Royal Air Force in 2000. Any early issues encountered have long been resolved, and Canada can be confident in receiving a combat-proven, fully certified aircraft, the most advanced airlifter in the world.

The C-130J's launch customer was the United Kingdom, and we have subsequently delivered aircraft to the U.S. Air Force, the Air National Guard, the Air Force Reserve Command, the United States Marine Corps, the United States Coast Guard, the Italian Air Force, the Royal Australian Air Force, and the Royal Danish Air Force--a total of 149 aircraft to date.

Our operational experience just gets better and better. Both the United States Air Force and the United States Marine Corps have completed their first two years of C-130J deployment in southwest Asia. During this time, four USAF C-130Js conducted 5,444 sorties over 10,750 flight hours, delivered 12,681 tons of cargo, and carried 70,350 passengers. The Marine Corps KC-130J air-refueling tankers completed 6,659 sorties, logged 13,082 flight hours, moved over 11 million pounds of cargo, transported over 32,000 personnel, and offloaded a staggering 83.9 million pounds of fuel.

On these deployments, the C-130J has achieved one of the highest reliability rates of any aircraft in theatre.The aircraft typically maintained a 93% mission-capable rate, which is almost unheard of in a military aircraft deployed to a combat theatre. In addition, the C-130J can execute in one tasking what it would take two older C-130s to accomplish. This is achieved through more payload capability, greater range--meaning no stops for fuel--which, in conjunction with increased power and speed, makes the overall mission time shorter.

The added benefits of the C-130J go on and on. For example, the C-130J is not encumbered, as older C-130s are, by a lack of performance due to altitude and heat. The C-130J is often the only aircraft that can get into short high-altitude austere fields in locations such as eastern Afghanistan. A 2,000-foot dirt strip at 6,000 feet of elevation on a 95-degree day with 20,000 pounds in the back is no big deal for this aircraft. That is not in a brochure; it is a fact of C-130J operational life.

These success rates have also been experienced by the Royal Air Force, which conducted the first ever C-130J combat mission in 2002, and the Italian C-130J fleet, which has now surpassed 50,000 flight hours, mostly in Iraq, Afghanistan, and North Africa. The Danes are deployed to Afghanistan, and the Australians are in both Iraq and Afghanistan. These customers are using the aircraft for what it was intended to do, in a very challenging environment and in a real theatre of operations, on missions ranging from humanitarian support to combat operations.

The global C-130J fleet has now surpassed 350,000 flight hours. The aircraft is seeing real combat operations every day, and it has a proven modern weapon system.

With the C-130J, Canada has selected a worthy and proven asset to support its commitments around the world. This selection was made against some of the most stringent selection criteria we have ever been asked to meet.

Upon assessing their requirements, many nations have found the C-130J is in a class of its own. It alone has the capability to provide the tactical transport support that military forces require: the capability to carry a significant load over long distances, but also the ability to operate dependably in austere conditions and demanding environments.

Operators such as the United Kingdom, Italy, Australia, and Denmark had aging C-130 fleets, and they all took a similar approach to Canada. They sought solutions, evaluated options before them, and determined that the C-130J is the only aircraft in the world with the capability to modernize tactical airlift fleets.

As we speak, discussions have begun between the Norwegian and United States governments to obtain--urgently--new C-130Js. There are other countries making similar decisions right now.

Canada has done what many other countries have done and what many will do. The C-130J is the only available, affordable, and proven transport aircraft. We designed and built the C-130J to meet a clearly defined operational need, based on our many years of experience in building both tactical and strategic military aircraft.

With respect to industrial regional benefits, Lockheed Martin recognizes the requirement for Canadian industry to realize the benefits of a robust IRB plan. Accordingly, we have been working diligently with Canadian companies. Our plan is already well populated and contains value-added, long-term programs for Canadian industry in all regions. To illustrate our historical and ongoing commitment to Canada, Lockheed Martin has invested more than $3 billion in Canada over the last 20 years. In addition, it has satisfied more than $200 million in IRBs since the early 1990s alone. There are many trusted and very competent suppliers in Canada that have benefited from Lockheed Martin's IRB obligations and worldwide supplier base in the past. The acquisition of a new tactical airlift fleet for Canada will see that proud cooperation extended for generations through the continued fulfilment of IRB requirements.

Also, we will respond to the requirement for a 20-year in-service support operation that will be executed by a Canadian industry team. Lockheed Martin has had a long-term relationship with many Canadian companies in the global maintenance and support of our products. We are confident in our ability to facilitate a very attractive arrangement--one performed in Canada by Canadians.

As with the current CC-130s, Lockheed Martin will respond to Canadian-defined requirements that will lead to Canadian industry's exercising sovereign support of its new fleet.

I could speak at great length about this amazing aircraft. I could speak at even greater length about the benefits to Canada. But that would be far too much of my now failing voice. For those who would like to hear of the aircraft's performance from a C-130J operator, I have passed to the clerk copies of a CD containing a briefing given here in Ottawa by Colonel Larry Gallogly, United States Air Force. This is a factual description from a senior airman who has direct experience with the aircraft.

I will be prepared to answer any questions you may have at the appropriate time.

Thank you, Mr. Chairman.

[The Chair, Conservative, Rick Casson]

Thank you, Mr. Simmons.

We'll move over now to Mr. Bertrand and Mr. Rodriguez-Barberán.

Gentlemen, I'm not sure who's going to be speaking, or whether you both are, but go ahead.

[Antonio Rodriguez-Barberán, Vice-President, Sales and Marketing, EADS CASA]

I'm starting.

Good day. It is a privilege and an honour to be here and to address this important committee. Mr. Chairman, thank you very much.

My name is Antonio Rodriguez-Barberán. I'm sorry I have a terrible, long Spanish name. Not only that, but I have a terrible Spanish accent. You should listen to my accent in French. So if you don't mind, I will continue talking in English. I am vice-president of sales for EADS CASA, based in Madrid, Spain.

As you know, EADS is one of the world's largest defence aerospace companies. Included in the EADS family, we have companies such as Airbus and Eurocopter. As a group, EADS has many solid long-term business relationships with Canadian industry, purchasing high-tech goods worth about $700 million Canadian per year.

My responsibilities can be translated in short as being responsible for the Spanish part of the business of the EADS group, but basically they encompass sales within our military transport aircraft division, including sales of the C-295 plane, which we are offering for the fixed wing search and rescue replacement program, and which is why I am here today.

But I am not alone. I have the pleasure of having next to me Mr. Richard Bertrand from Pratt & Whitney Canada, representing his company, but not only his company; he is also representing all of our Canadian team, consisting of CAE, Thales Canada, and Raytheon Canada. They are all part of our team and strategic partners in our worldwide marketing strategy.

Designed as a result of global military customer requirements, the C-295 is a multipurpose aircraft that is developed for tactical lift, search and rescue, maritime patrol, and surveillance. Today it is in operation in all and any geographic and environmental conditions, in war zones such as Afghanistan and Iraq and in peace missions worldwide. As a consequence of this, the C-295 is operational, it's proven, and it is cost-efficient.

The aircraft's combination of operational performance and efficiency has made it the world leader among medium military transport aircraft. Overall, we hold around two-thirds of the world market, which means that our Canadian strategic partners are also holding two-thirds of the world market and have access to this market.

The C-295 family of products has sold over 300 units in 30 nations, including units for the United States Coast Guard for search and rescue. In particular, the C-295 has been delivered to and is operational with countries such as Spain, Portugal, Brazil, Finland, Poland, Algeria, and Jordan. It is operational in war zones such as Afghanistan and Iraq today.

In my experience I have also found that most militaries and governments prefer cost-effective solutions when it comes to large-scale procurements. This applies to the actual acquisition and the in-service support, which is where the real costs are found.

The C-295 has put special emphasis on providing the best availability and reliability rates at extremely competitive operational and acquisition costs. In the design and the manufacture of the C-295, we are proud to be partnered with Canadian companies such as Pratt & Whitney Canada, CAE, Thales Canada, and Raytheon Canada. Each one of the C-295s sold worldwide creates value and jobs in Canada. The C-295 team looks forward to showcasing the aircraft to Canada in a best-value competition for fixed wing search and rescue. It is the ideal combination between operational capabilities and efficiency, both largely due to its world-class Canadian content.

I would like to pass the microphone to you, Richard, to continue with your presentation.

[J. Richard Bertrand, Vice-President, Government Affairs, Pratt & Whitney Canada]

I would like to thank the committee for this opportunity.

As Antonio mentioned, I am here on behalf of the manufacturers in Canada, who join me, as mentioned, and who are behind me, CAE, Raytheon, and Thales.

We are here to emphasize that included in these aircraft is world-class technology made in Canada. In fact, we are world leaders in this field.

The key components of the C-295 aircraft, including its turbo jets and avionics are manufactured in Quebec, which means that the total Canadian content is about 50%. The aircraft's flight simulator is also manufactured in Canada.

The Canadian components of the C-295 are to a great extent responsible for the aircraft's success. Since early in 2001, the C-295 has been a world leader in its category with more than 50 units sold.

To that you can add the in-service support in Calgary, a large percentage of the value of the contract, plus the sensor suite, in addition to avionics in Toronto. Our company's support, while significant in Quebec, counts major input from our plants in Halifax, Mississauga, and Lethbridge. In deference to my Spanish colleague, this is a real Canadian solution.

Our association, the Aerospace Industries Association of Canada, when it appeared before you, looked for investments that ensured better value for money and direct support for our industry. This is one of the most exceptional cases in point. The funds that had been allocated for this project were more than sufficient.

A central question today is that there is likely no program currently, but the need is there. Search and rescue for Canada and around its borders is military in one aspect, but it falls on the cooperation and teamwork of civilian and military people. It calls for the maximum effort of the best resources available from our nation. Search and rescue is there to protect Canada' s citizens, and we believe it would be appropriate to use an existing globally accepted Canadian solution, which in fact could be delivered in well less than a year.

The companies with me today are in two-thirds of the world's search and rescue solutions, and we've been there since the inception of the C-295.

In the ongoing discussions on the procurement of search and rescue aircraft, it would be important to remember that a Canadian solution does exist.

We are looking for a fair and open competition. We are able to compete globally and win globally. We are simply asking to be given a chance in our own country.

Thank you.

[The Chair, Conservative, Rick Casson]

Thank you very much.

Mr. Coderre, for seven minutes.

[Denis Coderre, Liberal, Bourassa, QC]

Thank you very much, Mr. Chairman.

Good morning gentlemen.

Mr. Bain, you and I will get along quite well, because we share the same opinions. The Bloc Québécois will probably tell you that they introduced a motion in the House, and it was supported by the Liberal Party. When it was in power—and that day will come again—the Liberal Party believed in the regions and invested massively in the aeronautics industry.

My friend has a cold; he should drink some water. I am happy to see that he now believes in the regions, because he should have a word with Boeing's employee of the month, Maxime Bernier.

I might have one bit of criticism for your association. A year and a half ago, we told you that something would be happening and that there would be some problems. At the time, our industry critic, Mr. Jean Lapierre, had met with Ms. Dabrowski. We would have liked your association to take a firmer stand, because it was too late in reacting. The contracts are already signed, and we are at the mercy of foreign companies.

There is also a problem in Ontario. I met with the people from the Ontario association, and they agree with what you have said. I have no questions, but I simply wanted to make that comment. The Liberal Party, which could be the next government, is in a position to deliver the goods.

Mr. Simmons and Mr. Crisler, thank you very much for being here. You will understand, of course, that I have several questions, since you have your contract, and it was kind of a freebie because there was no competition.

I'm troubled a little bit. Maybe it's the best equipment. Our role in the opposition is of course to provide the best equipment for our forces, but when we hear statements like those of Mr. Coyle, when we hear statements from the Pentagon.... You're saying it's factual, and it's your job to say that, but I have a copy of the air force program saying that it's not efficient, that you have some major issues, and that maybe the equipment at the start is okay but the maintenance has some problems. Now it's relayed to you, since this government doesn't want to do its job, and you're the one that will provide the contracts to the others in Canada. I hope you will focus on R and D and Canadians.

What do you have to say about what the Pentagon was saying about your plane? Mr. Schmitz, the inspector general from the United States, said the same thing.

It was exactly the same thing when you had Rumsfeld. I think he's a friend of the armed forces and definitely wanted, in his own perspective, to provide the equipment to the air force. The guy wrote a letter himself saying that we should pull the plug on your company.

So would you explain to us what's going on? You're saying it's the best thing in the world since sliced bread, but why are there all those reports? Why are they saying there are some problems?

We have insiders in the department who, instead of having criteria, would rather trace a line in the sand and say we have four or five principles and that's it, go for it, enjoy yourself. Would you tell us what is really going on with that issue? Are they all wrong? Are you saying those reports are not accurate? The last one is from January 2007.

So it is rather early.

I don't understand why we have so many problems with that.

Don't you think, Mr. Chair, maybe the best thing would have been a competition, so that we could have had both make their pitch, and taxpayers would get more of what they deserve for their money.

What do you have to say about all those reports?

[Peter Simmons]

I'd be more than happy to address what I think were some of the issues you raised.

First, I would like to clarify that we do not have a contract. Although we have been selected and are in negotiation, we have not been awarded a contract.

[Denis Coderre, Liberal, Bourassa, QC]

You still have a chance for competition. Is that what you're saying?