Evidence of meeting #80 for National Defence in the 44th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was industry.
A recording is available from Parliament.
6 p.m.
Bloc
Simon-Pierre Savard-Tremblay Bloc Saint-Hyacinthe—Bagot, QC
I have just half a minute left, but I wish I could ask other questions.
We know that you support an open competition. We know that that probably should have been the approach from the start, but that said, we have to stop living in the past.
If it were to happen today, would it be too late, or would you be able to respond quickly?
6 p.m.
President and Chief Executive Officer, Bombardier Inc.
It's important to move as quickly as possible, but the short answer is yes, Mr. Savard‑Tremblay.
6 p.m.
Liberal
The Chair Liberal John McKay
Thank you, Monsieur Savard-Tremblay.
Ms. Mathyssen, you have six minutes.
6 p.m.
NDP
Lindsay Mathyssen NDP London—Fanshawe, ON
Thank you to the witnesses for attending today.
One of the concerns—and I've tried to bring this up at other times—is the government's movement toward this idea of sole-source and how that seems to be a contradiction.
It's not exactly what you're dealing with, but in terms of that F-35 contract, the Conservative government came forward and said, “We are going to sole-source.”
Then the Liberals said, “No, that's never going to happen.” Then they opened up, and they wanted to.... They said, “Under all of that transparency, we have to have an open bidding process.” It took years, and it took quite a lot more money only to end up in the same position at the end.
Could you talk about that switch you're seeing and how difficult that is? They've gone from defending this open-source bidding to, again, sole-sourcing. How are you seeing that? They tend to use keywords such as “urgent operating requirements” and this pressure that they seem to be under. Can you talk about how that's impacting your industry overall? We've certainly heard that from others.
6 p.m.
President and Chief Executive Officer, Bombardier Inc.
That's a great question.
Clearly, I think we see—because, as I said earlier we're working with other countries—that unless other countries have the capability themselves, like we have here, they may decide to sole-source. Overall, other countries don't have.... As I said, five or six countries in the world can build and design airplanes, make them fly and certify them. We can do it in Canada, and we should be extremely proud of that. There's a lot of history behind this—decades. We could offer that solution.
Other countries are going through an RFP. They are usually not sole-sourcing. If you do benchmark other countries, they'll come and ask for advice and get around, but they'll do an RFP. We're doing a few right now, as we speak.
6 p.m.
NDP
Lindsay Mathyssen NDP London—Fanshawe, ON
It seems to be fairly reactionary. This is about building for the very long term. These are obviously very long-term contracts. It's a government having longer-term plans, seeing and being able to see 50 years into the future what they need, what the people in the armed forces need to keep them safe, to keep us safe.
Is it a scrambling? Is it purely reactionary? There is no planning process that seems to actually be at play here.
6 p.m.
President and Chief Executive Officer, Bombardier Inc.
As we said earlier, there's clearly a lack of working together before the need happens.
Right now, I think it's a bit of a reaction. I still don't understand, even in the situation we're in today, why that reaction exists. As I said, we just spent $2 billion on the CP-140s today, which have been there since the eighties, to extend their life to 2035. That was the plan, which gives us time.
The CP-140 especially is a good airplane, better than the P-8. You should know as a committee that the P-8 is competing with the CP-140 and others. The military is doing a competition among themselves. The CP-140 is winning over the P-8, over and over, year after year.
What new capability are we talking about? We have a better product today. We're going to be buying an older product that doesn't perform as well and that other countries are thinking about letting go.
6 p.m.
NDP
Lindsay Mathyssen NDP London—Fanshawe, ON
One of the actual benefits of the Boeing P-8 that was described to me—and, I'm sure, to many other members around this table, if not more—was that it was off the line, that it was off-the-shelf produced, and that in fact it would be so much cheaper.
You said in your testimony just now, however, that your model would be much cheaper. Can you go into more detail about that? I'm a bit confused.
6:05 p.m.
President and Chief Executive Officer, Bombardier Inc.
There has been a transformation over the last few years in our industry. Bombardier builds business jets. They are not as big as the big Boeing and big Airbus jets. They are the best performing jet in the world. They are the ones that fly farther, faster and higher than anybody else's. We're extremely proud as a Canadian industry to be able to design and build these here.
Also, I think one of the things that happened is a big change. The equipment you put on board these airplanes—communications equipment, surveillance and radar—is becoming smaller and smaller. What we have in our phones today would have been bigger than this room 30 or 40 years ago in terms of capability. Today, we can put on a smaller airplane—which is what we're offering—as much capability as they used to put on the old ones when they developed the P-8.
Of course, the airplane is smaller, so it's going to burn less fuel. It's going to cost much less to operate, and it's going to have a lot more capability in terms of the distance we can fly, the speed and the landing in tough airports. Our airplane is more capable. It's a smaller airplane, but we can do it today because the technology in all the systems has become smaller and smaller. There is no need for the bigger airplane anymore.
Right now, unfortunately, the P-8 is a big airplane because it is an older technology. This is the airplane that.... The Americans themselves are talking about when they will start replacing the P-8. We were the last one to buy it, so we should know that.
6:05 p.m.
NDP
Lindsay Mathyssen NDP London—Fanshawe, ON
Because the technology is smaller, more efficient and, as you've said, newer, does that make it environmentally better than an older version?
6:05 p.m.
President and Chief Executive Officer, Bombardier Inc.
Absolutely. This is a better product.
Our airplane versus the CP-140 Aurora today or, especially, the P-8 will burn 40% less fuel. Imagine, after years and decades of operation on a daily basis and thousands of hours of flying, how much fuel burn we're going to be saving and how much more environmentally friendly that solution is.
6:05 p.m.
Liberal
The Chair Liberal John McKay
Thank you, Ms. Mathyssen.
Colleagues, given that we have a hard stop at 6:30, if we shave a minute off everybody's time, we may get through another round. I take note that there is another witness here.
Go ahead, Mr. Kelly.
6:05 p.m.
Conservative
Pat Kelly Conservative Calgary Rocky Ridge, AB
Thank you.
I'm going to try to get this focused so that we get information that can help inform our study, which is on the process for procurement and recommendations to improve the process, because we have plenty of evidence of how broken the process would seem to be, given the challenges over decades to procure on a timely basis.
Earlier in this meeting, officials seemed to be unaware of or surprised about the readiness of your company to bid on this particular procurement.
Can you tell the committee about the process? Has the process been followed? If the process has not been followed, that's a problem, but if the process has been followed, what are the recommendations for this committee on how procurement processes can better serve Canadians?
6:05 p.m.
President and Chief Executive Officer, Bombardier Inc.
I will start and then let Anne-Marie answer, because she's the one who actually leads the bid team at Bombardier that receives the proposals from all around the world.
Clearly, there was a flaw in the process here. PSPC went out with an RFI, which we answered in good faith. As a very responsible company, we said we can do A, B, C, D...all the 13 criteria they had. We said we were capable of doing it. Our partner, GDMS, was also capable of doing the work with us.
To answer your first question, yes, there was a flaw in the process because, since that, we haven't heard from anybody. There's been nobody. They are referring now.... It's a new thing that we heard about for the first time a couple weeks ago. There was a study done by engineers who have never knocked on our door to ask any questions. I don't know how they can appreciate and make comments in a report about our capability, as we don't know these guys.
It was the same thing. We never had anybody from PSPC—an engineer who is knowledgeable—who could say whether Bombardier could do it or not.
I'll let Anne-Marie add about other countries' processes versus ours.
6:10 p.m.
Director of Capture and Proposal Management, Bombardier Inc.
I think the process in Canada is overly complex and overly complicated. As you mentioned before, it takes time and money. I think there's a way to simplify that and to put the onus back on industry to show what they can deliver in a fair and open competition, especially with a procurement of this importance.
Our priority is to deliver the capability to the war fighter and show what we can deliver. We can't do that without being able to bid, to propose a bid to the government, to show our solution, to give our timeline and to give our price officially, instead of by unofficial means.
6:10 p.m.
Conservative
6:10 p.m.
Director of Capture and Proposal Management, Bombardier Inc.
Without a formal RFP response....
6:10 p.m.
Conservative
Pat Kelly Conservative Calgary Rocky Ridge, AB
Is it your testimony that this procurement is not being done through official meetings, that there's an unofficial process under way?
6:10 p.m.
Director of Capture and Proposal Management, Bombardier Inc.
It seems that way, yes. It seems that the government is swaying towards a decision. It seems that a decision has been made without seeing all available solutions, so that the government can do its due diligence on available choices.
6:10 p.m.
President and Chief Executive Officer, Bombardier Inc.
You heard in the first hour before us that they had a study from a consulting firm. They got the information from the RFI, and they thought that with this information they could make a decision that the P-8 is the only one, which is totally untrue.
6:10 p.m.
Liberal
6:10 p.m.
Liberal
Andy Fillmore Liberal Halifax, NS
Thanks very much, Chair.
Thanks to the witnesses.
Mr. Martel, you've distracted me from the questions that I wanted to ask you, because of something you said. Hopefully I'll come back to them.
To you and your colleagues, you mentioned the unnamed country's RFP at 35 pages, and you compared that to perhaps a hypothetical Canadian RFP of 1,000 pages. You talked about how the shorter RFP gives industry more flexibility to respond and so forth. I would like to give you an opportunity to expand on that.
6:10 p.m.
President and Chief Executive Officer, Bombardier Inc.
Maybe Anne-Marie can also complement that, but some countries are clearly having conversations with us. They say, “Here's the airplane we want. Here's the capability we want the airplane to have. Here are all the systems we're looking for.” They give us the range they need to fly. They will say that they need to fly at x altitude. Here are all the short runways they need to have the capability to operate on. The airplane has to have all the systems to do surveillance or communications, or whatever the requirement is.
The requirements are not specific to the smallest detail we would like to see. We shouldn't care about the colour of the wire at some point, or which company we're buying the bolts from. We should be giving them an airplane that performs and delivers the mission they're looking for.
I think there is a bit of a middle ground here that needs to happen. Anne-Marie works with other countries that have a much simpler process. Then we're having a conversation where we say, here's how we think we'll do that, and they say, yes, they like it or that they would like us to consider other options. That's a dialogue that takes place, and that's what we should be doing now.
Right now we don't even know if there will be an RFP. They seem to have made up their minds on flawed information. The information they had was not right.
6:10 p.m.
Liberal
Andy Fillmore Liberal Halifax, NS
I want to stay away from the P-8 issue and just focus on the procurement process.
Is there an implication, and perhaps Ms. Thibaudeau could help, to the speed at which a product could be delivered with a shorter or more flexible RFP? Is there consideration around accelerating the opportunity for innovation? Are there other implications that would be beneficial through a more concise RFP?