Debates of March 1st, 2001

Supply

[Paul Szabo, Liberal, Parliamentary Secretary to Minister of Public Works and Government Services]

Mr. Speaker, as the Parliamentary Secretary to the Minister of Public Works and Government Services, I have been following the maritime helicopter project very closely for some time.

The minister and I have had several discussions about the department's central role in replacing Canada's Sea Kings, which have served the Canadian forces extremely well but are now nearing the end of their service lives. I welcome the opportunity to debate the merits of the government's decision to purchase 28 new maritime helicopters and, more specifically, its strategy for doing so.

As hon. members may know, this is the single largest federal procurement initiated by the Liberal government since it was elected in 1993. It is an important component of a larger long term strategy to equip the Canadian forces with modern, state of the art equipment for the 21st century.

Given the large monetary value and sensitive nature of the procurement, I can assure hon. members that the project has been thoroughly scrutinized by the Department of National Defence and Public Works and Government Services Canada. This is the right decision and the right approach for both the military and for Canadian taxpayers.

I commend the Minister of Public Works and Government Services for his commitment to ensuring that the process is not only fair, open, transparent and competitive, but that it is also innovative and progressive.

I also commend the Minister of Defence and his officials for developing a statement of operational requirements for the maritime helicopter that will meet the modern needs of our Canadian forces. The world has changed over the past decade and so have our defence requirements.

Both our ministers are determined to get the project right. Their efforts deserve the support of hon. members on all sides of the House. The procurement strategy developed by the Minister of Public Works and Government Services, combined with a more realistic understanding of Canada's needs, will save the Canadian taxpayers $1.5 billion compared to the previous government's helicopter project.

As the Minister of Public Works and Government Services has already pointed out, that money can and will be invested in other government priorities that were endorsed by Canadians in last fall's election.

One of the key factors that will ensure the success of the project is the government's commitment to initiate real, meaningful dialogue with the aerospace industry. From the moment the maritime helicopter project letter of interest was released last August, the doors for communication have been opened and a two way dialogue between the industry and government officials has been positive and constructive.

It goes without saying that there is a high level of interest in the project both in Canada and abroad. Why would there not be? Contracts will be awarded for equipment worth more than $2 billion over the next few years. On top of that, the winning bidders will be contracted to provide long term in service support of equipment they sell to the Crown.

Even in the defence industry, projects like this do not come along every day. The maritime helicopter project is expected to generate spirited and intense competition among some of the biggest defence contractors in the world.

The dialogue initiated with the industry last August has already generated feedback that will help defence and procurement officials fine tune the requirements and specifications according to the procurement strategy.

It has also allowed us to identify the firms that have both an interest and a capacity to be prime contractor for one or both of the helicopter and integrated mission system contracts. Potential contractors have been fully informed about the different elements of the procurement strategy and the obligations they will need to fulfil as we move forward.

Industry is also aware that two requests for proposal will be issued and two contracts will be awarded, one for the helicopters and one for the integrated mission system.

As the minister already noted, the issuance of the two competitive RFPs will allow us to procure both a helicopter and an integrated mission system that meet our needs at the lowest price. It will also result in opportunities for broader industry participation in the overall project.

As I stated a moment ago, one of our guiding principles for this procurement is the case for all government contracting, that is, to be open and fair with all bidders.

The cost of developing bids of this nature can run into millions of dollars, so we must take reasonable steps to avoid receiving bids that will be disqualified because of technical non-compliance. That is why the strategy for this project includes a prequalification process that has never been used before in Canada on a project of this size.

Basically what we are saying is that the potential bidders will have to demonstrate to procurement and defence officials that their proposed equipment complies with the government's operational requirements before they submit a formal bid. This will not eliminate but will certainly minimize the risk of non-compliance.

Two separate prequalification processes will also be conducted, one for the technical compliance of the basic helicopter and the other for selective components of the maritime helicopter integrated mission system. Potential bidders who have not prequalified at least 30 days in advance of the bid close will be declared non-compliant and their formal bids will not be considered.

I have to emphasize that prequalification will largely be based on the hardware side of each contract only. The bid could still be declared non-compliant if the company fails to meet the other requirements in the request for proposal. So even with the prequalification process, bidders will still have to meet tough criteria in other elements of the RFP.

Another unique element of this procurement strategy is that it will ensure a long term value to the crown in its decision to include inservice support as a component of each contract. Like any piece of mechanical or electronic equipment, both the aircraft and the mission systems will require comprehensive ongoing maintenance and support once they are in operation. In service support covers a broad range of activities that will ensure safe use of helicopters over their operating life, including basic aircraft and systems maintenance, spare parts acquisition, inventory management, software support and simulation and training.

The maritime helicopters will require in service support for a period of some 20 years or longer. Procurement and defence officials believe that including an in service support component in each competitive RFP will provide further assurance that they will obtain a high quality product. There is significant merit in the approach. After all, no supplier is likely to deliver substandard equipment if the same contractor has to assume the responsibility for its long term service. Potential contractors will be looking at a 20 year commitment to their equipment, so there is little chance that anyone will try to cut corners that may save them money today but dramatically increase costs down the road.

The dialogue with the industry that I mentioned earlier did not begin and end with the release of the letter of interest. It is in fact an ongoing process carrying through the prequalification stage of the procurement and continuing on to the bid close date. There will be a good deal of direct contact with potential bidders, but the primary vehicle for this dialogue and sharing of information will be the maritime helicopter project website, which was established a number of months ago by the project management office. For hon. members' information, the site can be accessed through the public works website.

I am pleased that our government has made a commitment to become the world's the most electronically connected to its citizens and is using its communications medium to keep potential bidders and other interested parties informed about this project.

Over the coming weeks and months we will be using the website to progressively release draft elements of both RFPs, beginning with documents related to entry level helicopter. This will give bidders a chance to review and comment on various aspects of the project early on when there is still time to make changes that may be beneficial to the crown as well as to the bidders.

I want to assure all hon. members that strict criteria will be used to evaluate each proposal that is ultimately received by the government. The bidder who submits the lowest price that is technically compliant and has acceptable terms and conditions, industrial and regional benefits and risk assessment will be awarded the helicopter contract. Shortly thereafter, we will release the RFP for the second element, the integrated mission system.

In closing, let me say that I have every confidence that the procurement strategy now being implemented will give the men and women of the Canadian forces the maritime helicopter they need for today's operational environment, and I am certain that all members will agree that the government's approach is supportive of our military, fair to industry and responsible to taxpayers.

[Rob Anders, Canadian Alliance, Calgary West, AB]

Mr. Speaker, I have a question for the hon. member. The speaker before him indicated that the Sea King had a role as an anti-submarine warfare device. I happen to think that hunting for subs is an important activity, especially considering that we barely have any other presence in the Arctic.

I know that the Minister of National Defence does not seem to agree with that position. The minister, by the way, has referred to the use of the Sea King as an anti-submarine warfare device as something that is a relic of the cold war.

The question I am posing is this: who has it right? Is it the minister, who says that the Sea King and its replacement are not to be used as an anti-sub device, that this is merely a relic of the cold war and does not have any more relevance, or is it the previous speaker who indicates that indeed this is an important purpose and that Canada should be conducting anti-submarine activities? Is it the minister who is right or is it the previous speaker who is right? Which Liberal has it right?

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, the motion before the House has to do with a procurement strategy for the new helicopters. There are two contracts, one for the basic helicopter and the second for the integrated mission system.

The Department of Public Works and Government Services provides procurement services for all departments of the government. The Department of National Defence has provided public works and government services with the specifications for this particular project. Public works and government services is now outlining its procurement strategy, as it did last August. We are now in the process of having a dialogue with the aerospace industry.

The procurement strategy and the process that we are going through is, in our view, the best way to ensure a good, successful project of acquiring these helicopters, which is in the best interests of the military, the government, DND and the taxpayers. Those are the issues before the House and that is exactly what we are doing.

[Gerald Keddy, Progressive Conservative, South Shore, NS]

Mr. Speaker, I would like to ask the parliamentary secretary to the minister of public works to perhaps enlighten us a bit more on the procurement strategy. All along we have been told by the government that the procurement strategy would be based on the cheapest cost, whereas the treasury board guidelines for procurement under article 9.1.1 are as follows:

As stated in the policy, the objective of government procurement contracting is to acquire goods and services and to carry out construction in a manner that enhances access, competition and fairness and results in the best value or, if appropriate, the optimal balance of overall benefits to the Crown and the Canadian people. Inherent in procuring best value is the consideration of all relevant costs over the useful life of the acquisition, not solely the initial or basic contractual cost.

As I already said to the previous Liberal member who spoke, there is a difference of $3.2 billion from the Liberals' own 1994 numbers. Their numbers state it will cost $3.2 billion to procure new helicopters, whereas if they had kept the original EH-101 plan it would have cost $5.3 billion or $5.1 billion.

I would like to hear the member's comments on procurement, on the fact that the government changed the rules for this contract, on the fact that it is not listening to the military advice its own defence department is giving, and on the fact that it has stepped out so that the Prime Minister could take his pen and write “no helicopters” across the paper. It has adapted, bent itself backwards and swallowed itself whole in order to do that.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, the member's first question was in regard to the process. The process of course, from the requirements of the Department of National Defence, was a decision of the government. Treasury board is part of that government, so it is in compliance with treasury board guidelines.

Let me just briefly lay this out. In August a letter of interest went out to the aerospace industry to promote a dialogue. It outlined the intended procurement strategy for all parties. The rationale for our procurement strategy is quite simple. We believe that a separate competitive process will ensure that the crown obtains both the required helicopter and the integrated mission system as well as the long term in service support needed, at the lowest possible price. It will also allow for greater industry participation in the competition.

The member's preamble simply talked about lowest cost. That is not true. The procurement strategy is much broader than cost. It has to be compliant with the broad specifications as outlined in the letter of interest and as fully detailed on the government website.

[Grant McNally, Canadian Alliance, Dewdney—Alouette, BC]

Mr. Speaker, I will be sharing my time with my colleague from Calgary West.

This debate has been a very interesting one. It is a very worthwhile topic that has been brought forward by the Conservative Party today. It has just been unbelievable to listen to the arguments put forward by the Liberal government in defence of an indefensible position. That is what it has tried to do today. Liberal members have spent their time defending their action or lack thereof on the maritime helicopter replacement program in such a way that their arguments do not stand up.

The argument just submitted by our colleague, the Liberal member from Nepean was unbelievable. He made the unbelievable statement that had the government gone ahead with the plan developed by the Conservatives in the 1990s, which the Prime Minister tore up in 1993, we would have had a helicopter with cold war capabilities and that would have been a bad thing.

First of all that is wrong. Second, if we follow his logic, it was a better thing for the government to have spent $10 billion over the same period of time and not get the helicopters that are needed in a shorter period of time, rather than spend the approximately $5 billion that would have seen the helicopters delivered under the procurement plan of the Conservative Party back in the 1990s. They would have been delivered in 1993. That is completely illogical. It does not make sense when we look at the pieces of this indefensible position being offered by the Liberals today in the House.

The second assertion being made by most Liberal members is that they are in some way saving the taxpayers $1.5 billion by waiting for who knows how many years before we actually get the replacements for the Sea Kings, which are older than I am. They are saying unbelievable things.

The Liberals should be embarrassed and disappointed by this, because in fact what they are saying is that they are going to be procuring 28 helicopters rather than the original 35 under the plan offered by the Conservatives in the early nineties. There will be seven less helicopters delivered so one would think that there should be some cost savings. It is a little bit like the following argument: the government says that instead of buying 35 cars it will buy 28, but it will be saving $1.5 billion or whatever the cost of those cars would be. If we look at the logic of that argument, here is where it leads.

The Liberals are saying that they can spend more now over the same period of time, get less and we are going to be saving money by doing that. That just does not make sense. Canadians know that. Our military personnel know that. They know that politics has been played in this situation for many years.

We know about the procurement plan that has been in the works to replace the aging Sea Kings for decades now. It is now the year 2001. We would have had military capability and the equipment in place in the mid-1990s had the Prime Minister not simply played politics and torn up the contract that would have seen the EH-101s delivered into service when they were needed.

Instead, what has happened is we have what I am going to call a boondoggle. It is a word that applies here, as it has in many other areas of spending by the government. We had this boondoggle occur. Lives have been lost because of old equipment that has put our military personnel at risk. Sea Kings take approximately 40 hours of service for every hour in the air.

It was mentioned by colleagues in the House today that the situation has become rather embarrassing. We commend our personnel for maintaining the equipment and putting their lives on the line when they use this equipment that should have been replaced long ago.

For a government to stand in this place and defend the position in this situation is simply indefensible. I think Canadians are forgiving when people say they made a mistake, that they were wrong and that they will make good on it. That is exactly what the Liberals should be doing in this House today. If they did they would be able to come clean with Canadians on the failed delivery of equipment, on the time it has taken to replace the equipment and on their defence of it. Instead of coming clean, they have offered lame excuses which do not sit well with those who are in need of the service.

My colleagues from the Conservative Party have mentioned the situations on the Atlantic coast in terms of rescues. My colleague from South Shore talked about the government obviously not having been in the situation of needing the service or knowing anybody who needed the service. That was a very good point. The lack of care and the lack of commitment to put this in place now because there is a need for it is simply indefensible.

It is a shame that the motion is not votable today. I think we would find opposition parties united on it. The motion is a common sense one that has attempted to correct a serious error made by the Prime Minister back in 1993. What is very upsetting and disappointing to members of the House from all parties on this side, and I am sure members on the government side as well, is the lack of action as well as the lack of acknowledgement that politics was played with this file and that those politics have resulted in lost lives, our personnel being put at risk and many other problems.

I want to touch on one other comment made in the House today with regard to earthquake preparedness, which falls under the realm of the Department of National Defence. During question period and in some of the debate today we were asked about the earthquake in the Vancouver area yesterday. There appeared to be a lack of concern on the government's part about that issue. It moved the base at CFB Chilliwack with the emergency preparedness capabilities from the Vancouver region to Edmonton, which is 750 miles away.

We raised questions about this particular issue today with the Minister of Justice from Edmonton. We asked the minister what we would do when those services were no longer available to help people in Vancouver should a large earthquake occur, and it will sometime but we do not know when. The minister's response was that we were fearmongering. What a completely unacceptable and disappointing comment. How are our forces going to bring heavy equipment to Vancouver if there are no runways and if the major transportation corridors are gone? It is an indefensible position.

The government has failed in the delivery of the maritime helicopter program and in so many other ways. Members of the opposition will be united on this debate and many others to keep the government accountable. It is very clear to all Canadians that rather than do the right thing, admit it was wrong and fix the problem immediately, it is going to continue to stonewall and drag on something that needs to be fixed and could have been fixed in 1993. That is truly disappointing.

[Rodger Cuzner, Liberal, Bras D'Or—Cape Breton, NS]

Mr. Speaker, the member suggested that unanimous consent would be garnered by the entire opposition party. During the his speech he did not allude to any of the barriers that pertain to this matter.

The motion states:

That this House call upon the government to eliminate the barriers in the Letter of Interest to the aerospace industry, which impede a fair and open Maritime Helicopter Project, and that maritime procurement be conducted on a “best value to the Canadian taxpayers” basis, in accordance with Treasury Board guidelines.

Could the member expand on what the barriers are as they apply in this situation?

[Grant McNally, Canadian Alliance, Dewdney—Alouette, BC]

Mr. Speaker, the immediate barrier is the Liberal Government of Canada. It is obvious that that is the huge barrier. We have solid agreement from all members that the barrier is the Prime Minister. He said no in 1993. We could have had helicopters in service now, here, today. Instead, eight years later there are still no helicopters in sight. That is the barrier.

Another particular barrier is the statement of operational requirements and the whole process that has been put in place. The Liberals have changed the process thereby eliminating particular members of the industry from putting forward proposals to be included in the procurement strategy. That has been done deliberately to save political face because the government does not want to end up ordering the same helicopters or variants of them that it cancelled in 1993. That is the barrier to this going forward.

[Elsie Wayne, Progressive Conservative, Saint John, NB]

Mr. Speaker, the chair and vice chair of SCONDVA stated today that they are on the record as supporting the cheapest helicopter for naval operations. I am sure our troops in the field feel wonderful about getting the cheapest but not the best.

Does the hon. member feel that it is right for the government to override treasury board's recommendations and policies when it comes to replacing the Sea Kings? With its letter of interest, the government has overriden treasury board sections 9.1.1 and 9.1.2. In no way should the government ever do that. That is there for everyone to abide by.

[Grant McNally, Canadian Alliance, Dewdney—Alouette, BC]

Mr. Speaker, I agree with my colleague for Saint John and I congratulate her for bringing this motion forward today.

What the government is doing is not right. It is indefensible. It is a position put forward here today by the Liberal Government of Canada and it is one that is clearly wrong. It must bear the responsibility for cancelling the program in 1993 that would have seen helicopters in place to save lives across Canada.

[An hon. member]

It would have saved $1.5 billion.

[Grant McNally, Canadian Alliance, Dewdney—Alouette, BC]

The member says it would have saved $1.5 billion but he does not say that it is seven less helicopters. He wants to say one thing but not the other. He does not want the whole story to be told. I do not blame him. The decision is made is such an embarrassment for his government. It should hold full responsibility for what it has done. Canadians are disappointed with the government and the course of action it has taken by cancelling the helicopters and rewriting the letter to exclude some so that it is not embarrassed further in this whole fiasco and boondoggle.

[Rob Anders, Canadian Alliance, Calgary West, AB]

Mr. Speaker, I will address the folks back home. I want to tell everybody who is watching at home or in the offices around the Hill today what is going on.

The Liberals are swallowing hard on a subject on which they ran a campaign in 1993. They told Canadians they wanted to scrap a Conservative initiative to purchase EH-101 helicopters which were clearly the best helicopters that could have been purchased. The Prime Minister went about beating his chest during the election campaign and said that cancelling this would save money. At the end of the day, what will happen is that the Liberals will spend a lot more money in aggregate and we will get less helicopters in return. That is what is called Liberal fiscal responsibility; pay more for less.

In the meantime, this is not just a tongue in cheek kind of cute argument. People have died as a result of that flawed decision. People lost their lives operating those helicopters that should not have been in the air because of the Prime Minister and his government's decision. This is not just a question of money. This is a question of sacrificing the lives of our forces. The Liberals should be really ashamed of that.

We are looking at about $600 million in cancellation fees that the Liberals brought upon themselves by cancelling the contract. It is a lot of money but it gets worse than that. It is also the fact that they paid all that money over the last decade to keep these flying heaps in the air. When we consider that some of them were bought in 1964, that is a long time.

As a matter of fact, it was 12 years before I was born. I will even venture to say that the Prime Minister, who went about beating his chest in 1993 about the ending of this contract, was probably not even elected when these helicopters were bought. It is an absolute shame to consider that our men and women in the forces have been flying things that are absolutely in heaps by everybody else's standard.

I want to quote from some things here. This is absolutely choice. This just goes to show to what lengths the Prime Minister and some of those around him are willing to go in order to try to quash this project so that they do not have to wipe the egg off their faces because they did not order the EH-101. The EH-101 won the contract fair and square. What did the government do to hide that, to obfuscate it, to delay it?

This is from an article from the London Free Press written by Greg Weston. The date of this is last February 22. For those folks back home who want to check it, they can look it up on the Internet. He said:

By mid-1997, sources say it had become apparent the bidding was again going to be won by the Cormorant.

By the way, the Cormorant is the parent of the EH-101. It is the same brand of helicopter. It goes on:

Now, buying Cormorant helicopters from the same group that got $600 million of public money for Chrétien's cancelling of the original contract of Cormorants—

[The Deputy Speaker]

Order, please. I remind colleagues that we cannot do indirectly what we might not be able to do directly. Although the member might be quoting, he will have to slightly adapt his text to refer to, in this case, the Right Hon. Prime Minister or other ministers that might otherwise be named or referred to in this same article.

[Rob Anders, Canadian Alliance, Calgary West, AB]

Mr. Speaker, the guilty do not like having their names read out loud. What it boils down to is that the Cormorants were the proper choice. It did not cost the Prime Minister. Who are we kidding? He is using taxpayer dollars in Shawinigan. It actually cost Canadian taxpayers $600 million. Then he decided he needed a political fixer.

Since I cannot name names, he brought in the Deputy Prime Minister as his trusty political fixer. The Prime Minister instructed the Deputy Prime Minister that the Cormorant through another bidding process was not to win. In other words, there would be a contest but the Cormorant or a version of the EH-101 could not be allowed to win. That was the rule. It goes on:

In December 1997, the (Prime Minister) headed south for his usual month of golf, reassured by the military that the Cormorant bid was history. But a funny thing happened on the way to the contracting office. The (Deputy Prime Minister) had to phone the (Prime Minister) in Florida to tell him the Cormorant had won.

They rejigged the process all over again and the Cormorant won fair and square. The Prime Minister's response to the news was described as largely unprintable. Expletives were uttered by the Prime Minister because he hated the fact that the Cormorant won the process by a fair bid.

It talks about a memo from a fellow officer to Air Force Commander L.C. Campbell, whom I have quoted before, which began:

Assuming there will be a competition to select the new maritime helicopter, it is quite possible that the Cormorant might win it.

It went on to ask:

How do you ensure that it does not win a maritime helicopter competition?

It then referred to the military and went on to say:

If the Cormorant were to win a military helicopter competition on its merits, wouldn't we again be in the same position of being accused of tricking the government?

Should the military not be the one to decide what helicopter would best service its function? Yet we have the Prime Minister, the Deputy Prime Minister and the cabinet interfering with the decision and competition process by saying the Cormorant is not allowed to win because they promised they would gut the program in 1993 when they were running during the election campaign.

It is very serious that they would waste billions of dollars of taxpayer money, put lives on the line and contribute to the death of our armed forces just because they did not want to get egg on their faces. Shame on the government. Shame on the Prime Minister and shame on the Deputy Prime Minister.

I would like to talk a bit about what these helicopters will be used for because even the minister seems to have some fuzzy logic about it. Basically they would be used for search and rescue. When I visited the base in Esquimalt I was told by military personnel that they could not do the job because of the situation. They had to bring in Americans in the Straits of Juan de Fuca. The Canadian forces could not perform this job but the Liberals are continuing to delay.

Search and rescue is one of the functions. Canadians are not doing a lot of it or as much as they should, especially when we consider that for every hour in the air there are 40 hours of maintenance on any helicopter in the air. That is the search and rescue story.

Let us think about the anti-submarine warfare activities. By having helicopters on the back of naval warships it multiplies by 25 times the ability of the ship to conduct anti-submarine warfare. As the ship is sailing along the helicopter flies off the back of the ship, goes out to the limits of its circumference, drops a boom into the water and listens for subs underneath. It drastically improves the ability of sub hunting.

Even though we only spend a scant few hours a year up in the Arctic with icebreakers, if we are lucky, our minister happens to think that anti-sub warfare is “a relic of the cold war”. He does not believe we should be enforcing sovereignty. The minister does not think that is important.

The job of our military, our navy, and these helicopters is to police our boundaries and to find out whether other nations are conducting submarine operations, whether they be under the ice or off either of our coasts. If our minister with his Liberal, fuzzy-headed, soft, mushy logic does not think we should be finding out whose subs are in our waters, we have a serious problem. That is pretty serious.

I could go on and on but I realize that my time has come to an end. I know that members on the other side will prattle on about procedures for bureaucratic buying.

[Paul Szabo, Liberal, Parliamentary Secretary to Minister of Public Works and Government Services]

Mr. Speaker, the member dealt very briefly with the motion before the House which has to do with the process. We are talking about the alleged barriers within the letter of interest.

The process and the procurement strategy has been approved by the government, which includes the Treasury Board, and it is in compliance with all procurement criteria. Most of the member's speech had to do with the allegation that somehow there was a bias against EH Industries.

In 1993 there was a cancellation of the EH-101. The government made that commitment during the election and followed through for the reasons outlined. The member should also know that we put out for tender replacement of search and rescue helicopters. EH won that contract in a fair, competitive and open process. With regard to the current contract EH Industries did make an appeal to the Canadian International Trade Tribunal, and the member should know that the CITT rejected that appeal.

Does the member disagree with the Canadian International Trade Tribunal with regard to the ongoing process? If he does, he should explain to the House why he disagrees with the CITT.

[Rob Anders, Canadian Alliance, Calgary West, AB]

Mr. Speaker, I am glad I have been given the opportunity to tell Canadians that Liberals across the way and the member who just asked the question have written it so that they can rule out Cormorant and Sikorsky from competing in the bids.

How will it be a fair bidding process when the government has specifically structured it so that Sikorsky and Cormorant cannot compete? Cormorant won the process fair and square before. Sikorsky is one of the biggest manufacturers in the world of helicopters. They are both ruled out of the bidding process because the PM does not think that meshes with what looks good on his face. That is a shame.

I will tell members a little private story in response to that question. I flew in the Eurocopter when it was brought to Ottawa. My staff and I had an interest in this issue even before I was serving on the Standing Committee for National Defence and Veterans Affairs. I actually flew around in that helicopter.

I asked the officials from Eurocopter about some of the details of the aircraft. They crassly told me, because I do not think they figured out that I was an MP, that it would come down to where the helicopter was assembled. Because of the way the Prime Minister wanted to guide the process for getting jobs, they said the government would not go with the other helicopter. Because of where it would be assembled and because of the jobs that would be in and around the Prime Minister's neck of the woods, the Eurocopter would win. It was driven by the most partisan political considerations of all.

[Elsie Wayne, Progressive Conservative, Saint John, NB]

Mr. Speaker, I was just given a document which states that any attempt to close the wide variance in air vehicle performance would require either a major redesign of the proposed Cougar or a significant change in the operational role of the National Shipping Agency, which would then require reassessment of the Canadian navy's concept of operations. The redesign is estimated to cost in excess of $500 million.

Is my colleague from the Reform Party aware the Cougar that will be given to the navy does not even meet naval requirements? Now it is another $500 million to redesign the whole process.

[Rob Anders, Canadian Alliance, Calgary West, AB]

Mr. Speaker, right from the beginning this issue has been a massive waste of taxpayer money. I agree with the hon. member. I could look at some of the statistics I wish could have been included in the main part of my speech.

There are cancellation penalty costs of $478.6 million. Then the cost of actually upgrading the Sea Kings. Mechanics can only do so much but they have to go ahead and repair them. It is $50 million to upgrade them. Then there are maintenance costs. As I said, for every hour in the air it is 40 hours of maintenance. That is another $750 million. Then there is the cost of the replacement at $2.9 billion for 28 helicopters.

This means that the government is spending close to $5 billion. The original contract was for seven helicopters and would have cost only $3.24 billion. It is an absolute waste of money.

[Carolyn Parrish, Liberal, Mississauga Centre, ON]

Mr. Speaker, this has been a fascinating day for me. How many angels can dance on the head of a needle? It is quite fascinating. I will be splitting my time with the member for Scarborough East.

I welcome the opportunity to address the House on this important opposition day motion. Let me begin by commending the hon. member and her party for their interest in how the Canadian forces are being equipped to do their job. Certainly this is of concern to many Canadians. As the hon. member knows, the government has been taking progressive steps for some time now to ensure that Canada's military has the state of the art equipment it needs.

I also acknowledge the hon. member's concern for the prudent use of taxpayer dollars. One of my principal goals as an elected official has always been to make sure that the government and the governments with which I served before on a municipal level deliver an appropriate level of service to all Canadians in an efficient and cost effective manner. I think that is the role of all politicians, is it not?

National defence is one of the most important services any government can provide its citizens. Expenditures in this area must undergo very careful scrutiny. I have no doubt that the maritime helicopter project will withstand such scrutiny. I also believe that the procurement strategy developed by the Minister of Public Works and Government Services is in the best interest of Canadians and our defence personnel.

From a strictly economic perspective, two factors set defence and military procurement aside from most other types of purchases. First, defence equipment is generally in service for relatively long periods of time so a strategic long term outlook is necessary.

As hon. members have no doubt been made aware throughout debate on the motion, defence equipment tends to be extremely costly. The maritime helicopter project is a case in point. The replacements for Canada's aging Sea King helicopters are expected to be in service for more than 20 years. They will be used in harsh conditions and extremely dangerous situations. Safety and durability are of utmost importance.

These helicopters and their associated integrated mission systems will be expensive to purchase. In fact, it bears repeating that even though we are saving taxpayers up to $1.5 billion compared to the former government's helicopter purchase project, it is still a huge financial commitment. With a value of close to $2.9 billion, the maritime helicopter project is the single largest procurement currently being managed by the Department of Public Works and Government Services.

That is why it is important to have a fair, open, transparent and competitive tendering process to award these contracts. We believe that separate competitive processes will ensure that the crown obtains both the required helicopters and the integrated mission system, as well as long term in service support that is absolutely necessary at the lowest possible price. I have the utmost confidence in the ability of the minister of public works and his department to manage this procurement.

When listening to debate coming from the opposite side of the House one thinks that as soon as the Liberals win an election we immediately dismiss all the departmental personnel and hire just Liberals to do a terrible job for the Canadian public. In fact, we have a huge department of people who have worked here for years and years, much before that party was even a glimmer in Mr. Manning's eye, and they have a vested interest.

[The Deputy Speaker]

I would remind members once again to please refer to one another by either portfolios or riding names.

[Carolyn Parrish, Liberal, Mississauga Centre, ON]

Mr. Speaker, my apologies. I am getting so enthusiastic about the topic that I got carried away.

I am especially pleased to see that the government plans to use a number of innovative practices to help ensure a successful, cost effective acquisition of the 28 maritime helicopters and the integrated mission system.

I will focus my remarks today on two measures in particular, the government's unprecedented commitment to industry dialogue and interaction, and the unique prequalification process that is the cornerstone of the procurement strategy for the maritime helicopter project.

As the Minister of Public Works and Government Services has informed the House, the defence contracting industry was made aware of the government's general intentions and requirements in relation to the maritime helicopter project through a letter of interest released last August. The letter of interest was much more than a statement of needs. It was also an invitation for individual companies to comment on the government's plans and to indicate their intention to participate in the competitive bidding process.

As the minister has already noted, the government has received input on its statement of operational requirements and procurement strategy from several companies. These comments will be given careful consideration as defence and procurement officials continue to define this project in the months ahead. The letter of interest has successfully initiated a dialogue with the industry which will not only continue but will broaden in scope and detail right up to the bid closing dates for each of the contracts.

We firmly believe that industry interaction is critical for large projects such as this. It protects the interests of taxpayers while ensuring that potential prime contractors and subcontractors are fully aware of the government's needs and intentions and do not assume an undue financial burden or risk in preparing their bids.

The government intends to make full use of the World Wide Web to facilitate this industry interaction. A dedicated website has already been established for the maritime helicopter project, as has been mentioned already, and information has been posted for the industry and other interested parties, including the Canadian public. Again, this reflects the government's commitment to a fair, open and transparent process.

As the project unfolds, the level of detail posted on the website, and thus the site's value to potential contractors, will grow. Draft specifications and other documents will be available through the website for review and comment by industry, the people who know what they are saying.

This interactive process could lead to changes in the technical requirements or other elements of the project. It will also increase the likelihood of technical compliance of candidate helicopters and integrated mission systems.

The second innovative procurement practice I wish to speak about today, the mandatory prequalification process, is in many ways an extension of the government's commitment to industry interaction. As hon. members have been informed, separate prequalification processes will be conducted for both contracts in advance of the formal submission of bids. This is the first time such a process has been used in Canada for a project of this size.

As the minister has already noted, prequalification should enable us to greatly minimize the problem of disqualification of bids due to technical non-compliance. This saves a lot of companies a lot of money. It stops them from getting into bids that they just cannot complete.

Mitigating the risk of non-compliance is good for the government because it ensures the maximum level of competition for the contracts. It is also good for the industry which, as hon. members can appreciate, invests an enormous amount of time and money in developing bids.

I want to make it clear yet again that prequalification will focus largely on the hardware aspects of each bid. Our goal is to make sure that potential prime contractors can conform with the technical requirements of the maritime helicopter project as set out by the Department of National Defence before—and I underline before—they submit a bid.

If a contractor cannot conform to these requirements there is no need to devote additional time and resources to developing or evaluating other elements of the bid, thereby saving us money and time.

To prequalify, potential prime contractors will be asked to provide an appropriate level of detail about their equipment and systems, which will be carefully reviewed by defence and public works and government services officials. Prime contractors will also have the opportunity to explain their proposed equipment and solutions, to seek clarification of technical issues and to address any concerns that might be raised on the government side.

Potential contractors that have not achieved prequalification status at least 30 days in advance of the bid close will be declared non-compliant and their bids will not be considered as part of the formal tendering process, thereby saving both sides a lot of time, money and aggravation.

Once the bids close, the normal process will be followed for selecting a successful contractor for government tenders awarded on the basis of lowest price. In addition to price and technical compliance and industrial and regional benefits, contractual terms and conditions will be part of that evaluation process.

For the basic helicopter, the price evaluation will include the basic helicopter, related ship modifications and in service support. For the integrated mission system, the evaluation will include the integrated mission system and its in service support.

The government clearly believes that Canada is more likely to meet both its technical and cost requirements for the maritime helicopter project by talking with the industry. Such dialogue will result in a better meeting of the minds, so to speak. It will reduce the risk to government and to industry alike.

Like the debate that is taking place in the House today, it will contribute to a successful procurement project that will respect the interests of taxpayers and meet the needs of the Canadian forces for many years to come.

[Art Hanger, Canadian Alliance, Calgary Northeast, AB]

Mr. Speaker, I listened to the member's speech very carefully, noting that there were comments in her speech that reflected the comments of some of her colleagues in almost identical words. I hate to think this, but it could not be a canned speech from the minister of public works that she was delivering, could it?

I know she gave a lot of credit to the minister of public works regarding the process he has set up. I am sure that she must be aware from his presentation, and it was actually one of the members of the media who brought this to my attention, that the contract for the maritime helicopter project will not be signed this year. It will be signed next year. What will that in effect do? That will push off the whole project again and it will be another five to six years before a delivery of even one machine to our military takes place.

We can talk about the openness of the process and so on, which I believe is a bunch of hogwash, but just think of this. Right now we have a 40 year old aircraft out there that requires 40 hours of service for every hour in flight, and we have this minister and this government stating that it will be another year before the contract is signed and another five years before one machine is delivered. There is something seriously wrong with the priorities on that side of the House, and I would like the member to comment on it.

[Carolyn Parrish, Liberal, Mississauga Centre, ON]

Mr. Speaker, I do not think there is anything wrong with ensuring the best quality available. The machines are going to be used for 20 to 25 years. If the member opposite wants us to rush about madly to put a less than perfect machine in the air and put men at risk, then I do not endorse that.

It is like anything else to the member opposite. It is like the party opposite starting as the Reform Party. It was almost what was wanted, but not quite. It had to take time to mature into the Canadian Alliance. The process we are in right now is maturing at a much faster rate and we are going to end up with a much better product.

[Diane Ablonczy, Canadian Alliance, Calgary Nose Hill, AB]

Mr. Speaker, I am not as involved in this issue as some of my colleagues, but I really cannot let the nonsense that I just heard go by.

The member says the government does not want to rush out and do this. The contract was cancelled in 1994. The last I looked, that was seven years ago. The contract that was cancelled was put in place because the military needed the equipment, so clearly the military needed the equipment well before 1994, knowing the less than lightning speed with which any government moves.

Equipment that was needed before 1994 was ordered. The government decided to toast the contract for political reasons in 1994. Here we are in 2001, finally with some kind of decision to buy. Now we find out that we will not have delivery of this badly needed equipment until later down the road and the member has the gall to say the government does not want to rush anything. How on earth can she stand and spout such nonsense and expect Canadians to buy that kind of line?