NDVA Committee Meeting

STANDING COMMITTEE ON NATIONAL DEFENCE AND VETERANS AFFAIRS

COMITÉ PERMANENT DE LA DÉFENSE NATIONALE ET DES ANCIENS COMBATTANTS

EVIDENCE

[Recorded by Electronic Apparatus]

Tuesday, April 27, 1999

• 1612

[English]

The Chairman (Mr. Pat O'Brien (London—Fanshawe, Lib.)): I call to order the meeting of the Standing Committee on National Defence and Veterans Affairs and ask those people who are not part of this meeting to please excuse us unless they wish to stay to listen.

With us we have senior officials from the Friends of Maritime Aviation and also Brigadier-General Colin Curleigh.

Welcome.

As we convene, colleagues, I will first introduce our new clerk, who will be with us at least until Mr. Morawski returns. Mr. Morawski is struggling a little bit with his health and is having some tests. With us earlier was Richard Dupuis, who will be, I understand, acting clerk of SCONDVA until Mr. Morawski returns, but today—musical clerks—we have Mr. Fournier with us.

I've had a couple of questions on the proposed trip to England in regard to procurement. I thought I mentioned—perhaps not—at a previous committee meeting that at this point that trip is on hold. Several of the House leaders had some concerns about it. Frankly, I think we may have to scale back the trip in terms of making sure all parties are represented. I think they had some concerns about (a) the size of the delegation, and (b) the timing in May. I believe it was related to the situation that's unfolding in Kosovo, so you can draw what conclusions you want from those comments. There were concerns, and it's not going to go forward at this time.

When we reconvene in the fall, I think we'll have a steering committee meeting and discuss the possibility of again putting the idea of the trip forward. I think it would be a very valuable trip for us to do in our study of procurement, perhaps with a scaled-down delegation. We could look at putting that forward. I'll have a steering committee meeting with all parties, and we'll discuss that in the fall. Consider it on hold until fall at the earliest.

• 1615

I will just indicate two other points before we go to the witnesses. Tomorrow, of course, we have a special meeting at 3.30 with the Minister of National Defence, on estimates. Of course the minister would be willing to take whatever questions you have for him that are relevant to his portfolio. I would indicate, though, that we first want to deal with questions about estimates. So if anybody has questions on estimates, let's get them on the table first. That's the purpose of the meeting.

Then, when we've exhausted, from all sides, questions about estimates for the minister, I'm sure that there would of course be interest in asking the minister some other questions about the unfortunate activities that our troops are performing so well, as Mr. Hart noted. Our pilots and the other NATO people doing an excellent job, by all accounts. It's to no one's surprise that Canadian pilots are performing well.

So that's for tomorrow from 3.30 to 5.30.

On Thursday, we meet with two groups of witnesses, one being Mr. Chadderton, who will speak first. You will recall that he has provided to each member a video called Sail or Jail, the history of this issue of the merchant mariners, from their perspective. I would strongly encourage you, if you haven't had the opportunity to view that, to do so, because I know he'll be referring to it. Time doesn't permit for him to show it again, nor should that be necessary when we've all had a chance to view it. He will be here, then, and other witnesses will follow him.

That meeting, of course, is at a special time, from 12 to 2, in room 371, in the West Block. A light lunch is included. That means little sandwiches, etc. We're all trying to watch our waistlines around here—except Mr. Proud and Mr. Clouthier, who don't have to. We will have a working lunch in our meeting from 12 to 2. That, of course, is because we have President Havel of the Czech Republic in the House of Commons during our normal meeting time at 10 a.m.

Then, of course, on Thursday we will have the briefing that we discussed earlier, at 3.15, with the other committee. It will be a joint committee briefing.

That fleshes out a rather busy week. Unless I have questions from members about those items, I'll go right now to our witnesses.

You are very much welcome, gentlemen. Thank you for being here. Who would like to lead off for us?

Colonel Lee Myrhaugen (Ret. (Co-ordinator, Friends of Maritime Aviation)): Thank you, Mr. Chairman.

By way of background, I retired as a colonel two and a half years ago, following 34 years of service. I served in four squadrons, flying the venerable Sea King and commanding one of them, and retired as the deputy commander of Maritime Air Group two and half years ago.

First of all, allow me to thank you and your committee, Mr. Chairman, for the invitation to appear in front of you as you examine this defence procurement process, a very critical process that should transform certain policy inputs into capability outputs in a timely and cost-effective manner.

I appear before you as the co-ordinator of a group known as Friends of Maritime Aviation, whose objective is to promote public awareness of maritime air requirements and the critical role maritime aviation plays in meeting Canada's domestic and international security commitments. I am not a procurement specialist but rather an operator who has witnessed a military procurement system that is considered cumbersome, time-consuming and very expensive.

From the time of the very first statement of requirements, or SOR, for a replacement for the Sea King in 1975, I have witnessed or been directly involved in staffing the SOR for the Sea King replacement, the new shipborne helicopter, the new shipborne aircraft, and, finally, the maritime helicopter project. Despite all the project name changes in the 24 years of effort, the government still has not seen fit to put the contract to tender, this despite the statement by the Minister of Defence that

...the government is not delaying. We are moving along expeditiously on the matter. All of the details have not yet been finalized. As soon as they are, the procurement strategy will be brought forward. It is recognized that we have to get on with the replacement of the Sea Kings.

This statement speaks volumes about the requirement to overhaul the defence procurement process and provides increased importance for the work of this committee.

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The Sea King replacement project now has the dubious distinction of being the project longest under consideration in the history of the Canadian military procurement system. With that distinction, I can only hope that in the end we get it right.

Given the length and complexity of the procurement process in an age of increasingly rapid technological change and reduced defence budgets, the military needs the assurance of predictability and stability in their capital budgets and needs timely follow-through with promised funds to ensure the proper phasing of capital projects. Since the capital component of the budget represents the residual amount remaining after allocations have been made for personnel, operations, and maintenance, and because this discretionary component is often used for unexpected contingencies, many defence procurement programs have been delayed, reduced or altered in scope, or cancelled altogether.

The point is, from a military standpoint, constant raids on already approved capital programs violate the principle of budgetary predictability and stability that the Canadian Forces seek and require from their political leaders.

Ladies and gentlemen, I applaud your efforts to improve the defence procurement process and wish you success.

With that, Mr. Chairman, I'm at your service. Thank you.

The Chairman: Thank you very much.

General Curleigh.

Mr. Colin Curleigh (Individual Presentation): [(Ret.) Brigadier-General] Thank you, Mr. Chairman.

When my grey-haired colleague and I first started working on the replacement of the Sea King helicopter, he was a blond and I had long, curly ringlets—a beatnik, so to speak.

Voices: Oh, oh!

Mr. Colin Curleigh: I'll give you just a bit of background. In 1992, I retired as a brigadier-general after 40 years in Canada's military. My operational experience was focused on maritime aviation, particularly as a pilot flying shipborne maritime helicopters. I flew four tours in Sea King squadrons and, in my last operational position, in 1986-89, I was the commander of the Maritime Air Group, responsible for all maritime aviation operations in Canada, including all Sea King operations on both coasts.

During my career, I also served six years at different times in the officer professional development system and served as a staff officer out of country, in Washington, The Netherlands and the U.K. By some miracle, during my 40 years I was never posted to our headquarters here in Ottawa, and people phone me constantly, saying, “How did you do it?”

So I do not have direct experience with the defence procurement process per se. However, I have certainly been on the periphery and on the receiving end of this complex, costly, slow, and only marginally effective system.

Although retired, I have maintained a keen interest in maritime helicopters and am very concerned about the timely replacement of our ancient Sea Kings with modern maritime helicopters and a proper support system.

Over a year and a half ago, when the government was bogged down trying to make a decision on the search-and-rescue helicopters, when the Sea Kings were embarrassingly in the news—grounded for technical problems and unknown problems—and the pressure was building for government to fulfil its promise to initiate a program to replace the Sea Kings, I offered to come to Ottawa at my own expense to speak on these issues with the Minister of National Defence and his staff. My offer was rebuffed.

In February 1998, senior members of the Naval Officers' Association of Canada were scheduled to meet with the Minister of National Defence. I was not one of that group. However, several papers on topical subjects were prepared, which were to be left with the minister after that meeting, and I wrote the paper on the maritime helicopter project, the MHP, which has been referred to. The minister cancelled the meeting at the very last minute, without explanation or apology. However, the papers were sent to him in any case.

In my paper, which I have enclosed for the clerk, I discussed the procurement strategy for the MHP. I also enclosed three paragraphs excerpted from that paper in order to give you an insight into my concern and, if you wish, Mr. Chairman, I will read them into the record. They are very short.

Shortly after those two frustrating experiences trying to help the government, I accepted the invitation to join the Sikorsky helicopter company as an adviser.

So while I come before you not able to give specific answers to the matter, perhaps I can be helpful in assisting you in the formulation of the tough questions you can put to those who must answer for this pathetic situation.

If you wish, Mr. Chairman, I'll just read those three paragraphs.

The Chairman: By all means.

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Mr. Colin Curleigh: These are plucked out of a larger paper just to give you the flavour of the concern. It's a paper that I wrote just a little over a year ago: New Maritime Helicopters—Essential for Canada's Navy. We've talked about the statement of requirements and I'm sure you have often been briefed about it as to how important it is. Here's what I say about the statement of requirements.

There are important lessons to be learned from the recent Canadian search-and-rescue helicopter project. What should have been a simple document of a few dozen pages clearly stating the requirements soon grew into an SOR of over 140 pages, with 8 annexes of supporting material that added another 33 pages.

That bloated SOR led, not surprisingly, to an enormous request for proposals—to industries—of over 1,200 pages, which truly shocked those companies that were interested in responding. They responded with documents that filled not books but shelves. Not only was a monster created, but it came with a significant cost as well. Developing the unnecessarily detailed responses is an expensive and time-consuming process, the costs of which companies eventually just charge back to the project.

Also, it was difficult for the many others in the decision chain, including those in the political chain, to wrap their minds around such a mass of detail—all this for what should have been a simple project for 15 basic helicopters. The maritime helicopters themselves and the forthcoming project for their procurement will be much more complex. In order to prevent an even larger imbroglio for the MHP, it is recommended that a fresh look at the whole matter be initiated. Here are some thoughts for consideration.

In that paper, I go on and give some thoughts.

Next is the procurement strategy. Again, this is an excerpt from a larger section.

There are many different ways to handle such major procurement projects as the MHP, and it is suggested that the department be encouraged to examine innovative methods that could streamline the whole process and lead to considerable cost savings as well. The rut that we seem to be trapped in is a practice that is too complex and too costly, and this leads not only to constipation but also to a lack of credibility that exposes the whole process to understandable criticism.

Certainly there must be due diligence exercised in such major projects, and a degree of CYA is unavoidable for legal and political protection, but, once again, a simplified process could bring great benefits while still safeguarding contractual integrity. Within DND at this time there are people who have such innovative ideas, which could be brought forth for examination, but only if they were unfettered from the “business as usual” harness that clearly won't work in today's circumstances.

Towards the end of the paper is another paragraph I've extracted—on “other considerations”.

Costly old methods of doing business waste at least a third and, by some estimates, up to a half of the money—money spent on matters that add no value to the end product of major crown projects such as the MHP. This is not the place to go into those wasteful practices that add no value, but it should be stressed that every dollar squandered means one less that could have been devoted to obtaining the right helicopter and its required support at an affordable price. Changing costly selection and procurement practices would go a long way toward reducing such waste in the MHP, and would contribute to the goal of getting the best value for the limited funds available for the project.

I'll stop there, Mr. Chairman.

The Chairman: Gentlemen, thank you very much.

We'll now go to the first round of questions, with 10 minutes for each questioner, starting with Mr. Hart of the Reform Party.

Mr. Jim Hart (Okanagan—Coquihalla, Ref.): Thank you very much, Mr. Chairman.

Thank you both for your interesting presentations this afternoon. You've both outlined some real problems with the procurement process. At this committee, we've heard from officials that, really, the procurement process is driven by operations, yet we have two operators in front of us today who have quite a different story.

Where exactly do you think the quagmire is? We seem to be bogged down here. Why is it taking so long? You've pointed out that the first time we saw an SOR for a helicopter was in 1975, and we're still waiting to see it. What do you think the specific problem is?

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Mr. Colin Curleigh: Maybe I could have first crack at that. Certainly any procurement process should be driven by the operational requirements. I don't think there's any doubt in anybody's mind about that. It's what happens between the simple statement of a deficiency—and this is what we're talking about first of all, an operational deficiency—and how that is translated into a statement of requirements for a particular piece of equipment to try to overcome that deficiency. That's the first step.

There was a time when it was done at the operational level, with a simple statement of requirements. With several awkward projects, particularly the search-and-rescue project, which should have been so simple—as I say, it was just 15 basic helicopters and a hoist—I think things became so complex that it became politicized. In my personal view, and after talking to those who are trying to develop the SOR now, I believe that at the highest level within DND there's great pressure on those who are writing the SOR to put it in such a way that it will be—I was going to say acceptable, but I think the better word is palatable—palatable to government, so that it can be swallowed.

Over and over again, they're going over the statement of requirements so that it will have a better chance of getting approval at the political level.

Mr. Jim Hart: What are some of those considerations, then? For instance, are regional offsets, industrial offsets, one of the considerations that bogs the process down?

Mr. Colin Curleigh: I don't think it has reached that stage yet. It has certainly reached that stage with the search-and-rescue helicopter, and those regional benefits have not been sorted out yet.

In regard to my other hat, I was the past president of the Aerospace Industry Association of Nova Scotia, and we're still looking at the search-and-rescue project and asking, “Where are the industrial offsets for the maritimes and for Nova Scotia?”

So it's at that late stage, once the project has been initiated, that I think the industrial offsets come in. This project for the replacement for the Sea King helicopter has not even been initiated yet. We're not at that stage yet.

Mr. Jim Hart: Did you ever anticipate when you were flying Sea Kings that they would still be in operation in 1999 and that we'd still have maybe another five to eight years before we take delivery of new helicopter replacements?

Mr. Colin Curleigh: I don't want to make a big deal out of this, but—

Mr. Jim Hart: Go ahead. Make a big deal out of it.

Some hon. members: Oh, oh.

Mr. Colin Curleigh: —I flew the first Sea King helicopter into Shearwater, into Canada, in August 1963, and I can tell you that back then we were very proud of these new helicopters. It was a whole new era, and our Canadian navy was leading the world in putting a large size of helicopter onto a medium-sized or relatively small size of ship, and we bloody well did it. Many other navies—the British navy and the U.S. navy—said we were crazy to try to do that, and we did it. There was a very positive feeling with the new helicopters and making the whole concept work for the destroyer-borne helicopter.

But you're right. Back then, if we ever thought that in the 1980s we'd still be flying Sea King helicopters, we'd have rolled our eyes, certainly.

Mr. Jim Hart: You mentioned—

Mr. Colin Curleigh: Excuse me, sir. I think Colonel Myrhaugen wanted to respond to your first question about the SOR.

Mr. Jim Hart: Sure.

Col Lee Myrhaugen: May I, Mr. Hart?

Mr. Jim Hart: Yes.

Col Lee Myrhaugen: I understood from your question that you were asking us as operators... or the inference was that the holdup in bringing the SOR through to fruition was operator based. I can assure you that it isn't, because, as an operator, I can assure you it was completed at least 12 months ago. I'm well aware, as are you, of what the minister has said.

I have an anecdotal story. I would like to read a very short story about SORs, from an operator's perspective. This happens—

[Translation]

Mr. René Laurin (Joliette, BQ): I'm sorry, Mr. Chairman. Could someone tell me what an SOR is? We've been talking about this for 15 minutes and...

[English]

The Chairman: Okay.

If you're using initials or acronyms, gentlemen, could you help us out and say the words in full?

Col Lee Myrhaugen: Absolutely. SOR is the statement of requirements, which is—

[Translation]

Mr. René Laurin: The interpreter said it, but I didn't catch it the first time.

[English]

The Chairman: Okay.

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Col Lee Myrhaugen: Mr. Hart, this is an anecdotal story, which is about to be published as part of the historical accounts of our Friends of Maritime Aviation. This is a Gulf War slant on the MHP, the maritime helicopter replacement project.

In August 1990, we were given the warning order to prepare for the UN deployment to the Gulf. It dawned remarkably quickly on those in charge that our aging and obsolete Sea Kings were not really all that well equipped for the potentialities that lay ahead. In fact, our Sea Kings weren't even all that capable of carrying out their old Cold War tasks any longer. When it came to finding money for equipment, modernization or improvements, the Sea King fleet always seemed to be at the end of line. In 1990, with the Sea King replacement—cancellation of the EH-101—just around the corner, it was seen to be nonsensical to spend anything on the aircraft that were about to be replaced.

I'll abbreviate this.

It says that the statement of requirements, the SOR, the list of the new equipment and modifications, was put together in less than an hour by an ad hoc team of Sea King people sitting around the table at the Maritime Air Group headquarters in Halifax on the morning of August 10, 1990, and it was approved before the day was out.

From an operator point of view, it is very easy to identify what the military requirement is to satisfy the political objectives. Therefore, I would only add to General Curleigh's comment that the quagmire, the restriction, that we see today is, in my view, political will as opposed to operator will. If the minister wanted the statement of requirements in his hand, he'd only need to ask for it.

Mr. Jim Hart: I would agree with you on that particular issue.

I wonder if I could ask a few questions about the S-92, since we have the ability to talk to General Curleigh. What is—

Mr. Colin Curleigh: Could I just interject here, please?

Mr. Jim Hart: Sure.

Mr. Colin Curleigh: I am employed by the Sikorsky corporation as an adviser. It's very clear in my contract that I can in no way represent the Sikorsky company.

Mr. Joe Haddock, I understand, will be appearing before you in a week's time. I think he would be the one that you should put the specific questions to. I can talk to it—I've touched it, I've watched it fly, and I'm enthused about it—but I really shouldn't be representing Sikorsky in this forum.

Mr. Jim Hart: Maybe you can just advise me if you think it's an area we shouldn't be going to, but I was interested in the production, where it sits right now as far as production goes, and I was also interested in knowing if it's considered an off-the-shelf helicopter. Maybe you could also tell me if it's been “marinized”, if it has the folding rotors and naval accoutrements that it will require for shipborne duty.

Mr. Colin Curleigh: I'd be glad to respond to those three questions, bearing in mind that Mr. Joe Haddock will be able to give you a much fuller answer when he appears.

In regard to the state of the production, they have three of them built right now, and two more are “in building”. Those are the first five in the development. These are not the production line but the first five for the development and the certification. At the moment, one is being flown down in West Palm Beach. It first flew on December 23 of last year. It has about 30 or 40 hours of very intense test-flying under its belt and is meeting all the expectations and beyond. The company and, I think, the people who are watching it here are very enthused about this aircraft.

We can get into a lengthy discussion about off the shelf, because I think it's one of the key points that this committee should be looking at—or will be looking at, I'm sure. How do you define it? It depends on who asks.

Mr. Jim Hart: What's your definition?

Mr. Colin Curleigh: It depends on who asks the question. I think one of the fundamental aspects of off the shelf is that you don't get into a lengthy developmental project such as the NSA, the new shipborne aircraft, which was cancelled by the government. That program became a developmental cow. It was being milked to such an extent... that's what boosted the price up more than the price of the helicopters did. It was this huge, developmental... everybody was getting into the act on the developmental aspect of it. Off the shelf minimizes any sort of particular-to-country or particular-to-type development.

Your third question is an interesting one, because in Sikorsky's companies we are already saying that the helicopter, the S-92, is “marinized”, in the sense that it's built specifically to safely fly over water to take people out to the oil rigs. It is built for that type of over-the-water maritime operation.

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When we talk about “navalizing” it—sorry, I'm putting some jargon in here—that's where you'll want to have the folding blades and the folding tail, so that it can go into the hangar, and making the undercarriage more rugged... As I understand it, the preliminary design has already been done. They have not yet gone into advanced design on that. In fact, before they go beyond the preliminary design stage, I think they're waiting for some sort of indication from the Canadian government that the MHP, the maritime helicopter project, will be initiated.

The Chairman: Thank you, Mr. Hart.

Mr. Jim Hart: Don't I have any more time?

The Chairman: No. I'm sorry, but you're way over.

[Translation]

Mr. Laurin from the Bloc Québécois.

Mr. René Laurin: Mr. Chairman, my question is for General Curleigh.

You talked about the procurement process and about a request for proposals that was over 1,200 pages long. I'm not sure how long it should have been, but why did it end up being over 1,200 pages long? I agree with you that this is ridiculous, but what possible explanation could there be for this? Was it that individual requirements were too detailed? Is that the reason?

[English]

Mr. Colin Curleigh: It was a crazy process. I remember that the year before the statement of requirements came out officially, the project director stood up at a meeting here in Ottawa, which I attended, and said, “Gentlemen, all I want is 15 tough helicopters, with a good hoist.” He said, “Don't ask me to tell you any more that I want. That's all I want.” Somehow, between that verbal statement and what actually came out, they went crazy—and that's the bureaucracy that I think is immobilizing and constipating this whole process. I think those are the sorts of questions that you ought to ask of those who are responsible for it, not so much to point fingers but to make sure that somehow we can overcome that sort of thing.

I saw the statement of requirements. They were even getting details down to where they'd put the holder for the coffee cup. It was just madness. Of course, when industry gets something like this they have to respond to every point that's in the statement of requirements.

If I'm here to help you ask these tough questions, that is a good one to ask of the appropriate people: what happened between what was said in the simple verbal statement of requirements and what came out in this huge document?

[Translation]

Mr. René Laurin: Yes, but you experienced this first hand. I can ask others the same question, but if you're here, surely it's because you want to talk to us about this. Obviously we want to hear from the military, from the people who are going to use this equipment. Was the process complicated by the fact that requirements were too numerous? It's all fine and well to blame government officials, but as a rule, the first people you consult are the people who are going to use the equipment, not officials who probably don't know very much about it. Surely the users themselves were consulted.

Were you involved in this consultation process? Are users too demanding, or is it that they are not properly consulted? That's what we're trying to understand. In order to improve the procurement process, we have to know which actions are unnecessary, what we're failing to do, and what needs to be done.

[English]

Mr. Colin Curleigh: Yes, I do have experience, at the operator level, in developing a statement of requirements that is passed on to Ottawa. With the one I was referring to with the search-and-rescue helicopter, I was retired by that time, so I was not involved in what happened here in Ottawa.

But I would agree with you, sir, that something happens within the military bureaucracy—I would agree with that—that seems to drive them into this large, lengthy, and detailed statement of requirements.

Now I understand that those who are writing the statement of requirements for the maritime helicopter project, learning the lessons from that experience... Last time I talked to them, they were able to keep it under 50 pages. That's the sort of statement that it ought to be.

• 1645

If you want get my own personal experience, when the statement of requirements came around for the replacement for the Sea King in 1985, for the fourth go-round for this statement of requirements, I was in Halifax in an operational position. I was a colonel in the air force. Two naval colleagues—four-stripers, captains—and I said, “Let's pin down this statement of requirements at the operational level, once and for all.”

We got three very experienced and capable staff officers—two air force lieutenant-colonels, experienced maritime helicopter pilots, one of whom is here on my right, and a naval commander—and we locked them in a room for five days. Every morning we'd come in, they'd brief us on what they had done the night before, and we'd give them direction. Our direction was to it keep slim, keep it to the point, and to put in that statement of requirements only the essentials for what we wanted, because, we said, anything else would be attacked and it would become a football. At the end of that process—and we were brutal with these guys—we came out with a slim statement of requirements that we could all live with.

I personally took it to the admiral at the time and, with my two naval colleagues on either side, said, “Sir, this is the result of a very stringent and excruciating analysis of the statement of requirements and we are convinced that this is what you need for your ships.” He studied it for a day and said, “Right. Now you take it out to Winnipeg and give it to the air force.” I took it under my arm, went out to Winnipeg, got the blessing of the commander of the air force, brought it to Ottawa, and said, “This is the combined navy and air force statement of requirements for what we need and we're not going to write another one.” Well, then, what happened after that, I don't know.

[Translation]

Mr. René Laurin: In your presentation, you mentioned a meeting originally scheduled for February 1988 which was cancelled at the last minute by the minister, without any explanation or reason. You had hoped to be invited to the meeting. What was it that you wanted to say that you weren't able to say?

[English]

Mr. Colin Curleigh: Yes. That was the meeting that the senior officials from the Naval Officers' Association were going to go to. I was not part of that group that was going to go, but I wrote the paper on the helicopter. They were writing papers on submarines and on other aspects of the navy, which they wanted to present to the minister. So I wrote the paper. In fact, it's the one that you were referring to a few minutes ago. So if I had had the chance to talk to the minister—although I wasn't invited—I would have talked to him about what I had written in that paper.

[Translation]

Mr. René Laurin: Had you begun working for Sikorsky at the time, General?

[English]

Mr. Colin Curleigh: No, it wasn't until that second incident I mentioned that I offered to come to the minister to offer whatever advice I could give him, taking into account my experience with the military helicopters, and with maritime helicopters in particular, and he said, “no, thanks”. That's when, to be frank, I was approached by another helicopter company. Because I had flown Sikorsky all my life and because I thought that the S-92 looked like the aircraft that we really needed for our shipborne maritime helicopters, I approached Sikorsky and said, “Look, I've been asked by this other company to join them, I'm a happy retired guy, I don't need any more hassle in my life, but I do feel strongly about getting the right helicopter for our ships.” They said they'd like to take me on, and that's how I joined Sikorsky.

[Translation]

Mr. René Laurin: Is your contract with Sikorsky limited to a procurement relationship with the Canadian government, or do you also contract with other foreign governments for the purchase of equipment like this?

[English]

Mr. Colin Curleigh: No. My very specific role with Sikorsky Team Canada is the Canadian maritime helicopter project, because of my experience with maritime helicopters in Canada.

• 1650

[Translation]

Mr. René Laurin: Then your involvement is limited to this particular project?

Mr. Colin Curleigh: That's correct.

Mr. René Laurin: Is it possible that once this contract is over, your employment with Sikorsky will end?

[English]

Mr. Colin Curleigh: Would my employment with Sikorsky end? Yes, probably.

[Translation]

Mr. René Laurin: Do I have time to ask another question?

[English]

The Chairman: One more question.

Mr. Colin Curleigh: Excuse me, but Colonel Myrhaugen had a response to a couple of your questions, sir.

The Chairman: If he does, Mr. Laurin, you won't have time for any more questions, so it's your call.

Mr. René Laurin: Okay. Le deuxième tour...

Col Lee Myrhaugen: If I may, I will add to General Curleigh's comments regarding the question on the proliferation of paperwork, the 1,200 pages.

When the statement of requirements that General Curleigh spoke of left the three staff officers in maritime air group headquarters, it contained essentially four statements. The airplane had to be robust because it had to operate in the North Atlantic, off ships. It had to be multi-purpose, in that it had to respond to multi-purpose missions dictated by the government. It had to be combat capable, because it would operate off ships placed in harm's way from time to time. It had to be survivable. It had to afford the crews the opportunity of getting out if it had to go to ground—which meant to water. Of course, we all understood that it had to be affordable.

With terms of that nature, I think it's easy to see that the more specific the government can be in what it wishes us to do with the vehicle, the more specific we can be in defining those broad terms.

Essentially, you're talking about two aspects. You're talking about a vehicle—the helicopter, in this case—and you're talking about what's in it, the mission suite. The vehicle is fairly straightforward, or it can be. Relative to the suite, however, you get a number of people in industry who all have vested interests in making sure that the vehicle contains this suite or that suite. That tends to help expand the statement of requirements.

I hope that helps explain why this documentation, which normally starts with fairly straightforward statements, can expand.

The Chairman: Thank you.

[Translation]

Thank you, Mr. Laurin.

[English]

Now we'll go to the majority side. Our two questioners are Mr. Proud and Mr. Clouthier.

Mr. Proud.

Mr. George Proud (Hillsborough, Lib.): Thank you, Mr. Chairman.

Mr. Myrhaugen, you claim that the project to replace the Sea King is one of the longest running in the history of DND, but I ask you if isn't it true that the NSA-NSH project you refer to is different from the MHP project, and that, really, the purpose may be the same, but the project is different? I don't believe, for instance, that the government will again position itself to spend $5 billion on a helicopter that exists only on paper. Do you believe that?

Col Lee Myrhaugen: Mr. Proud, technically speaking, you are absolutely correct, and I stand the correction. In the 24 years that I speak of, I think you detect my frustration, in that we're talking about replacing the Sea King. Circumstances have changed, politically certainly, requirements certainly... I would not stand here and disagree with you that the cancellation was appropriate or inappropriate. I think it was unfortunate that it became a political football, but that's history. That's water under the bridge, so to speak.

Despite the fact that you could argue that there have been these changes in the requirements, it's still running the risk of being the MHP, which we're now running since the 1994 white paper, which I think is an excellent document, outlining precisely what it is expected of this particular aircraft. I think there have been a number of circumstances.

Unfortunately, maritime air is a bit of an orphan, in that the work we do in maritime aviation, as you are well aware, is in support of maritime operations. However, the people responsible for financing our equipment are the air force and, thus, we have difficulty from time to time with having an appropriate sponsor.

• 1655

I might add that this is where we, as Friends of Maritime Aviation, hope to educate people, to bring into the light what it is that those aircraft do in support of an operator, which is often done outside the eyes of most Canadians.

Mr. George Proud: In your view, both of you, when could these original ones have been in place? When could they have been on board if things had gone according to what both of you talked about? Could they have been in place prior to 1993, certainly?

Mr. Colin Curleigh: I would say yes, certainly before 1993.

The other complication with the cancellation of what was then called the NSA—the new shipborne aircraft—was the problem that they had let the Sea Kings deteriorate in anticipation of a new helicopter. The spare parts bins were empty. They had not put in any modifications. There were structural problems. They crossed their fingers and hoped that they could hang on before they had to replace them. After the cancellation, they then had a great catch-up program to make the Sea Kings even viable for the next few years.

But even then, the estimated life expectancy of the Sea Kings was to the year 2000. It has now been, I understand, extended to the year 2005.

Do you want to add anything, Colonel?

Col Lee Myrhaugen: I don't think I can add anything to that, Mr. Proud, other than to say that one of the most difficult things in this whole process is that until you make a decision to replace, you have to continue to throw money at this.

At the moment, we've just learned, as the general said, that the Sea King can be extended to 2005. If you start the procurement process today, it's going to be that period, plus, before these aircraft arrive and are in service. Therefore, you have to continue to throw good taxpayers' dollars at maintaining the Sea King fleet until you can get the entire new replacement fleet in operation.

It's very critical that the process be initiated. While I'm a layman in regard to this procurement process, I'm also of the understanding that the initial decision is not a financial decision but a commitment. That's all. The government, as of the 1994 white paper, made that commitment. They're just failing to come good on the execution phase.

Mr. George Proud: Thank you.

The Chairman: Thank you, Mr. Proud.

Mr. Clouthier, five minutes.

Mr. Hec Clouthier (Renfrew—Nipissing—Pembroke, Lib.): Thank you, Mr. Chair.

Just as a little aside, I know he's a colourful character, this general we have, General Curleigh, and it's a nice misnomer with the hairline.

General, a former defence minister, J.J. Blais—who has much the same hairdo you and I do—were off having a coffee and we're rather upset that your bald pate seems to be a little more bronzed than ours; we were wondering if you were out on the golf course or something—but we're not getting into that because now you're retired.

You seem to be a little upset, General, with the procurement process, where you're using a little bit of pejorative language here, where you say it is a “complex, costly, slow, and only marginally effective system”. I realize where you're coming from.

But as you know only too well, we're dealing with sophisticated machinery, and when they bring out these SORs and these RFPs, certainly maybe things extrapolate themselves a little and instead of 50 pages we get 500 pages. But if the RFP or the SOR was not that minute in detail, wouldn't it be possible that the industry supplying the aircraft would actually supply a helicopter that would be incapable of doing the job?

As you just indicated earlier, you're now an adviser to Sikorsky. I know you weren't an adviser whenever Sikorsky did the initial bidding on the SAR—the search-and-rescue helicopter—and correct me if I'm wrong, but wasn't one of the reasons they did not get the bid that their helicopter, their piece of equipment, was deemed by the air force to be incapable of actually doing the job?

I know where you're coming from, but now you're going to find out. Idealistically it'd be nice to have the three pages and say, “here's what we want”, like you said, “do the job, be strong”—I should have said strong like you, maybe—and you said you're on the periphery, but now you're going to be involved in it. I don't know... how would you answer that?

• 1700

Mr. Colin Curleigh: First of all, this is good Nova Scotia sunshine on my pate here, from sitting out my deck reading—

Mr. Hec Clouthier: You're golfing. I know you're out golfing.

Mr. Colin Curleigh: No, I'm not a golfer.

Of course we have to be very careful and very prudent and we can't spend the taxpayers' dollars foolishly. This project must be done wisely, and we must have all the contractual protection built into any sort of dealing we do with industry. There's no doubt about that.

What we're talking about is the detail that has to get involved. One of the suggestions, which I'm sure you'll hear, is that rather than go into the detail, into the nuts and bolts and everything else, about the radar, for example, you say, “We want a radar with this capability.” Then you say, now, you, industry, come back to us with your proposals for your radar, and talk about its capability, its reliability, its costs, that can fit that operational capability. Then we'll make the decision on which one we want rather than going out to them and giving the details. As I say, they filled 1,200 pages with detail. There's a better way of doing this and still maintaining the contractual—

Mr. Hec Clouthier: Basically, what you're saying, General, then, is that in some instances, let the actual... whether it's Sikorsky or Boeing or whoever, they come through with the proposals and then the military people could say no, that doesn't really meet our requirements. It's six of one and half a dozen of the other.

Mr. Colin Curleigh: No, I don't think it's six or half a dozen. If you read that paper that I proposed, you saw that there are several strategies with which they can approach the maritime helicopters. They can go out to competition for the bare helicopters and maybe direct the mission systems that go into the helicopter. They may do it in the reverse, direct, because they see a good helicopter out there and they say, right, that's the one we want, we can get it for a good price, and if we act now we won't have to go through this lengthy, costly process. This is dangerous because it leaves you open to criticism.

You can do a partial; one or the other, or both compete, or both directed. There are many combinations within that. Again, the other system you can do is to find a prime contractor. You can spend your energy determining who you trust, who can get you the helicopter, the systems, and the support that will meet the statement of requirements with the price you are prepared to pay. Let that prime contractor, with the business experts that they would have on hand, go out and determine whether you should have a competition for the helicopter or whether you should select the helicopter.

Or maybe you should even have a competition for the whole package. That would really be an off the shelf. The problem there, of course, is that Canadian industry would scream—

An hon. member: There would be...

[Inaudible—Editor]

Mr. Colin Curleigh: Yes, because the total off-the-shelf capabilities right now, it looks like, are from France, from the United States, from the U.K. or from Italy.

Mr. Hec Clouthier: But it is possible?

Mr. Colin Curleigh: Sure.

Mr. Hec Clouthier: The difficulty there, as you know, is that there's such a concentration of different lines of thought. You're going to find out now that you're an adviser to Sikorsky. Don't worry—you won't pull your hair out.

Voices: Oh, oh!

The Chairman: Thanks very much.

Next is Mr. Earle of the NDP, for 10 minutes.

Mr. Earle.

Mr. Gordon Earle (Halifax West, NDP): Gentlemen, I'm very pleased to see you here today, since both of you hail from the fine province of Nova Scotia. I was pleased to be able to encourage you to come as witnesses to this meeting. I would like to acknowledge the presence of the president of the Pearson Peacekeeping Centre, which I visited and which is, when we look at what's happening today in this world, an important institution.

First of all, both of our witnesses have mentioned that this process is complex, cumbersome, time-consuming, and expensive. What is the one most important thing that you would recommend to make the process more effective and less expensive? What's the biggest issue that you would recommend to this committee to deal with in terms of trying to streamline that process?

• 1705

Col Lee Myrhaugen: I understand your question, Mr. Earle. Let me see if I can be as succinct in offering an explanation.

I'm going to offer a very personal opinion as to what I think the fundamental problem is. At the same time, I'd like the caveat that I think the fundamental problem may be slightly outside the purview of your committee, notwithstanding that it has to start somewhere. If it's the culprit, perhaps if we address it collectively we'll get to the bottom of it.

I personally feel that it is summarized in four words: “repeated defence budget cuts”. We've just taken the hits too often, and it comes down to... The procurement system involves two things. What do you buy? How do you buy it? In this particular case, I think, “what do you buy?”, is very straightforward. You buy a replacement to do at least what we're doing today and to do any projected aims that the government would like the military to look after. How do you do it? That's what we're talking about. We're stymied. We're in a quagmire.

One thing we don't have to tell any potential contender is how to build a helicopter. They're professionals at that. We do have to invite them to compete, and that's the first stage that I was talking about. The government has to carry it through. Once you do that, I personally believe, things fall into place. Contenders come forward and make you an offer, because they understand what our requirements are.

In the past with military-specific equipment, whether it be radar, sensors, radios, we've had to be very specific in detailing the requirement that they have to be able to operate in extremes of altitude, temperature, and environment. With modern technology today, you can buy these off the shelf in virtually any hardware shop, whether we're talking GPS... Literally now, you can buy hand-held GPS, so in my view, we don't have to be as specific as we once had to be.

Tongue-in-cheek, I would say that when you operate an aircraft for 36 years, you don't have a whole bunch of experience in writing effective statements of requirements. Neither do we understand exactly where technology is today, but I can assure you that Sikorsky and Eurocopter and EHI can tell us where they are when it comes to technology.

I started by saying that the fundamental problem was repeated defence budget cuts. Our procurement system relies only on the residue after you pay the personnel costs, whether they be for retired or serving members, the pensions, and costs of the operation and maintenance of the equipment. At the levels we're at today with personnel and equipment, it's very hard to imagine going any lower and still calling it a Canadian military.

Therefore, the only other thing you can do is to do something to the budget. We've never reached 30%, which is the magic figure estimated by a number of western militaries as the figure that procurement ought to be at as a part of your defence budget. We've never reached that. I stand to be be corrected, but I think the highest figure we ever reached was about 26%, back in about 1985. Therein, I think, lies the root, as far as I'm concerned.

General?

Mr. Colin Curleigh: To that I would just add long-range planning and sticking to some sort of program. They knew that the Sea Kings were going to have to be replaced, because the navy brought in a new ship program at a cost of almost $10 billion, and these ships could have been gunships or missile ships. They decided to continue with the concept of operating them as small aircraft carriers with capable helicopters aboard. That was a tough decision they made back then. So there's no doubt about it, the Sea Kings had to be replaced, not because Sea Kings have to be replaced or because the air force wants Sea King replacements, but because those ships need the modern helicopter to complement them.

Knowing that... and they knew it 20 years ago. They knew there was a point at which the Sea Kings were falling off their operational capability, at which the Sea Kings were becoming more unreliable, at which we were pouring in more money to keep these marginally operational aircraft flying. There came a point where we ought to have replaced them with proper modern helicopters.

• 1710

Initially, the new ship program and the new helicopter program were married. They were one program. Because there such a big price tag on it, they split it up.

Mr. Gordon Earle: I have two other questions. You touched upon one of them when you talked about the various methods of procuring this helicopter, where one might go for a prime contractor who would do everything or one might go for the shell and the mission system separately. I'm interested in what your thoughts are as to what might be the best method to approach this to provide for Canadian content and a good spinoff effect for Canadians in terms of jobs and input, at the same time keeping in mind effectiveness and cost-effectiveness. What is your own personal view on the way to approach this?

I'll mention my last question just in case we don't get the time to get it in. You and I, individually, have talked about the safety issue before. I know it's constantly said that, well, with these Sea Kings, we would never send anyone up in a unsafe aircraft. I personally believe that no one intentionally sends someone up in an unsafe aircraft, but with the age factor... In fact, quite often due to just that age factor alone, even when it's been fully serviced something unexpected can come up. That seems to be creating concern in the minds of some people about the safety of flying these ancient Sea Kings. I'd like your comments on that as well.

Mr. Colin Curleigh: Could I grab the first one?

The Chairman: Could I ask you gentlemen to try to do it in about two minutes or so?

Mr. Colin Curleigh: Thank you.

The best procurement policy? First of all, we should be aware of what we want in a maritime helicopter. We want a fundamental helicopter that has to be reliable, that can operate safely from our ships, and that has the endurance to go out and do the job. It has to have the cabin size that can hold the tactical crew, the mission systems, and survivors—or if you have to transport people.

That's the basic helicopter, and then it would need to have modern communications and navigations systems up in the cockpit and perhaps a good search radar. That's your fundamental maritime helicopter. That doesn't speak very much about Canadian content, because that fundamental maritime helicopter can be bought virtually off-the-shelf from any of the three companies that I mentioned earlier.

When you start packing in the mission systems and the integration of all those systems in the helicopter, that is where the Canadian content comes in, and that's where the pressure comes from. So I would say that if you're looking for a fundamental maritime helicopter that can do up to, I would say, around 80% of what the navy demands of it in regard to its ships right now, you're getting a fundamental helicopter that does not have very much Canadian content.

Col Lee Myrhaugen: Mr. Chairman, if I may, on the issue of safety, Mr. Earle and I have discussed this, and as we all clearly understand, the Canadian Forces do not fly unsafe aircraft. Therefore, the effort we're having to expend manpower-wise—and the taxpayers' money we're spending—to keep these aircraft flying is extraordinary. You know the figures: 30 hours on the ground for each hour airborne.

The problem today is that while they're more unreliable than unsafe, if you accept the fact that only one-third of the time that air crew wish to get airborne they do so in a serviceable airplane, and then, once they're airborne, another one-third of the opportunity is gone because they have to return to base because something in that aircraft has gone unserviceable... It is the problem in trying to maintain and fly a 36-year-old airplane.

We cannot say they're unsafe. That would be very unfair on our technicians and on the people who fly them. But there is no doubt that the longer you stretch this rubber band, the more you are running the risk of unreliabilities becoming a major factor and the risk of inexperienced crews not being able to deal with them sufficiently. Unfortunately, we all know how that may end. Without being dramatic, every aircraft that ever crashed took off serviceable.

The Chairman: Thank you.

Mr. Price, for 10 minutes.

Mr. David Price (Compton—Stanstead, PC): Thank you, Mr. Chairman.

I have so much stuff here. Getting back to the SOR, as you said from the beginning, the SOR started off very tiny—and of course I'm talking about the shipborne helicopters—and went up to 1,200 pages.

• 1715

Mr. Myrhaugen, I believe, you mentioned that it was down to 50 pages now.

Mr. Colin Curleigh: I mentioned that. The statement of requirements that went wild was the one on the search-and-rescue helicopter. That should have been so simple, yet it got bloated. For the maritime helicopter, I understand that they are keeping it to below 50 pages. The pressure that they've been through, like briefings to senior officers and to senior bureaucrats in the department, three, four, five, six times, and being told to go back and change this and change that, probably for good reasons... But much of it is driven by what the minister will accept, what the government will accept, as opposed to—

Mr. David Price: The thing is... Well, we're in a completely different situation. If you look at the mission systems in this helicopter—

Mr. Colin Curleigh: Right.

Mr. David Price: —as compared to search and rescue, they don't even compare. So you would think that if we were looking at 1,200 pages in the other, we'd be talking many thousands of pages. So they've been able to drop it down.

Yet, if we go back to October 1997, I believe, that is when the first group was put together to prepare this SOR. I have a letter confirming that from the minister. Supposedly they've been working on it ever since—to prepare about 50 pages. As you say, is it because they keep having to go back and forth to try to fit into a certain window? Yet if we look at it budget-wise, there's no budget slot anywhere near big enough that it could ever fit in.

Is it possible that this could be somehow divided up, perhaps, in the sense, for instance, that we went out to tender on a platform and in oncoming years added different mission systems? Are there possibilities like that?

I'll give you an example. In a previous life, I was a contractor. I did electrical and communications contracting. Quite often, we'd take on a building—the building being the platform—and we'd have to supply proposals for it without a set of specs or anything, just a very basic sort of specs, like “this building is going to be used for a call centre, for instance, so therefore it will require this and this”. It was a very limited—like you say—one-page type of SOR. We supply a proposal. Many other companies supply proposals. Sometimes you find a better way of doing things. You find a better piece of equipment to do things with—always off-the-shelf equipment. As you mentioned, off-the-shelf equipment is what we're looking at in most of these cases, particularly in the electronics.

So in regard to this type of system, maybe you could comment. Are there possibilities in that direction?

Mr. Colin Curleigh: What I'm going to say is heresy, and my colleagues will not like me for this. It's based on the fact that with our experience we just don't trust the government. I'm not talking about a particular party. I'm talking about any government.

If we could, though, if there were an opportunity to say “we don't have the money now for the total program, but we understand the requirement and we will pledge that we fulfil it over time”, then there are other procurement strategies. You can drag out the production over time. You could perhaps batch them. The initial batch is where you do all your initial training, testing, and modifications to the ships and the aircraft. You could certainly do that.

Another way you could do it, as you said, is to get that fundamental maritime helicopter that can do, as I say, up to about 80% of what is required off the ships now. If there were a promise and a pledge and some trust that the rest of it could happen, then—you're right—you could add the mission systems. The aircraft from all three contenders, as I understand it, would have a databus in them, so that these ones could be almost like “plug and play”. There would have to be some integration, of course, in it. So there—

Mr. David Price: I understand your frustration, of course. If we look back, the real platform was the ship itself. The helicopter was an add-on.

Mr. Colin Curleigh: Right. It's a complement. Yes.

Mr. David Price: It is part of the mission system.

Mr. Colin Curleigh: Right.

So yes, there are all those opportunities to use imaginative systems if there is some confidence that the total requirement will be met. The danger lies in somebody saying, right, here's your basic helicopter, now go away and we'll worry about other problems... I'm saying that if there were some trust for the long term, I think you could really develop some imaginative procurement.

• 1720

Col Lee Myrhaugen: Mr. Price, if I could just... I have no track to industry so I feel I can say this, but I think there are some lessons we can learn towards your current line of thinking, as illustrated by our F-18s today. Of the 91 that are operational, if 18 of them are in Kosovo it's probably because 18 of them are fitted with a certain package that can drop a precision guided weapon and the others aren't. So do we need the full number of Sea King replacements—30 plus—with the entire package? Today, I suspect, no, but there has to be this element, and that may be a way to go. In view of modern technology today, if the aircraft can be fitted with a databus that allows you to plug in and plug out—fitted for, not with, that type of technology—I think that's a very shrewd way to go.

Mr. David Price: I think that's exactly my next question. What I was leading into is that the original EH-101 was very modular and was designed to accept all kinds of different systems, which would be added in. The interesting thing is that if you look at the period of time we've already gone through and the changes in technology in that period of time... if you go into one particular system right now, before the system is even installed there's a newer one out there that's probably more compact and cheaper and everything else, right on down the line.

Col Lee Myrhaugen: Yes, sir.

Mr. David Price: That is my feeling. Could we not work in this way?

We have a really good example now. We're talking about this blockade or embargo or whatever it's going to be. We're going to send over a ship that's going to have to have two helicopters on it. They're going to be our ancient Sea Kings, unfortunately. We don't have anything else. Fifty per cent of the time they're available. The mission systems fail most of the time. There are only two of them going over. That's what happens a lot of the time. If we had just a couple of platforms and a couple of systems to start with, we could probably be doing the job.

That's probably a question I have to ask you now. We know that the Serbs have four subs over there that are going to be running around. What are your thoughts on how we're going to be able to handle this with the Sea Kings we're having to send over and with the equipment they have with them?

Col Lee Myrhaugen: Based on reports from people I've talked who have operated in the Gulf, they carried this equipment then. They fitted their aircraft to meet the contingencies they knew they were facing. With the potential of having to face a submarine threat, they took those components in boxes ready to be fitted in the event... I think one of the things modern technology would allow is an easier strap in-strap out, roll in-roll out capability. In the past, with the Sea King in particular, 36 years ago, this was not the state of the technology. Every time you plugged it in or plugged it out, you decreased the life expectancy of it.

There is one other aspect, and from your business experience you would understand this better than I. Of course if you were only going to buy six sets of a particular component, you're not going to develop the economy of scale. However, I think where you're going with your—

Mr. David Price: But if they're off the shelf?

Col Lee Myrhaugen: Yes, sir, then there's an economy there, obviously. I think what's important here is that we get the right number of vehicles. As the occasions arise, whether they be a Kosovo excursion or a blockade or a Persian Gulf or what have you, we then, hopefully, have the political will and the commitment to make sure those aircraft and crews have the equipment and that the crews are trained before they're put in harm's way.

The Chairman: Thank you, Mr. Price.

We'll go to a second round as time permits. I guess it'll be Mr. Hart for five minutes. Then we'll be at the end unless you don't use quite all of your five minutes.

Mr. Jim Hart: Oh, I think I'll use it.

The Chairman: Okay, Mr. Hart.

Mr. Jim Hart: Colonel Myrhaugen, you recently stated in an article that because of fiscal constraints the government may be tempted to buy a minimal helicopter as an expedited solution, an expedient solution, to the problem. Truthfully, for the committee, how do you assess this risk? Do you feel that's a real possibility? Where would that leave our naval forces if we did get just the very minimum of helicopter?

• 1725

Col Lee Myrhaugen: Mr. Hart, thank you for attributing that article to me. We've all written a number of articles, but I must bow to the general.

Mr. Jim Hart: Oh, okay.

Col Lee Myrhaugen: The original notion was his. However, since he's stealing so much of my... Let me try to respond.

Mr. Colin Curleigh: Let me just say, while he's looking for his notes—

Some hon. members: Oh, oh!

Mr. Colin Curleigh: —that I have enough copies of the article for everybody. The article is, “New naval helicopters: beware of expedient solutions”. That's exactly the thing in there, and I give a good example where this government gave a minimal helicopter, a toy helicopter, down in Yarmouth, at the promise of the Ministry of Fisheries, who happened to be Brian Tobin at the time. It was useless, but they walked away and said, “There. That's done.” The fear of those of us who are concerned about getting the right helicopter for the ships for the navy is that... We're keeping it very visible that a minimal helicopter would be a waste of taxpayer's money and that the navy would have the wrong helicopter for the next 30 or 40 years.

Col Lee Myrhaugen: To be very succinct, Mr. Hart, it's the worst possible scenario that could be imagined. It really is. I spoke of there being two aspects, the “what to buy” and the “how to buy”. When you don't have the reliable funds—which we don't have—to buy what it is we wish to buy, we then have to compromise on how we buy it.

I think between you and Mr. Price you've probably put your finger on what has prevented the statement of requirements from coming forward. It's not what we want or what we want to ask industry; it's how we do it financially in view of what we have remaining. It's a nightmare to think in that way and that's why we've tried to alert people to that.

Mr. Jim Hart: This leads me to my last question. I think we're running out of time really quickly, but, based on the collective years of experience in naval operations, both of you... We've gone around the sides on this issue here today, but I want to know specifically what, in your view, the basic requirements are for a maritime naval helicopter in terms of range, endurance, robustness, ease of maintenance, crew configuration, payload, true weapons, fuel capacity, and the ability to perform simultaneous missions such as ASW and search and rescue. You said you could do it in a couple of hours. Can you do it in two minutes?

Mr. Colin Curleigh: We could do it in 30 seconds.

You have identified the key factors, every one of them. To quantify them would take two hours, and I don't think I'm the best one to do it right at this particular moment. But you've put your finger on it. That's the sort of thing that has to be written into the SOR: endurance, robustness, reliability, and proper support package, which, to me, is as important as the mission capabilities themselves. Then you go into what mission system you want.

Mr. Jim Hart: Would you write it down, though, and submit it to this committee so that we can see what your...

Mr. Colin Curleigh: Well, a lot of it is right there, except specific numbers.

Col Lee Myrhaugen: Mr. Hart, if I may, I'll add 30 seconds to this, in that I think it's well documented, sir, but we would be only too pleased to submit anything to help clarify. On the specifics, whether it be three-and-a-half hours' endurance or three hours' endurance, that truly has to be determined by the military people today in responding to the political requirement. As a retiree, I would be incompetent to comment on that. I can tell you what it was when I was in uniform. Today, I would seriously bow to them because they are the authority.

But those are specifics that need to be addressed, and I think that's a very valid question to a man in uniform today.

The Chairman: Thank you, Mr. Hart.

I understand the witnesses can stay with us a few more minutes, so we'll continue. Some other colleagues have questions.

Mrs. Longfield, then Mr. Laurin and Mr. Richardson, our normal questioning pattern.

Now we'll go to Mrs. Longfield for five minutes.

Mrs. Judi Longfield (Whitby—Ajax, Lib.): I just have a couple of comments. How we do it financially is one thing we're struggling with, and I don't think that necessarily impacts the SOR or how it's written or what details are in it. That's something we're struggling with and will continue to struggle with. I don't think we should get bogged down in it when we're talking about procurement strategy, because this is something we have to resolve independent of that.

I also heard you say very forcefully that we should take time to do it right, that a quick fix is probably worse than no fix at all. So I keep that in mind.

• 1730

I want to get away from search and rescue and the maritime helicopters, because we really spent a long time on those specific projects and we're talking about procurement in general. We've made procurements over the years, and one that I can think of is the frigate. From all reports, we have a fairly good frigate. I haven't heard about anything too seriously wrong. That went through the procurement process. It obviously worked. Why can't it work again? Use the model that we had to purchase the frigates, to put them on line, and apply it to maritime helicopters or whatever. I'd like some comments.

Mr. Colin Curleigh: You're right about the frigate program. In the end, it was a good product, but I think if you speak to anyone who was involved in the early days of the whole process... it was inordinately lengthy and complex and it cost a lot. Those dollars could be better put towards the ship rather than a huge bureaucracy that was grinding away at—-

Mrs. Judi Longfield: Where was the cost at that point, again keeping in mind that you take time to do it right and that you want a good product at the end?

Mr. Colin Curleigh: Certainly you want to do it right, and you're right about a good part of—-

Mrs. Judi Longfield: And sometimes that's a costly process.

Mr. Colin Curleigh: Yes, right.

Mrs. Judi Longfield: A little money spent up front saves a whole lot in the end.

Mr. Colin Curleigh: There's no doubt about that. The point is, taking that into account, it was still lengthy and costly beyond what ought to have happened. That's what I've been told by my naval colleagues. Plus, there were other complexities. The fact that inefficiently... it cost us more because they were forced to build certain of those ships in Quebec, for example. Now, that's just a reality that we had to face, but that was another complication that was built into it.

If you want to go back to the frigates—and I hate to go through the back door with the maritime helicopter—those ships were designed and built from the keel up to be complemented—not supplemented, but complemented—with a maritime helicopter, so that frigate program is not complete yet. We have one of the most modern and fine warships in the world, which is capable of going anywhere, except that they don't have their major system on board, which is the helicopter.

But you're right. We should certainly learn from the models that work and not throw out—

Mrs. Judi Longfield: That's what I was afraid of: that unless we pointed out that we do some things right and build on that and look at it...

Mr. Colin Curleigh: Sure. That's a very good point.

The Chairman: Thank you, Mrs. Longfield.

[Translation]

Mr. Laurin.

Mr. René Laurin: I have one question only, and it's for General Curleigh. Perhaps Mr. Myrhaugen will want to add something further.

Some criticism has been levelled at the procurement process and we're not very pleased with it either. Occasionally you work for Sikorsky, but you are not here today as this company's representative. Would you say that the complex nature of procedures is the main reason why the government did not chose Sikorsky when it contracted recently to purchase 15 helicopters?

[English]

Mr. Colin Curleigh: My boss is sitting back there, and he probably won't like what I say next, but as I understand the search-and-rescue situation, the statement of requirements made it very clear that a large cabin was required for a search-and-rescue helicopter in Canada, to take the survivors, to take the survival equipment, and to have medical teams on board to deal with the people if there were a medical evacuation.

As I understand it, while all four contenders met the basic, the minimum, requirement, only two had cabins that would satisfy what I think any of us who have been involved in the helicopter business would say. We would say, yes, you need a large cabin. So in the assessment process, it depended on how much weight they gave to the size of the cabin.

As I understand it, the criticism from Sikorsky—and you can ask Mr. Haddock when he sits in this seat in a few weeks' time—was that they changed the statement of requirements with regard to the minimum cubic metres of the cabin so that those four helicopters could all be in the selection contest. But then, when they weighted them in regard to which was the best one, certainly the size of the cabin became a very important factor. Only two helicopters, the Boeing Chinook and the Cormorant, had that large size. The Boeing Chinook was so expensive that it wasn't a contender. It came down to the EH-101, and I think the EH-101 was the right selection at the time.

• 1735

[Translation]

Mr. René Laurin: But to say that specifications were added just prior to the final decision in order to give one manufacturer an advantage over another, well that's... Is that what you're insinuating? Mind you, that could well be the case.

[English]

Mr. Colin Curleigh: That's always a danger. I think I missed the first part of your question, but as I understand it, you are asking whether the statement of requirements was tailored so that there could only be one outcome.

Mr. René Laurin: Yes.

Mr. Colin Curleigh: No, I'm not really that familiar with the whole process for the search-and-rescue helicopter, but again, being on the outside and talking to people who were involved, in regard to the statement of requirements, when they put the weight on the cabin size—I've heard this from people—maybe they didn't make it clear enough how important the stress on the cabin size would be in the final selection process. I think that was the—

[Translation]

Mr. René Laurin: Did companies know how each requirement would be rated before bidding on the contract?

[English]

Mr. Colin Curleigh: As I understand it, yes. But, again, I think you'd be better off asking Mr. Haddock when he gets here. I would have to say, yes, they understood it.

[Translation]

Mr. René Laurin: Thank you.

The Chairman: Thank you, Mr. Laurin.

[English]

Mr. Richardson.

Mr. John Richardson (Perth—Middlesex, Lib.): Thank you very much, Mr. Chairman.

I too would like to welcome the two members, the helicopter pilots, the partners. It's nice to have here someone who has flown them, lived them, and lived the development with them, and lived so long—

Some hon. members: Oh, oh!

Mr. John Richardson: —and look so young.

I was really impressed to hear your concerns about the helicopters and the cabin size, particularly with regard to the rescue aspect of the work. You did make some comments on the EH-101. That was a combination British-Italian group. It seems that the British have just taken theirs recently; it was over cost and it wasn't on time. There was a little bit of a concern there when we were around the table talking about it.

I would like to think that we could get the kind of helicopter you two fellows talked about from the very beginning, bidding it all together and putting the package together, so that we do the right thing, so that if we're going to match up the cars—and I mean that in the literal sense—when we put this very vital piece of equipment on the frigates, the matchup is just perfect. We shouldn't be beating around the bush on this. We should be making that kind of push from our end. We've squeezed our noses into the procurement business here today, and we'd probably like to see it in the future. It's essential that we at least get a helicopter that is capable or more capable than the EH-101 and that the matchup with the ships is as good as we can get.

Mr. Colin Curleigh: Amen.

Mr. John Richardson: Is there anything you'd like to add to that?

Col Lee Myrhaugen: Mr. Chairman, may I respond to Mr. Richardson?

• 1740

You've summarized it very succinctly. Rather than us worrying about that, the due process will look after it, I think. What we need to do is to go to industry and ask, “Who's interested in providing this replacement?” We know that at least three of them are. Then we can at least analyse. At the moment, I would hate to be in the industry, because they're in a heck of a dilemma. They really are. They have no idea of which way the Canadian government is ultimately going to go, but we know they're interested, and they would respond.

I think that part of the process you've alluded to, which is so important—getting the right or the best airplane—will naturally fall out of our tender to industry. Let's ask them to say what they're prepared to put on the table, and then we can judge the best one and put it on the ship.

Mr. John Richardson: Thank you.

Mr. Colin Curleigh: May I respond to that, please?

Mr. John Richardson: Yes.

Mr. Colin Curleigh: I took some excerpts out of the white paper of 1994, which most people in this business think is a fine document—if the promises in it could only be fulfilled. One of the statements in there was very adamant. It said,

Canada's maritime forces will be adequately equipped to carry out their new array of tasks. There is an urgent

—and “urgent” is their word—

need for robust and capable new shipborne helicopters. The Sea Kings are rapidly approaching the end of their operational life. Work will, therefore, begin immediately to... put into service new affordable replacement helicopters by the end of the decade.

If my numbers are right, that's about seven months from now. That's from the 1994 white paper.

They also went on to say, “The Department will also explore innovative ways to acquire and maintain equipment.” They said,

Further steps will also be taken to modernize and streamline the procurement process in consultation with other concerned departments.

Then they go on to say, “The Department will also enhance its partnership with the private sector.”

If they ever fulfilled those three promises that they had in the white paper, in conjunction with some of the other thoughts, like going to industry and asking what a better way of doing it is today because everybody has tight budgets, I think you'd get the helicopter that the navy needs, within the budget, and it would be done cost effectively—value for the dollar.

The Chairman: Thank you, Mr. Richardson.

Mr. Earle, now, for five minutes.

Mr. Gordon Earle: Mr. Chairman, one theme that has come through during these discussions—Colonel, you mentioned it—is repeated defence budget cuts, the questions being, what do you buy and how do you buy it? In the final analysis, though, it comes right down to what money is available to purchase equipment.

One theory or thought that has been presented and seems to make sense to me is that rather than the government waiting until all the equipment is outdated and then going for a big, huge contract of, say, 20 or 30 helicopters or ships or whatever they may be, all at once, it might make sense to have an ongoing kind of process, whereby every year or two years, whatever, you acquire a certain number of pieces of equipment, say, maybe two helicopters. So there's always a purchasing process taking place, whereby the oldest equipment is constantly dropping off and you're adding new, but not all at once. Therefore, you might in that way resolve some of the budgetary thing as well as ensuring stability for the industry in that they would know there is going to be this equipment required on an ongoing basis.

What are your thoughts on that kind of process?

Col Lee Myrhaugen: If I may respond first, Mr. Earle, I think what you need here... and I'm not a budgetary specialist.

I think, Ma'am, that what you highlighted was that we ought not to confuse the two here.

I would say that what you need for industry is a commitment to buy them. How you pay for them is something that I would turn over to the budgeters. Let them do some creative budgeting. They've done it before and I'm sure they can do it again.

I feel totally unqualified to attempt to answer that, but I know that it would be inappropriate, I believe, sir, to say, well, our commitment to industry today is two airplanes every year. I think we need to go out and say that the requirement is for 32, for 35 or for whatever their figures are today, and make that commitment. How you pay for it... When I see how our government acquired four Upholder submarines with some very creative budgeting, I submit to you that for the replacement of the Sea Kings it should not have to be any more imaginative than that.

• 1745

Mr. Gordon Earle: I was not thinking just about how you pay for them, but also about how you bring them on stream, about whether you end up waiting until all your equipment is in need of replacement or whether you have an ongoing process whereby they're being replaced periodically so that you're never at any given point in drastic need, so that all of a sudden we have helicopters that are 35 years old. We would have some that are 30 years old, some that are 25 years old, and some that are 10 years old. It would be that kind of process, which would also facilitate, I think, the budgeting and the paying for them as well.

But bringing them on stream is what I'm more interested in. What are your thoughts on that? Is that a reasonable kind of approach?

Mr. Colin Curleigh: There's a good argument for commonality when you buy a fleet of ships so that you can have common maintenance standards, common spare parts, and all the rest of it. If you start doing it in batches where each one is different, then you get yourself into a very complicated situation of trying to support them. There are some navies that replace ships every two or three years so that the shipyards have a steady building program.

I'm not sure whether you could do the same thing with helicopters, but what you could do is to say, here's the basic helicopter and in five years' time they may be upgrading the transmission and the engines so that you can carry an extra 1,000 pounds. So you make the conscious effort, then, to upgrade the helicopter fleet. A new piece of equipment comes in that we haven't even dreamed about, like, for example, the forward-looking infrared now, which wasn't even thought about 15 years ago. Now it has become one of the most important pieces on our Sea Kings, for everything from the Winnipeg floods to the Adriatic. You could add these modifications and improvements across the fleet.

So I would say for ships, yes, but for things like helicopters, especially for the small numbers we're talking about, no.

The Chairman: Thank you, Mr. Earle.

Mr. Price, do you have any further questions?

Mr. David Price: Yes, just one.

If we look at the program for the frigates with the helicopters onboard, it had the very sophisticated sonar array set-up. That was looked at as being a very costly component of the frigate program at the time. Today we know that it's basically almost outdated. Technology has taken over, and there are newer, easier, and cheaper things out there. Do you have any comments on that?

Mr. Colin Curleigh: Yes. To be very brief, when the Cold War was still at its height and there were Soviet ballistic missile submarines in the Atlantic and in the Pacific, part of Canada's effort was to join in the large international effort of anti-submarine warfare, of trying to keep track of them. The active sonar—you drop the ball down on the end of a wire and you sit there and you ping—is the most ancient equipment in the Sea King today, but it's still our first line of defence.

At the same time, the navy was developing a passive system, where they'd tow a tail behind. It could make long-range detections in that they would think something is out there, sort of in that direction. They needed something to go out to classify and to find out exactly where it was and where it was going. This is where the helicopter came in, with a passive system, where it would drop sonar buoys and listen passively for the noise of the submarine. That's mainly deep water anti-submarine warfare.

What we're seeing in the last 10 years is a lot of naval operations in what they call the littoral waters—which is shallow water, noisy water with a lot of merchant traffic, where everything is going on, like fishing fleets—where this passive system is not very effective. So now we're looking at maybe getting back to an active system.

So you're right. That aspect of it has lost its urgency and its importance, but ASW has not gone away.

Mr. David Price: Our threat, more and more, has become that third world countries are now still running old diesel subs.

Mr. Colin Curleigh: And they can be just as deadly.

Mr. David Price: Yes.

The Chairman: Mr. Hart.

Mr. Jim Hart: I have just one final question.

• 1750

We started to talk about commonality of platforms. Because we've already purchased the Cormorant for the search-and-rescue platform, doesn't it make economic sense, then, that you would purchase the same kind of helicopter for the shipborne purpose, because of training, spare parts—as you've mentioned—and everything? You're just duplicating absolutely everything, which sends the cost right through the roof. Why wouldn't we...

I'm not trying to get you fired, by the way.

Mr. Colin Curleigh: No, I'll tackle that. I'll take my Sikorsky hat off.

You're right in regard to commonality. There are advantages to having a common aircraft. There's no doubt about it: the training costs, the initial costs, the spare parts, the maintenance, and all the rest of it. The question is, what is the exact increment of that advantage? I think that's something about which they're scrambling around now, trying to quantify it. Over a 5-year period, a 10-year period, a 15-year period, how much would you actually save by the commonality factor? It could become an important factor in the selection process. There are some who will say that you're saving millions and billions of dollars and there are others saying, well, you're not saving that much. I think it has to be quantified properly before we can say that it's the overwhelming factor.

The Chairman: Colonel, do you have a brief thought before we finish, sir?

Col Lee Myrhaugen: I may be able to answer it more easily than the general.

First of all, Mr. Hart, you have to make the assumption that the aircraft that was selected for one environment, for one job, is indeed the best one for the other, because if you're just buying it for commonality and it's not the best aircraft, you've defeated all the benefits of commonality. So I think you have to go to industry, initiate the program and see what... These aircraft are different sizes. They have different operating costs. They have different numbers of engines. They advertise different maintenance capabilities and hours on the ground, etc. All of these are the cost factors. With the due process of analysing the submissions from industry, I think, then, and only then, will the answer to your question really come forward.

The Chairman: With that, gentlemen, I want to thank you very much for appearing before this committee today and sharing your expertise with us. We have an important topic to delve into. You've been a considerable help.

This committee will meet tomorrow at 3.30 with the Minister of Defence, for estimates.

We are now adjourned.