...for $1Billion Over Helicopter Contract
The Ottawa Citizen reports, "Stephen Harper's new government could face a $1-billion legal penalty after a European aerospace firm filed a claim for damages, citing political interference by the Liberals during the 2004 purchase of naval helicopters."
Aerospace giant Agusta-Westland recently filed the $1-billion claim for damages in Federal Court, alleging its EH-101 helicopter didn't win the competition to provide Canada's military with a maritime chopper because of political interference by the Liberal government. The company is also asking for $1 million in punitive damages.
"These kinds of lawsuits are not that common in government contracts. Agusta-Westland contends the Liberals designed the $5-billion program to buy 28 maritime helicopters in such a way as to prevent the selection of its EH-101 chopper. The firm lost out to its American rival, Sikorsky, which was awarded the contract in 2004 to provide a replacement for the military's aging Sea Kings."
"Pierre Teotonio, a spokesman for Public Works and Government Services Canada, said the government has until February 17 to file its defence in court. He declined further comment."
Sikorsky announced they had won the contract in November, 2004. "Sikorsky Aircraft Corp. today announced it has signed contracts worth C$5-billion with the Government of Canada to provide and maintain 28 Sikorsky H-92 maritime helicopters. The new H-92s will replace Sea King aircraft currently in service with the Canadian Forces and deliveries are scheduled to begin in late 2008."
"Canada's new H-92 Cyclones will be multi-mission capable and will perform surface surveillance and control, subsurface surveillance and control, and utility operations that include search and rescue, passenger and cargo transfer, medical evacuations and tactical transport in support of national, North American and international security."
"Sikorsky has been a part of Canada's history for more than 50 years, and we are proud to continue this legacy," said Sikorsky President Steve Finger. "The specifications for Canada's new maritime helicopter were rightfully among the most demanding in the world. There is no better aircraft to fulfill these missions than the H-92."
When the Liberal government announced the deal it was showcased with Liberal cabinet ministers front and centre.
“The Government of Canada firmly believes that the Sikorsky H92 helicopter represents the right helicopter for the Canadian Forces at the best price for Canadians,” stated the honourable Bill Graham, Minister of National Defence. “The Sikorsky H92 provides a world-class robust, multi-role helicopter that will serve our defence needs for years to come.”
“With this completion of the evaluation of proposals and the selection of the winning supplier, the Maritime Helicopter Project has marked an important milestone,” said the Honourable Scott Brison, Minister of Public Works and Government Services. “The Government has conducted a fair, open and comprehensive procurement process, and now looks forward to the next stage of the procurement process, the establishment of formal contracts with the supplier.”
"More than simply providing the right helicopter, the Sikorsky bid is a true win for Canadian high-technology industries, particularly the aerospace and defence companies who will partner in the delivery and long-term service of these helicopters," said the Honourable David Emerson, Minister of Industry. "This project will deliver sustained industrial activity in regions across Canada, in our small businesses and in our Aboriginal businesses, and will showcase our talented work force and innovative companies long after the delivery of the last helicopter."
This court case could have implications for the Liberal party of Canada as they start to re-build after losing the election. If the case were lost, and the government of Canada had to pay out a billion dollars to Agusta-Westland, the political fall-out could last for generations.
With the withdrawl of Frank McKenna today from the Liberal leadership race, the field remains wide open. This court case could be a factor in the Liberal efforts to re-build.
Lawsuits against governments by major military contractors are not common. For a major aero-space contractor like Agusta-Westland dealing with many nations, it would not likely be considered, unless seen as critical. The message such a lawsuit would send to other potential customers would have to have been carefully considered.
Who is Agusta-Westland?
Agusta-Westland according to Wikipedia "is a helicopter design and manufacturing company based in Italy and the United Kingdom. It was formed in July 2000 when Finmeccanica S.p.A. and GKN plc agreed to merge their respective helicopter subsidiaries (Agusta and GKN-Westland Helicopters) to form AgustaWestland. Finmeccanica and GKN each held a 50% share in AgustaWestland."
"On May 26, 2004 GKN confirmed that it would sell its share to its partner for £1.06Bn. AgustaWestland is now a fully owned subsidiary of Finmeccanica of Italy."
The Ottawa Citizen reports, "Stephen Harper's new government could face a $1-billion legal penalty after a European aerospace firm filed a claim for damages, citing political interference by the Liberals during the 2004 purchase of naval helicopters."
Aerospace giant Agusta-Westland recently filed the $1-billion claim for damages in Federal Court, alleging its EH-101 helicopter didn't win the competition to provide Canada's military with a maritime chopper because of political interference by the Liberal government. The company is also asking for $1 million in punitive damages.
"These kinds of lawsuits are not that common in government contracts. Agusta-Westland contends the Liberals designed the $5-billion program to buy 28 maritime helicopters in such a way as to prevent the selection of its EH-101 chopper. The firm lost out to its American rival, Sikorsky, which was awarded the contract in 2004 to provide a replacement for the military's aging Sea Kings."
"Pierre Teotonio, a spokesman for Public Works and Government Services Canada, said the government has until February 17 to file its defence in court. He declined further comment."
Sikorsky announced they had won the contract in November, 2004. "Sikorsky Aircraft Corp. today announced it has signed contracts worth C$5-billion with the Government of Canada to provide and maintain 28 Sikorsky H-92 maritime helicopters. The new H-92s will replace Sea King aircraft currently in service with the Canadian Forces and deliveries are scheduled to begin in late 2008."
"Canada's new H-92 Cyclones will be multi-mission capable and will perform surface surveillance and control, subsurface surveillance and control, and utility operations that include search and rescue, passenger and cargo transfer, medical evacuations and tactical transport in support of national, North American and international security."
"Sikorsky has been a part of Canada's history for more than 50 years, and we are proud to continue this legacy," said Sikorsky President Steve Finger. "The specifications for Canada's new maritime helicopter were rightfully among the most demanding in the world. There is no better aircraft to fulfill these missions than the H-92."
When the Liberal government announced the deal it was showcased with Liberal cabinet ministers front and centre.
“The Government of Canada firmly believes that the Sikorsky H92 helicopter represents the right helicopter for the Canadian Forces at the best price for Canadians,” stated the honourable Bill Graham, Minister of National Defence. “The Sikorsky H92 provides a world-class robust, multi-role helicopter that will serve our defence needs for years to come.”
“With this completion of the evaluation of proposals and the selection of the winning supplier, the Maritime Helicopter Project has marked an important milestone,” said the Honourable Scott Brison, Minister of Public Works and Government Services. “The Government has conducted a fair, open and comprehensive procurement process, and now looks forward to the next stage of the procurement process, the establishment of formal contracts with the supplier.”
"More than simply providing the right helicopter, the Sikorsky bid is a true win for Canadian high-technology industries, particularly the aerospace and defence companies who will partner in the delivery and long-term service of these helicopters," said the Honourable David Emerson, Minister of Industry. "This project will deliver sustained industrial activity in regions across Canada, in our small businesses and in our Aboriginal businesses, and will showcase our talented work force and innovative companies long after the delivery of the last helicopter."
This court case could have implications for the Liberal party of Canada as they start to re-build after losing the election. If the case were lost, and the government of Canada had to pay out a billion dollars to Agusta-Westland, the political fall-out could last for generations.
With the withdrawl of Frank McKenna today from the Liberal leadership race, the field remains wide open. This court case could be a factor in the Liberal efforts to re-build.
Lawsuits against governments by major military contractors are not common. For a major aero-space contractor like Agusta-Westland dealing with many nations, it would not likely be considered, unless seen as critical. The message such a lawsuit would send to other potential customers would have to have been carefully considered.
Who is Agusta-Westland?
Agusta-Westland according to Wikipedia "is a helicopter design and manufacturing company based in Italy and the United Kingdom. It was formed in July 2000 when Finmeccanica S.p.A. and GKN plc agreed to merge their respective helicopter subsidiaries (Agusta and GKN-Westland Helicopters) to form AgustaWestland. Finmeccanica and GKN each held a 50% share in AgustaWestland."
"On May 26, 2004 GKN confirmed that it would sell its share to its partner for £1.06Bn. AgustaWestland is now a fully owned subsidiary of Finmeccanica of Italy."
