According to a report in the Globe and Mail, the federal government has already spent a $1 billion on a stalled helicopter purchase that now appears at risk of cancellation:
The federal government has spent more than $1-billion on a delay-plagued acquisition of naval helicopters, sources say – a deal that Ottawa is now threatening to scrap.
Those sources say that if a contract goes unfulfilled, the government would launch a legal claim to recover monies paid, a standard practice in procurement deals. In the event the contract is cancelled, Sikorsky, the manufacturer of the Cyclone helicopters, would likely launch a countersuit.
The government has made milestone payments over the years on the procurement deal for 28 choppers, originally signed by the Liberal government in 2004.
Last week, Public Works Minister Diane Finley signalled Ottawa is contemplating pulling the plug on an acquisition the Auditor-General has estimated would total $5.7-billion when all costs, including setup, maintenance and training, are included. Ms. Finley said the government is shopping around for alternatives to the Sikorsky CH-148 Cyclone.
The report notes that, if cancelled, this deal would be added to a growing list of failed military procurements overseen by the federal government in recent years.
