CAE set to land federal training contract; Ottawa-based xwave key participant in $500-million deal
By David Pugliese
The Ottawa Citizen
Thursday, November 27, 2008
The Conservative government is getting set to approve a $500-million program that would see the creation of aerospace training facilities to teach Canadian Forces aircrews how to fly new transport planes and helicopters, as well as aircraft to be bought in the future for search and rescue.
A team of Canadian companies led by CAE of Montreal will be awarded the contract for what is known as the Operational Training Systems Provider or “OTSP.”
Montreal-based CAE, one of the world’s largest aviation simulation firms, had been deemed by the federal government as the only qualified bidder for the program. Awarding the contract, however, had been delayed by the federal election in October.
Neither the Defence Department or Public Works and Government Services Canada responded to a request for comment.
The Conservative government is expected to highlight the contract as an example of its efforts to invest and build up Canada’s aerospace firms in tough economic times.
Defence officials privately say the OTSP program, which will include new training facilities and simulators at different locations in the country, will provide the air force with a common infrastructure for teaching crews on a number of aircraft. The project would run over the next 20 years and include training on new C-130J transport aircraft, Chinook helicopters and aircraft yet to be purchased, such as new fixed-wing search-and-rescue planes.
The final worth of the deal will depend on how much training for various aircraft fleets will be eventually be included. The initial deal for CAE is expected to be worth around $250 million.
The contract to buy 17 C-130J transports has already been signed and the first plane is expected to arrive in 2010. Discussions regarding the purchase of 16 Chinook helicopters have been continuing for more than two years and no contract has been signed. The fixed-wing search-and-rescue program isn’t expected to acquire an aircraft until around 2015.
Richard Stoneman, an analyst who monitors the training and simulation market for Dundee Securities in Toronto, said he was told that an announcement on the first phase of the OTSP program could come over the next several weeks.
“The C-130J training will be announced as phase one of this program,” said Mr. Stoneman. “Phase 2 will be the Chinook training. And Phase 3 will be the search and rescue.”
CAE spokesman Chris Stellwag said no contract has yet been signed. “We hope to be under contract for the C-130J portion of the OTSP contract before the end of CAE’s fiscal year, which is March 2009,” he said.
Mr. Stellwag said the CAE team that will work on the project includes:
– xwave defence and aerospace in Ottawa;
– MacDonald Dettwiler Ltd. of Richmond, B.C.;
– NGRAIN of Vancouver;
– Atlantis Systems International of Brampton;
– Bombardier of St-Laurent, Que., and:,
– Simgraph Inc. of Laval, and
Officials with xwave defence and aerospace did not respond to a request for comment.
The then-minister of public works, Michael Fortier, announced plans to buy the training system in July 2007. At the time, he said buying aircrew training services from a single provider was part of the government’s objective to establish a world-class aircrew training capability in Canada and to provide a seamless transition for the operation of the new aircraft fleets.
Details on how many new jobs will be created by the initiative were unavailable. Officials said once a contract was awarded a centre of training excellence would be built but they did not indicate where.
Mr. Stoneman said it is likely that several training schools will be constructed to deal with the number of aircraft fleets the military operates.
He noted that once those centres are operating, there is the possibility that Canada could offer training to the militaries of other nations for a fee.
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