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, June 13, 2000

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[English]

The Chair (Mr. Pat O'Brien (London—Fanshawe, Lib.)): I would like to call to order the meeting of the Standing Committee on National Defence and Veterans Affairs.

Now that we've had our picture taken for our rogues' gallery, we'll make sure everybody gets a copy. Put it on your dart board or whatever. It's for posterity, George.

There's a revised agenda, colleagues, which I would refer you to now. Sikorsky Canada accepted our request to highlight their outstanding product, their helicopter, and they will do that in a moment. Also, we want to take a look at whether or not the committee wishes to table an interim report on NMD.

We all know there are votes here late Thursday night. I suppose at this point the Thursday meeting is tentative. We could very well have it, or if we don't need it, we certainly won't. But I'd like the members to consider whether or not we want to report something to the House on an interim basis summarizing what we've heard on NMD.

At my request, Mr. Koerner has put such a summary together. I think I'm the only one with a copy at this point, but obviously we would get copies to members before the next meeting. It doesn't come out with any recommendation. It simply summarizes the arguments pro and con NMD that we've heard at this committee. And it would offer probably something to the effect that the government should remain seized with this important issue. It is a national issue that needs to be debated, and this committee has begun the debate and has advanced it quite a bit.

So whether you want me to table something on an interim basis in the House is something I'd ask you to keep in your minds, and we'll talk about it after we hear from Sikorsky.

I've indicated to Sikorsky Canada that we're happy to have their submission, and then if there are any questions, fine. I hope we won't take the whole time on that, because we want to move on to this NMD question. Then following that, if time allows, there's a little social event in Mr. O'Reilly's office that you know you've all been invited to, and you're invited to again. Come and see how the other half lives with a really fancy office in the East Block.

With that, I'm going to invite Mr. Haddock and his colleagues to come forward, please.

Welcome, sir. Really what this amounts to, to be quite candid about it, is this. Most of the committee was in London, England, a few weeks ago, and we had a presentation from Team Cormorant. It was very interesting, but we felt all the other people in the same business deserved the same opportunity, and they've all been extended that opportunity by the committee. We're pleased you're here today.

Over to you then, Mr. Haddock.

Mr. Joseph Haddock (Director, International Business, Sikorsky Aircraft Corporation (Canada)): I appreciate the opportunity to address the committee. This time my purpose is to present an overview of the Sikorsky Aircraft Corporation, my company.

I'd like to begin by thanking you for the opportunity and the reasons behind it. It underscores the strong sense of fairness that is a hallmark of this committee and indeed the government's procurement process, which has been your focus for the past several months.

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Sikorsky is a wholly owned subsidiary of United Technologies Corporation. Our sister divisions include Pratt & Whitney, Carrier, Otis Elevator, and Hamilton Sundstrand. You may remember Hamilton being formerly called Hamilton Standard.

But before I go on, I'd like to introduce Jeff Craven. He's my able adviser from GPC Corporation, and he'll slap me if I get out of line here, I suppose.

The net assets for United Technologies was about $24.1 billion U.S. last year, and UTC employs several thousand Canadian citizens, most of whom are employed by Pratt & Whitney Canada.

By way of background, in 1931 Igor Sikorsky received the patent for the design of what's acknowledged as the first modern helicopter. In 1939 he flew the VS-300 for the first time and is credited with starting an industry. From the early days, Sikorsky Aircraft has grown into the world leader in the technology of vertical flight.

As you may recall, my background is that I'm a military helicopter pilot, and I have close to 3,000 hours, most of which are in Sikorsky products. The fact that I'm sitting here today alive and well is a tribute to the technology that brought me home.

We're about a $1.5 billion U.S. company with 7,000 employees. Our main plant is in Connecticut and it covers 3.5 million square feet. I'd like to extend an invitation to any of you—if you have a chance and you're heading south to Florida, if you cross the Housatonic Bridge, we're right there, and you can stop by and see us any time.

We'll deliver 80 aircraft this year. Our international sales have recently surpassed our U.S. government sales for the first time, and we expect to widen that gap each year.

We are best known for our military helicopters, which serve or have served in a majority of international armed forces, including Canada's, for over 50 years. The Sea King set the standard for modern maritime helicopters and is still serving today—I'm sure you know—in many navies of the world. The longevity of the Sea King, believe it or not, is a source of pride for Sikorsky Aircraft. It's a 40-year-old airframe and it's still doing the job in several navies, including your own. The President also flies around in a version of the Sea King.

The Hawk series of helicopters, built on the heritage of the Sea King, the Horse, which your navy flew before the Sea King, and others, is flying in over 35 nations.

The most famous of the Hawk series of course is the Black Hawk, and it's the workhorse of many of the world's armed forces. This machine has proven itself time and again in battle as a machine that gets the job done and, more importantly, gets the crew home. I've personally seen Black Hawks with their entire sides blown away by rocket-propelled grenades that have flown the crew home.

The U.S. Navy has chosen the Sea Hawk, which is a naval derivative of the Black Hawk, as its only helicopter type, and this is a significant issue for us. It was born out of something called a helicopter master plan that basically was formulated about four years ago in the Pentagon. It serves in surface and sub-surface tactical squadrons as well as search and rescue, mine warfare, and logistic support roles for the U.S. Navy, and will do so for the foreseeable future.

Our Comanche helicopter launches us into the forefront of the 21st century digital battlefield. It's stealthy, it's lethal, and it's electronically sophisticated. Comanche will revolutionize rotary-wing combat roles and missions, and the U.S. army will receive over 1,200 of these machines over the next 20 years.

I might remark that the Comanche was conceived 20 years ago. It's still not in full production. So when you talk about procurement issues, while you're waiting a long time to field your Sea King replacement, I hope it doesn't take 20 years for you to get it into production. It shouldn't.

We've learned, however, that military sales will not provide all the growth and opportunities we seek as a company. So in 1992 we embarked on an effort that was unheard of in the industry. We basically realized we could not develop a helicopter all by ourselves, financially or technically. So we set out to gain some world-class business partners to help us technically and financially develop a helicopter that would easily fit both military and civilian rules foreseen over the next 30 to 50 years. Our focus with this aircraft was on replacing the S-61 Sea King, S-61 being Sikorsky's designation for that machine.

We knew the size and weight of that machine was a perfect match for military and civil roles. We knew we had to build it tough for the demands of the military and we had to build it efficiently for the pocketbooks of the civil aviation community. It had to have impressive performance for the military as well as economical performance for the civil operator.

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We've achieved our goal, and we now have the S-92. This aircraft will be the foundation of our Canadian maritime helicopter bid.

Right now I would like to turn to the presentation you should have in front of you to provide you with additional information about our S-92 helicopter program.

On the cover is the S-92 flying over West Palm Beach, Florida. For those of you who vacation in Florida, once again I'll extend you an invitation to visit our plant in West Palm Beach. It's just right out the Bee Line highway, right in the middle of the state. That's where we're flying our Comanche.

Mr. John O'Reilly (Haliburton—Victoria—Brock, Lib.): January.

Voices: Oh, oh!

Mr. John Haddock: January is a fine time.

I can give you an anecdote. I flew out of this test facility once in an H-60, and had what I thought was a pretty severe emergency. I went to let down over a swamp, saw an alligator, and decided the emergency was not quite bad enough for me to land, so I flew it home. There are a lot of interesting flora and fauna.

The second page gives you an idea of the breadth of our production models for our key products: the S-58 Horse, at 2,351 machines, some of which are still flying; 1,431 Sea Kings, S-61s, both military and civil; 2,369 of the Hawk series aircraft, which are still in production and should continue to be into 2010; and the S-92, which we announced production of at the Shearwater air show last year.

We are in production with customers. Our launch customer is Cougar Helicopters in Canada and Helijet Airways. We've just received word of two more customers in the Nordic countries.

The next page shows the actual S-92 production line and a flying model. Once again, our goal was to produce a civil aircraft with military capability. A 19-passenger, 400-nautical-mile mission was our goal. Category A performance deals with power loss in an elevated platform, such as oil rigs, and basically we have category A performance with a full load of passengers.

We have a goal of reducing operating costs, and we've done that. A few slides later you'll see how we've done that. Modern safety features, lower maintenance, and high reliability—all of the things you actually hear automobile companies talking about—are the hallmarks of what we've designed into this aircraft.

Looking at it, it looks like your standard, run-of-the-mill helicopter, nothing new, nothing exotic about the design, but what is exotic and new is what the technology brings to cost of operation. Helicopters are not inexpensive to operate, with lots of moving parts. We've dealt with that in a very coherent and intelligent way, I believe, and have a machine, at a 25,000-pound weight class, that operates with costs that you would find in aircraft in a 12,000-pound weight class.

The next slide shows you the international consortium that has gone into building this machine. Once again, I will reiterate that these are not governments, these are companies. Thus, we basically don't have the complications that politics might provide us, except perhaps with the helicopter group in China, where the government is always involved in some degree. Aerospace Industrial Development Corporation—the words are listed in front of the nose in the illustration—is a Taiwan organization. Obviously, to have Taiwan and China working on the same aircraft, we had to have Japan and Brazil in between so that the two wouldn't get too close together.

The next chart shows the concept of one single design, once again focusing on cost. We can take that single design and tailor it to customer needs. The baseline machine is shown at the top. We'll build every S-92 the same way, and then, depending upon what the customer wants, for use either commercially or as a military machine, very, very few modifications will be required to the basic aircraft.

The next slide talks to basic design features. The civil variant is shown at the top and the military variant is shown at the bottom. That photo was taken at Shearwater last September at the air show.

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Once again, it has a category A takeoff, with a crashworthy fuel system, landing gear, and crew seats. It has a bus ready for the most sophisticated electrical equipment. It has the brand-new CT7-8 General Electric engines, an auxiliary power unit for engine start in emergencies, and a stand-up cabin, just like the Sea King.

In the military design, we can include, if it's a utility role, 22 side-facing crashworthy seats; 1553 avionics databus interface; and ballistic tolerance options. On the ballistic tolerance side, I might add that very few of those are options. This aircraft is ballistically tolerant in the rotor system. Basically the tolerance option goes to floor matting and also winglets for the pilot and co-pilot seats. As well, weapon mounts on all the aircraft will come with a rear ramp.

Commercial design features are as you see here. Basically you can see the similarity in features that apply to the commercial sector as well as the military. The two last bullets, crashworthy passenger seats and large push-out windows, are obvious benefits for both military and civilian design.

The cabin is the right size. The competition is shown on the bottom. I'm not going to put names under those, but there is one item I'll mention. You can see the distance between the floor and the bottom of the aircraft in the S-92 as compared with the S-61. The reason the S-92 is so narrow is that fuel is in the belly of the S-61. Fuel is in the belly of all three of the competition. With fuel in the belly, a hard landing causes a fire, more than likely, so we've elected to put our fuel in outboard and breakaway spots, which is an enhanced safety feature.

The S-92 cockpit is a pretty picture. It's a glass cockpit, basically night-vision-goggle-capable, with sunlight-readable liquid crystal displays and an optional centre display for a moving map. It has a narrow cockpit, narrower than the Sea King or the SH-60 Seahawk, because we can pack so much information in these displays.

It has good outside visibility. Once again, that came from the requirements of our civil operators, but it is certainly applicable for a military shipboard environment.

The next slide shows key attributes—safety, performance, cost of ownership, mission flexibility, and reliability. All of these attributes are common between military and civil operations.

The bottom line, “Certified to Harmonized FAA/CAA Part 29 Requirements”, sounds nice, and it is nice, but I'm not going to get into what part 29 of the Federal Aviation Administration regulations means, except to say that this is the only helicopter, from the ground up, that will comply with these new requirements. The requirements speak to safety. They speak to durability and fail-safe attributes to the dynamic system.

I'm not going to read the next chart, but the safety features are many and varied. You can read those at your leisure. We built this aircraft, once again, for a community that does not tolerate any mishaps whatsoever—not that the military does, but the military flies in a different environment from the civil aviation community. As you read through these, you will see that all of these are applicable to the military environment. The “Sea State 5” flotation system is one that I think would be most useful in a maritime environment.

No briefing from any helicopter maker would be complete without the ubiquitous line charts. I'll let you try to figure these out. I can't figure these out. I don't know what they mean.

Actually, if you look at the charts, the thing to break away is that the S-92 beats the competition—in the little chart on the left—at 19 passengers per takeoff, and of course it beats for takeoff gross weight with an external load, both in range and payload. By the way, HOGE stands for “hover out of ground effect”, if that means anything to you.

In terms of direct maintenance costs, this is where the S-92 shines against its competitors, in my opinion. One of the things all armed forces of the world are contending with is the cost of operating armed forces: “How much of a percent of GNP does that take, and what do I get for my dollar?”

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We paid a lot of attention to lowering this direct maintenance cost. In the DMC monitoring chart—it's a little bit of an eye chart—at the end of the top line, you'll see $766.33. That's where we are as of the end of 1999. That figure, as compared to a typical medium helicopter direct maintenance cost of $1,315 per flight hour, is significant.

Every flight hour you fly in the S-92 will basically save you $600 a flight hour against the competition. This competition at the $500-or-so variance line is not the EH-101. It's the Puma. So from the standpoint of beating the best of breed in an economical cost environment, the S-92 chose the Super Puma as its target to beat. So far we've done so, and I don't think we're going to climb much above $800, if we do.

How we do that is basically inherent in the design. The less you have to touch the dynamic parts on a helicopter, the less you have to take things apart, inspect them, and put them back together again, and the less time you have to spend removing parts for overhaul, the more money you save in operation. We went about making this aircraft pretty much maintenance-free, as much as possible. It's going to need oil. It's going to need gas. It's going to need to be looked at, but it's not going to need to be taken apart and put back together again like you're having to do with your Sea Kings and others.

Mission flexibility is the title of the next chart. We will operate as an airline. We'll operate in offshore oil, with troops, with cargo, and as a maritime helicopter as well once the time is right for us to do so. As we speak, we are in competition in Portugal and in the Nordic countries for machines that are very similar machines to that which will be required by the Canadian Armed Forces.

Next, in the program schedule chart you'll see that we achieved our first flight in 1998. We have two aircraft currently flying, with aircraft number four and number five soon to join the flight test program, with production deliveries in 2002, with the basic type of certification as shown here, well within the envelope of providing aircraft in 2005 if that's the schedule Canada requires.

Our development progress has gone very well. Our ground test vehicle is shown on the next page. All efforts were completed on that machine by July 1999 and now it's a maintenance trainer. Even in the age of digital engineering and a lot of computer-aided design, there is basically no substitute for taking a helicopter that has a lot of moving parts and screwing it into the earth and turning the rotor to see if it doesn't beat itself to death. That's what we did with this machine. It completed a 200-hour FAA endurance run, and now we're finished in terms of what the FAA requires.

Flight test on aircraft number two: this is our first flight aircraft. The colours of that aircraft are indicative of the parts made by different partners. Basically for a first flight it's pretty unusual to achieve almost an hour's worth of flight; I witnessed the first flight of the V-22 and it lasted 37 seconds. So this was a tribute to the low-risk approach we took to putting this aircraft together.

Aircraft number two is shown on this next page. It has achieved what we intended it to achieve at this point. It is flying today and every day and will probably cease flying in middle to late fall of this year; we will be finished with this particular product. This aircraft is flying with less powerful engines. It's basically just going to define the envelope to where we want it and then cease flying.

Ship number three will be our workhorse, as shown on the next page. Basically, this aircraft, once it completes its tests, will be ready for sale. We intend to sell this aircraft to a commercial user.

Once again we have another flight test chart, with a few more graphs on the bottom. Basically it just says that with the 19 passengers we fit within the envelope, and the velocity, which is the middle chart, we perform our payload mission outside of requirements and our reliability is better than expected.

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Aircraft numbers four and five: the upper right-hand picture on the next page is the aircraft as it appeared at the Paris air show last year. We will have this aircraft at Farnborough, for those of you who make the trip over there for the air show in July. Please come and see us. You'll be able to walk through this aircraft and take a look for yourself. The final aircraft is being assembled to accommodate all of the changes and revisions that we see through our flight test program. It will be ready to go towards the end of the year, primarily with integration.

So with regard to our sales opportunities for the S-92, we feel these are worldwide numbers: 115 aircraft for commercial and 160 aircraft for military and government.

On our next chart, I often get the question, how come the U.S. isn't on there? The U.S. isn't on there because we don't see sales opportunities in the U.S. for the next 10 years. However, there are opportunities that are beginning to pop up with the coast guard for drug interdiction that may make us revise this chart.

We are in competition, as I've said, with Portugal and the Nordic countries. We have opportunities in Oman. As well, we have opportunities with some other countries in the Far East.

The S-92 is shown on our final page, both aircraft flying. These are not doctored pictures. These are real pictures. They are flying every day.

We feel that we've put a lot of thought into this. You don't go into a $500 million investment at a company level without putting a lot of thought into why you think this aircraft can sell worldwide: cost of operation, reliability, and basically the reputation of Sikorsky aircraft for building reliable, durable products, as you've experienced with your Sea Kings and other nations with Sea Kings and Black Hawks.

With that, I have been short and sweet. I think our product stands for itself. I think our reputation stands for itself. I'd be pleased to answer any questions you may have.

The Chair: Thank you very much, Mr. Haddock.

Now just recalling that unlike the U.S. the defence committee doesn't get into choosing the actual pieces of equipment that we buy in Canada, still, I think, we've had a very good overview from Mr. Haddock, so we'll go for some questions.

Again, let us recall that by about 4:30 we'd like to try to take a look at what we want to do in national missile defence, if anything, by way of an interim report, and spend a few minutes on that before the votes.

Just to update my colleagues, I'll chair the committee's study on procurement, that report, on your behalf tomorrow in the House.

I want to thank Mr. O'Reilly for chairing meetings when I was in France last week.

I think there were some improvements made on the IRB part of the report, and I thank Mr. Pratt for some of his suggestions and all of the committee for your contributions there.

Let's go to some questions for Mr. Haddock. Then we'll go on to something else.

We'll start with Mr. Hart.

Mr. Jim Hart (Okanagan—Coquihalla, Canadian Alliance): Thank you very much, Mr. Haddock. I enjoyed your presentation.

Can you tell me the cost per copy of an S-92 that would meet the requirements of the government for Sea King replacements?

Mr. Joseph Haddock: Not being privy to the exact Canadian requirements, I can basically surmise that it would not be unlike the requirement for the Nordic countries or perhaps for the United States Navy's SH-60R program. Based upon a U.S. fly-away cost of $12.5 million to $13 million, I would anticipate a price in the range of between $21 million and $24 million.

Mr. Jim Hart: I take it by your answer, then, that you haven't received the government's specifications for what they're looking for in the replacement program.

Mr. Joseph Haddock: No. The SOR, to my knowledge, has not been released to industry.

Mr. Jim Hart: You say in your presentation that you can deliver the S-92 by the timelines that the government has set out, although that has been revised from 2000 and now changed to 2005.

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What is that dependent on? Is it dependent on knowing what the government wants within two months, within three months, yesterday, or when?

Mr. Joseph Haddock: For us to be able to deliver a full-up aircraft—and I've engaged in these conversations quite extensively with the program office—there is a production lead time from contract award. Unlike automobiles, you don't simply go to a lot and pick one out and drive it away. And if the aircraft has some unique attributes, not to compromise the off-the-shelf nature of the procurement, but everything is going to be unique. There may be some unique man/machine interface. There may be some unique things in terms of testing that are required.

I would think the profile would be to award a contract and about 30 months later get your first aircraft. You may or may not want to do something with that first aircraft before you order the rest. In my opinion, you might want to make sure it's what you thought you were going to get, and do some testing on it for perhaps six months, whereupon you make your next order.

Given that you've awarded to a contractor at T-1, as you go through the 30-month production cycle, your discussions with the program office and the customer will continue and you may make modifications. But you may be able to continue the production line in the long lead items so that you don't have to wait another 30 months for your next batch. You can kind of continue on.

Mr. Jim Hart: Timelines are tight, then, too.

Mr. Joseph Haddock: Timelines are going to be tight. If you started today with an announcement and let's say you took a year to put out an RFP and another year for contract award, we would be in the second quarter of 2002. If you add 30 months, you're still within the 2005 window.

Mr. Jim Hart: Is that unique? I know you probably don't want to comment on your competitors—

Mr. Joseph Haddock: We're much better.

Mr. Jim Hart: —but is everyone in the same boat when it comes to delivery times?

Mr. Joseph Haddock: My experience in my past life as a program manager for the U.S. Navy has been that a 24-month to 30-month build schedule is pretty standard for a sophisticated maritime machine.

Your own experience with the CSH, with EHI, with Westland, I think, could show you that there is a production lead time, and that's for a very... I don't want to call it unsophisticated because I don't want to be rude, but it doesn't have the electronics, anti-submarine, anti-surface, radar-type equipment that a maritime helicopter would have, and the intended integrations. I think that's fairly industry-standard.

We hope to be able to build S-92 airframes in 18 months. But depending upon how many orders we have and what our production cycle is like, I'm not sure our build schedule will come down to being able to accommodate anything less than about 24 months.

Mr. Jim Hart: I didn't notice de-icing capability in your slide presentation. Is that something the S-92 has or can be equipped with?

Mr. Joseph Haddock: The S-92 de-icing capability will be accommodated as a part of our sale to Cougar Helicopters. We're going to do that in conjunction with them, with some help from other manufacturers. We have the basic concept design. The rotor blades are already matted with heat strips. The engines are already anti-iced. So it's a matter of testing the cycling of the heat to the rotor head to make sure your shed patterns are reasonable enough, something like what the 101 had to do this winter in Shearwater. We'll have to go through that.

Mr. Jim Hart: One final question. The cost per copy, does that include training, maintenance, and all of those other things? Or is that just the per copy?

Mr. Joseph Haddock: That's just per copy.

Mr. Jim Hart: How much additional cost for the training manuals and all that other stuff that goes along with it?

Mr. Joseph Haddock: On a per unit basis, do you mean?

Mr. Jim Hart: Yes. Do you have any idea? You can get back to us on that.

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Mr. Joseph Haddock: Actually, I don't think I can because I don't know what the maintenance concept is. If it's going to be organic, then that's not a cost to us. If it's going to be “we do it all”, then you would talk to... Are you considering it to be a 20-year life, a 30-year life, a 40-year life? If you take all that and amortize it over the cost... And I don't know the exact number of airframes.

Mr. Jim Hart: Right.

Mr. Joseph Haddock: I think we're talking between 25 and 35 airframes. If you take the entire cost of everything, you're way up there in numbers per aircraft. We aircraft manufacturers don't like talking about costs of aircraft that are burdened by the entire support infrastructure and hubs. It's easier to compare on a per-unit basis and then deal with the life-cycle costs separately.

Mr. Jim Hart: The reason I brought that up... You probably know, but the EH-101 project that was cancelled always talked about including all of the training and manuals and all of that stuff in that one-time cost.

Mr. Joseph Haddock: For a period of time.

Mr. Jim Hart: Yes.

Mr. Joseph Haddock: If there's an interim support concept, which you basically have on the SAR helicopter—you had two years of interim support included in that. You bought 15 aircraft for $700 million. You can do the arithmetic. That's a pretty high per-unit cost.

For 28 or 30 helicopters, if you elect to have an interim period of time where you get all the manuals and you get the trainers out and you get interim spares all laid in, all the detachments with their pack-up kits all funded and fielded, and take that number and divide it, for 30 helicopters you could probably take the cost of your 101 procurement and perhaps double it, and even add a little bit.

Mr. Jim Hart: Thank you.

[Translation]

The Chair: Mr. Laurin, do you have a question?

Mr. René Laurin (Joliette, BQ): I have a technical question for Mr. Haddock. On page 3 of your brief, it says category A performance. What does that mean?

[English]

Mr. Jim Haddock: Category A is a civil requirement, and I'll just go through the requirements very quickly. If you take a helicopter on, say, an oil platform and that is fully loaded with 19 passengers, in the case of the S-92, the take-off from an oil platform basically involves lifting the helicopter about 50 feet off the platform and then transitioning into forward flight. In a helicopter, you basically push the nose forward and you pull in some power and you start rolling.

At that particular instant, about 10 seconds into that manoeuvre, you are at your highest power demand, you're going to see, probably, until you land again at the other end. If you should lose an engine, one engine, at that point, category A certification says you won't crash into the water. On one engine you'll basically be able to reduce your power requirements, go into a slight descent, get in what is called ground effect over the water, and fly out on a single engine. So category A is basically the capability of an aircraft in a power loss situation over land or water.

To give you an idea of a comparison, in today's Sea King, today's S-61, to be certified for category A, that aircraft can only carry one passenger and crew. If you add any more weight to that, if you lose an engine in an S-61, from about 50 feet, at that point—high power required point—the aircraft can't recover and you'll have to land in the water or ditch or crash. The EH-101 has a category A requirement, and the way they manage to do that with a bigger, heavier airframe is the reason they have three engines, because if the loss of a single engine is involved, they are left with two.

Our aircraft, because the engines are slightly more powerful than the 101 and we're about 5,000 to 7,000 pounds lighter, can achieve that category A with a full load of passengers, 19 passengers, and a full load of fuel. We have already demonstrated that we can achieve that with just a single engine.

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[Translation]

Mr. René Laurin: Your presentation was very interesting, but I must say that it was targeted at lay people. You have provided us with beautiful pictures, there are many explanations, but a lot of things which may interest politicians were left unsaid.

You have built an aircraft without knowing what the specifications would be or what the military needs would be, because the statement of requirements had not yet been filled out. You admitted earlier that you don't know what the military specifications would be. The Auditor General has often rebuked the Armed Forces for buying aircraft which did not correspond to its needs. How can you build an aircraft which meets the future needs of the Armed Forces when you should have received a statement of requirements weeks, if not months, beforehand? How do you deal with this situation without generating huge cost overruns which would simply add to the price of the order?

[English]

Mr. Joseph Haddock: Number one, I suppose we're relying on Canada's stated objective to buy off the shelf. Number two, we looked at your Sea King operation and we elected to design this aircraft to replace the Sea King. Number three, on my comment about not having been in receipt of the statement of requirements, it was more a statement about what the mission performance would have to be, not necessarily the aircraft performance.

Helicopters of a certain size pretty much perform the same way. If you need more range, you add more fuel. If you need more power, you add different engines or more engines.

The only reason you would need power would be to carry around weight. Our assessment of the weight of radars, sonars, electronic surveillance equipment, forward-looking infra-red equipment, life rafts, consoles, and displays adds up to something called a payload. We look at various trade studies and various companies around the world that make a living putting this mission equipment together and get a concept of weight. Then we basically look at the aircraft and say, “Can this aircraft accommodate that payload?”

So we're certainly not totally in the dark about what the requirement is. We know what the requirement will be within a range. We basically don't know things like the required range of the radar, the required accuracy of the sonar, the required angle of arrival, the bearing accuracy of any ESM equipment. Those are the things we don't know. But we do have a very good feel that any of the potential competitors for MHP—at least the three that I think are the most serious—can do this mission.

The airframe is capable of doing a maritime helicopter mission. The issue will be, from my company's standpoint, that given that all three can do the mission, who can do it most cost-effectively?

The Chair: Mr. Proud.

Mr. George Proud (Hillsborough, Lib.): Thank you, Mr. Chairman, and thank you, Mr. Haddock, for your presentation. I think it was very informative. You gave us a lot of information on the S-92.

I'm just wondering about an issue I didn't hear about—I suppose it was probably in there somewhere. Will this aircraft be interoperable with all our allies—the Europeans and the United States—with the radars and things like that?

• 1615

Mr. Joseph Haddock: There are a lot of elements that go into interoperability. Certainly from a NATO interoperability standpoint, the radios will be interoperable. The aircraft will use the bear trap system in Canada, modified with a slightly lower-profile trap. So it would certainly be interoperable with U.S. ships. It fits on the deck of Perry class frigates. It probably won't fit in the hangar.

In terms of other aspects of interoperability, such as security, communications, equipment, and things like that, I really can't comment. It's pretty much in the hands of the customer in terms of ensuring that interoperability. But from the use of fuels, the use of lubricants, and the use of hydraulic fluid, it will certainly be interoperable.

Mr. George Proud: What about engine maintenance?

Mr. Joseph Haddock: The T700 engine family is the precursor to the CT7-8 engine. There are thousands of T700s flying around the world. The U.S. Navy Sea Hawk fleet uses it. The Black Hawk fleet uses it. The NH 90 for Italy will use it. The EH-101 for Canada uses it. So engine maintenance is very common.

Mr. George Proud: We've just completed, as you know, a procurement review. It may not be the most timely topic to discuss here today, but I wonder if you could give me your comments on what sort of role you see industry playing in the procurement process?

Mr. Joseph Haddock: Do you mean specifically in the MHP, or in any procurement?

Mr. George Proud: Any.

Mr. Joseph Haddock: It all depends on what your definition of success is in government procurement. That is really the crux of the problem. Having been a uniformed government procurement executive, I'll limit my comments to the U.S. government. The founders of the U.S. government wrote a constitution that guaranteed we'd be inefficient, and we live up to that every day. There was a method behind the madness of inefficiency, so I would say good government does not always make good business.

Having said that, there is always going to be tension between industry and government because there are certain things the government has to comply with that industry does not, for example, fairness, IRB distribution, and all of the things industry would probably elect not to do if left to itself.

There certainly needs to be understanding and communication between government and industry. There also needs to be cooperation and collaboration between government and industry. At the outset, I think it would always be helpful, at the beginning of a procurement, to outline the terms and conditions of what would constitute success for both sides.

Obviously with industry it's pretty simple. Success is, “Don't lose your shirt doing this”. On the side of the government, it's get what we pay for, have an intelligent process that leads us to an efficient machine, and comply with schedule and cost milestones we lay out.

Making those two thing work together is where it gets hard. You have to be very rigid in terms of requirements. You can't let them creep. Once a helicopter starts being made, you can't march in and say, “Ah well, you know, we'd like a third engine”, or “We'd like a tail landing gear instead of a main landing gear”. If you do that, costs get out of control and all the horror stories begin.

But always, at the end of the day, if you get what you want, the sins of the past are quickly forgotten. The C-17 is a perfect example of that in the U.S. Boeing just got the crap beat out of them—excuse my English—all through that procurement, but at the end of the day that C-17 is probably the best machine that's ever been built to do the mission. So everything is forgotten, and now it's the darling of transport.

So a lot of things go into the pie. I don't know whether I gave you the right answer, but certainly cooperation, understanding, and collaboration are key.

Mr. George Proud: Thank you.

The Chair: Thank you Mr. Proud.

Mr. Earl, do you have any questions?

• 1620

Mr. Gordon Earle (Halifax West, NDP): Yes, thank you, Mr. Chair.

I have a technical question. I notice in some of the photos, what looks like a probe is coming out from the nose of the aircraft. Can you tell me what that's for, what that represents?

Mr. Joseph Haddock: Yes. In early flight tests on any aircraft, you have to have what's called an airspeed boom. The way you measure airspeed in any aircraft is you have something called a Pitot static system. It's a little tube that has a hole in the end of it, and it measures air pressure. As you move forward in the air mass, it measures air pressure against a little bellows, and the more pressure it sees, the faster you're going. There's a little device in there that measures it against static pressure, and there are static ports on the side of the aircraft that don't see ram air pressure.

Well, in order to get airspeed right and in order to know where to put these Pitot tubes on helicopters especially, because there's lots of rotor downwash and disturbed air, you need to stick a boom in the front of the aircraft, way out past all the disturbed air, so that you get an accurate depiction of what the airspeed is, and then you move the production-model Pitot tubes all around the airframe until you get a match between that and the other.

Mr. Gordon Earle: So that's not something that would be—

Mr. Joseph Haddock: No, no. We will have a capability of in-flight refuelling, but that's not shown here.

Mr. Gordon Earle: Okay.

You give some information about comparisons, and you say the S-92 has the best performance in its weight class. How are those tests done? How do you arrive at that? Do you just have statistical information about the competitors' aircraft, or do you actually do tests?

Mr. Joseph Haddock: We are in the enviable position of not having a lot of historical data to prove us wrong, so guys like me can stand up and say we have the best performance. But we compare what we have seen in tests against the actual performance attributes of aircraft that are in production, which are matters of public record.

Mr. Gordon Earle: I see.

You show us some pictures of cabin size, and you say “The Right Size”. The two on the top are Sikorsky?

Mr. Joseph Haddock: S-92 and Sea King, right.

Mr. Gordon Earle: And then you have three down below, and I take it one is of a size that's a little bit larger than the Sikorsky, and then the others look as if they're of inadequate size. Is that what this is intended to convey?

Mr. Joseph Haddock: Those are depictions of what we consider our competitors. Obviously the very large one, you can guess who that is.

Mr. Gordon Earle: Yes, okay.

Mr. Joseph Haddock: And the other two are from the other company.

Mr. Gordon Earle: Right, okay.

And maybe we've touched upon this already, but I'd like to ask about the compatibility with the decks of the ships. If this aircraft were the successful aircraft, would that mean it could land on the ships we currently have without any kinds of alterations to the ships themselves?

Mr. Joseph Haddock: To my knowledge, that's a true statement except in one area, which is that the bear trap itself that you use with your Sea King is a high-profile bear trap. It's about eight inches high. For these aircraft, any of the competitor aircraft, you'll have to go to an alternative rapid securing device or trap that's already in production for the U.S. Navy. That's the only change I know of that would have to be made.

Mr. Gordon Earle: Right.

And last, on the program schedule, it sounded as if you said the first helicopter could be available by 2005. Is that correct?

Mr. Joseph Haddock: That's for Canada. The first aircraft we will deliver will be the Cougar Helicopters, and I believe we have a delivery scheduled toward the end of 2003.

Mr. Gordon Earle: I see. So how long does it take roughly? If you were successful in getting this contract, how long would it take to produce the first aircraft? Is it one year or two years or what?

Mr. Joseph Haddock: Thirty months.

Mr. Gordon Earle: Thirty months?

Mr. Joseph Haddock: That's a full-up, missionized machine.

Mr. Gordon Earle: And are they usually just done one at a time, or can you produce more than one at a given time? Let's say the government said they wanted to get five or six of these in operation as soon as possible. Is that something that can be done?

Mr. Joseph Haddock: I believe we are tooled at present to produce up to four a month.

Mr. Gordon Earle: I see.

Mr. Joseph Haddock: So we can produce 48 a year. I may have to get back to you on the accuracy of that, but I think it's four a month. It might be higher.

In building the S-92—you'll see that picture of the production line on the third page back—we have tooling. One of the things you don't normally see in a development program is hard tooling. We usually build the aircraft on what's called soft tooling, which is not conducive to a production line operation. This aircraft is built on hard tooling right from the start, so we're ready to go.

• 1625

Mr. Gordon Earle: The reason I asked that question is it seems to me there's some urgency to replace the Sea Kings, and the longer the delay is in even the decision being made to put the thing out to tender and so forth, that's more time. Then if on top of that there's a certain amount of lead time to produce these, and then if they're only going to dribble in one or two at a time, the problem is still there. So I was just wondering what the capacity is to produce them at a reasonable rate and within a relatively short period of time.

Mr. Joseph Haddock: Certainly the longer the delay, obviously you run against lead time. The other thing is your place in an active production line. We may have orders that precede yours, and you just can't fit in.

Mr. Gordon Earle: Sure.

Mr. Joseph Haddock: We always make accommodation obviously. We wouldn't turn customers away; that's for sure.

Mr. Gordon Earle: Thank you.

The Chair: Thank you very much, Mr. Earle.

Mrs. Wayne, do you have any questions?

Mrs. Elsie Wayne (Saint John, PC): As our chairperson, Mr. O'Brien, has stated, we don't make a decision, as you know, on which company should get the contract.

Have you had an opportunity to speak to the Department of National Defence with regard to when you're going to have an opportunity to present your case to them, as you have with us today? Have you had an opportunity to do that?

Mr. Joseph Haddock: Yes, we have. We've made every attempt at continuing the flow of information about our product with the Department of National Defence in various ways. There's a very good communication between us, and I'm sure our competitors, and the program office. I've had discussions with Mr. Alan Williams, the ADM of materiel, and Mr. Onuoha, the minister's executive assistant. So I feel pretty confident they know what we have to offer.

Mrs. Elsie Wayne: Have they given you a timeline as to when the bids will be out?

Mr. Joseph Haddock: No.

Mrs. Elsie Wayne: So we still don't know.

Mr. Joseph Haddock: No. We've seen estimates on how long they think the process will take, and I alluded to that. It's perhaps 18 to 24 months. But that's all.

Mrs. Elsie Wayne: That's all.

Thank you.

The Chair: We're all anxiously awaiting that date too, Mrs. Wayne.

I'm going to give the last question to Mr. Wood, and then I'd like to thank Mr. Haddock. Then we can take a minute or two on what we want to do on NMD, and then we'll continue our discussions in another venue.

Mr. Wood.

Mr. Bob Wood (Nipissing, Lib.): Thank you, Mr. Chair.

I'd just like to ask Mr. Haddock a question concerning the industrial regional benefits package that Sikorsky obviously will be proposing for the maritime helicopter bid. As Mr. Haddock knows, and I guess it's no secret, I was a big supporter of the Sikorsky bid during the previous search and rescue helicopter procurement, mainly because one of their IRB spinoffs would create a lot of jobs in my riding. It's as simple as that.

Some hon. members: Oh, oh!

Mr. Bob Wood: I guess I want to know, not only just for my riding, Mr. Haddock, how committed is Sikorsky to following through on IRBs? If you've seen some ads in The Hill Times and everything, you know a lot of other people are doing that. What assurances can you give this committee that Sikorsky will deliver what they promise?

Mr. Joseph Haddock: Well, let's see. I can give you the history of our company: we've never missed an IRB commitment anywhere in the world.

An hon. member: Just get to how many jobs in North Bay.

Mr. Bob Wood: That's right.

Voices: Oh, oh!

Mr. Joseph Haddock: I could also tell Mr. Wood the enterprise we were talking about for North Bay is no longer one of our considerations for IRBs for this project.

Mr. Bob Wood: Mine neither.

Voices: Oh, oh!

Mr. Joseph Haddock: We've learned our lesson on that one.

Mr. Bob Wood: So have I.

Mr. Joseph Haddock: I would say, from my standpoint, in the last six to eight months, I suppose—and Jeff, you can chime right in—my team up here has spent more time on industrial benefits than just about anything else.

The aircraft flight testing is going quite well. We have people all over the world selling S-92s and customers knocking on our door for S-92s, but we realize that industrial regional benefits are an important part of any procurement package. On this particular procurement, we're fully prepared to meet 100% or more of contract value up here. In my opinion, it's not going to be too difficult from the standpoint of the Maritimes, since that's where the aircraft are going to operate. We certainly have instituted discussions. We've teamed with Lockheed Martin. We're discussing partnerships with other fairly significant aerospace firms up here.

• 1630

Our concept is that we're in this to build and provide a good, solid maritime helicopter to the Canadian Forces. Historically—and this gets into your question—in terms of dollars, that's about 15% to 20% of the bill. For the other 80%, it's our intent to spend that money in Canada, employing Canadian citizens all around the country for care and feeding, training, publications, fighting, parts supply of that machine in its 20- to 30- to 40- to 50- to x-year life that we hope it has up here, just like our Sea King.

I hire a full-time person just to bug me about IRBs. We're going to have a pretty impressive package once the games begin.

The Chair: Thank you.

[Translation]

Mr. Laurin.

Mr. René Laurin: I have a question for our witnesses. Once the statement of requirements has been made public and the bidding process opened, could the witnesses return before the committee and tell us why their bid meets the needs as laid out in the Armed Forces' statement of requirements?

[English]

The Chair: Well, Mr. Laurin, this committee can invite any witness it wants. Indeed, as you know, under certain circumstances, committees can even subpoena witnesses. I don't think we have to subpoena Mr. Haddock or other witnesses. The quick answer is oui. We can invite back witnesses on this matter any time we want. It will be a committee decision.

Mrs. Wayne.

Mrs. Elsie Wayne: On a point of clarification, I would just like Mr. Haddock to know... With a name like Haddock from the Maritimes... We eat haddock every day. I would just like you to know that my city, being the largest city in the province of New Brunswick, would be most happy if you set up there. We're right in the maritime provinces, Mr. Haddock.

Voices: Oh, oh!

The Chair: With that, Mr. Haddock, before we all put our pitch in for jobs in our ridings, I'm going to thank you very much for a very interesting overview and presentation and for answering our questions today.

Mr. Joseph Haddock: My pleasure.

The Chair: Colleagues, if I can turn your attention to national missile defence, there are three options as I see it. We've had a number of hearings on national missile defence, and this could be our last meeting if we decide. We could have a meeting at the regular time on Thursday. If we need a meeting, we could advance it to tomorrow. We may decide in a few minutes that we don't need another meeting, but we can't leave without a comment on national missile defence. Then we'll all retire to Mr. O'Reilly's for further discussions.

Voices: Oh, oh!

The Chair: We could do three things on national missile defence.

Mrs. Elsie Wayne: Can they stay?

The Chair: Yes, absolutely. It's an open discussion.

We could basically report nothing on national missile defence. We're not necessarily finished our hearings, so we could do that. We could send a letter and a summary of what we have heard so far, pro and con, to the relevant ministers, Mr. Eggleton and Mr. Axworthy, and whoever else we might wish to send a little summary. As I said, Mr. Koerner has, at my request, produced a short summary, which only I have so far, but it will be available tomorrow to all members in both official languages. The third option is that we could table an interim report to the House on what we have heard so far on NMD, with or without any particular recommendations.

Those are the three options. If you don't mind me expressing a point of view from the chair, I don't think we should do nothing. I think at least we should send a letter to the two ministers saying here's who we've heard from, here's what they've said, and the committee has not taken a final position on this yet. Or we could go further, with a report to the House.

• 1635

Let me put that on the table and take your points of view. Mrs. Longfield, then Mr. Proud. We'll give everybody a chance.

Mrs. Judi Longfield (Whitby—Ajax, Lib.): If we were to choose option three, which is to table the report, that means a lot of work by Corrine and Wolf and others. Is that feasible? Is it possible? We're talking a day and a half.

The Chair: Mr. Koerner.

Mr. Wolfgang Koerner (Committee Researcher): What we have now is a five-page overview of the issues, with no firm recommendations. It's something that could be tabled. If you want to go with an in-depth report, that's not going to be possible between now and the time the House leaves.

The Chair: Mr. Proud.

Mr. George Proud: I think we should do something, whether it's the interim report or a letter to both the ministers, to tell them what we heard at our meetings. We shouldn't go away, because by the time we get back, there's probably going to be a decision made in the United States as to what they're going to do with it. It would be nice to let people know that we were investigating this and hearing witnesses on it from both sides.

The Chair: Yes. We've broken the ground at this committee and got the debate out in public.

Mrs. Wayne.

Mrs. Elsie Wayne: Since we haven't come to a final conclusion ourselves, I think it would be better for us to write to the ministers rather than to bring in a report when we don't have a final decision from around our committee, Mr. Chairman. I really do. They'll be wondering why we bothered to table it if we haven't come up with any recommendations of any kind. I think it's better just to deal with the two ministers until we get things finalized.

The Chair: That's a fair point.

Mr. Earle.

Mr. Gordon Earle: I would echo sentiments similar to that. We haven't really conducted a sufficient study and brought it to a conclusion so that we can come up with a formal report. We've heard pros and cons, not only from people we've heard directly from, but also from various submissions, which you've sent around from time to time. A lot of these were against; some were for.

My thought would be that if we are going to write to the two ministers, giving a summary of the pros and cons without a position, the one position that I would put forward, which is neither for nor against at this point, although I do have my feelings on that, would be that we should suggest that if a decision is going to be made on this by the government, we should recall Parliament and have a debate on the issue so that the members can have the opportunity to vote on that issue.

The Chair: A parliamentary debate.

Mr. Gordon Earle: Yes. I think there should be a vote in the House on the position before Canada takes an official position.

The Chair: All right. There are two issues you've put there, Gordon. I think we need to separate them. There's the parliamentary debate, which may or may not take place. I would probably agree with you that it should, but it wouldn't necessarily come to a vote. So they're related, but they're two distinct issues.

Can we have that as a friendly... Well, let's see what everybody says. Notice I stressed that it would be an interim report, because of the points you've both just made.

[Translation]

Mr. Laurin.

Mr. René Laurin: Mr. Chairman, I would find it extremely unfortunate to have spent several hours listening to witnesses for nothing, since it seems quite probable that the Americans will reach a decision on NMD by June, July or August, at which time Canada will quickly have to decide where it stands.

If the Minister had to take a position sooner rather than later, he could at least take note of the views expressed by the witnesses we have heard, even if the committee has not yet made any recommendations, which in itself is unfortunate. At least that way their testimony will not have been in vain. I don't think we have time to draft valid recommendations this week, and I also don't think the issue warrants us working on it this summer.

Regarding the possibility of holding other meetings, I thought, as did my colleagues probably as well, that our committee would not meet next Thursday. So I made other commitments. I hope I don't have to make any changes in my day-timer. I think it might be better if we sent the Minister a summary of the testimony we heard and that we only meet again in the fall.

• 1640

The Chair: All right.

[English]

Thank you.

Mr. Hart, then Mr. O'Reilly, and then I'm going to see if we have a consensus and we'll adjourn.

Mr. Jim Hart: I think it would be unfortunate if we didn't provide the House with some information. I'm not even sure if everyone around the table here is in support of or opposed to the NMD. I know I'm in favour of it. I think it would affect our position with NORAD and our allies, the United States, if we weren't a part of NMD and they went ahead with it.

Having said that, I think the interim report is a good idea, just basically laying out the pros and cons of what this committee heard. If we include a recommendation, that recommendation, from my point of view, would be that the House of Commons have a debate on this issue in the fall, when the House returns.

The Chair: Thank you.

Mr. O'Reilly.

Mr. John O'Reilly: I agree that we should do a letter. I don't think we can do a report when we haven't really concluded our evidence yet. I don't think we can make a recommendation till we've heard all the witnesses. So I agree.

I think we could meet this summer in Trois-Rivières.

The Chair: Joliette.

Mr. John O'Reilly: Or Joliette. I'm sure Mr. Laurin would be more than happy to host a meeting there.

The Chair: We can go to the music festival in Joliette.

Mr. John O'Reilly: Sure, watch him do Shakespeare again.

The Chair: Yes, that's right.

Okay. Here's what I hear the committee saying: we will write to the two relevant ministers, Eggleton and Axworthy, with a summary of what we've heard, which has been prepared by the staff already; a listing of the witnesses we heard and the briefs we received; a summary of the arguments for and against NMD; and a call for parliamentary debate before Canada would take any decision as to its participation in this system. Is that what I hear?

Some hon. members: Yes.

The Chair: With your agreement, with the help of the researchers, we will write to the two ministers. We'll do that before we recess on Friday.

Mr. Proud.

Mr. George Proud: I don't know whether that would come to pass or not. We can recommend that, but it's up to the government to decide if they're going to go ahead or not go ahead.

The Chair: That's right. We can certainly go on record. I agree that there should be a parliamentary debate—indeed, a national debate—which is starting to take place now, thanks to this committee.

So is that the understanding?

Some hon. members: Yes.

The Chair: Okay.

Since it will be our last meeting, I want to thank all the colleagues here for your good work in this session. I'm very pleased that the procurement report is going to be unanimously presented. All the names of the members of the committee, of course, will be on the report.

I want to thank Corrine McDonald, our researcher, for the good work she did on that, and also Wolf, but Corrine was seized with this issue a little bit more. I would note that it's Corrine's last meeting because she's going to CIDA. We wish you well there. We're going to miss you, but thank you for your good work.

Voices: Hear, hear!

The Chair: So that's what we'll do. Now we'll adjourn to Mr. O'Reilly's spacious quarters.