Cormorant Mid-Life Upgrade

1. Identification

n/a

2. Options analysis

n/a

3. Definition

• Project approval: February 7, 2019

4. Implementation

• Project approval: June 2022
• Contract award: July 2022
• First delivery: to be confirmed upon contract award (previously 2022)
• Initial operational capability: to be confirmed upon contract award (previously 2024)
• Final delivery: to be confirmed upon contract award (previously 2027)
• Full operational capability: to be confirmed upon contract award (previously 2028)

5. Close-out

• 2028

Project updates

December 2021
Canada re-engaged with industry to seek proposals for aircraft upgrades and a training device (simulator).

March 26, 2021
Leonardo submitted an updated proposal.

February 4, 2021
The definition phase of the project was extended in order to investigate alternate solutions.

January 25, 2021
Work commenced to investigate possible alternate solutions.

November 10, 2020
The proposal received was deemed unaffordable, and Leonardo was informed that the Government of Canada will be investigating alternative solutions.

May 13, 2020
Leonardo submitted their commercial proposal.

April 30, 2020
Leonardo submitted their technical proposal.

January 31, 2020
The Request for Proposal was released to Leonardo.

September 25, 2018
The project briefing to the independent review panel was completed.

July 26, 2018
Project Option 3, upgrade of the CH-149 and augmentation with the use of VH-71 parts where possible, was approved.

May 2018
Canada released a Letter of Notification indicating the Government's intention to sole source the project with Leonardo.

January 2018
The AW-101 is endorsed as the only solution and the procurement strategy is approved.

September 2013
The Defence Capabilities Board approved the start of the Options Analysis phase.

July 2012
The Cormorant Mid-Life Upgrade project was initiated by the Commander of the RCAF.

Benefiting Canadian industry

Industry engagement so far includes:

• Leonardo provided an unsolicited proposal to upgrade Cormorants and augment fleet with conversion of 7 VH-71 helicopters to the search and rescue role in April 2013.
• A market survey was conducted through informal meetings and discussions held with over 25 companies interested in supporting the Cormorant Mid-Life Upgrade Project between 2016 and 2018. Discussions were held from staff to assistant deputy-minister levels in multiple government departments.
• Leonardo provided an updated unsolicited proposal to upgrade Cormorants and convert VH-71s in December 2016.
• Canada released a Letter of Notification indicating the Government's intent to sole source the Cormorant Mid-Life Upgrade Project to Leonardo in May 2018.
• Canada provided written responses to companies who have had concerns or questions with the procurement strategy in June 2018.
• Leonardo, with Innovation, Science and Economic Development present, held an industry day during the Farnborough airshow in July 2018.

The Industrial and Technological Benefits Policy, including value proposition, applies to this acquisition. The industrial analysis conducted to date reveals that this project is related to a number of areas of strategic interest to Canada, including rotary wing maintenance, repair and overhaul, systems upgrade, and training and simulation. The potential to leverage economic benefits will be a consideration in finalizing the procurement strategy. Draft Industrial and Technological Benefits requirements for the CMLU project were shared with Leonardo in July 2019.

Technical Requirements

The current in-service support contract is with IMP Aerospace and will expire on July 31, 2021. DND and PSPC are working to put in place a short contract extension. Competition for the future sustainment of augmented fleet will be determined as part of the ongoing sustainment business case analysis.

Project costs

The acquisition cost for this project—including project management costs, infrastructure, contracts and contingency—is 1.03 billion.

The project is proceeding under a procure to budget approach and intends to use assigned cost contingency to maximize the capability delivered if and when risks are retired.

Issues/Risks

Scope: The Government of Canada is investigating alternate solutions to move forward within the available budget as the original planned proved unaffordable. Solutions may not meet all the current high-level mandatory requirements.

Schedule: The investigation of alternate solutions may delay the implementation past June 2022. Key milestones such as first delivery, initial operational capability and full operational capability depend on contract award, and will be adjusted once a contract award date is determined.

Budget: Definition funding is sufficient only to June 2022.