Fixed-Wing Search and Rescue Aircraft Replacement Project
The Government of Canada is buying 16 C295W aircraft equipped with advanced technology systems to support Canada’s search and rescue operations. The aircraft will be based where search and rescue squadrons are currently located, in Comox, British Columbia; Winnipeg, Manitoba; Trenton, Ontario; and Greenwood, Nova Scotia.
These aircraft will replace Canada’s current fleet of CC-115 Buffalo and CC-130H Hercules, which have served Canada well over the last 20 to 40 years. They perform over 350 missions annually and are responsible for saving the lives of thousands of Canadians every year.
After extensive industry engagement, and following a fair, transparent and competitive procurement process, the Government of Canada awarded a contract to Airbus Defence and Space on December 1, 2016.
This contract includes:
- delivery of 16 C295W aircraft
- infrastructure and set-up activities, such as training and engineering services
- construction of a new simulator-equipped training centre in Comox, British Columbia
- maintenance and support services
Also included are tools and test equipment, spare parts and access to the necessary technical data for military personnel.
New fleet and systems delivery schedule
The first aircraft are expected to be delivered in 2019. Training for the aircrew will begin by that time.
The final aircraft are expected to be delivered in 2022. This will also mark the beginning of the long-term maintenance and support services for the aircraft.
After the first few aircraft are delivered, the new fleet will begin to operate alongside the existing fleet as it gradually transitions to becoming the main operator at all times. This will be followed by the retirement of Canada’s CC-115 Buffalo and CC-130H Hercules fleets.
The contract for the initial period of 11 years is valued at $2.4 billion (plus applicable taxes) and includes delivery, set-up of support systems (training centre, initial spare parts, tools, support and test equipment, electronic information environment, etc.) and the first 5 years of maintenance and support of the aircraft.
The contract also includes the opportunity for the company to earn contract extensions for the operation and maintenance of the aircraft in increments of 1 to 3 years, for up to a possible additional 15 years. This could potentially extend the maintenance and support services until 2043, for a total value of $4.7 billion (plus applicable taxes).
With the opportunity to earn contract extensions based on its performance, the company is motivated to provide highly reliable aircraft, services and spare parts, and to perform well throughout the life of the contract. This will also provide more efficient government contract management, since it means not renegotiating contracts every year.
Further to this, the contract includes financial incentives and disincentives for the company, ranging from an additional 2% bonus to up to a 10% penalty, if the company’s performance is not in accordance with the requirements set out in the contract.
Basis of payment
Acquisition of aircraft and delivery of support systems: Basis of payment is fixed-price with an established schedule of payments, providing a strong incentive for the company to deliver on time. Payment will only be made after milestones have been met and accepted by Canada, as set out in the contract.
Ongoing maintenance and support: The company will be paid a combination of fixed annual rates and fixed rates per flying hour, to begin after the delivery of the last aircraft. Estimates are based on actual flying hours of the current fleets.
Economic benefits for Canadians
Canada’s Industrial and Technological Benefits Policy applies to this procurement. Accordingly, Airbus Defence and Space will continue to develop strategic relationships with Canada’s world-leading aerospace and defence firms and will undertake business activities in Canada equal to the contract value.
Such business activities include manufacturing major systems on the fixed-wing search and rescue aircraft, such as engines, radars and sensors, as well as researching and developing new product lines in Canada. This will open up opportunities for these firms to enter new markets in partnership with PAL Aerospace.
Additionally, repair and overhaul work, maintenance and training for the aircraft will be performed in Canada, which is expected to create significant high-value jobs for Canadians.
The Government of Canada took many steps, some new and innovative, to ensure a fair, open and transparent procurement process for the new fixed-wing search and rescue aircraft, resulting in increased competition and best value for Canadians.
Learn about the procurement timeline for the fixed-wing search and rescue aircraft.
Extensive participation of Canadian aerospace and security industry
- 2 industry days with more than 200 participants
- 7 multi-day one-on-one meetings with each industry team
- 2 site visits for industry of the 4 main operating bases and 1 tour of the Joint Rescue Coordination Centre
- Workshops and training sessions
- 30 letters of interest over 3 years, with 176 formal responses from industry
In the past, bids were evaluated on the basis of best price and capability. However, today’s innovative practices are more comprehensive, and the proposals were evaluated based on three mandatory criteria, for an overall score:
- Capability: Search and rescue response performance, aircraft and system characteristics, proposed maintenance and support services program and an evaluation of their capability to deliver on potential risks, as well as ground and flight testing of the actual proposed aircraft (worth 65 out of 100 points)
- Cost: Based on cost of acquisition and option years. The winning proposal provided the best long-term, operational capability and maintenance and support services benefits to Canada (worth 25 out of 100 points)
- Economic benefits for Canada (Industrial and Technological Benefits Policy and Value Proposition): The bidders had to commit to undertake business activities in Canada equal to the contract value, for both the acquisition and maintenance and support services components of the contract. The winning proposal developed an innovative approach to ensure the aircraft are maintained in Canada by Canadians (worth 10 out of 100 points)
Additional methods and tools were used for evaluating bids, and various processes were reviewed by an independent third party, which concluded that the methods used were consistent with the objective of promoting competition and best value. The capability-based procurement also led to innovative elements incorporated into the Request for Proposals, such as an aircraft performance assessment tool and a proposal cost evaluation tool.
A two-step bid evaluation process was also used to avoid rejecting bids for minor errors and omissions. Bidders were offered the option to provide Canada with a submission prior to the closing of the bid process, for a preliminary assessment of their proposed response to key requirements.
- Procurement timeline for the fixed-wing search and rescue aircraft
- National Defence: Fixed-Wing Search and Rescue Aircraft Replacement
- Royal Canadian Air Force: Search and Rescue
- Search and Rescue Canada
- Innovation, Science and Economic Development Canada: Industrial and Technological Benefits
For media questions, please communicate with the Public Services and Procurement Canada media relations contacts.
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