11/13/2011 11:32 EST | Updated 01/13/2012 05:12 EST

Lockheed Martin, Maker Of F-35 Stealth Fighter, Interested In Building Canadian Search Planes


OTTAWA - Lockheed Martin, builder of the controversial F-35 stealth fighter, is lining up to make a bid on the Harper government's planned purchase of fixed-wing search-and-rescue planes — an idea that's apparently being warmly received in deficit-minded Ottawa.

The giant U.S. manufacturer, the world's largest defence contractor, is preparing a bid to build more Hercules transports for the air force, say several defence and industry sources.

A spokesman confirmed the interest, but was coy on the details.

"We look forward to seeing the detailed statement of requirements and look forward to offering a cost-effective, affordable solution," Peter Simmons, a spokesman for Lockheed Martin, told The Canadian Press.

The entrance of the Bethesda, Md.-based corporation is bound to cause waves within the political and defence communities.

Aside from the continuing debate over the stealth fighter, the company was the recipient of a multibillion-dollar, sole-sourced contract for cargo planes and irked Industry Canada when it came to appropriation of regional benefits. The department was so put out, it held up cabinet approval of the F-35 for about a year.

The Royal Canadian Air Force will soon take delivery the last of 17 brand-new C-130J transports, ordered by the Harper government through that 2006 sole-source contract.

It already uses H-model Hercules transports for rescue missions and defence sources said some within the air force see the purchase of newer ones as natural fit at time of shrinking budgets.

The Defence Department is currently studying its requirements for the fixed-wing search-and-rescue replacements.

Defence insiders are split on when the federal cabinet will release a notice of proposed procurement — or even a specific request for proposals. The Conservative strategy doesn't envision replacing those planes until 2015, even though both Defence Minister Peter MacKay and associate defence minister Julian Fantino have named it as a top priority.

The $3.1-billion program has been delayed almost a decade.

It was Paul Martin's Liberal government that first proposed replacing both the existing Hercules and the nearly 50-year-old C-115 Buffalos, which hunt for missing people among the mountain folds of Western Canada.

Despite repeated promises, the Conservatives have failed to get the program on track and critics have accused them of being as ham-fisted as the Liberals with their pledge to replace the Sea King helicopters.

The search-plane proposal was sidelined by a combination of material focus on the Afghan war and charges that the air force's original statement of requirement was rigged in favour of the Italian-made C-27J an accusation both the Defence Department and the maker, Aleina, have strongly denied.

Nevertheless, the Harper government ordered the National Research Council to review the requirements to make sure there was no bias. The report found the air force had limited its scope.

A spokesman for Fantino said a review of the report is still underway.

"Our government recognizes that quick and efficient Search and Rescue service is critical to many Canadians," said Chris McCluskey.

"That is why we are looking at all options to ensure the best possible equipment and service."

Once it is released, a request for proposals is expected to draw interest from not only Lockheed Martin and Aleina, but European-based Airbus Military, Bombardier in Montreal and perhaps Viking Air, another Canadian company.

Hercules supporters within National Defence say the government could save on training, infrastructure and long-term support costs by sticking with one fleet.

Lockheed Martin currently builds a search-and-rescue variant of the Hercules — known as the HC-130 — for the U.S. coast guard. Simmons wouldn't say if that was what the company plans to offer to Canada.

Ontario New Democrat MP Matthew Kellway said he's worried the government will be tempted to short-circuit the process with another sole-source contact.

"Lockheed Martin has every right to bid on this contract, but where I'm concerned is how it could tie into the F-35," Kellway said.

"Despite the bravado, the Conservatives are in deep trouble on the F-35 file and need to find a way to save themselves from enormous political embarrassment."

Delivering long-delayed search planes quickly might be a way to accomplish that, he suggested.

But McCluskey said the government is committed to an open competition.

"Our government demonstrated its ongoing commitment to a competitive, open and transparent process," he said, pointing to consultation with the defence industry that took place in the summer 2010.