03/21/2012 04:30 EDT | Updated 05/20/2012 05:12 EDT

Feds expected to start moving ahead on purchase of search and rescue planes

OTTAWA - The federal cabinet is expected give approval this week to open a project office to buy new fixed-wing search and rescue planes, according to senior federal officials.

It is the first step in getting the stalled, nearly decade-old program to replace C-115 Buffalos and older model C-130-H transport aircraft.

The $3.1 billion replacement plan has been mired in controversy and bureaucratic in-fighting almost since it was announced by the Martin government — obstacles that Prime Minister Stephen Harper's government has yet to overcome.

Potential bidders were informed a couple of weeks ago that a formal tender call is not expected until next year and there will be more industry consultation.

Part of the delay has involved accusations that the air force had rigged initial specifications to favour one aircraft — the C-27-J Spartan, built by the Italian company Alenia.

The U.S. Air Force recently announced it intended to sell its fleet of Spartan transports, both existing and soon-to-be-delivered.

It's part of a cost-cutting move, but it has yet to receive Congressional approval.

Senior defence officials say they intend to ask Washington how much it wants for the planes, but took pains to emphasize that there will be an open competition.

One official, who asked for anonynmity, said the query would be part of the necessary due diligence that auditor general would expect of both National Defence and Public Works.

Other aircraft-makers are champing at the bit, including Lockheed Martin, the European Aeronautic Defence and Space Company and Bombardier Inc., among others.

Air force officials have said once formal proposals are received next year, there will be further review against the air force's "criteria for mission success."