Leonardo Challenges Canada Govt's Decision To Buy Airbus' C-295W Transport Aircraft

Leonardo has filed notice of legal action in January, after having failed in a bid to replace Canada's fixed-wing search and rescue fleet.

The company is challenging the Liberal government's decision last fall to buy 16 new C-295W transports manufactured by rival Airbus Defence and Space. 

Leonardo S.p.A offered its C-27J transport for the competition, CBC News reported Wednesday.

The company requested Federal Court judge to toss out the multibillion-dollar contract, but only delivered supporting arguments and affidavits to the court on Tuesday. 

The Italian aircraft-maker said that the bid by Airbus should be disqualified and the court should cancel the contract. 

The company cites a number of grounds, including a claim the C-295W does not meet the specifications originally set out by the Royal Canadian Air Force, notably the ability to "perform mandatory long-range missions stipulated" in the request for proposals. 

Leonardo's court filing also raises alleged safety concerns related to the absence of a redundant power system in the aircraft. 

"The necessary consequences of this inadequacy should have been the disqualification (if no modification was proposed) or rating penalization (if a modification was proposed) of the Airbus proposal," said the filing. 

Separately, Leonardo argues that the Airbus bid should have been disqualified at the outset because of cost. 

In late November, the Liberal government announced it was buying the C-295 in two-step procurement for a total price of $4.7 billion over the next two decades. 

The first step, at a cost of $2.4 billion, involves the purchase of aircraft, simulators and 11 years of support. The second step involves a future in-service support program that will have to be negotiated with Airbus, at an estimated cost of $2.3 billion. 

However, in the request for proposals, which was filed in court as part of the supporting documents, all bidders were told their package could not exceed $3.4 billion, including in-service maintenance support. 

"Officials with Leonardo have sought an explanation from Public Works, but have been met with silence," said a source familiar with the file, but who was not authorized to speak with the media. 

"The applicant's proposal to supply Canada with FWSAR aircraft and related services was evaluated as being fully compliant with the requirements of the (request for proposals) and substantially less costly than the aircraft and services proposed by Airbus," the court filing said. 

Federal lawyers have indicated the government intends to fight the claim, but has not filed a statement of defence.