L3Harris blindsided by Ottawa bypassing competition for surveillance jet contract

i of the leading competitors to sell Canada betimes warning surveillance aircraft says it was caught away ward by the conclusion of Prime Minister Mark Carney's government to open contract negotiations with European defence giant Saab.

Three companies — two American, one Swedish — were in the running to provide the air force with six Airborne Early Warning and Control (AEW&C) aircraft, which are seen as essential for monitoring the Arctic.

L3Harris Canada, a subsidiary of the U.S.-based L3Harris Technologies, pitched the Aeris X utilizing a Bombardier 6500 business jet airframe. Saab's GlobalEye uses both the Bombardier 6000 and 6500.

The decision to make Saab a preferred supplier for the early warning plane was announced at the end of May by the prime minister in Ottawa at a major defence industry trade show.

In keeping with Carney's promise to speed up defence procurement, the opening of negotiations with Saab skirted many of the normal purchasing routines. That included a request for information (RFI) — the preliminary step of asking the overall defence industry which companies have a product that meets the air force's needs.

"We had been anticipating that an RFI was coming out and that a competition would ensue, that would uncover all of the facts necessary for Canada to make an informed decision," said Foster, who spent 35 years in the military and retired a decade ago as deputy commander of the Royal Canadian Air Force.

"We certainly respect Canada's decision. And whatever they decide in the end we'll abide by. But we would still like to talk to the government to let them know that if negotiations don't go well, that we have an alternative solution."

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From a technical point of view, Foster said the Aeris X would have no issues plugging into both the North American Aerospace Defense Command (NORAD) and NATO defence grids because of the company's access to U.S. Technology. 

"We have full 360-degree coverage with our radar capability that removes any kind of blanking issues," Foster said. 

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"And we have, I think most importantly, access to the fifth-generation, sixth-generation components that would need to be integrated to provide the stealth capabilities required to maintain that capability in an operation, while also seamlessly providing the necessary intelligence." 

Critics of the GlobalEye have said the Swedish-built plane will face political and technological hurdles in order to seamlessly share data with F-35 fighters, which it would be in charge of controlling over North America.

Saab said the issues are not insurmountable and the absent technology can be integrated if Canada asks the Trump administration for access to Multifunction Advanced Data Link (MADL) terminals, which is Lockheed Martin's proprietary technology. Defence analysts have said that would be a tough sell in Washington until more allied countries start using the GlobalEye.

Foster says L3Harris faces none of those challenges.

Interestingly, the company says it has yet to see the air force's full list of requirements for the early warning aircraft.

"We've told the Royal Canadian Air Force we can deliver in 2032," Foster said. "Depending on requirements … we could potentially meet that earlier."

L3Harris MAS, another subsidiary of L3 Harris Technologies, is involved in a partnership with Lockheed Martin to establish a heavy maintenance and sustainment facility for Canada's F-35s in Mirabel, near Montreal.

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The company conducted an independent study on the potential economic impact of both the F-35 maintenance facility and the proposed sale of the Aeris X to Canada.

Just the early warning aircraft, Foster said, would create 1,100 jobs at the Mirabel facility for 22 years.

Wendy Gilmour, a Canadian and the former assistant secretary general for defence investment at NATO, said the federal government chose to negotiate with Saab because the GlobalEye is already in service with other partner nations.

While it requires some modification, she said it represents the fastest way to get capability into the hands of the air force.

"It's a proven capability that could be delivered more quickly than starting a new process to integrate different technologies," Gilmour said, referencing the limited development work going on with the Aeris X.

L3Harris is currently in the process of fielding its surveillance plane with South Korea and has one other unidentified customer.

A number of federal officials have acknowledged privately that ready access to a proven aircraft factored into the decision to move quickly on the GlobalEye. But the lure of the manufacturing jobs associated with building the aircraft in Canada was another important aspect because the defence project falls within the "national economic interest" in building up the country's defence-industrial base.

The Liberal government is currently pushing through legislation to set up the Defence Investment Agency (DIA). Bill C-31, an omnibus bill with a whole series of diverse measures, including the DIA, will be headed to a Commons committee for study this fall.

But the various measures related to the agency are meant to expand the scope of the Defence Production Act to include economic security in the definition of national security.

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If the federal government wants to suspend the normal procurement process, as it has with the GlobalEye and the larger submarine purchase, there are four exceptions under the existing law.

When passed, Bill C-31 will allow 14 exceptions, giving the government greater flexibility to bypass a system that has long been criticized as too cumbersome.

Included on the list of allowable exceptions are provisions to suspend the rules if the project "is warranted in order to support a sector of the Canadian economy that is important to national defence or to national security, including economic security."

In pushing ahead with the GlobalEye at this moment, the federal government seems unconcerned about having legislative backing and could conceivably retroactively justify the sole-source decision.

"In a perfect world, would you go out to industry and compete everything? Sure. But then you are accepting significant risk in schedule and possibly also in cost and capability," said Gilmour.

Senior reporter, defence and security

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