Government fights ruling it bungled $830M army trucks purchase

The Canadian government has gone to court to overturn a trade tribunal ruling that it bungled the $830-million purchase of new trucks for the military.

Last year the Canadian International Trade Tribunal ruled that the process, which awarded the truck contact to Mack Defense of the U.S., was flawed.

The CITT found in favour of Mack’s rival, Oshkosh, and called on Public Services and Procurement Canada to conduct a new evaluation of the trucks to be bought for the Canadian Forces.

The ruling was yet another blow to the program, which had been trying new trucks since 2006.

But instead of complying, the federal government has decided to challenge the CITT decision.

Public Services and Procurement Canada declined comment as the matter is before the Federal Court of Appeal. “The contracts with Mack Defense LLC have not been cancelled and the project is moving forward as planned,” department spokesman Nicolas Boucher stated in an email.

Department of National Defence spokeswoman Jessica Lamirande said the first delivery of the trucks is expected sometime in late fall. The final delivery is expected in mid-2019, she added.

The Conservative government announced in 2015 that Mack Defense had won the $834-million contract to provide 1,500 trucks.

Oshkosh then challenged the award before the CITT, arguing that there were significant errors in the evaluation of the vehicles.

The CITT, which reports to Parliament, provides Canadian and international firms with a process to investigate complaints against federal government procurement. At the time of the CITT ruling, Oshkosh issued a statement that while it was “disappointed in the significant errors found in the conduct of the evaluation process, we look forward to a fair and timely implementation of the Tribunal’s recommendations.”

The company has declined to comment on the federal government’s appeal of the CITT findings.

But industry representatives point out that if the federal government loses its court case, it will likely have to pay significant penalties to Oshkosh since the trucks being provided by Mack will have already been delivered.

Mack Defense, of Allentown, Pa., has been awarded two contracts to provide standard military pattern trucks and related equipment for the Canadian Forces. Assembly will take place in a Sainte-Claire, Que., plant operated by Prevost, one of the firms partnered with Mack.

The project to replace 1980s-era military transport trucks was originally announced in 2006 by then Conservative defence minister Gordon O’Connor.

It was considered a priority because the vehicles they were to replace had become a safety hazard, with faulty brakes and excessive rust.

But the truck program has been plagued by problems and missteps by the DND.

At one point the Conservative government stopped the procurement process entirely after DND tried to spend hundreds of millions of dollars without permission.

The department had received government approval to move forward with a $430-million purchase of 1,500 trucks. But in subsequent years, department and military officials began adding more capabilities to what they wanted in the vehicles, bumping the estimated cost to more than $800 million.

And in an unprecedented move, DND officials continued on with the acquisition without getting government approval to cover the extra hundreds of millions of dollars.

When Treasury Board and Conservative government officials discovered in 2012 what was happening, they intervened, shutting down the project, just minutes before bidding was to close.

It was restarted in 2013.