No compensation for bidders after armoured vehicles cancelled
C234450 Canada will not compensate defence companies who spent millions to bid on an armoured vehicle project that was cancelled after the army decided it didn’t need the equipment after all.
The army originally determined in 2009 that the purchase of the Close Combat Vehicle, or CCV, was essential to protect the lives of Canadian soldiers, and embarked on a four-year competition that cost taxpayers $37 million and defence companies additional millions.
But the project was shut down in December after the army changed its mind; it said it had just recently discovered that an ongoing upgrade of other armoured vehicles would provide the same protection as the CCV.
At a press conference to announce the cancellation of the CCV project, Chief of the Defence Staff Gen. Tom Lawson said he was happy with how equipment programs were being run.
Nexter, a French firm that had bid on the CCV project, called on Canada to reimburse bidders, noting it had spent years and millions of dollars pursuing a contract it had been told was essential for the military.
There will be no compensation, says the government.
“There is no obligation or commitment by Canada to reimburse the bidders for their costs associated with the Close Combat Vehicle solicitation,” Public Works spokesman Pierre-Alain Bujold stated in an email to Postmedia News.
Newly released figures also show how the army spent the $37 million: almost $16 million on testing and evaluation; $5.4 million in project management costs; and a little more than $12 million on salaries for 34 civilians, reservists and military personnel working in the project office. Another $3.5 million was provided to Public Works to cover its costs for supporting the project, army spokesman Capt. Denny Brown said in an email.
The $2-billion CCV project has had a troubled history since it was announced in 2009. Early in the competition, every vehicle offered by various companies was rejected by Public Works and the Department of National Defence, although no public reason was provided.
In the spring of 2012, the companies were told their bids had been rejected and they would have to resubmit their proposals. The next year, the army was backtracking on the need for the CCV.
Nexter and BAE, another of the companies that had bid, declined to comment on the government’s decision not to provide compensation.