Sub firm dives out of sight with $1M

German company that was to supply navy with equipment ‘cannot be contacted’

A European company that was paid $1 million to provide equipment for the Canadian navy’s submarines has taken the money and run.

The Department of National Defence has been trying since 2009 to get the equipment it paid for from Applied Radar and Sonar Technologies GmbH, a German firm.

But the company is no longer registered in Germany and “cannot be contacted,” according to a December 2012 briefing document for senior department staff.

The Citizen has tracked the firm to Izmir, a city in Turkey, but company officials did not respond to emails or phone calls seeking comment.

The company was supposed to deliver a transportable acoustic range to the Royal Canadian Navy. It was supposedly being built at the company’s facilities in Turkey but officials with Public Works and Government Services Canada couldn’t locate that site.

The equipment, designed to support submarine operations, was to have been delivered in 2009.

“Contractor has not delivered on key deliverables and cannot be contacted,” pointed out the briefing note obtained by the Citizen. “Neither (Public Works and Government Services Canada) nor DND has been able to reach the contractor since January 2012.”

Canada signed a deal with Applied Radar and Sonar Technologies in December 2008 for the transportable acoustic range and paid the firm a little more than $1 million out of the total price-tag of $1.3 million. But according to the DND briefing the firm ran into a series of unspecified problems with the equipment.

In June 2012, with the delivery almost three years behind schedule, Public Works requested the company provide evidence as to why the contract should not be terminated.

It sent letters to the company’s German office and a Turkish address where the equipment was supposed to be manufactured. But those letters couldn’t be delivered, prompting Public Works to determine that Applied Radar and Sonar Technologies was no longer registered in Germany and there was no record of the firm having a Turkish company.

It is now up to DND to try to recover the $1 million.

DND spokeswoman Tracy Poirier stated in an email that “following a default by the contractor, Public Works and Government Services Canada terminated the contract.”

“DND recently received a legal opinion that it can now engage international collections agencies to recover the money the Government of Canada paid to the company,” she added.

The company, however, is still trying to sell its sonar products to other customers.

The firm’s website lists its capabilities in maritime surveillance, noting that: “Our services do not end after distribution, installation and testing of the equipment. We keep close contact to our clients and can provide an individual after-sales support.”

The site also carries details on the company’s mobile acoustic range. “The Mobile Accoustic (sic) Range is a platform for measurement of radiated noise and sea ambient noise,” states the website. “It is developed and successful (sic) tested on surface ships and submarines.”

“Mobile Accustion (sic) Range is easy to deploy,” the site noted.

DND officials could not answer whether the department had properly checked out the credentials of Applied Radar and Sonar Technologies before awarding it the contract.

Navies use such systems to monitor and verify the noise and magnetic signature of their ships and submarines.

A number of firms produce such equipment and, in the case of the Canadian project, three companies bid.

The equipment was to be used on the west coast to support Victoriaclass submarine operations. Instead, the Royal Canadian Navy will have to use U.S. military facilities if it wants that capability, according to the DND documents.

Canada purchased its submarines second-hand from Britain and took delivery of the boats between 2000 and 2004. The fleet, however, has been plagued with a series of technical problems and incidents over the years. Navy officers say the fleet is now proving its worth while critics say the submarines should be scrapped.