PM settles missile purchase dispute
Sea Sparrow chosen for navy.
OTTAWA — Prime Minister Stephen Harper settled a dispute between the Treasury Board and the Defence Department to approve an $ 800- million, sole- source purchase of next- generation Sea Sparrow missiles for the Royal Canadian Navy’s aging frigates, sources familiar with the situation say.
The decision was taken early this week after a written request this month by three ministers — Industry Minister James Moore, Defence Minister Rob Nicholson and Public Works Minister Diane Finley — that won out over the objections of Treasury Board president Tony Clement, sources say.
The Sea Sparrow is built by U. S.- based Raytheon. The nextgeneration version, the Evolved Sea Sparrow Missile, is distinct from the existing, older version in that it is a so- called smart missile, and can be guided while in flight.
Sources argue the upshot, if the decision stands, is the Lockheed-Martin Raytheon group, which is vying for billions in contracts in the building of systems for Canada’s soon- to- bebuilt new navy, will once again have the inside track in a major defence procurement, with no competitive bidding process, as occurred in the F- 35 affair. The F- 35 is made by Lockheed-Martin.
The Sea Sparrow purchase would give Raytheon and Lockheed an edge in billions worth of subcontracts in the $ 26- billion national naval building project now underway, sources say, because its updated missiles could also be used on the new vessels.
At the end of the day, the thing is a complete charade.
“It’s identical to the F- 35 consortium,” a defence industry source said, referring to the Sea Sparrow consortium, of which Canada is a member. “It’s a move by the United States again to try to keep people within their orbit.”
Until roughly half a decade ago, Raytheon’s Sea Sparrow missile was the undisputed technology leader in ship- borne missile defence systems. In recent years, however, sources said Europeanbased MBDA has shot ahead and now has technology equal to Raytheon’s.
The issue first emerged last spring, when the Royal Canadian Navy approached the Treasury Board with a request to spend $ 200 million to remain a member of the Sea Sparrow club, and participate in development of the ESSM.
The Treasury Board balked, out of concern the decision of a supplier to replace the missiles on the old frigates should not pre- determine the outcome of the same purchase decision for the new ships. “Treasury Board wouldn’t approve the stuff,” a defence industry source said. “They started raising hell about whether DND could go off and do this stuff without approval.”
Officials in the Defence Department eventually persuaded ministers Nicholson, Moore and Finley of the rightness of the case for the nextgeneration Sea Sparrows, and they in turn persuaded the PM, sources say.
The request for $ 800- million — $ 200 million for development and an additional $ 600 million to buy and integrate the missiles — is to be sent back to Treasury Board, with assertions that this purchase will have no bearing on the fire control systems and missiles in the nextgeneration frigates being built under the Canadian Surface Combatant program.
“At the end of the day, the thing is a complete charade,” a source said. “If they actually went and did this and invested the better part of a billion dollars, are you going to move to another missile system at that point?”
Delivery of the new Sea Sparrow missiles would not be for another five or six years at the earliest, sources say.