Canada has signed a $1.4 billion contract for 17 Lockheed Martin C-130J-30 tactical airlifters. Deliveries are to begin in the fourth quarter of 2010.

Announcing finalisation of the contract, Public Works and Government Services Canada minister Michael Fortier said the procurement will meet Canada's "dire need" for new tactical airlifters. "The airlift requirements of the Canadian Forces is a top priority," said defence minister Peter Gordon MacKay.

The C-130Js are the second of three new airlift procurements announced by Canada in 2006. Under the first procurement, for strategic transports, Boeing was awarded a $869 million contract in February 2007 for four C-17s. The first aircraft was delivered in August and the last will arrive this year.

The third procurement is for medium/heavy-lift helicopters. Canada plans to issue a request for proposals to Boeing by the second quarter for CH-47F Chinooks, with contract award expected by the end of 2008. The company will be required to deliver the first helicopter 36 months after contract and the last within 60 months.

C-130J head-on

The C-130J procurement sparked political controversy, with accusations the process used avoided a competition. Canada began by issuing a solicitation of interest and qualification requiring any potential bidders to demonstrate their ability to meet mandatory high-level performance criteria. including delivery schedules.

Although EADS offered the Airbus Military A400M, only the C-130J bid was judged compliant, and a request for proposals was issued to Lockheed in August 2007. The contract was signed in late December, with the first aircraft to be delivered within 36 months and the last within 60 months.

Lockheed is now required to establish a 20-year in-service support programme for the C-130Js. Under the terms of the contract, the US manufacturer is required conduct a series of competitions to select Canadian companies to perform the in-service support. A second contract covering the 20 years of support is to be signed in 2009.

The Ottawa government says Lockheed is required to invest in Canada 100% of what the country spends on procuring and maintaining the C-130Js over the life of the contract. "Under the in-service support portion, the contractor will be required to spend in Canada 75% of the total cost in direct industrial regional benefits," said Fortier.

A similar 20-year in-service support arrangement is to be put in place for the CH-47s, but Canada is using the existing US Air Force support system for its C-17s.