Prime Minister in this file photo. THE CANADIAN PRESS/Hannah Yoon Prime Minister Stephen Harper settled a dispute between 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 following a written request earlier 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 next-generation version, the Evolved Sea Sparrow Missile, is distinct from the existing, older version in that it is “smart,” and can be guided while in flight.
The upshot, if the decision stands, is that the Lockheed-Martin Raytheon group, which is vying for billions in contracts in the building of systems for Canada’s soon-to-be-built 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 also give Raytheon-Lockheed an edge in billions worth of sub-contracts in the $26-billion national naval building project now underway, sources say, because its updated missiles could also be used on the new vessels.
“It’s identical to the F-35 consortium,” said a defence industry source, 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.”
A RIM-7P NATO Sea Sparrow Missile is launched from the Nimitz-class aircraft carrier USS Abraham Lincoln.
Until roughly half a decade ago, Raytheon’s Sea Sparrow missile was the undisputed technology leader in ship-borne missile defence systems. However in recent years European-based MBDA has shot ahead and now has technology equal to Raytheon’s, sources say.
The set-to first emerged last spring, when the Royal Canadian Navy approached 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.
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 next-generation 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 next-generation 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.
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