Get ready for an epic showdown! The Royal Canadian Air Force (RCAF) is embarking on a mission to acquire the next Canadian Multi-Mission
Aircraft (CMMA) and replace its ageing fleet of CP-140 Aurora. This multi-billion-dollar military program has ignited fierce competition between industry titans Boeing and Bombardier.
To Sole Source or Not to Sole Source: The $9.0 Billion-Dollar Question
So far, Boeing has flawlessly executed a textbook capture strategy. It successfully persuaded the Canadian government to expedite the procurement process and sole source its P-8A Poseidon aircraft. Let's dive into how it achieved this feat.
Hot buttons and Win themes
Firstly, Boeing aligned its solution with the customer's key priorities namely, opting for a low-risk solution to avoid cost-overruns and minimize purchase and delivery delays. This strategy would mitigate unpleasant experiences with previous RCAF capital acquisitions such as the F-35 fighter jets, C-295 search and rescue aircrafts, and CH-148 Cyclone maritime helicopters. Speed was also of the essence, and nothing conveys promptness better than a sole source.
Partnership strategy
Secondly, Boeing assembled a remarkable Pan-Canadian team including industry heavyweights CAE, GE Aviation, IMP Aerospace & Defence, KF
Aerospace, and Honeywell Aerospace Canada. This strategic move checked all the Industrial and Technological Benefits (ITBs) boxes. However, not all ITBs are created equally, and this is likely to be the Achilles heel of this partnership strategy which is largely focused on In-Service Support (ISS) to provide economic benefits for Canada. Bombardier can certainly come up with a more compelling partnership strategy with higher value-add economic benefits for Canadians that encompasses both the capital acquisition as well as the ISS portion of the procurement.
“Ghosting” the competition
Next, Boeing employed an effective “ ghosting “ strategy to downplay the competition's strengths while emphasizing their weaknesses. They focused on interoperability and interchangeability, highlighting that the P-8A aircraft is already in service with major Canadian allies like the United States, the United Kingdom, and Australia. This aspect is c
rucial as military operations often involve collaboration and resource-sharing between different branches and allied nations. In the coming weeks, we can expect Boeing to amplify its rhetoric by painting Bombardier's solution as a non-existing "paper plane" and underscoring the risks and costs associated with such a choice.
Political Pressure: Meeting NATO Commitments
It is no secret that Canada is lagging behind its NATO commitment to spend 2% of GDP on Defence. This resulted in mounting pressure from all allies, especially the United Stated. Interestingly, just three days after President Biden's visit to Canada, Public Services and Procurement Canada (PSPC) declared the P-8A Poseidon “as the only currently available aircraft that meets all CMMA operational requirements, including anti-submarine warfare and C4ISR capabilities”. A remarkable coincidence, one might say.
Scarcity and Urgency
Lastly, Boeing resorted to the tried-and-true technique of employing scarcity and urgency for persuasion. They informed Canada that the production line for their P-8A Poseidon aircraft in the United States might close by 2025 if additional orders are not placed. While this threat holds credibility, it conveniently aligns with Canada's desire to accelerate the procurement process.
Bombardier Slow to React: Playing Catch-Up
While Boeing meticulously shaped the procurement landscape, Bombardier was slow to respond. They politely expressed their desire for a fair and open competition. However, this wasn't enough to persuade the government to open the program to competition, yet.
On May 18th, nearly two months after the Canadian government submitted a letter of request to the United States government for the acquisition of 16 P-8A, Bombardier announced a strategic partnership with General Dynamics Mission Systems-Canada.
Looking ahead
The upcoming CANSEC Defence show will be eventful. Boeing will be hosting a cocktail with the U.S ambassador to Canada to highlight the role of Canadian firms and the potential economic benefits that would come if the P-8A is selected. Bombardier will not go gentle into the good night and will hold a media conference. Significant announcements and media coverage are expected to drive the push for a competitive process.
Bidding and winning defence contracts is complex and costly. If Bombardier is successful in convincing the Canadian government to allow an open competition, it needs to have a very robust, well-articulated capture plan and execute it flawlessly to have a real chance at winning this lucrative contract.