The tender competition for the acquisition of medium lift helicopters for the Air Corps is progressing well. This project forms part of the major investment programme upon which this Government embarked in 1997. The competition involves the acquisition of two medium lift helicopters, with an option of a third, for search and rescue purposes as well as an option for two medium lift helicopters for general purpose military transport.
Tenders were invited on 5 March 2001, and the closing date was 19 April 2001. Four tenders were received. The four companies involved are Sikorsky from the USA, EH Industries Ltd. from England, Eurocopter from France and CHC Scotia from Scotland.
The tenders are being subjected to a comprehensive evaluation process which included visits to each of the four companies involved. This evaluation process is being undertaken by a project team comprising officials from my Department and Air Corps personnel assisted by an outside consultant. The team's report will be examined by my Department to ensure policy and procedural compliance, after which negotiations will be entered into with a selected contractor.
The tender competition for the supply of the helicopters is being carried out under EU contracts procedures. The award of contract criteria set out in the tender documentation states that the contract will be awarded on the basis of the most strategically and economically advantageous tender applying the following award criteria, not necessarily in order of priority: (1) functional characteristics; (2) technical merit; (3) all maintenance and on-line technical support; (4) after sales service and warranty terms on offer; (5) cost and ready availability of spare parts; (6) tender prices; (7) life cycle costs over a nominal 20 year period.
I am advised that other factors cannot be taken into account as part of the evaluation process. It is not possible to alter the award of contract criteria once the competition has begun.
There is no provision in EU procurement directives for the use of offset and therefore it is not the practice of the Department of Defence to consider offset or countertrade issues in the assessment of tenders. In any event, it would not be possible to measure objectively the value of such offers in the assessment of tenders. The long-term economic effects of such offers would be unquantifiable for a variety of reasons.
Negotiations on countertrade, were they to be a consideration in the course of a tender competition, would invariably take place between the tenderer and a company or number of companies located here. In such circumstances there could be no control over the conduct of those negotiations by the Government Department in question.
Additional information
From the point of view therefore of maintaining a truly competitive process any consideration of countertrade should only come into play after a decision to enter into contract negotiations with the chosen tenderer.
Once a decision on the merits has been made on a particular contract it is the practice in my Department to seek offset in Ireland in the case of major contracts. It is, of course, made clear to the contractor that there is no legal or contractual obligation to provide such offset. Many contracts have resulted in significant offset to the benefit of the Irish economy.
