An Roin Cosanta Department of Defence Mr Ken Foxe ken@righttoknow.ie Re: I refer to your request dated 1 June 2020, made under the Freedom of Information Act 2014 for records held by this body. Your request was for a copy of the business case, cost benefit analysis or other such document for the procurement of the P012 aircraft that is currently in use. 0 copies of any briefings/submissions or other such reports prepared for the minister or secretary general relating to the procurement ofthe above aircraft. I would prefer to receive this information electronically, ideally in its original electronic format. Accordingly, I have now made a final decision today to part grant your request. The purpose of this letter is to explain that decision. This explanation has the following parts: 1. a schedule of all of the records covered by your request; 2. an explanation of the relevant findings concerning the records to which access is denied, and 3. a statement of how you can appeal this decision should you wish to do so. This letter addresses each of these three parts in turn. 1. Schedule of records A schedule is enclosed with this letter, it shows the documents that this body considers relevant to your request. It describes each document and refers to the sections of the FOI Act which apply to prevent release. The schedule also refers you to sections of the detailed explanation given under heading 2 below, which are relevant to the document in question. It also gives you a summary and overview of the decision as a whole. 2. Findings, particulars and reasons for decisions to deny access The following paragraphs set out in more detail the various sections of the Act which have been applied to the various records. Curriear i?ilie roun'n chomnihreagras nGaeilge. Bomar an Siaisii?nn, Drouchead Nua. Contae Dara. W12 AD93 Station Road. Newbridge. Co Kildare. W12 A093. Teiican?On Telephone (045') 49?000 Glao Arum 4' LUCall. 189.0 2.5 1890 R-Pllusi li-mail: customer??dclence ;c Laiihrean Greasain Web; Section 28(1) of the Act states: (1) head may refuse to grant an FOI request if the record concerned - as been or is proposed to be, submitted to the Government for its consideration by a Minister of the Government or the Attorney General and was created for that purpose.? I am satisfied the record refused (Record 4 B) using this exemption is a record which was created for the purpose of being submitted to the Government for its consideration and accordingly falls within this exemption. Section 32(1) (3) (ix) of the Act states: (1) head may refuse to grant an FOI request if the record concerned could, in the opinion of the head, reasonably be expected to prejudice or impair (ix) the security of a building or other structure or a vehicle, ship, boat or aircraft The records part granted (Records the basis of this exemption contain information, the release of which could in my opinion prejudice or impair the security of Air Corps aircraft and accordingly that information has been redacted from the records. In line with Section I have considered whether the public interest would be better served by granting this information and have determined that the public interest in preserving the confidentiality of the records involved outweighs the public interest that would be served were the records released in full. Section 33(1) of the Act provides: (1) A head may refuse to grant an FOI request in relation to a record (and in particular but without prejudice to the generality otherwise of this subsection, to a record to which subsection (2) applies) if, in the opinion ofthe head access to it could reasonably be expected to affect adversely--?- the security of the State the defence of the State matters relating to Norther Ireland, or the international relations of the State. Subsection (2) provides (2) This subsection applies to a record that-? (3) Contains information that relates to the tactics, strategy or operations of the Defence Forces in or outside the The records part granted or refused (Records 1, 2, 3, 4, 4A, 4C and 6)under this section contain details concerning certain Air Corps aircraft, and I am satisfied that the release of this information could reasonably be expected to affect adversely both the security and defence of the State as well as matters relating to Norther Ireland and international relations of the State. . Section 35l1llal of the Act provides (1) ?Subject to this section, a head shall refuse to grant and FOI request if- The record concerned contains information given to an FOI body, in confidence and on the understanding that it would be treated as confidential (including such information as aforesaid that a person was required by law, or could have been required by the body pursuant to law, to give to the body) and, in the opinion of the head, its disclosure would be likely to prejudice the giving to the body of further similar information from the same person or other persons and it is of importance to the body that such further similar information as aforesaid should continue to be given to the body" The records part granted (Records 2, 4A, 5, 6, 6A and 68) under this section contain information provided in confidence by a third party on the understanding that it would be treated as confidential in the course of the acquisition process. I am of the view that release of such information may restrict us from obtaining similar information in the future and it is vital to the orderly operation of procurement within the Department that such information be supplied in the future. I do not have the consent of the third party involved to release the information. Section of the Act states: (1) subject to subsection (2), a head shall refuse to grant an FOI request if the records concerned contains- Financial, commercial, scientific or technical or other information whose disclosure could reasonably be expected to result in a material financial loss or gain to the person to whom the information relates, or could prejudice the competitive position of that person in the conduct of his or her profession or business or otherwise in his or her occupation.? I am satisfied that the records part granted (Records 2, 4A, 6, 5, 6A and 63) using this exemption relates to commercially sensitive information provided which is not public knowledge and its release would affect the competitive position of the third party concerned. I do not have the consent of the third party involved to release the information. i have considered whether the public interest would be better served by granting this information and have determined that the public interest in preserving the confidentiality ofthe records involved outweighs the public interest that would be served were the records released in full. Section 29 (1) of the Act states: (1) A head may refuse to grant an FOI request - If the record concerned contains matter relating to the deliberative process of an FOI body (including opinions, advice, recommendations, and the results of consultations, considered by the body the head of the body or a member of the body of the staff of the body for the purpose of those processes) and The granting of the request would, in the opinion of the head be contrary to the public interest, And, without prejudice to the generality of paragraph the head shall, in determining whether to grant or refuse to grant the request, consider whether the grant thereof would be contrary to the public interest by reason of the fact that the requestor concerned would thereby become aware of a significant decision that the body proposes to make.? Part of Record 4 has been refused on the grounds that it refers to ongoing deliberations and having considered the record I am satisfied that the public interest would not be better served by granting access to this information. Further to the redactions explained in the forgoing paragraphs, the personal contact details of personnel have also be redacted from records 1 and 3. 3. Rights of appeal In the event that you are unhappy with this decision you may appeal it. in the event that you need to make such an appeal, you can do so by writing to the FOI Monitoring Unit, Department of Defence, Station Road, Newbridge, Co Kildare, W12 A093. Your correspondence should include a fee of ?30 for processing the appeal. A reduced fee of ?10 will apply if you are holder of a medical card. Please ensure the envelope is marked Internal Review. You should make your appeal within 4 weeks from the date of this notification, where a day is defined as a working day excluding, the weekend and public holidays. However, the making of a late appeal may be permitted in appropriate circumstances. The appeal will involve a complete reconsideration of the matter by a more senior member ofthe staff of this body. Should you have an uestions or concerns regarding the above, please contact me by Yours sincerely, Melanie Connolly Assistant Principal From: Margaret Stanley Sent: 19 March 2020 10:01 To: Maurice Quinn; Clare Tiernan Subject: Fw: PC 12 Issue - Proposal paper in response to Covid-19 emergency situation. Maurice, Clare, Please find attached a paper recommending approval be given for a contracts specialist to enter into immediate talks with Pilatus to acquire PC-12 aircraft at short notice. Pilatus has confirmed that they are open to these discussions and have made a point of contact available despite the public holiday in Switzerland. We have shared this contact information with Contracts Branch (Melanie Connolly). From earlier discussions with Contracts Branch we understand that the Defence Directive has provision for a crisis situation which essentially means the procurement rules can be put to one side. Given the national crisis the country is facing, I consider that this meets the criteria for putting normal procedures and rules to one side. We already have an on-going relationship with Pilatus because of the PC-12 contract and they appear to have two aircraft available for immediate delivery which we could add to our State Register. I therefore recommend that, as a matter of urgency, discussions begin with the company with a view to, ideally, having aircraft on the tarmac of Baldonnel by the end of next week. Regards, Margaret Margaret Stanley PnnC/pa/ Officer! Executive Branch An Roinn Cosanta Department of Defence Bothar an Staisiuin, An Droichead Nua, Contae Chill Dara, W12 A093. Station Road, Newondge, CoKiIdare, W12 A093From: John 00er Sent: 18 March 2020 19:28 To: Margaret Stanley Subject: PC 12 Issue - Proposal paper in response to Covid-19 emergency situation. Margaret, I attach a draft paper for consideration in relation to securing, ideally through lease but if necessary through purchase, two PC12 aircraft to ensure the Air Corps have a suitable fixed wing capability during the Covid-19 emergency. I am suggesting that normal procurement rules need to be relaxed and put to one side subject to SG and approval. You will be aware that the Defence and Security Directive acknowledges that the military may be required to intervene in crisis situations and that the security of Member States may require that their forces may necessitate the award of certain contracts at speed in an emergency situation. Emergency situations can include critical health emergencies such as a pandemic like the Covid-19 Emergency. Grateful if we could seek approval from the SG and for a contracts specialist from our Contracts Branch to engage directly with Pilatus with regard to concluding an agreement quickly regards. John John Doyle Executive Branch An Roinn Cosanta Department of Defence Bdthar an St?isiuin, An Droichead Nua, Contae Chill Dara, W12 A093. Station Road, Newbn'dge. CoKi/dare, W12 A093. From: Clare Tiernan Sent: 23 March 2020 16:05 To: Maurice Quinn Cc: Margaret Stanley Subject: FW: PC12 submission - additional information Maurice. data irqe:mef 3C i2_liHig feasible Ujrdo so. rotifiay'nish th?~LUss regards {hue From: Margaret Stanley Sent: 20 March 2020 18:00 To: Clare Tiernan Subject: Fwd: PC12 submission - additional information Clare. Attached please see an updated paper which includes details ofthc pilots that could be made available for the PC 12s if they are purchased and also information about the timeline for the other I 25 we have on order. Regards, Margaret Sent from my iPhone Begin forwarded message: From: John Doyle Date: 20 March 2020 at 17:43:43 To: Margaret Stanley Subject: PC12 submission - additional information Margaret. Further to our ongoing discussions regarding and the questions raised by Contracts Branch this morning. I attach a draft further paper for consideration which provides additional information in support of securing, ideally through lease but if necessary through purchase. two PC I 2 aircraft to ensure the Air Corps have a suitable ?xed wing capability during the Covid-l 9 emergency. You will recall that am suggesting that normal procurement rules need to be relaxed and put to one side subject to SG and approval. You will be aware that the Defence and Security Directive acknowledges that the military may be required to intervene in crisis situations and that the security of Member States may require that their forces may necessitate the award of certain contracts at speed in an emergency situation. I am of the view that emergency situations can include critical health emergencies such as a pandemic like the ovid-l9 Emergency. There is scope to secure these aircraft now and ensure the Air Corps have suf?cient enhanced capability when they are called upon - which is likely soon. After the Covid-l9 Pandemic passes. which it will. there will be uses for both aircraft as detailed in my paper by possibly by GASU and D/Health. Grateful if we could seek approval from the SG and for two PC 12 aircraft to be acquired. regards, John John Doyle Executive Branch An Roinn Cosanta Department of Defence Bothar an Staisiuin, An Droichead Nua. Contae Chill Dara, W12 AD93. Station Road. Newbridge. Co.Kildare, WIZ AD93. E-mail: Original Message-nu From: Fiona Lafferty Sent: 19 March 2020 9' 7 To: Margaret Stanley Cc: John Do 'le 2 Melanie Connolly Subject: Transport modalities for Air Corps Hi Margaret 1 got a text from Des arising from a chat he had with Maurice. He has asked that Executive Branch bottom out 7 . SG is comfortable with one but not necessarily convinced by rationale for two. Happy to assist. I have a conference call with OGP and other public sector bodies at 11 tomorrow morning so may not be available to chat for about an hour. Regards Fiona Fiona Sent from my iPad Security Sensitive Ms Margaret Stanley, Ms Clare Tiernan, Secretary General Runai Aire Proposal to lease/ purchase additional contingencv fixed wing capacity l2x Pilatus PC12 Aircraftl during the situation - additional information. Recommendation: Given the unique situation arising from the pandemic, it is the recommendation of Executive Branch that our colleagues in Contracts Branch be requested to progress the acquisition either through lease to purchase or purchase of two PC12 aircraft directly from Pilatus. My earlier submission dated 18 March 2020 (Tab A) also refers. Additional Information: The decision regarding the merits of acquiring two PC12 versus one PC12 aircraft is supported by the following observations: Leariet 45: In late 2003 a Learjet 45 aircraft was purchased. This aircraft supported the MATS for the provision of short-haul flights. However, since 2014 the Learjet 45 is operating as the primary MATS aircraft for the State. The Learjet is approx. 16 years old and is expected to remain in service for a number of years. Maintenance for the Learjet is carried out at Bombardier?s maintenance facility in London Biggin Hill Airport. Other locations in Germany and USA are also used. However, given the current situation with Covid-19 these facilities may close or operate restricted protocols delaying maintenance and impacting on availability of this aircraft. In such a circumstance, having contingency is essential. .The Learjet operates a maintenance cycle whereby it will be required to complete scheduled maintenance per 300hrs flown. i Security Sensitive CASA Aircraft: As you wilt be aware, the Air Corps operates two Airbus Military CN235-100 Maritime Patrol Aircraft which were purchased in 1994. I understand that these aircraft have the second/third highest hours in the world with the aircraft having accumulated in-excess of 20,000 hours each since introduction in 1994. Whiie there are plans to replace both aircraft with new Maritime Patrol Aircraft these will not be delivered for a number of years. (See TAB Govt Memo). Security Sensitive Three being acquired under contract: 0 You wiil be weli aware that the Department has agreed to acquire three aircraft from Pilatus. The contract for the suppiy of the aircraft was awarded to Pilatus in December 2017 foilowing an open tender competition. This contract also includes an option for AGS GASU to acquire a aircraft. The new aircraft, which replace the five Cessna FR172H aircraft purchased for the Air Corps in 1972, is being equipped for lnteiligence, Surveillance, Target Acquisition and Reconnaissance taskings, logistics support including transport of Defence Forces troops and equipment, and medical evacuation/air ambulance taskings. Approx. Timeline for purchase of PC12 by contract with Pilatus 2015 2017 White er RFT issued Dec 2017 Contracts ned 2018 Des hase/construction hase C12 2018 first aircraft came off production line in Switzerland Flew to Denver USA I understand that all three aircraft are at an advanced stage, but currently in the USA, at various stages of production. Given the Covid-19 pandemic and this emerging situation, it is unknown whether delivery of the aircraft currently on order might be delayed. it is probable that delays are inevitable particularly if production in the USA facility is impacted by Covid-19. it is also unclear what impact the Covid-19 pandemic will have on the FAA in the USA who are required to ?sign?off? on the work being done on all three aircraft and issue a certificate so that the aircraft can enter service. Security Sensitive Flying a PC12 - Pilots Department of Health: in 2017, the Department of Health tasked HIQA with assessing the situation for Priority 1 transplants. The requirement for the HIQA assessment and subsequent report arose following the stand? down ofthe night?time roster by the Air Corps due to shortages of experienced and specialised personnel. On foot of the HIQA report and as an interim measure, the Department of Health introduced night time cover by a private provider for Priority 1 transfers to the UK. This contract is understood to have cost in the region of ?7m for two years (night-time only). However, there may be scope to explore how the second aircraft proposed under this paper could support the Department of Health in the future (subject to Security Sensitive suitable staffing numbers in the Air Corps. in that regard, i understand that a number of contacts have been made by ex-pilots and others to return to the Air Corps recentiy. In addition, there is now a mechanism for re-entry by recommissioning.) The Air Corps does feature heavily in assessment for the longer term provision of air ambulance services to the UK. The second aircraft proposed for acquisition could easily be reconfigured into an air- ambulance once the current Covid?19 emergency concludes. Air Taxis: This is a service where the Department arranges an Air Taxi to transport to a required destination. This type of service is not as flexible as using military aircraft and in the current situation with limits on civil air travei, it is uniikely to provide the service and flexibility we could secure from the two aircraft. Aircraft available from Piiatus: 0 Pilatus have confirmed they have two Aircraft ready to go. The two PC12 aircraft proposed for acquisition under the current set of papers are available in Switzerland and are ready for immediate delivery. They are separate to the aircraft cu rrentiy in the USA. 0 Acquiring two aircraft gives greater confidence of being abie to service requests from the HSE/other agencies during this crisis while also ensuring contingency backup in the event of the Learjet or CASA being unserviceable at times when travel off-island is required in support of evolving national priorities. Submitted for consideration and approval. John Doyle Executive Branch 20 March 2020 U1 Security Sensitive Ms Margaret Stanley, Ms Clare Tiernan, Secretary General Runai Aire Proposal to lease/purchase additional contineencv fixed wine capacitv during the COVID-19 situation Recommendation: Given the unique situation arising from the COVID-19 pandemic, it is the recommendation of Executive Branch that our colleagues in Contracts Branch be requested to negotiate the acquisition of two PC12 aircraft directly from Pilatus. As you will be aware, we have an existing relationship with Pilatus and they are trusted suppliers. The preferred order of approach to my recommendation is as follows: 1. Lease two PC12 aircraft for a period of 6 months from Pilatus, with the option to extend (rolling) every 3 months both one aircraft; Lease two aircraft and give a commitment to acquire one aircraft in the future; Acquire one PC12 aircraft; Lease two aircraft with commitment to acquire both aircraft in the future; Acquire two PC12 aircraft. 5399?!? It is also recommended that normal procurement rules be relaxed and put to one side but that Secretary General and approval be sought. In that regard, the Defence and Security Directive acknowledges that the military may be required to intervene in crisis situations and that the security of Member States may require that their forces may necessitate the award of certain contracts at speed in an emergency situation. Emergency situations can include critical health emergencies such as a pandemic like the Covid-19 Emergency. Indicative Costs: While it will be for negotiation to finalise a cost for this proposal, The cost to purchase two PC 12 aircraft is in the region of ?8.6m. (?4.3m per aircraft). I understand that the purchase cost is broadly in line with contract costs already in place following a competitive tender exercise which Pilatus secured for the delivery of three PC12 aircraft (excluding mission equipment). (It is understood that currently the Air Corps staff number is in the region of 680 personnel, approx. 200 below establishment. Using an approx. payroll cost of ?45,000 per vacancy that suggests a non- allocation of pay for 2020 in the region of ?9m. similar to the cost proposed to acquire two aircraft.) Security Sensitive Background: 0 In the coming period there may be situations where the Taoiseach, Minister for Foreign Affairs and Trade, Minister for Health or other Ministers need to travel at short notice for urgent reasons arising from the pandemic or other Brexit?related issues. Commercial travel in the current developing situations may be unavailable, unreliable, insecure or too risky to contemplate. The MATS service offers a flexible and effective air transport service to assist the Government in meeting national and international obligations. The Air Corps can operate where civilian flight operations are restricted or denied. 0 If two additional aircraft are acquired, eitherthrough lease or purchase, the aircraft will be added to the State Register so that they will enjoy the same privileges as the existing MATS aircraft including access to use military airfields and/or airspace. The current fixed-wing transport options available are the LearJet 45 and occasionally the CASA. The Air Corps provide contingent support to many Departments and Agencies, in particular the HSE and Department of Health, and this support is likely to require greater support in the coming period than heretofore due to the Covidw19 emergency situation. 0 The HSE and the Department of Health have signalled that they may have urgent need forthe Air Corps to pick~up and deliver time?sensitive or vital medical supplies at short notice. The HSE and the Department of Health have also signalled their continuing requirement for the Air Corps to be available to move critically ill patients at short notice. 0 A contingency solution is required to support and complement the existing limited options available within the Air Corps fixed wing fleet. Why two PC 12 Aircraft: 0 The Air Corps has recently trained up a number of its pilots on the PC-12 aircraft and they are now rated and ready to fly it. 0 Pilatus have two P012 aircraft available for immediate delivery from Switzerland. These aircraft are similar in type/airframe to the aircraft the Air Corps have on order to acquire from Pilatus following a competitive tender exercise. 0 You will be aware that we have a contract with Pilatus for the acquisition of three PC12 aircraft. Pilatus was due to deliver a number ofthe PC12 aircraft to the Air Corps earlierthis year, however, the aircraft are currently delayed in the USA at present and while they are expected to be delivered by end June, given the rapid development ofthe Covid?19 pandemic situation, delivery may well be delayed even further leaving the Air Corps with no PC12 but pilots rated to fly a PC12. The Air Corps also have requirements for essential specialised training to continue and the location of this training is typically on the European continent. With the developing situation, commercial options to travel are reduced or unavailable. Using an aircraft like the PC12 to transport Air Corps personnel to access this training would also cut down on the present health risk associated with commercial travel options. 0 Acquiring two PC-12 aircraft either through lease or acquisition will ensure that the Air Corps can provide an enhanced contingency service during this forthcoming period of uncertainty. Security Sensitive View of GOC AC: GOC Air Corps has verbally indicated to me that given the profile of fixed wing aircraft, - at this challenging time. In that regard both the Learjet 45 and CASA aircraft are the existing He is ofthe View that this capability needs to be supplemented so that the Air Corps are ready to respond to likely demands arising from the Covid?19 Pandemic. Given the Covid-19 pandemic and this emerging situation, it is unknown whether delivery of the PC- 12 aircraft currently on order might be delayed. it is probable that delays are inevitable. To be ciear, the two PC12 aircraft proposed for acquisition under this paper are available in Switzerland and are ready for delivery. initial contact with Piiatus: Preliminary contact was recently made with Pilatus to establish 1. availability of aircraft and 2. whether a lease might be possible. ?~mev may be open to discussion with colleagues from Contracts Branch who already have an excellent working relationship with this company. With your approval, at this point a contracts specialist from this Department should formally engage with Piiatus with a View to negotiating the most appropriate agreement as detailed in the above recommendations to ensure ireland secures the use of two PC12 aircraft as quickly as possible in response to the Covid-19 pandemic. Submitted for consideration and approval. John Doyle Executive Branch 18 March 2020 U) F?x From: Des Dowling Sent: 24 March 2020 17:44 To: Maurice Quinn Cc: Fiona Lafferty Subject: Fwd: PC12 Secretary General Please see submission below from Contracts Branch and associated one from Executive Branch. The proposal now is to purchase a new single additional PC12 for immediate delivery from the OEM and for the Air Corps to put this into immediate operation. The cost of the aircraft will, inclusive of VAT and at current exchange rates be ?5.36m. The cost can be met from within our existing capital budget (leaving aside the possible virement of possible pay savings later in the year). The acquisition is very much by way of contingency to provide additional fixed wing capacity to supplement very immediately the Casa and Learjet and taking account of the likely late delivery of the three PC12 on order. It is impossible to say when these latter aircraft will be delivered as they remain confined to the US due to with outstanding certification and other works. in the present uncertain context, the possibility of these aircraft not being delivered until much later in the year or even next year cannot be ruled out. That said, every effort will be made to expedite matters. The question of the level of contingency required, allied to the likely demand for services that the PC12 can provide, and taking into account operational factors, all contribute to a judgement as to whether to acquire one aircraft or two. The assessment concluded with DCOS Support and GOC Air Corps is to acquire one aircraft. Director Tiernan has indicated that she is satisfied that there will be additional demands on the Air Corps and that additional provision needs to be made for these. While the nature of these demands is as yet unclear, the limitations and sustainability of our existing fixed wing capacity, along with the possible constraints in the area of civil aviation, all support the case for the proposed acquisition. As the note below makes clear, other variations have been considered whether purchase of two, leasing and lease/purchase permutations. None of those is straightforward or in some cases feasible in terms of immediate delivery of a PC12 which can go onto the military register. Other aircraft types, whether available or not, with the concomitant training issues, are not feasible. and because the present NG version which we are acquiring will cease production in the coming months and its replacement as a different type would not be a feasible solution for the Air Corps. Your urgent approval and that of the Minister is therefore sought please to conclude a negotiation with Pilatus for the immediate acquisition and delivery of a PC12 in accordance with the foregoing. In order to proceed with the next phase of negotiation as well as to secure diplomatic clearances for aircraft collection and delivery, we need to move immediately. Dowling Assistant Secretary Sent from my iPad Begin forwarded message: From: Melanie Connolly? Date: 24 March 2020 at 17:06:56 GMT To: Des Dowling Cc: Fiona Laffert Subject: FW: PC12 lf?r?i Please see attained ?i Tr?e mantra - ur-f 3-mnvi'i l.)l ailili'in idl Fi?: ,ledl,? li?n-x f-?r 'lir: deli-13, in :er?ding ll?l?f. on :?ial "Milt? a? mil lim'? (one Hm ?li" il?f? --: la)? Kind regards Melanie Melanie Connolly ASS/stem Cont/acts Manager Contracts Branch An Roinn Cosanta Depanmenr of Defence From: Melanie Connolly Sent: 24 March 2020 16:45 Subject: FW: PC12 liitriEi Plume fine attarluwl 'e_i;e;l "your itm'i? and ir?r'uilii?f infirm. cairn you psi?, idea. Kind regards Melanie Melanie Connolly Assistant Contracts Manager, Contracts Branch An Roinn Cosanta Department of Defence ., . A .. .. -, :n.3.- .nill ca 1 From: Melanie Connolly Sent: 24 March 2020 15:47 To: Fiona Lafferty Subject: PC12 Fiona Please see attached supplementary submission from contracts branch regarding the Proposal to lease/purchase additional contingency fixed wing capacity and associated papers. Kind regards Melanie Melanie Connolly Assistant Contracts Manager, Cont/acts Branch An Roinn Cosanta Department of Defence Bathar an Staisiijir?. Al?. Drotchead Nun. 03:12:10 Chili Dara. "fill A593. 1. Ms Fiona Lafferty, PO 2. A56 Des Dowling 3. Secretary General S_upplementary submission from Contracts Branch in relation to the Proposal to leag/?irchase additional contirmency ?xed wing capacity during the situation Background On 18 March 2020 and 20 March 2020, Executive Branch submitted a Proposal to lease/purchase additional fixed wing capacity during the situation. That proposal made the following recommendations in order of preference: 1. Lease two PC12 Aircraft for a period of 6 months from Pilatus, with the option to extend (rolling) every 3 months both/one aircraft; Lease two aircraft and give a commitment to acquire one aircraft in the future; Acquire one PC12 aircraft; Lease two aircraft with commitment to acquire both aircraft in the future; Acquire two PC12 aircraft. The submissions made by Executive Branch address the requirement for additional air capability. This submission should be considered as a supplementary paper from Contracts Branch addressing the further exploration of the various procurement/leasing options with a view to securing the required additional contingency fixed wing capacity. Exploration of options Contracts Branch commenced discussions with Pilatus regarding the various options available from them while simultaneously initiating some research of the aircraft leasing market. This approach was necessary in order to ensure compliance with best practice as well as endeavouring to ensure the best value for taxpayers? money, albeit within the limitations of the evolving COVID-19 situation. Pilatus Proposal Pilatus have provided a concept paper (see attached at Tab A) and a separate Proposal for the purchase of two PC-lz NG aircraft (see attached at Tab B) which together set out the main high level conditions and pricing structures that could form part of an agreement to lease or purchase one or two PC12 NG aircrafts. The options are summarised as follows: Pilatus currently have two (2) aircraft available for delivery in the immediate future, however- but as a result the current offers are only valid until 31 March. However, Pilatus have advised that in order to meet our preferred timeline of delivery on Friday 27 March (as set out in the submission from Executive Branch), they require a decision today Tuesday 24 March. Option 1: Direct Purchase Purchase price per aircraft ex VAT. Standard warranty and support options apply. GOC AC has advised that there are no additional costs associated with the purchase option. Reference in the proposal letterto a country certification kit does not apply when placing an aircraft on the Mil Register. Option 2: Lease/Lease to Purchase A fixed lease term of 12 months would apply. Aircraft will be under military register during the lease period. All operating costs (inciuding maintenance) during the lease period will be for the account of the Air 1 I Exploration of Leasing Market Contracts Branch engaged with Atron an lrish aviation service provider to explore options in relation to the aircraft leasing market. Atron identified two PC12 leasing opportunities. One UK based Pilatus Sales Agent (Oriens Avation) with two new PC12 N63 for sale that were willing to consider leasing. However, due to our existing relationship with Pilatus (and their Pilatus Sales Agent status) they have advised that they are not in a position to provide a solution. A US based company, Western Aircraft, has also been identified with available PC12 aircraft. The proposed aircraft is a 2015 PC-12 MS with over 5,000 flying hours. The GOCAC has provided the following observations regarding the provision of PC12 capacity through a leased aircraft: ?As the operator and regulator of this aircraft 1 would be insisting that the aircraft is registered as a military aircraft and receives an Air Corps tail number. This will mean removing it from the national civil register on which it currently resides, and it will lose its civilian registration. As the military air advisor to the Minister, [have to ensure that maintain and operate aircraft in accordance with current military air regulations.? ?In order to place a leased aircraft on to the Mil register we must complete an airworthiness review. This requires going back and examining all the maintenance and technical records back to birth. in many cases the operator of leased aircraft contract the continued airworthiness and maintenance recording to an external CAMO company which could be located anywhere in the world. If we were to take on a leased aircraft the travel over and examination of these records and the physical inspection of an aircraft would be dh??cult with current travel restrictions. From the initial market research carried out in relation to the leasing market it is not considered feasible to enter into a discount leasing option in the timeframe given the complexities involved in leasing arrangements in this urgent situationn. Recommendation Giving consideration to the observations from GOC AC, regarding the leasing market and the difficulties posed with that approach, as well as the restricted parameters within which we are currently working in particular the urgency and ever evolving nature of the crisis, I recommend that the best course of action is to proceed to engage directly with Pilatus. As previouslv described, Given this high cost associated with a lease it is my opinion that the purchase option USS 4,699,230 plus VAT per PC12 NG aircraft ex-works fly-away purchase price) is the most favourable commercial and common sense based approach in this instance. By way of comparison the contract price for Aircraft 2 (green aircraft) being provided as part ofthe PC12 Project is ?7,799,990 plus VAT. White the Green Aircraft and the aircraft being offered by Piiatus are not directly comparable, with the Green Aircraft being a modified aircraft ?fitted for? our Mission System, the price comparison suggests that the offer price from Pilatus is fair and reasonable. One vs Two Aircraft it is the recommendation of DCOS Support that one aircraft be procured. This is on the basis of a number of factors as follows: 1. Hangar space in Casement Aerodrome - while it is possible that an additional two aircraft could be facilitated it would put pressure on the hangar space. 2. Pilot availability?two additional aircraft would impact on pilot availability, particularly in light of pilot training requirements 3. Existing capacity as addressed by Executive Branch in their submission as well as practical supply chain and maintenance chailenges as a result of the impact ofthe crisis which are evolving on a daily basis in third countries, these would not be considered impossible or insurmountable with the addition of one further aircraft. 4. Purchasing of one aircraft is a prudent approach. Contracts Branch view is that there are ongoing supply chain issues emerging with Defence industry suppliers and sub suppliers and many manufacturing facilities are completely shutting down to mitigate the health risks of their workforces and the impact on the supply chain for the existing CASA and Learjet air assets of the Air Corps cannot be discounted. The purchase of one aircraft is sufficient in the circumstances of constraints on maintainability and the operation of future aircraft by the Air Corps and provides the Air Corps with contingency air asset to perform any tasks as required by Government. in line with the recommendation of DCOS Sp, Contracts Branch recommend that a negotiation is entered into with Pilatus for the purchase of one PC12 NG aircraft. Legislative basis for proposed procurement approach The Defence and Security Directive acknowledges that the military may be required to intervene in crisis situations and that the security of Member States may require that their forces may necessitate the award of certain contracts at speed in an emergency situation. Emergency situations can include critical health emergencies such as a pandemic In a genuine emergency, there is a recognition that there is a need to be flexible in how a Member State can procure the goods and services that are required for their response. Contracting Authorities are permitted to forgo routine procurement procedures. In adopting a more flexible procurement process matters to consider are what is reasonabie and justifiabie given all of the facts and circumstances they have to hand. Contracting Authorities are permitted to purchase direct from a suppiier if the delay involved in conducting a routine procurement which involves advertising and competitive tendering) will prevent them delivering the goods or services in time to bring effective relief. Contracting Authorities are to balance the need to act without deiay (for exampie to save or preserve life, or safeguard buildings or repair critical infrastructure) against meeting their overarching pubiic sector obligations (act lawfully, reasonably and with integrity). in this regard Directive (the Defence and Security Directive) includes a number of provisions which support entering into a negotiated procedure with Pilatus directly as foilows: 0 Article 28 of Directive (the Defence Directive) provides for the use of the negotiated procedure without pubiication of a contract notice ?when the periods laid down for the restricted procedure and negotiated procedure with publication of a contract incompatible with the urgency resulting from a crisis?. 0 A crisis situation is recognised in the Defence and Security Directive as including "any situation a Member State or third country in which a harmful event has occurred which clearly exceeds the dimensions of harmful events in everyday life and which substantially endangers or restricts the iife and health of 0 Articie 28 aiso provides for ?for additionai deliveries by the original supplier which are intended either as a partial replacement of normal supplies or installations or as the extension of existing supplies or instaiiations where a change of suppiier wouid oblige the contracting authority/entity to acquire materiai having different technical characteristics which would result in or disproportionate technical difficulties in operation and maintenance.? The Department of Defence has a current contractuai arrangement in place with Pilatus Aircraft Limited for the provision of 3 PC 12 N6 aircraft, it is possibie in the circumstances to extend this contractual arrangement as an ?extension of existing supplies from Pilatus and to procure aircraft on that basis. Contracts Branch has also issued an information note for guidance on procurement under the Defence and Security Directive in an emergency situation (see Tab C). This note is based on guidance issued by the USP and on best practice in defence procurement from other jurisdictions. in the event that format approval is provided for a procurement the file wiil reflect the guidance note issued. Pilatus have indicated that they require a decision today to progress this matter-w it is a stop go decision as they require the time to put necessary contractual arrangements and other aircraft certification arrangements in place on an urgent basis. There are also diplomatic clearances issues which need to be progressed as a matter of urgency as these need a lead in time of several days. Submitted for your urgent consideration and approval please. Melanie Connolly Contracts Branch 24 March 2020 Policy on Emergency Procurement in the Department of Defence The Defence and Security Directive acknowledges that the military may be required to intervene in crisis situations and that the security of Member States may require that their forces may necessitate the award of certain contracts at speed in an emergency situation. Emergency situations can include critical health emergencies such as a pandemic In a genuine emergency, there is a recognition that there is a need to be ?exible in how a Member State can procure the goods and services that are required for their response. Contracting Authorities are permitted to forgo routine procurement procedures. In adopting a more ?exible procurement process matters to consider are what is reasonable and justifiable given all of the facts and circumstances they have to hand. Contracting Authorities are permitted to purchase direct from a supplier if the delay involved in conducting a routine procurement which involves advertising and competitive tendering) will prevent them delivering the goods or services in time to bring effective relief. Contracting Authorities are to balance the need to act without delay (for example to save or preserve life, or safeguard buildings or repair critical infrastructure) against meeting their overarching public sector obligations (act lawfully, reasonably and with integrity). Key considerations in responding to an emergency 0 Clarify that the situation meets the criteria for treatment as an ?emergency? and that a ?exible approach to procurement can be fully justi?ed identify, specify and prioritise the immediate procurement activities that will bring relief - consider the operating environment and conditions ?on the ground? 0 in emergencies there is a higher risk in?ated prices fraud, bribery and corruption may also be a concern. Be aware of these possibilities and take action to guard against them 0 be aware of the possibility of con?icts of interest and manage them appropriately - document your emergency procurements during or as soon as possible after the event 0 clearly state in your records that the purchase was an emergency procurement and record the facts and circumstances justifying this approach. Major catastrophe reactive procurement in the event of a major catastrophe, it is critical to react instantly to the conditions on the ground. This may involve getting medical equipment to help the injured and securing water, food and shelter for other victims. It could also involve immediately mobilising staff, equipment or machinery or relocating service centres for major infrastructure provision e.g. power, gas, water and telecommunication, to new safe sites. in this scenario, a common sense approach to procurement must be adopted. There may be significant pressure to respond immediately and the Contracting Authority must be enabled to do whatever is necessary and within their powers to help. Contracting Authority are not therefore required to follow routine procurement procedure, but simply demonstrate sound reasoning and good judgement when acquiring goods or services. A file note should be made after the situation has stabilised covering the approach taken. Exercise judgement and be prepared to provide a rationale for the nature and extent of the procurement in the circumstances. If a procurement involves a major expense it is recommended, at the very least, that verbal approval (followed up in writing) from an officer with suf?cient delegated financial authority is obtained before making the commitment. - Identify, specify and prioritise the immediate procurement required to bring effective relief 0 consider the operating environment and conditions ?on the ground?. - a normal procurement process would not allow for the delivery of effective relief - purchase direct from the most convenient suppliers. - Whilst price will be a factor in deciding the selection of suppliers, the overriding consideration must be the immediate provision of relief - always obtain ?nancial approval to proceed prior to the purchase. - consider options for sourcing, including what contracts may already be in place (All- of-Government supplier, panel contractor or syndicated contract) or the extension of such a contract by way of additional supplies. where there are no existing contracts, identify what quotes can be achieved quickly and what suppliers are able to deliver immediately. Verbal or e-mail quotes are suf?cient. Where verbal make a note of the conversation - check What assurance suppliers can give to delivering immediately, to the right location, the right quantity and quality at the right price - advise suppliers that the purchase is being made as an emergency procurement to provide immediate relief and that a more competitive process will be used for any medium to long term solution where possible, consider alternative contract solutions, for example, short term lease of equipment rather than purchasing. This may allow you time to source a more permanent solution through a more competitive process - con?rm your agreement with the supplier in writing. If you can, use the simple OGP Government Model Contract available on procurementie. If time does not allow, confirmation by email is suf?cient. You need include only the basics: what is being delivered, to what specification, when, where, by whom, the price and any other charges, for example freight and insurance.