Converting NAPS to Acquisitions … or, DND attitudes towards Canadian Aircraft Makers
The National Aircraft Procurement System (NAPS) does not exist – but an outside observer could be forgiven for thinking that there was a real ‘NAPS’. For those making the decisions about meeting the needs of the Royal Canadian Air Force (RCAF) do seem to be asleep at the switch. And, when it comes to taking advantage of suitable products available from the Canadian manufacturers of aircraft, ‘NAPS’ is more of a descriptive practice than a program.
An example of how DND deals with Canadian aircraft makers is well illustrated by the current RCAF Twin Otter utility transport aircraft. Nine DeHavilland Canada DHC-6-300 Twin Otters have served as CC-138s.  Today, only four RCAF Twin Otters remain in service with 440 Transport Squadron out of Yellowknife, NT – 13802, 13803, 13804, and 13805 – all four having originally entered service in 1971.
The first of the four CC-138 airframes will reach ‘end of life’ by 2018. To keep 440 Squadron’s surviving aircraft flying, DND has planned to begin its ‘CC-138 Twin Otter Life Extension Project’ in 2015. 
Preliminary estimates are that pushing the Expected Life Span of these ‘legacy’ aircraft out to 2035 will cost between $20M and $49M. So, the median cost for this refit project is $34.5M or, divided between four ‘legacy’ CC-138 airframes, an average per-airframe cost of $8.625M.
The goal of this ‘Twotter’ life extension project is to keep the RCAF’s four CC-138s in the air until at least 2026 (but more probably as late as 2035).  By that stage, DND hopes that its much-delayed ‘Utility Transport Aircraft’ project will have delivered a completely new model of aircraft to the RCAF’s flight line. The thing is, a highly suitable Utility Transport Aircraft candidate already exists in the form of the made-in-Canada Viking Air DHC-6-400 Twin Otter.
Twin Options for the Twin Otter: Does DND’s Chosen Option for ‘Twotters’ make sense?
As transitions to a new aircraft type goes, nothing could be simpler. But how does the new- build Viking Air DHC-6-400 compare on price with DND’s ‘CC-138 Twin Otter Life Extension’ Project? We’ve seen that the CC-138 refits will average $8.625M per airframe. Based on sales figures, the unit cost for a new Viking Air DHC-6-400 Twin Otter is around $8.95M CDN. 
In other words, the difference between procuring the new Viking Air DHC-6-400 Twin Otters and refitting 1971-vintage CC-138s comes at a relative cost of just $325,000 CDN per airframe. However, it should be noted that one reason that DND could not replace the CC-138s earlier was that used Twin Otters were then in hot demand. That has not changed. So, the disposal value of the existing RCAF CC-138 fleet will reduce that relative cost difference even more.
So, how is the citizen to understand the Government of Canada’s current ‘business model’? Why launch into a refit program for four-decade-old CC-138 airframes when a direct replacement exists? At times, refitting older hardware can realize a great savings. But this isn’t one of those times. Given the Harper Government’s claimed emphasis on Northern Sovereignty, why wasn’t the UTA Project not ‘fast- tracked’? More to the point, why wasn’t UTA just an ACAN purchase of new Series 400 Twin Otters?
It is not as if the Government of Canada doesn’t need a military procurement success story. With the potential for an easily-negotiated buy of Viking Air Twin Otters, the Government of Canada’s preference for refitting its aged CC-138 fleet sometime between 2016 and 2020 is mystifying. It’s further baffling in light of Viking Air’s successful sales to other air forces. 
For answers to these questions, the Government of Canada need look no further than DND and the RCAF Directorate of Aerospace Requirements (DAR). The Utility Transport Aircraft project has mushroomed from being a ‘fixed-wing northern utility aircraft’ – a straightforward, direct CC-138 Twin Otter replacement – into being yet another tactical transport requirement. The timeline for DND’s Fixed-Wing Search and Rescue Aircraft Replacement Project hints at the slim chance of success for the DAR’s approach to the Utility Transport Aircraft project.
Justifiable Fears versus Economic Commonsense: the ‘Reality Sandwich’ on Twin Otters
The RCAF and its DAR are right to be fearful that the acquisition of new Twin Otters from Viking Air could jeopardize plans for a much larger, more complex aircraft to fulfil all of their Utility Transport Aircraft desires. With only $500M-to-$1.5B earmarked for the UTA Project, the future of this project is in doubt anyway (especially with other major aircraft acquisition projects already underway). On the other hand, that same $500M – $1.5B would buy a lot of DHC-6-400s from Viking Air along with the needed spares and in-service support contracts.
There are twin options for the RCAF’s Twin Otter. One option makes better economic sense and ensures that the RCAF is ready and able to operate ‘in the rough’ in the North for years to come. But the chosen option will only allow our aging CC-138 fleet to limp along – at least long enough to discover that DND’s bloated Utility Transport Aircraft project will never get funded. So, twin options for the Twin Otters, and Canada seems to be on the wrong course
 This includes a CC-138 Twin Otter replacement airframe, 13809 (c/n 382), which replaced 13808 after the earlier aircraft was destroyed while on UN operations in Pakistan in Dec 1971.
 http://www.forces.gc.ca/en/business-defence-acquisition-guide/aerospace-systems.page (Page defaults to the top. Scroll down & click on ‘CC-138 Twin Otter Life Extension Project’.)
 Those dates reflect the anticipated delivery schedule for DND’s Utility Transport Aircraft Project. By 2035, any surviving legacy CC-138 Twin Otter airframes will then be 64 years old.
 This is based on average sales figure of $7M USD. However, note that published cost figures relate predominantly to DHC-6-400 Twin Otters that are configured as light airliners or as VIP aircraft. The RCAF’s more spartan utility transport model would be rather cheaper.
 Viking Air’s Series 400 Twin Otter has found military orders with: the Peruvian Air Force (12 x utility transports), the Vietnamese Navy (3 x utility transports and 3 x Guardian 400 MPA search aircraft) and the US Army ( 3 x utility for the Golden Knights Parachute Team).