Government of Canada announces contract award for maintenance of Leopard 2 tanks

From: Public Services and Procurement Canada

News release

September 12, 2024 - Gatineau, Quebec - Public Services and Procurement Canada

As part of Canada’s defence policy, Our North, Strong and Free, the federal government is committed to supporting members of our Canadian Armed Forces (CAF) with the modern equipment they need to complete their missions and keep Canadians safe.

Today, the Honourable Jean-Yves Duclos, Minister of Public Services and Procurement, and the Honourable Bill Blair, Minister of National Defence, announced that the federal government has awarded a contract to KNDS Deutschland GmbH & Co. KG (KNDS) for the long-term sustainment of the Leopard 2 Family of Vehicles (FoV).

The Leopard 2 is the main battle tank of the CAF. Ensuring our fleet has a consistently high level of operational availability for Canada’s military operations is essential to our national security.

The contract is for an initial period of 6 years and 7 months, and includes 4 option periods that could extend the contract until March 2036. The contract has an estimated value of $2 billion (including taxes).

In addition to providing crucial services to the fleet, KNDS will establish a Regional Maintenance Centre located near Edmonton, Alberta, and undertake business activity in Canada as part of the Industrial and Technological Benefits (ITB) Policy. KNDS’ economic commitments are estimated to create or maintain 295 well-paying jobs annually in the Canadian economy and contribute a total of $32.5 million annually to Canada’s GDP over the initial contract period.

Quotes

“The Government of Canada is committed to providing members of our Canadian Armed Forces with the necessary equipment to carry out missions and protect Canadians. Today’s announcement underscores our commitment to meeting North Atlantic Treaty Organization requirements, while ensuring economic and security benefits for Canada.”

The Honourable Jean-Yves Duclos
Minister of Public Services and Procurement

“Through our defence policy update, Our North, Strong and Free, we are providing the Canadian Armed Forces with the necessary equipment to maintain a ready and resilient defence force. As Canada’s main battle tank, the Leopard 2 vehicles are an essential part of the Canadian Army. This new sustainment contract is an important step in ensuring the long-term availability of our Leopard 2 Family of Vehicles, allowing them to continue supporting Canadian Armed Forces operations now and into the future.”

The Honourable Bill Blair
Minister of National Defence

“Today’s announcement underscores our government’s commitment to providing the Canadian Armed Forces with the equipment they need, while ensuring long-term economic benefits for Canadians. Through the application of the Industrial and Technological Benefits Policy, we aim to ensure this procurement will advance Canadian innovation in our world-class defence industries, create high-value jobs and contribute to economic growth in Canada.”

The Honourable François-Philippe Champagne
Minister of Innovation, Science and Industry

“This interim measure to sustain our Leopard 2 Family of Vehicles is a welcome and important step to ensure that we can continue to conduct operations and train effectively, while concurrently planning for the future mobility and firepower requirements of the Canadian Army.”

Lieutenant-General Michael Wright
Commander of the Canadian Army

Quick facts

The Leopard 2 FoV are the main battle tanks of the CAF, as well as several North Atlantic Treaty Organization (NATO) countries. This FoV includes the Armoured Engineer Vehicles and Armoured Recovery Vehicles, and are capable of supporting a wide range of operations.
These heavily armoured and highly protected vehicles provide soldiers with a tactical advantage on the battlefield, thanks to their excellent mobility, firepower, and survivability.
The CAF currently operates a fleet of 103 Leopard 2 vehicles in 5 variants, which are anticipated to remain operational until 2035.
KNDS has the experience and technical expertise, and also owns and has access to the intellectual property rights and supply chains for the Leopard 2 FoV. This makes KNDS the only candidate to become Canada’s single prime contractor providing long-term sustainment services.
This contract will allow for the transition of multiple support services into a single long-term sustainment contract to ensure the vehicles continue to be available and relevant for their remaining life. The contract includes program management, maintenance, technical services, supply support, engineering support, and other forms of support as required.
A significant portion of the Leopard 2 FoV vehicles are maintained at high readiness for short-notice operational deployment. This ensures Canada will meet its commitments to NATO.
Canada’s ITB Policy, including the Value Proposition (VP), applies to this contract. The ITB Policy will leverage mandatory in-country work to ensure that Canada delivers a domestic sustainment solution and maintains supply chain partnerships for Leopard 2 FoV components and systems.

Associated links

Contacts

Guillaume Bertrand
Press Secretary
Office of the Honourable Jean-Yves Duclos
418-564-9571
guillaume.bertrand@pwgsc-tpsgc.gc.ca

Media Relations
Public Services and Procurement Canada
819-420-5501
media@pwgsc-tpsgc.gc.ca

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Date modified:: 2024-09-12