Â鶹ӰÊÓ

Canada's efforts to equip its CF-18 fighter jets with laser-guided smart bomb technology has hit a snag, with a ruling that the contract to do the work may have been improperly awarded, Â鶹ӰÊÓ has learned.

In March, the Public Works Department awarded the massive $180 million contract to outfit the jets with Advanced Multi-Role Infrared Sensor systems to aerospace company Lockheed Martin.

But two competitors immediately began to complain.

Raytheon Company and Northrop Grumman Corporation -- both U.S.-based defence and aerospace leaders -- submitted lower bids to do the work.

In fact, an industry source tells Â鶹ӰÊÓ one of the losing bids was $20 million lower than the one put forward by Lockheed Martin, which eventually won the contract.

And unlike Lockheed Martin, both Raytheon and Northrop Grumman had similar systems already in operation on F-18 jets around the world.

On Tuesday, Â鶹ӰÊÓ learned that the Canadian International Trade Tribunal had sided with the losing bidders, who complained the process wasn't fair.

The ruling could dramatically raise the total cost of the project, and the timeline for getting the work done. The decision prompted opposition members to demand an inquiry.

Liberal defence critic Denis Coderre called on Auditor General Sheila Fraser to investigate exactly what took place.

"I believe the Auditor General should take a look at that, so the official Opposition will write a letter to the auditor to make an inquiry," Coderre told Â鶹ӰÊÓ.

Pat Martin, the NDP's ethics critic, said the government's military spending has gotten sloppy.

"They've been spending billions and billions and billions of dollars trying to show that they're going to beef up the military," Martin said. "And they're doing it so fast and footloose that they're dropping the ball and they're making stupid mistakes, embarrassing mistakes."

The tribunal ordered the federal government to redo much of the bidding process, even though the hardware provided by Lockheed Martin is already being tested on two CF-18s in Cold Lake, Alberta.

A statement from Lockheed Martin said the company hadn't given up hope:

"Lockheed Martin is currently waiting for the 'rationale for decision' from the Canadian International Trade Tribunal in order to understand its decision and impact.

"Lockheed Martin continues to work the terms of the contract awarded to us and remains committed to delivering this capability for the modernization of the Canadian Forces' CF-18 Fleet."

None of the companies involved in the bidding would agree to be interviewed on-air by Â鶹ӰÊÓ, but Northrop Grumman and Raytheon both released statements saying they were encouraged by the trade tribunal's ruling.

The statement from Northrop Grumman said the company filed its complaint with the belief that it had provided the best and most cost-effective proposal.

"Northrop Grumman contended that the Canadian government improperly applied the evaluation criteria in the request for proposal in its technical scoring of the two companies' proposals," the statement reads.

"We believed that if the Canadian government had scored both companies' technical proposals as required by the evaluation criteria, Northrop Grumman would have prevailed in the AMIRS competition."

The statement said the company is "gratified" the trade tribunal validated its protest, but will have no further comment until a government reevaluation is complete.

A spokesperson for Raytheon told Â鶹ӰÊÓ they were "encouraged" by the ruling.

The Department of Public Works and Government Services, which awarded the original contract to Lockheed Martin, also refused an on-camera interview with Â鶹ӰÊÓ. The department would only say the contract process was "open, transparent and fair."

In the meantime, Canada's troops in Afghanistan are relying on British and U.S. airpower because Canada's jets can't be used in the theatre until they're equipped with the laser-guided missile technology.

With a report from CTV's Parliamentary Correspondent Graham Richardson