CONTRACT: The Government will not abandon a contract with Sikorsky to purchase up to five medium-range helicopters, the Minister for Defence, Mr Smith, has said. A report earlier this week said the Government was ready to scrap its offer to Sikorsky because of fears that it would become embroiled in legal actions launched by rival bidder Eurocopter.

Mr Smith, speaking to the Oireachtas Select Committee on Justice, Equality, Defence and Women's Rights yesterday, said the Government had "no intention of going back to the marketplace". Furthermore, he rejected suggestions that he had prepared, or was preparing, a memorandum for Cabinet on the issue.

"There is nothing being prepared for the Cabinet," he told Labour TD, Mr Jack Wall.

The awarding of the largest Irish defence contract to Sikorsky in January for up to five S-92s search and rescue/ transport helicopters was quickly challenged by Franco-German firm Eurocopter.

Despite Eurocopter's claims, it is understood that the S-92 won a number of the qualifying categories and featured highly in all others against its competitors, which also included CHC Scotia Scotland and EH Industries Limited UK.

The Franco/German combine claimed the Department of Defence had abandoned its selection criteria mid-way through the fiercely competitive tender process and treated them unfairly.

Following the award, the Government sharply denied suggestions that Sikorsky's offer to carry out aircraft cargo conversions at the troubled FLS Aerospace in Dublin Airport played any role in its success. Fianna Fáil Dublin TDs lobbied heavily in favour of Sikorsky, arguing that the conversion of Boeing 767 aircraft at FLS would help to secure hundreds of the highly skilled jobs in the company.

Speaking in the Dáil late on Wednesday, the Minister said: "The offer from Sikorsky was deemed to be the most strategically and economically advantageous tender, taking account of the award criteria set out for the tender competition.

"Those criteria included functional characteristics, technical merit, all maintenance and online technical support, after-sales service, tender prices and lifecycle costs over a nominal 20-year period."

He told Fine Gael TD, Mr Alan Shatter, he expected that three search and rescue/ transport helicopters from Sikorsky would be delivered to the Aer Corps by the end of the year.

Eurocopter has already launched a bid for a High Court judicial review into its charge that the Minister had breached key elements of European Union procurement rules, and demanded key papers under the Freedom of Information Act.

Last month, the Government gave a commitment in the High Court that it would not sign the deal with Sikorsky pending the outcome of the judicial review proceedings but negotiations with Sikorsky have been continuing in the meantime. The legal proceedings will come back before the courts in mid-April.