Skip to comments.The untold story of Canada's JSF deal
Posted on 12/12/2010 5:22:32 AM PST by sukhoi-30mki
The untold story of Canada's JSF deal
Canada's purchase of 65 Joint Strike Fighters is the largest military purchase in its history. It is also one of the most controversial. The deal was done without competition or even testing the aircraft against other contenders.
By David Pugliese,
The Ottawa Citizen December 11, 2010
During a late-night debate on May 27, Defence Minister Peter MacKay was on his feet to talk about the future of Canada's fighter aircraft fleet.
He was verbally sparring with NDP defence critic Jack Harris, outlining the government's moves to improve the Canadian Forces and to replace its CF-18 jets.
The world's aerospace industries were eagerly anticipating a heated competition.
"The Joint Strike Fighter program, of which Canada has already made significant investments, will see Canada participate in that program and avail itself of an aircraft that will exceed the current capability," MacKay said in the House of Commons. "This has been a magnificent aircraft."
With those brief remarks, MacKay confirmed that Canada had selected its CF-18 replacement.
BlackBerries lit up with the news.
Ninety minutes later, as the debate continued, MacKay admitted he'd misspoke. The Joint Strike Fighter was one of at least two aircraft being considered to be the military's new fighter aircraft. "I just want to be very clear on the record that the reference to the next generation of fighter aircraft does not preclude a competition," MacKay assured fellow MPs. "An open and transparent one."
A little less than two months later, MacKay would announce the government was indeed buying 65 Joint Strike Fighters, the largest and most expensive single military purchase in Canadian history. There would be no competition.
To the Air Force, it was a dream come true -- a stealth fighter on the cutting edge of technology. To critics, it was a multibillion disaster that could haunt taxpayers for a generation.
The government doesn't yet know the full costs of the fighter aircraft program. The Joint Strike Fighter -- or JSF -- is still being tested and has yet to enter into service with any military. The Harper government estimates $14 billion. One Defence Department calculation suggests it's closer to $21 billion.
Unlike other military equipment purchases -- where stipulations ensure Canadian firms receive work that equals or exceeds the money spent -- the JSF deal contains no guarantees.
Auditor General Sheila Fraser says it's a risky project.
Critics, ranging from opposition parties to organizations that want Canada to return to peacekeeping, say the purchase is based on a wing and a prayer.
In the mid-1990s, the Pentagon began to develop the Joint Strike Fighter to be a stealthy, relatively affordable, replacement to a number of existing planes.
It expected to build 3,000 fighters for the U.S. and Britain in a program that could cost up to $300 billion. If U.S. allies could be convinced to purchase the aircraft, there would be billions more in sales.
Except for the development of the atomic bomb, the JSF is considered by U.S. military officials to be the most expensive weapons program ever undertaken.
In the fall of 1996, the Pentagon asked two U.S. firms, Lockheed Martin and Boeing, to come up with an aircraft design, of which one would be selected.
Canada decided to become an "informed partner" on the project and committed $10 million U.S.
While the arrangement didn't give Canada decision-making power, it kept it in the loop on JSF development. It was also assumed it would position Canadian aerospace firms to receive future contracts from the program, according to a 1999 DND briefing note obtained by the Citizen.
In 2002, Alan Williams, then DND's assistant deputy minister for materiel, urged Canada to invest $150 million in JSF. "Our main goal was to make sure Canadian companies were in a position to get work from it," said Williams.
By then, the Pentagon had decided on Lockheed Martin's JSF model.
Williams and other DND officials emphasized to the Liberal government that investment in the JSF project didn't mean Canada had to buy the plane.
Shortly after the Conservatives came to power in 2006, it signed up for the next phase of JSF, committing $500 million over 45 years.
The Conservatives emphasized their commitment did not mean Canada would purchase the aircraft. The move was mainly to position Canadian firms to win contracts.
Still, some Air Force officers and DND bureaucrats made no secret they favoured Lockheed Martin's F-35. In May 2006, the Air Force surveyed the market and determined the JSF was the top choice. "The JSF family of aircraft provides the best available operational capabilities to meet Canadian operational requirements, while providing the longest service life and the lowest per aircraft cost of all options considered," stated the briefing note prepared by the office of Dan Ross, assistant deputy minister for materiel.
But at the time of the study, only one JSF test model existed. There was no way to prove the JSF had the lowest cost per aircraft or that it would be the cheapest to fly. (Today, only 19 JSF are in existence and the aircraft is still in tests.)
Even though the Air Force strongly favoured the JSF, its officers fully expected there would be a competition.
In the spring of 2009, Air Force officers outlined the key points for a CF-18 replacement in a document obtained by the Ottawa Citizen; in 2010, a competitive process would be held for the purchase of the planes and their long-term maintenance. The Conservative government distrusted Lockheed Martin because it had failed to deliver significant industrial benefits after Canada had purchased new transport aircraft from the firm.
At the same time, nations that had signed on for the F-35s were having second thoughts. Denmark decided to delay its selection of a new aircraft. Dutch parliamentarians called for the country to cancel its F-35 contract.
The U.S. was dealing with its own concerns. In February, Defence Secretary Robert Gates fired the Pentagon's JSF program manager.
The Pentagon was worried about rising development costs. In the spring of 2010, it informed Congress costs had climbed to as much as $95 million per plane. Another Pentagon report put the cost at $135 million.
"The JSF program has fallen short on performance over the past several years," warned Ashton Carter, the Pentagon's chief of procurement.
At DND headquarters, however, there were no such concerns. Bureaucrats and officers were moving to position the plane as Canada's new fighter aircraft.
They had a strong ally in Peter MacKay. The personable minister was well liked by senior officers and he was also seen in headquarters as a politician who didn't ask too many questions or challenge the military's equipment requests.
contract would be signed in 2012.
That summer, F-35 advocates inside DND tried to convince the Harper government to buy the aircraft without a competition, according to industry officials and government sources.
The pro-F35 group was concerned by the inroads of other aerospace firms, particularly Boeing, which had made a significant push for its advanced F-18 Super Hornet.
Boeing representatives were telling Conservative MPs they needed a competition to ensure Canada would get the best deal. "We believe we are much less expensive than the JSF," said Boeing's Glenn Erutti.
"We have industrial benefits for Canadian industry available right now."
In addition, Boeing said it could provide Canadian firms with work equal to or exceeding the money the federal government planned to spend. As part of the sales pitch, the company noted the U.S. Navy was committed to flying the Super Hornet until 2035, ensuring a supply of parts and upgrades. Other aircraft manufacturers such as BAE Systems and Saab Aerospace were also interested in making deals.
Industry representatives are still divided about the worth of the JSF. Some say the program will provide major benefits for the country's industry. Others note only a limited number of specific companies will see work.
By the fall of 2009, however, the push by DND officials for a sole source deal on the F-35 fell victim to vigorous lobbying by aerospace firms. The While Canada's allies started to ask questions about the F-35 program, there was pressure from the U.S. for Canada to buy the F-35.
Government documents would later reveal the military wanted the purchase to show Washington that Canada was committed to defence.
The Harper government tightened security as the procurement wound its way through the bureaucracy. Parliamentarians received few details about the JSF. DND would not allow those involved in the JSF program to speak to the news media, insisting that any release of details would jeopardize the procurement.
Even still, a select group was given information.
In April, Col. Randy Meiklejohn, of the directorate of aerospace requirements, told a gathering of defence industry representatives in Ottawa that the cost of the next generation fighter would be about $9 billion. The Air Force, he pointed out, had plans to have the new aircraft in service in 2017.
A senior DND official flew to the U.S. to brief industry representatives. The Americans were told the maintenance cost of the new fighter program would be $12 billion, according to the documents from the presentation obtained by the Citizen. (Later when the maintenance issue became controversial, MacKay would claim maintenance costs would be only $5 billion over 20 years.)
In May 2010, Boeing and other aerospace firms arrived in Ottawa to urge the government to hold a competition. They were too late.
By early June, Cabinet had approved the F-35 purchase. The Conservatives planned a mid-June press conference for the announcement.
But then controversy hit over the G20 and G8 summits. There were headlines about ballooning security costs and a fake lake. The government decided it was not the time to announce a multibillion fighter aircraft program.
By Friday, July 16, the government was ready. MacKay, Public Works Minister Rona Ambrose and Industry Minister Tony Clement gathered in Ottawa. To the wail of bagpipes, the ministers marched into the press conference and took their place in front of a full-size model of the F-35. Later, MacKay would pose for photos in the fake cockpit.
"The F-35 Joint Strike Fighter is the best aircraft we can provide our men and women in uniform to face and defeat the challenges of the 21st century," MacKay said.
What they didn't mention was that the F-35 had been selected without testing it against other contenders.
In the 1980s, when Canada's Air Force was looking for a new fighter jet -- eventually picking the CF-18 -- it gathered the competing aircraft at Cold Lake, Alberta, for rigorous flight tests. One military participant recalls tens of thousands of pages of aerospace evaluation data and flight test details. Among those taking part was then military pilot Laurie Hawn, now the Conservative point man on the JSF file.
But Canada decided on the JSF without testing it against competing planes. Boeing and French aircraft manufacturer Dassault would later confirm DND never asked nor received high-level performance data from them.
The developmental nature of the JSF, in itself, violated DND's criteria for a replacement aircraft. In 2006, department officials stated that any CF-18 replacement would have to be an aircraft in operation with an allied force, according to records obtained by the Citizen.
The F-35 was still being tested at the time of selection. DND officials would claim it was "operational," but that isn't true. Recently, the head of the U.S. air force voiced concern that development problems will delay the introduction of the F-35 by 2016.
Critics were also asking questions. Did it make sense to have a fighter aircraft with only one engine patrolling the Arctic when the CF-18 was selected, in part, because its two engines provided emergency backup?
Did Canada really need a sophisticated stealth fighter to protect Canadian airspace?
It was just the beginning of the JSF debate.
SUNDAY: SELING THE F-35
On July 16, Defence Minister Peter MacKay sat in the fake cockpit of an F-35 Joint Strike Fighter and said the aircraft 'is the best we can provide our men and women in uniform.' He didn't mention the F-35 had been selected without testing against the competition.
Photograph by: Chris Wattie, Reuters, Ottawa Citizen
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