Wednesday, June 15, 2016

Sajjan: F-35 consortium agreement never seen as commitment to buy

By TIM NAUMETZ, The Hill Times 

A 2002 agreement Canada signed with the U.S. and seven other countries for development of the F-35 stealth warplane was never viewed by the partners as “a commitment to buy the F-35,” Defence Minister Harjit Sajjan’s office told The Hill Times.

Meanwhile, a leading expert on military affairs said the Liberal government could make good on its 2015 election promise to exclude the F-35 stealth attack plane as it wrestles with the need to replace Canada’s aging CF-18 fighter jets, but the decision would inevitably anger “a lot of powerful people in the Pentagon.”

In the wake of reports the government may be considering a sole-source acquisition of new fighter planes to replace at last part of Canada’s fleet of roughly 80 1980s-vintage CF-18 Hornets, University of British Columbia professor Michael Byers told The Hill Times Prime Minister Justin Trudeau (Papineau, Que.) and his cabinet could either hold a competition, as Mr. Trudeau promised in the election campaign, or acquire more modern versions of the Boeing CF-18 without inviting other bids.

“Doing a fleet extension of Canada’s existing planes, Canada would buy a number of the latest model of the same plane,” Mr. Byers said, in reference to the fact Canada initially acquired the U.S. Boeing Corp. aircraft, under a previous Liberal government, coincidentally led by Justin Trudeau’s father, then prime minister Pierre Trudeau, in 1982.

“It would be like, let’s say you had a taxi fleet of Toyota Priuses that were all from 2010 and you decided to buy a sizeable number of 2016s, you’re buying the latest model of the same equipment, which means that your mechanics and your pilots don’t need to undergo the same degree of re-training,” Mr. Byers said in an interview this week.

Under his scenario, either through a sole-sourced contract with Boeing or a competition to replace part of the aging fleet whose life span was extended by the previous government to 2025 the year before the federal election, the Liberal government could still have an option in later years to acquire a smaller number of the new generation F-35 aircraft, sophisticated to the point some avionic experts refer to it as a “flying computer.”

Development delays, however, have been extensive.

U.S. Air Force news releases this month reported one of its major bases has yet to declare F-35As, the same model plane Canada was set to buy, fully combat operational.

Hill Air Force Base, Utah, also reported its wheel-shop technicians found a hydraulic tire-changing machine Lockheed Martin had supplied in 2015, along with the base’s first batch of F-35 planes, was designed to require four technicians to lift one wheel onto the changer.

The shop adapted its legacy changer to fit the heavy F-35 wheel.

Furthermore, the Eglin Air Force Base in Florida reported on May 24 that its technicians saved $84,000 by using locally manufactured parts and tools rather than those available from Lockheed Martin.

Mr. Byers noted Australia has already beefed up its similarly aging F-18 Hornet fighter jet fleet by acquiring Boeing F-18 “Super Hornets,” a more modern version of the original F-18, while waiting for the delayed Lockheed Martin F-35 to reach full operationally ready levels, as well as production levels that provide economy of scale prices Lockheed Martin promised as the plane was in early development and testing stages.

Canada in 2002 signed on with a consortium of eight other countries after the U.S. launched the Pentagon-led Joint Strike Fighter Program.

The previous year, the Pentagon conducted a prototype competition that defence giant Lockheed Martin Corp. won over Boeing Corp., for development and production of the so-called next generation of fighter jet warplanes.

In 2010, the former Conservative government announced Canada would exercise its option of acquiring a fleet of the costly planes—a total of 65 F-35 fighters with no timeline yet set for the actual purchase—but the Conservatives put the acquisition on hold in 2012 after a raging controversy over costs that had been withheld from Parliament prior to the 2011 federal election.

Former prime minister Stephen Harper (Calgary Heritage, Alta.) and his Conservatives concluded an analysis of options from among a range of fighter jet makers in 2014, including Lockheed Martin, but Parliament has received no update on the estimated cost of acquiring and operating a fleet of 65 F-35s since the last government report that year.

The 2014 update estimated a cost of $45.8 billion for acquisition, maintenance and sustainment over the fleet’s 35-year lifecycle, and the estimated price tag has since risen by at least $3 billion for acquisition and operating costs alone, due to the Canadian dollar’s lower value in exchange with the U.S. dollar.

Liberal Defence Minister Harjit Sajjan last week did not rule out the possibility that the government is set to begin replacing the declining CF-18 fleet without competitive bidding.

“The CF-18 will be extended to 2025,” Mr. Sajjan (Vancouver South, B.C.) told the House of Commons on June 7.

“We do need replacements, they should have been replaced a long time ago, we have to start the process soon because our fighters have been flying for some time, they should have been replaced,” Mr. Sajjan said.
Canada intends to pay instalment to F-35 consortium

In response to the speculation about sole-sourcing, a Lockheed Martin official raised a requirement that the Canadian aerospace industry would be able to bid on future aircraft sustainment and contracts only if Canada acquires some of the planes.

Mr. Sajjan responded Tuesday by pointing out that none of the original members of the Joint Strike Fighter Consortium are required to buy any F-35s, and Canada’s participation in the development of the plane through the consortium has led to $743 million in contacts for the Canadian aerospace industry.

“Canada remains a member of the Joint Strike Fighter program and has not notified the JSF Office about any changes to our participation,” Mr. Sajjan’s press secretary, Jordan Owens, said on behalf of Mr. Sajjan in response to questions from The Hill Times.

Ms. Owens said the government still owes an instalment to the consortium, but intends to pay it.

“To date, our participation in the JSF MOU (Joint Strike Fighter Memorandum of Understanding) has allowed companies in Canada to secure US $743 million in contracts,” the email from Ms. Owens said.

“New skills and technologies gained through access to the JSF Program have helped position Canadian industry to take advantage of other advanced aerospace and defence projects; it has always been clear that participation in the JSF MOU is not a commitment to buy the F-35.”

Canada currently has four Canadian Forces personnel assigned to the Joint Strike Fighter Office near Washington, D.C.

The Liberal campaign promise to hold a competition while excluding consideration of Lockheed Martin has come under severe criticism, including from Alan Williams, the former Department of National Defence procurement chief who was with DND when Canada joined the F-35 Joint Strike Fighter Program in 2002.

Mr. Byers said the Liberals, now having delayed a decision for seven months, could have delivered on their campaign promise by either sole-sourcing a CF-18 fleet extension with Boeing or releasing a competitive request for proposals whose maximum cost and desired type of fighter jet, along with required regional industrial benefits, would have ruled out the F-35.

The DND statement of operating requirements for the new plane could have established a maximum unit price, lower than the costly single-engine F-35, or a need for two engines, which the legacy Hornets as well as the modern version of the Boeing fighters have.

“There was nothing inherently difficult with the Liberal position in the campaign, but obviously it would require certainly annoying Lockheed Martin and by extension a lot of powerful people in the Pentagon,” Mr. Byers said.

He said the Liberals still have the option of sole-sourcing the Boeing plane, with no competition from any other bidders.

“That is my understanding, you are able to do a sole-source procurement, we do sole-source procurement for lots of things,” Mr. Byers said, referring to Conservative government procurement of long-range jet transport planes from Boeing, as well as short-haul cargo aircraft from Lockheed Martin.

“You can do this, and obviously it’s easier politically to do that when you’re simply acquiring the same model of equipment, that same type of equipment, in effect the same but a newer model,” Mr. Byers said. “It (the Super Hornet) is not a totally new plane, it’s based on the same air frame and a lot of the avionics are based on 30 years of experience and technological development at Boeing.”

The NDP has been insisting on an open competition to replace the CF-18 Hornets, with cost and capability among the required parameters.
“Either of those aircrafts might have pros and cons, but the only way to make that evaluation is to have an open and transparent competition,” said NDP MP Erin Weir.

“One of the things I find striking is that the federal government has not even put forward what those parameters would be for a competition,” said Mr. Weir (Regina-Lewvan, Sask.)

“We challenge the government, they say there haven’t been any decisions, there’s still a possibility of an open competition, but in seven months they haven’t taken any steps towards initiating such a competition,” Mr. Weir said in an interview.

“Certainly I would agree that one of those first steps is to lay out parameters of what the government is looking for, in terms of our defence requirements.”
The Hill Times