Translate

Monday, December 5, 2016

Allan: Gov't delay tactic isn't helping the RCAF

By: Alastair Allan

The responsibility of government is to set policy and budget for Canada’s National Defence in terms of domestic and international policy. The selection of weapon systems to meet these requirements should be left to the military professionals who must risk their lives operating these systems in combat.

Years ago, the government of the day agreed, without any commitment to purchase the aircraft, to invest in the development of the USA’s F-35 Joint Strike Fighter Program – to the tune of millions of dollars.

In return, the U.S. authorities enrolled Canada in its F-35 Industrial Benefits Program (Canadian firms would be invited to compete for program sub-contracts) and, by all accounts, it has paid off handsomely. To maintain this position, Canada recently agreed to increase its funding by approximately $30 US million dollars. The Canadian Government also chose to initiate two expensive and questionable purchase programs: A sole source contract for 18 Super F-18 Hornets as an interim measure; and a future international competition (which will include the F-35) for the balance of the requirement.

Apparently, this is supposed to satisfy election concerns that: without a competition the F-35 would be too costly; secondly, that the aircraft had not yet been certified for operational duty; and finally, that this would push any decision to the NEXT election mandate, giving the government time to re-evaluate and potentially re-spin the choices.

However, the question remains, why is a sole source contract acceptable for the purchase of Super Hornets and not the F-35? No aircraft on offer can compete operationally with the F-35. It was designed for NATO countries and literally thousands will be produced; and it has recently been certified as combat (operationally) ready. Choosing the F-35 will simplify logistics, inter-operability and fleet maintenance. Our multi-million dollar down payment would not be wasted, nor our industry penalized, as it will if a different airplane is chosen. The international competition will be seen to be a phony exercise as none of the aircraft to be considered can outperform the F-35. Other aircraft (may or may not) be cheaper, but their operational performance will be second or third rate at best.

If a sole source contract is deemed acceptable all of a sudden, the professional thing to do is to proceed with negotiations to purchase the F-35. Prices and costs can be verified by comparing US/Danish/Norwegian purchase costs. Overhead and labour costs can be confirmed by audit and a reasonable profit can be negotiated in accordance with government supply policy. This will eliminate gouging and ensure a reasonable and defensible price. If Canada is seen to be insincere in considering the F-35 aircraft it will risk losing its place in the F-35 industrial benefits program. This would be a severe blow to Canadian industry and to our reputation as a reliable business partner around the world.
---
Alastair Allan, (Retired) Assistant Deputy Minister, Science and Engineering Procurement, Department of Supply and Services (1961 to 1982). He was responsible for the procurement of the original CF-18 Fleet and the Long Range Patrol Aircraft Program (in Joint Ventures with DND and DOI).