Introduction: What if the F-35 is the Right Plane, at the Right Time, for the Right Price?
Part One: Why Canada Needs An Air Force And Supersonic Fighters
Part Two: A New Generation Of Fighters
Part Three: The Joint Strike Fighter Program
Part Four: Replacing the Cf-18
Part Five: The Cost Controversy
Canada originally acquired 138 CF-18s, delivered between 1982 and 1988, with a life expectancy of 15 to 20 years, i.e. until around 2003. Accidents and retirements subsequently reduced the fleet to 101. In 2000, the government of the day announced a modernization program devoted to improving the aircraft’s combat and communications capabilities – and doubling its operational life. Modernization was aimed at keeping 80 aircraft operational until around 2017 to 2020, though the number in service today is down to 77. This meant that planning for a replacement would have to be well advanced by now (2014) if Canada were to acquire a new generation of aircraft by the time the CF-18s are due to be decommissioned.The problem of replacing aging F-18s is not unique to Canada. Some 1400 F-18 Hornets and 500 F-18 Super Hornets were produced, of which almost a thousand remain operational. In addition to the US (651) and Canada (77), Australia has 71 in service, Finland, 62, Spain 36, Kuwait 35, Switzerland 33 and Malaysia 8.
It has been argued that, by investing in the Joint Strike Fighter program, Canada committed to buying a concept rather than an actual plane, never examined alternatives, and never held a competition to choose the right plane for Canada’s needs. None of these arguments carry much weight.
- By investing in the JSF program, Canada was able to make significant input into the design of the most advanced aircraft under development.
- Nothing in the terms of the partnership obliged Canada to purchase the JSF, but it accorded Canada a preferred position if it decided to do so.
- Canada’s investment allowed it to acquire privileged information into what the JSF could do compared to alternatives.
- Alternatives were indeed considered as the Auditor General confirmed (see below).
From the analysis in Part Two, it is clear that if Canada intended to acquire a fifth-generation fighter to last until the middle of the 21st century, there was only one realistic option for the “right plane”. By investing in the JSF, Canada was well placed to exercise that option.
In 2011 and 2012, the Parliamentary Budget Officer (PBO) and the Auditor General of Canada (AG) respectively issued reports on the CF-18 replacement program. Both declared up-front that their observations were not to be viewed as conclusions regarding the operational merits of the F-35. This was a reasonable position for both to take given their mandates and areas of expertise, but it had the unfortunate effect of steering public discussion almost entirely to considerations of cost.
The focus of the AG audit was on whether the three main departments involved (National Defence, Industry Canada, and Public Works and Government Services Canada) had “applied due diligence in managing Canada’s participation in the Joint Strike Fighter Program and managing the federal decision-making process to replace the CF-18 fighter jets”.
To judge from the reception the AG report received in Parliament and in the media, it constituted “a scathing indictment” of the government’s handling of the project. But a plain reading of the report carried no such finding.
The Joint Strike Fighter (JSF) Program is unique. In this context, National Defence, as the lead department, exercised due diligence in managing Canada’s participation in the Program. National Defence managed industrial participation well (together with Industry Canada), identified and communicated risks and mitigation strategies related to JSF Program participation, and assessed options before signing the 2006 memorandum of understanding (MOU), committing Canada to the third phase of the JSF Program (production, sustainment, and follow-on development.) (Para 2.78)
What the AG found difficult to accept was that National Defence appeared to have been assuming Canada would be acquiring the F-35 before the government had actually committed to purchasing the aircraft. While not completely true, one wonders what other assumption DND officials could have entertained and acted on considering that two governments had already made three separate decisions (in 1997, 2002 and 2006) to invest a total of US$710 million in the F-35 program. In the event, the AG declared that “National Defence did not exercise due diligence in managing the process to replace the CF-18 jets.” So, DND was diligent in developing the F-35 but not diligent in choosing the F-35 to replace the CF-18.
Observations in the AG report which found fault with DND certainly reflected some old-think about how procurements should be conducted. The report observed that “sound management practices would have required that National Defence assure itself that the F-35 was a suitable, if not preferable, aircraft before further committing Canada and Canadian industry to the JSF program”. (Para 2.36) In the next paragraph, however, the report noted that DND had in fact conducted an assessment of the operational requirements for an aircraft to replace the CF-18, had reviewed five options including the F-35, had stated a strong preference for the F-35, and had summarized its conclusions in a June 2006 Operational Requirements Concept Document.
The AG was especially critical of DND’s failure to “fully inform decision makers of the implications of participation in the JSF program for the acquisition process” (2.46) or to consult PWGSC “appropriately” about these implications (2.80). But it also found PWGSC guilty of not exercising due diligence in its role as the government’s procurement authority.
Continue to: Part Five: The Cost Controversy