Opposition demands F-35 be dropped after leaked Pentagon report cites more flaws

By The Canadian Press - Wednesday, March 6, 2013 at 10:04 PM - 0 Comments

OTTAWA – Opposition parties say the Harper government should exclude the F-35 from its search for replacements for Canada’s CF-18 jets after a new Pentagon report found more flaws with the stealth fighter.

A leaked evaluation in Washington criticizes the visibility in the cockpit of the multi-role fighter, and contains blunt comments from test pilots that suggest the shortcomings could get planes shot down in combat.

The design prevents pilots from looking behind them.

“The head rest is too large and will impede aft (rear) visibility and survivability during surface and air engagements,” one test pilot was quoted as saying in the U.S. Defense Department’s directorate of operational test and evaluation report.

A second pilot reportedly said visibility is crucial and any disruption “will get the pilot gunned” down in dogfights.

The document was leaked and posted online Wednesday.

Pilots have also cited concerns about the sophisticated helmet that’s supposed to display data, saying there are flickering and non-existent readings.

Vocal critics, such as aviation expert Winslow Wheeler, say the F-35 is not ready for combat training, let alone combat.

Both the New Democrat and Liberal defence critics say the stealth fighter should be dropped from consideration.

A spokeswoman for Public Works Minister Rona Ambrose accused the Opposition of playing politics.

Michelle Bakos said it’s “shameful that the opposition is trying to undermine the National Fighter Procurement Secretariat.”

The government is committed to a thorough review, she said.

“The plan will ensure that the Royal Canadian Air Force acquires the fighter aircraft it needs to complete the missions asked of it,” said Bakos “The Harper Government is committed to examining all options and has made significant progress.”

The Harper government has asked a panel of independent experts to ovesee an evaluation of all the options on the market to replace the 1980s vintage CF-18 fighters to ensure the process is rigourous and fair.

Once the evaluation is complete, the government will decide whether it will hold a full-fledged competition.

The Public Works secretariat overseeing the fighter replacement recently sent a questionnaire to the five companies that could be bidding, asking for detailed information and plans, including costing and availability.

Last year’s auditor general report, which accused National Defence of hiding the full cost and Public Works of not following the proper process, forced a reset of the program.

The Lockheed Martin-built F-35, with a history of development delays and cost overruns, is still considered a strong contender. The Harper government initially chose it in 2010, and has expended much political capital defending the decision.

A spokesman for Lockheed Martin said the stealth jet has been declared ready for training, and that the company is “maturing” its operations and maintenance procedures.

Peter Simmons defended the program.

“The (U.S.)Air Force concluded through its Operational Utility Evaluation that the F-35 is ready to conduct safe and effective flying training operations,” said Simmons.

NDP procurement critic Matthew Kellway, however, said Lockheed Martin has a brochure while the other competitors have real planes.

“I think the challenge for the government now is: How do you run a legitimate competition that pits a paper fighter against (other) real, operational fighter jets that can be flown and tested?” he said.

One of the options, long considered, is extending the life of the CF-18s beyond 2020 until the stealth fighter is fully tested and ready for operations.

Engineers would have to find a way to extend the CF-18 airframe life, technically complex and expensive.

New Democrat defence critic Jack Harris says that given the latest report by the Pentagon, an extension is unrealistic.

“There are planes that are already available and flying,” he said.

“The government needs to have a good, hard look at what they’ve committed themselves and say this plane is not going to be available to us when we need it.”

Note to readers: This is a corrected story. An earlier version incorrectly said a panel of experts would be producing an evaluation report. An earlier version also attributed NDP procurement critic Matthew Kellway’s comments to Liberal MP John McKay.

The F-35: The Conservatives were ‘dead right’

By Aaron Wherry - Tuesday, January 22, 2013 at 12:53 PM - 0 Comments

You might have thought that the auditor general’s report and the KPMG audit amounted to a repudiation of the Harper government’s accounting for the F-35. Gary Goodyear would like to assure you otherwise.

“I can tell you the F-35 is another file – now we see KPMG come out with a report that couldn’t be more plain and simple – that Conservatives were dead right and that those planes would cost $9 billion and that the service contract for 20 years would be $16 billion.”

Setting aside everything the Conservatives said about the F-35 beyond the cost estimate, Mr. Goodyear seems to have chosen a particular set of terms on which to define the government’s correctness.

Granted, this is all a bit confusing, but let’s go over this one more time. The stated acquisition cost does, indeed, remain at $9 billion: that’s the budget the government says it will adhere to in purchasing new fighter jets. But $16 billion was once thought to be the total cost for acquisition and maintenance—in March 2011, the government tabled an estimate of $14.7 billion. The KPMG audit, meanwhile, identified $15.2 billion in “sustainment” costs, in addition to that $9 billion for acquisition.

But the “life-cycle” cost estimate was a particular concern of the auditor general and here, so far as the math is concerned, is the real trouble.

Treasury Board policies require consideration of all relevant costs over the useful life of equipment, not just the initial acquisition or basic contract cost. Careful planning and full costing are needed to ensure that all of the elements required to provide the needed capability come together in a timely and predictable way and that adequate funds are available to support the equipment over the long term. We examined whether National Defence conducted full life-cycle costing related to its Next Generation Fighter Capability project and whether cost estimates were complete, supported, and validated, using the best information available at the time. Estimating future full life-cycle costs for military equipment, especially the F-35, is challenging…

We have a number of observations regarding the life-cycle costing for the F-35. First, costs have not been fully presented in relation to the life of the aircraft. The estimated life expectancy of the F-35 is about 8,000 flying hours, or about 36 years based on predicted usage. National Defence plans to operate the fleet for at least that long. It is able to estimate costs over 36 years. We recognize that long-term estimates are highly sensitive to assumptions about future costs as well as to currency exchange rates. However, in presenting costs to government decision makers and to Parliament, National Defence estimated life-cycle costs over 20 years. This practice understates operating, personnel, and sustainment costs, as well as some capital costs, because the time period is shorter than the aircraft’s estimated life expectancy. The JSF Program Office provided National Defence with projected sustainment costs over 36 years…

We also have significant concerns about the completeness of cost information provided to parliamentarians. In March 2011, National Defence responded publicly to the Parliamentary Budget Officer’s report. This response did not include estimated operating, personnel, or ongoing training costs (Exhibit 2.6). Also, we observed that National Defence told parliamentarians that cost data provided by US authorities had been validated by US experts and partner countries, which was not accurate at the time. At the time of its response, National Defence knew the costs were likely to increase but did not so inform parliamentarians.

As Andrew Coyne has pointed out, National Defence agreed with the auditor general in 2010, on a separate file, that life-cycle costing was appropriate.

As noted above, in responding to the parliamentary budget officer, the government tabled an estimate of $14.7 billion over 20 years for capital, acquisition and sustainment costs.

According to the auditor general, National Defence had an internal estimate in June 2010 that covered capital, acquisition, maintenance, personnel and operating costs over 20 years. That estimate came to $25.1 billion. (Andrew has noted that a $25 billion estimate was briefly, and fleetingly, acknowledged in June 2010, only to disappear from the debate soon thereafter.)

According to KPMG, an estimate that covers capital, acquisition, maintenance, personnel, operating and development costs comes to $45.8 billion over 42 years.

So we have three sets of numbers: $15 to $16 billion over 20 years (the publicly debated cost), $25.1 billion over 20 years (National Defence’s internal estimate) and $45.8 billion over 42 years (the KPMG estimate).

But as Andrew has argued, it is difficult to compare the KPMG estimate to the previously acknowledged estimate because the KPMG audit includes money and time for development. If you remove the development figures from the KPMG audit, you get an estimate of $45.2 billion over 30 years.

For the sake of comparison, it is probably most accurate to say that the stated cost has gone from $15 to $16 billion over 20 years to $45.2 billion over 30 years. (Peter MacKay’s office has waded into this debate and Colin Horgan has parsed it here.)

Dan Ross on the F-35

By Aaron Wherry - Monday, January 21, 2013 at 5:20 PM - 0 Comments

Dan Ross, the former assistant deputy minister of defence materiel, tells Postmedia that the Harper government is to blame for the handling of the F-35.

Ferguson said officials failed to communicate the F-35’s risks, including escalating costs and schedule delays, to Parliament and decision-makers. Ross says National Defence had all the information — but the Harper government wouldn’t let officials go public with it. “For seven and a half years, whenever a journalist asked to do an interview, it was denied,” he says. “The Defence Department doesn’t communicate and it asks the (Prime Minister’s Office) for permission and they say no, and no one ever communicates. If we’d had a tech brief bi-weekly that had the good news and the bad news, the facts, went through costing in great detail, I don’t think you’d be in the same place,” he says.

In the lead-up to the 2011 federal election, Parliamentary Budget Officer Kevin Page asked officials in Ross’s section to discuss the true cost of the F-35 program as he prepared a report about the stealth fighter’s pricetag for Parliament. Ross says he never received approval from above for the meeting. “At the end of the day, communications in federal governments is a political decision,” he says. “Bureaucrats don’t get to decide.”

Lee Berthiaume previously detailed how defence officials avoided the Parliamentary Budget Officer in 2011. Mr. Ross appeared at a news conference in March 2011 to attempt to counter the PBO’s report on the F-35.

Harper on the F-35

By Aaron Wherry - Saturday, December 22, 2012 at 3:26 PM - 0 Comments

From the Prime Minister’s interview with Global, Mr. Harper’s explanation of the F-35 procurement.

Dawna Friesen: Let’s talk fighter jets for a moment.  I don’t want to go through all of the numbers because I think we’ve done that.  What I’m wondering is why wasn’t there more transparency about the full cost of the fighter jet program right from the beginning, and do you wish in retrospect that there had been?

Stephen Harper: Well I think we’ve been very clear about what the numbers are that we projected, which actually have been validated by the recent KPMG report. But what the Auditor General said in the spring was he looked at the process as it had gone to this point and let’s remember we’re very early in the process. We haven’t spent any money on acquiring the next generation of fighter jets, but he said that he thought that both the costs and the options analysis had not been as thorough as it should be. So, based on that, the government has reset those parts of the process and we’re going through that again.  As I say, I think the cost numbers from the KPMG report look in fact, identical to what the government has budgeted but they’ll also do an options analysis.  I think what happened here, I think it’s very easy to explain the process whether it’s right or wrong, is that you know, back in 1997, the previous government made a decision with an international … with its allies to be involved in an international consortium to actually develop the new fighter jet and to make sure that Canadian industry was part and parcel of the development of that airplane, as opposed to coming in after the fact and trying to get what we can an industrial and regional benefits.

Dawna Friesen: And so there would be Canadian jobs?

Stephen Harper: There would be Canadian jobs, a much more profound position of Canada in the worldwide supply chain for this aircraft. I think because of that, an assumption was just made all along the way that of course, if we’re developing this plane, this will be the plane we’re purchasing. It’s not an unreasonable assumption, but I think what the Auditor General pointed out is because of that, National Defence had not done as thorough an analysis as it should on some aspects of this, both the costs and options and that’s what we’re now doing.  And we will continue to do that. And we’ve been very clear; we’ve set up a multi-stage process. We set up some independent expert panels and we’ll go through this step by step to make sure we are making the right purchases. The CF-18, the current fighter jet fleet will start to reach the end of its life in the middle to end of this decade and we’ll make sure both that we have aircraft ready to go when we need that and also at the same time that Canada is involved in the development of next generation airplanes.

Colin Horgan reviews and footnotes the Prime Minister’s explanation. The Auditor General’s report on the F-35 is here.

Kevin Page on the F-35

By Aaron Wherry - Monday, December 17, 2012 at 8:00 AM - 0 Comments

The Parliamentary Budget Officer considers the F-35 experience.

Tom Clark: Let’s stick with the process for a second, from everything that you’ve seen; the process the numbers, do you believe that Canadians were deliberately misled about the costs of this program? 

Kevin Page: Well very clearly, back in 2010 when we released our report, and a year later when the AG released his report, it was clear from the AG’s report that there were numbers that existed at DND that were much higher than what was presented to Parliament. And the Canadians saw the lower set of numbers. And things were taken out of those numbers to make the number as small as possible. So in that sense they were misled, clearly they were misled. And I think that’s a failure again in leadership, both at the public service level and I think because … and a failure politically but I’m more comfortable talking about the failure at the public service level.

Mr. Page also discusses the future of his office and says he’s not been contacted about who will succeed him in March.

Mythbusting the F-35

By Aaron Wherry - Saturday, December 15, 2012 at 12:12 PM - 0 Comments

A note posted to Facebook by Chris Alexander, the parliamentary secretary to the minister of defence. (It seems to have gone out from the PMO as an internal Conservative memo on Thursday evening.)

Replacing Canada’s CF-18s – Just the Facts

Media have incorrectly reported on some aspects of the replacement of Canada’s CF-18s. Here are the facts:

Myth 1: Costs have risen from $9 billion to $45 billion.

Fact 1: Our government has set a $9 billion budget for the purchase of new fighter aircraft. This amount is for the purchase of new aircraft and will not change. The remaining costs are the long-term costs associated with owning and flying these planes, such as maintenance, fuel and salaries. These costs are now presented over 42 years, as compared to 20 years previously. It goes without saying that the dollar figure for operating and sustainment costs for more years will be proportionately higher.

Myth 2: The Auditor General’s report increased the costs from $16 billion to $25 billion

Fact 2: The Auditor General recommended that operating costs be included in the total lifecycle cost estimates, resulting in the apparent “increase”. This is not new money as DND currently spends this money for our CF-18 fleet. These costs are currently being incurred by our fleet of CF-18s and will be incurred by whichever aircraft is chosen to replace the current fleet.

Myth 3: The review of options is a competition

Fact 3: We have a seven point plan that has reset the process to replace Canada’s aging CF-18s. As part of that plan, we have released the rules that will guide the review of alternative fighter aircraft. No decision on a replacement will be made until that work is complete.

Myth 4: Costs are rising, so $9 billion will not be enough to pay for these aircraft.

Fact 4: We have identified $9 billion for the purchase of replacement aircraft. We will not exceed that amount.

Myth 5: Canada is leaving the Joint Strike Fighter development program.

Fact 5: Canada will not end Canadian industrial access to F-35 contracts before the Seven Point Plan is complete and a decision on the replacement of Canada’s CF-18s has been made.

Myth 6: The government did not follow the rules when it released costs over 20 years.

Fact 6: Previously lifecycle costing was done over 20 years, consistent with long-held practices for this type of acquisition. The Auditor General recommended extending that time frame to cover the complete costs over the full life cycle; we complied by adopting the aircraft’s entire program life of 42 years.

Myth 7: The options analysis will find that the F-35 is the only viable option because it is the only plane that meets the Statement of Requirements.

Fact: 7: The original mandatory requirements for this purchase (known as the Statement of Requirements) have been set-aside. Once the options analysis is complete, a determination will be made as to whether a new statement is necessary.

Myth 8: Canadian companies have only received benefits equal to 1% of the total cost of the contract.

Fact 8: Over 70 Canadian companies have won nearly $450 million in contracts already. We believe our world leading aerospace industry will be able to continue to compete for and win contracts in the global marketplace.

Myth 1 seems to depend on the meaning of the word “risen”—the stated cost of the procurement has increased from $9 billion (for acquiring the planes) and a total of $16 billion (for acquisition, operation and sustainment) to $45.8 billion (for development, acquisition, operation and sustainment), owing to an acknowledgement and calculation of a full life-cycle costing. The timeline of 42 years is problematic though. For the sake of comparing the previous estimate for acquisition, operations and maintenance to the current estimate for acquisition, operations and maintenance, the price has gone from $16-billion over 20 years to $45.2 billion over 30 years.

As for Myth 6, the auditor general’s report in April states that “Treasury Board policies require consideration of all relevant costs over the useful life of equipment, not just the initial acquisition or basic contract cost.” And, as Andrew Coyne, has pointed out, National Defence agreed with the auditor general in 2010 that life-cycle costing was appropriate. Of the life-cycle costing for the F-35, the auditor general found in April that “costs have not been fully presented in relation to the life of the aircraft. The estimated life expectancy of the F-35 is about 8,000 flying hours, or about 36 years based on predicted usage. National Defence plans to operate the fleet for at least that long. It is able to estimate costs over 36 years. We recognize that long-term estimates are highly sensitive to assumptions about future costs as well as to currency exchange rates. However, in presenting costs to government decision makers and to Parliament, National Defence estimated life-cycle costs over 20 years. This practice understates operating, personnel, and sustainment costs, as well as some capital costs, because the time period is shorter than the aircraft’s estimated life expectancy. The JSF Program Office provided National Defence with projected sustainment costs over 36 years.”

In the defence of Myth 8, 450 million is one percent of 45 billion. There is the potential for more contracts for Canadian companies, but as Canadian Press reported this week, there are doubts about how much Canadian companies will get.

Q&A with Thomas Mulcair

By Aaron Wherry - Friday, December 14, 2012 at 2:38 PM - 0 Comments

I sat down with NDP leader Thomas Mulcair in the leader of the opposition’s office yesterday. Here is a transcript of our conversation, slightly abridged and edited.

How do you see the last year for you and the NDP? Do you feel you’re winning? Do you feel you’re getting somewhere?

We’re doing well. And the Abacus poll was confirmation of that … I dare say that we’ve been through a rough 18-month cycle. I mean, we started off in 2011 with a huge high, May 2. We realized then … It was interesting. I don’t think I’ve told too many people this story. I sat down with Jack shortly after, like two, three days after the election and when we became official opposition, he was asking me to become opposition House leader, it was a great feather in my cap. And then he said something to me that was quite interesting, he said, you know, this is a huge challenge. And I was just expecting him to be so effusive with the breakthrough and everything and he said, no, no, this is going to be a huge challenge. So then the huge challenge became all the bigger with his loss. And then we had to really work hard through a long, seven-month leadership  where we were missing a lot of our frontbenchers who were in the campaign and then we had to rebuild.

When I held the little press conference up in Toronto after the leadership, the next day, I used an expression that came to spontaneously, I said, we’re going to have a cascading transition under the sign of continuity. So I was so lucky, like somebody like [chief of staff to Jack Layton] Anne [McGrath] stayed with me long enough to hand off to [current chief of staff] Raoul [Gebert], overlapped with Raoul … So a couple of the other changes that took place were like that. We brought in a few people, the core team you still recognize when you see them around us. And so it’s been a huge challenge in terms of the structure and the organization, but some of the good points for me after becoming leader: in August I was doing my parish visit in Quebec, I would be in places like Vercheres—Les Patriotes, where Sana Hassainia is our MP, and be in a community hall on a Sunday morning with several hundred people who had all paid as part of a fundraiser, but she had municipal officials there, you know the mayors and the councillors, she had community groups, she had the schools and stuff like that. They’re getting settled in, they’re putting down roots. The same day I was at a corn roast for Helene LeBlanc and she had about 600 people and a lot of the cultural communities, so they’re setting down roots, they’re doing their fundraising, they’re getting well known in their communities, they’re in their local papers, so that part’s coming together.

Come this spring, we’re pivoting, right? We’re going to be entering the third year. And so the consolidation phase has to be finished. We’ve got to start the preparatory phase for the next campaign. Continue…

Out with the old F-35 logic, in with the new

By Aaron Wherry - Friday, December 14, 2012 at 11:34 AM - 0 Comments

Colin Horgan finds that an old accounting for the F-35 procurement seems to have disappeared.

Meanwhile, through Colin, National Defence attempts to rebut Andrew Coyne’s clarification of the F-35 lifecycle timeline.

The silver lining in the F-35 fiasco

By macleans.ca - Thursday, December 13, 2012 at 4:56 PM - 0 Comments

(Terri Hallenbeck, Burlington Free Press/AP)

Continue…

The F-35: Kind of almost like a flying national television, radio and Internet network

By Aaron Wherry - Thursday, December 13, 2012 at 9:00 AM - 0 Comments

A la Dean Del Mastro, Conservative MP Bob Zimmer attempts to put the F-35 in perspective.

A billion a year for the F-35 (over 42 years) or a Bil a year for CBC(indefinite period)..hmmm…best plane for our RCAF would be my choice!

As noted, the 42-year estimate seems not only to change the end date, but also to introduce a new start date.

F-35: Hubris is a Greek word that means ‘what just happened’

By Paul Wells - Wednesday, December 12, 2012 at 11:45 PM - 0 Comments

Let’s start with the email Dimitri Soudas, a former press secretary to the Prime Minister, sent from the Prime Minister’s Office on Aug. 25, 2010:

“On 24 August, two CF-18 Hornet fighter aircraft were launched and visually identified 2 Russian aircraft, the TU-95 Bear, approximately 120 nautical miles north of Inuvik, Northwest Territories. At their closest point, the Russian aircraft were 30 nautical miles from Canadian soil. The CF-18s shadowed the Bear aircraft until they turned around. The two CF-18s came from 4 Wing Cold Lake, Alberta.

 ”Thanks to the rapid response of the Canadian Forces, at no time did the Russian aircraft enter sovereign Canadian airspace.

 ”We are happy to report that CF aircraft returned to their base without incident….

 ”The CF-18 is an incredible aircraft that enables our Forces to meet Russian challenges in our North. That proud tradition will continue after the retirement of the CF-18 fleet as the new, highly capable and technologically-advanced F-35 comes into service. It is the best plane our Government could provide our Forces, and when you are a pilot staring down Russian long range bombers, that’s an important fact to remember.”

Never mind that the email contained an industrial quantity of bullshit; on a day like today, if we let that slow us down we will never get anywhere. Note, instead, the tone — “when you are a pilot staring down Russian long range bombers;” the assumption, too ludicrous to state outright but there all the same, that if our lonely flyboys don’t stare down the Russians they will be dropping their lethal payload on Edmonton any minute now; and most importantly, the casually assumed identification with the men and women in uniform, who actually do face danger whenever they taxi down a runway, hardly ever from an external enemy, but routinely from altitude, velocity, thin air and the immense hurtling canisters of inflammable liquid upon which they are perched.

This is serious business, the Harper government has said in one way or another a thousand times. They got at least that much right. It is so serious that one of the distinguishing characteristics of most professionals in uniform is an elevated degree of humility, because if you get too far up your own backside you will miss information that could cost lives. That level of humility helps explain why, immediately after Soudas sent his Top Gun email and the Sun papers began a fun week trying to figure out how to spell “Russki,” NORAD put out a news release stating for the record that the Russians had done nothing untoward. “Both Russia and NORAD routinely exercise their capability to operate in the North,” the people who actually wear uniforms and actually stare at bombers wrote. “These exercises are important to both NORAD and Russia and are not cause for alarm.”

There is a straight line from that day to today, when Peter MacKay should be hanging his head in shame and the Prime Minister of Canada with him, but instead they put on the kind of asinine spectacle that has my very even-tempered colleague Geddes plainly struggling to contain his temper. That line is drawn along the hard rule of a simplistic assumption that has been pervasive in this government: that because Conservatives like soldiers and pilots and airplanes, and the Liberals don’t, then the Conservatives will make correct decisions and any critic, anywhere, must therefore be a Liberal and therefore — what’s the word? — treasonous.

Stéphane Dion used to ask about the treatment of Afghan prisoners who were legally a Canadian responsibility. Stephen Harper used to say Dion cared more about the Taliban than about Canadian troops. The details of the file cost Gordon O’Connor his job as defence minister, and incidentally, on the ground in Afghanistan, real Canadian troops were scrambling to adjust, day after day after day, to meet and reconcile two requirements they, at least, took very seriously: the need to keep large numbers of potential bad guys out of circulation, and the need to respect those prisoners’ most elementary human rights. Which meant Stéphane Dion had a point.

Michael Ignatieff voted to defeat the government in the spring of 2011, and then Ignatieff led his party to historic defeat and he lost his own seat and ho-ho, isn’t it fun, but the really funny thing is that what made Ignatieff vote the way he did was grave concern over the cost of F-35 fighters and the government’s continued snit about even being asked to consider the question. The Canadian people voted the way they did, and there was probably real insight in their decision that the Liberals should be pushed further from power rather than invited closer to it. But if the Conservatives had “pressed the reset button” 20 months ago instead of today, then real pilots who have to stare down real threats would be 20 months closer to real equipment that might really help. Instead the pilots’ friends at Langevin have done the pilots a real disservice.

Every once in a while the government does listen to an opposition member, or a critic outside politics. It does reconcile its vision of the world with others’. That’s been an important part of Stephen Harper’s political longevity, too rarely recognized. But there was never any real chance that it would do so on a military procurement file until it was far, far too late, because Conservatives like soldiers and pilots and airplanes. This is how your strengths become weaknesses. There should be a designated full-time devil’s advocate in the PMO, somebody the prime minister trusts a lot and fears a little. The person should argue, every day, that the government might be wrong. We used to have a civil service to do that, but those days are gone. On odd days, the designated full-time devil’s advocate could preface his remarks by saying, “I’m not really the devil’s advocate, you know. I’m the Queen’s, and the Canadian people’s, and yours too, if you’re smart.”

The reset button

By Aaron Wherry - Wednesday, December 12, 2012 at 10:05 PM - 0 Comments

John Geddes observes Peter MacKay’s no good, very bad day.

He might have made it easier to hear his answers without wincing had he just admitted to past mistakes. Failing that mature, obvious response, he might have clung to a fragment of dignity by resolving at least not to drag Canadian men and women in uniform into it.

But no. His couldn’t restrain himself. He couldn’t resist bringing up his concern for the troops when pointedly asked if he had any regrets about his past harsh words toward critics who raised what turned out to be entirely valid concerns about the F-35 program.

Andrew Coyne fumes at the latest attempt to present the numbers more charitably.

The new line, as expressed in government documents and repeated by the Defence minister, Peter MacKay, is that the planes will cost $45.8-billion “over 42 years.” Not 20 years, or 30 years, but 42 years. And then the spin: it was a billion dollars a year before, it’s pretty much a billion dollars a years now. So you see? Nothing’s changed. Except it isn’t 42 years. Not in any comparable sense. The 20 years used in previous cost estimates was the (supposed) service life of the planes: that is, how long they’re expected to be in use, after delivery. KMPG’s report, as I said, assumed a service life of 30 years. So to compare apples to apples, you would have to say the planes are now projected to cost $45-billion over 30 years.

How does the government get 42 years? By adding in 12 years for “development and acquisition,” from the decision to acquire the planes in 2010 to the delivery of the last plane in 2022. No previous estimate included development costs. And indeed they add next to nothing to the total: just $565-million. But by tacking on another 12 years, they allow the government to spread the cost over a much longer time frame, and make the annual cost of the planes seem much lower than it is.

More from the Canadian Press, Postmedia, Global and CBC. And Dale Smith reviews the evening chat shows, including Chris Alexander’s latest effort.

Meanwhile, here are the exchanges between Thomas Mulcair, Bob Rae and the Prime Minister during QP this afternoon. Continue…

A clearer path for fighter jets, but a grim day for Peter MacKay

By John Geddes - Wednesday, December 12, 2012 at 6:54 PM - 0 Comments

It was painful to listen to Defence Minister Peter MacKay this afternoon as he faced repeated questions from reporters on whether he has any regrets about his handling of the government’s program to buy F-35 fighter jets.

Today’s news, not surprisingly, is that the problem-plagued Lockheed Martin jet is only one of several whose costly tires the government will soon be kicking. And so pretty much everything MacKay has ever said about the necessity and inevitability of the F-35 procurement has proven to be dead wrong.

He might have made it easier to hear his answers without wincing had he just admitted to past mistakes. Failing that mature, obvious response, he might have clung to a fragment of dignity by resolving at least not to drag Canadian men and women in uniform into it.

Continue…

The F-35 audit

By Aaron Wherry - Wednesday, December 12, 2012 at 3:34 PM - 0 Comments

The “Next Generation Fighter Capability Annual Update” is here. The first CP dispatch from the official briefing is here.

A long-awaited KPMG report on the F-35 purchase says National Defence did not build a big enough financial cushion into the plan. It says the $9 billion the department set aside may not be enough to pay for the planned 65 jets.

The report says uncertainties in the oft-delayed program could force the air force to cut the number of planes to 55 — or force the Conservatives to up the purchase amount by between $1.5 billion and $2.5 billion. The Conservatives have said the $9 billion figure is carved in stone.

The terms of reference for the “evaluation of options” is here. A status report on the seven-point plan is here. And the official announcement of all this is here.

Ottawa ‘hits reset’ on new jet fighters; report warns of soaring costs

By The Canadian Press - Wednesday, December 12, 2012 at 3:32 PM - 0 Comments

OTTAWA – Canada’s public works minister says the federal government has “hit the reset button” on its controversial efforts to replace Canada’s aging fighter-jet fleet.

Rona Ambrose says the entire process is being reviewed in the face of a long-awaited KPMG report that warns of the soaring cost of the planned purchase of high-tech F-35 stealth fighters.

The report says the lifetime cost of owning the Lockheed Martin-built F-35s is estimated at $45.8 billion over 42 years.

The report says National Defence did not build a big enough financial cushion into the plan and that the $9 billion the department set aside may not be enough to pay for the planned 65 jets.

Ambrose and Defence Minister Peter MacKay are both insisting no decision will be made until the review is complete.

The KPMG report says uncertainties in the oft-delayed program could force the air force to cut the number of planes to 55 — or force the Conservatives to up the purchase amount by between $1.5 billion and $2.5 billion.

The Conservatives have said the $9 billion figure is carved in stone.

But the various cost figures cited in a series of reports released today are based on a number of variables, including the notion that other allied nations will buy as many jets as they’ve promised.

The F-35: The way we were

By Aaron Wherry - Wednesday, December 12, 2012 at 1:07 PM - 0 Comments

Ahead of the release of the KPMG audit, here is the transcript of the September 15, 2010 meeting of the national defence committee, at which Peter MacKay, Rona Ambrose, Tony Clement, assistant deputy minister Dan Ross, assistant deputy minister Tom Ring and Lieutenant-General J.P.A. Deschamps appeared to discuss the F-35. Two months earlier, the Harper government had announced it was “acquiring the fifth generation Joint Strike Fighter F-35 aircraft.”

Mr. MacKay was enthusiastic in his opening statement to the committee.

Our commitment, colleagues, to procure the F-35 is part of the overall strategy to give the Canadian Forces the tools they need in order to deliver security to Canadians…

‘Update on the Seven-Point Plan on replacing Canada’s fighter jets’

By Aaron Wherry - Wednesday, December 12, 2012 at 11:57 AM - 0 Comments

The government is promising a statement from Rona Ambrose and Peter MacKay at 3:15pm, preceded by an embargoed briefing for reporters at 1:45pm. Presumably the KPMG audit of the F-35 will be tabled in the House around the time Ms. Ambrose and Mr. MacKay are due to speak.

It’s been suggested that the House could rise for the Christmas break this evening—meaning this afternoon’s QP would be the last until January—but as of about an hour ago negotiations between the parties were not yet concluded.

The Commons: Thomas Mulcair attempts to conduct an intervention

By Aaron Wherry - Tuesday, December 11, 2012 at 7:23 PM - 0 Comments

The Scene. The leader of the opposition had asked again for the Prime Minister to account for the government’s fraught relationship with the F-35 and the Prime Minister had again reassured the leader of the opposition of the government’s intent to follow a “seven-point” plan. And Mr. Mulcair was apparently ready for this.

“Mr. Speaker, instead of following their seven-point program, they should inspire themselves with 12-point programs,” the NDP leader offered, “and start by admitting they have a problem.”

This drew some desk-thumping from the New Democrats. Continue…

What was the PM talking about?

By Aaron Wherry - Monday, December 10, 2012 at 8:28 PM - 0 Comments

After his exchange with Bob Rae this afternoon, Stephen Harper had this exchange with Thomas Mulcair (who made a rare foray beyond the leaders’ questions).

Thomas Mulcair: Mr. Speaker, the Prime Minister keeps repeating that no money has been spent on acquisition, but of course, several hundred million dollars has been spent on the F-35 fiasco. It is as if it was not real money because the product does not exist yet. The reason that it is such a fiasco is because they never defined Canada’s needs, they never went to public tender, so there is a basic question of public management involved. Are they going to go to public tender and give it to the lowest conforming bidder, yes or no?

Stephen Harper: Mr. Speaker, as I have said repeatedly, the government is following a seven-step process to ensure that Canada will have new fighter aircraft when the air force will need those aircraft. In the meantime, for some years, in fact even under the preceding government, Canada has been involved in the development of new fighter aircraft. Canadian companies, based actually in his city, have hundreds of millions of dollars of contracts for that work, and the government has no intention of ripping up those contracts. If he does, he can go explain that to the workers in Montreal.

What did Mr. Harper mean by “ripping up those contracts?” As a result of Canada’s participation in the Joint Strike Fighter program, Canadian companies were able to bid on and acquire contracts related to the F-35. Was Mr. Harper suggesting those contracts would be declared null and void if Canada pulled out of the program and decided not to buy the F-35? Was the Prime Minister indicated some kind of commitment to the F-35?

I asked the Prime Minister’s Office for an explanation: What did the Prime Minister mean when he referred to “ripping up those contracts?” Here was the response. Continue…

The Commons: Back to the future of the F-35

By Aaron Wherry - Monday, December 10, 2012 at 5:49 PM - 0 Comments

The Scene. “Will the Minister of National Defence finally admit that the jig is up,” Matthew Kellway asked, “admit he was wrong and hold an open competition?”

So the latest in jet fighter technology was damned with the language of Elizabethan times. Alas, the Defence Minister did not stand here to proclaim himself besmirched. Instead, Rona Ambrose stood to impart the talking points.

“Mr. Speaker, as you know, the National Fighter Procurement Secretariat has been set up to ensure transparency and due diligence is done before the decision is made to replace our CF-18s,” she explained. “We are committed to completing its seven-point plan and moving forward with our comprehensive and transparent approach to replacing our aging CF-18 aircraft.”

For good measure, Ms. Ambrose added a pre-emptive explanation for the decidedly larger price tag that is still to be released publicly. “When including more years in operations and maintenance cost estimates,” she said, “it goes without saying that the dollar figure will be proportionately higher.”

That such stuff went without saying seems largely to be problem here.

Of what was said, there were now a few rounds of reading into the official record the pronouncements of yesteryear. Continue…

Chris Alexander has the worst job in Ottawa

By Aaron Wherry - Monday, December 10, 2012 at 12:59 PM - 0 Comments

For whatever reason, Chris Alexander, the parliamentary secretary to the minister of defence, has been assigned the task of going on television to face questions about the F-35 on behalf of the government. This did not go very well for Mr. Alexander in August. And this did not go terribly well for Mr. Alexander on Friday. But he seemed to do a bit better on CTV’s Question Period on Sunday. At the very least, he seemed to concede some government responsibility for the pre-April 2012 impression that a decision had been made to purchase the F-35.

There were various statements in the past that amounted to commitments intentions. The situation has changed. Cost outlook has changed. The auditor general came out with a report that we had to take very seriously, earlier this year. And we accepted his recommendation. And we put in place a seven-point plan to get us to the point where a decision can be made, not just with regard to one option, but with regard to all the options, on the basis of verified costs.

Mulcair on the F-35

By Aaron Wherry - Monday, December 10, 2012 at 9:00 AM - 0 Comments

From the NDP leader’s interview with Tom Clark on the West Block.

Tom Clark: Let me take you to the other major story of the week and that is what’s coming up tomorrow, the F-35 report, the KPMG report is coming down. We basically already know what’s in it because the government has leaked most of the information. But what it comes down to is, that it’s going to cost this country about a billion dollars a year to have a fighter jet fleet. Is that an acceptable amount of money to you? 

Thomas Mulcair: The problem in this case is that they never proceeded as prudent public administrators. There are rules Tom that exist to protect the public money. And in this case, they’ve always used the half lie. They say well no money has been spent on acquisition. Well of course no money has been spent on acquisition, the plane doesn’t exist yet but you’ve spent $700 million dollars so far on the process. Seven hundred million dollars by the way is the exact sum of money required to lift every senior in Canada above the poverty line. That’s exactly how much it would take. So they are pretending that that’s not even real money. It is real money. You’re right, I mean it’s going to cost a certain amount to keep a fighter fleet and we need one. It’s part of our national defence but you proceed in the normal way of public administration. You say exactly what your needs are. For example, it has to be able to work in the arctic. Who knew the F-35 can’t work in the arctic. It has to meet Canada’s needs. We have to define what those are and then the lowest conforming bidder gets the contract. Who knew? That’s what public administration is about. The Conservatives talk a good game when it comes to public administration, public management, public money, but they’re abysmal failures when it actually comes to doing the job. And that’s what the F-35 debacle is about more than anything else. It’s a fiasco of public management and the Conservatives are going to wear this one for a long time. 

Tom Clark: So we know that they are going to be looking at alternatives but from your point of view, should the F-35 itself be off the table? Should we be only looking now at alternatives to the F-35? 

Thomas Mulcair: You define your need, you define your price range, and then you go to the lowest conforming bidder. I’m not saying anything should be off the table, that’s the mistake the Conservatives made. Even when they got caught in their series of lies the first time and they were derisive and dismissive and they were mocking anybody who dared even question them. And we didn’t know anything about this, how could we even ask questions of a great military genius like Peter MacKay. Now they’re going to have to wear it. Of course we should be looking at other options but if the F-35 can meet those criteria, that’s too but you have to say what they are. They’ve never even done that basic exercise. That’s the real problem here. We have the CF-18’s right now. There’s something called the super…that’s the Hornet. There’s something called the Super Hornet, it’s very close and a lot of the preparatory work is already done. We’ve got teams that are already prepared to do that. That would be one of the first ones I’d look at. There are other planes in the world Tom that could be looked at, but again if we haven’t even defined what our own needs are, how are you going to be able to say that you’ve got the lowest conforming bidder?

The F-35: Cheap by comparison to a national health care system

By Aaron Wherry - Monday, December 10, 2012 at 8:00 AM - 0 Comments

Dean Del Mastro attempts to put the F-35 in perspective.

If we were to assume that health care costs were contained to a 3% annual increase for the next 42 years, Canadians will spend roughly 10.88 trillion to provide care over that period of time. If we assume that John Ivison from the National Post is correct on his costing estimate on the F35 then the cost over the same time period would be .o46 trillion. That means that for every dollar spent on aerial defence and security that Canadians will spend $237 on health care, which demonstrates how perspective on these things matter.

The latest on the F-35

By Aaron Wherry - Friday, December 7, 2012 at 10:33 PM - 0 Comments

Reuters, the Canadian Press, Star, Globe and CTV report that a four-person panel will review the options for a new jet fighter and John Ivison says the price tag for the F-35 will be $45.8 billion, but John Geddes notes that a panel review is not the same as an open competition.

Among those being identified as members of the four-person panel is Philippe Lagasse, the University of Ottawa professor. Lagasse wrote for Macleans.ca about the auditor general’s report when it was released in April. He wrote again about the F-35 for us in May. He wrote about defence procurement for the Ottawa Citizen this week.