F-35 fighter jets: Defence officials waged stealth campaign to get jets approved, auditor general report says
Photograph by: Tom Reynolds/Lockheed Martin Corp/Handout , Reuters
OTTAWA — Department of National Defence officials twisted government rules, misled ministers and Parliament, and whitewashed cost overruns and delays in a determined effort to ensure Canada purchased the F-35 stealth fighter.
Auditor General Michael Ferguson's scathing assessment, released Tuesday, puts the military's own cost estimates for Canada's involvement at $25 billion — instead of the publicly stated $16 billion — and questions assertions that Canadian industry stands to benefit from $12 billion in contracts.
The auditor general's report also says the F-35 was "clearly the fighter jet of choice" as early as 2006, and that officials intentionally played up the F-35's stealth capabilities to sidestep established purchasing guidelines.
"National Defence did not exercise the diligence that would be expected in managing a $25-billion commitment," Ferguson said. "It is important that a purchase of this size be managed rigorously and transparently."
The report is expected to usher in significant changes to the handling of the fighter program going forward, with the federal government reportedly preparing to promise more transparency and oversight into the multi-billion-dollar project.
Ferguson's report says Canada initially joined the F-35 program in 1997 not with the intention of purchasing the stealth fighter, but to ensure Canadian industry could win contracts associated with developing and producing the fighter.
That changed in 2006 when a memorandum of understanding was signed by Canada and eight other partner nations committing them to long-term participation in the project. By then, the military was knee-deep in the program.
"By the end of 2006, the (Defence) Department was actively involved in developing the F-35, and a number of activities had put in motion its eventual procurement," the audit report says.
The report says that in convincing the Conservative government to sign onto the MOU, the military talked up the potential billions in contracts Canadian industry could secure if the country continued to participate in the project.
However, "while ministers were told, correctly, that signing the 2006 MOU did not commit Canada to buy the F-35, we did not see evidence they were told that retaining industrial benefits depended on buying the F-35 as a partner in the [Joint Strike Fighter] program."
In addition, "in the majority of cases, only the most optimistic scenario was put forward, rather than a range of potential benefits that reflected the inherent uncertainties in the projections."
Defence Department officials also did not tell ministers that by signing the memorandum of understanding, the government would be hard-pressed to run a fair competition in the future to replace Canada's aging fleet of CF-18s.
Normal government procurement rules say departments must lay out their requirements so multiple companies can bid on the contracts. That, however, didn't happen with the F-35.
In fact, starting in late 2008, the report says, Defence officials "led a process to get a government decision to buy the F-35, partly in response to pressure from industry." Following Canada's signing onto the MOU in 2006, the report says, the Defence department began putting together necessary documents to support the eventual purchase of the aircraft.
To get around requirements for a competitive bidding process, officials intentionally played up the fact the F-35 was the only fifth-generation aircraft available to Canada.
In May 2010, the Public Works Department, which is supposed to provide oversight of all major government purchases, questioned the military's assertion that no other aircraft could meet Canada's requirements.
It eventually agreed to waive requirements for a competitive bidding process "if National Defence provided a letter confirming National Defence's requirement for a fifth-generation fighter and confirming that the F-35 is the only such aircraft available."
Over the four years between when the MOU was signed and the Conservative government's announcement in July 2010 that Canada would be purchasing 65 F-35s, the report says, military officials regularly downplayed or glossed over cost overruns and delays afflicting the stealth fighter program.
"Officials from National Defence who participated in the senior decision-making committees of the (Joint Strike Fighter) program were regularly informed of these problems," the report says. "Yet in briefing materials from 2006 through 2010 that we have reviewed, neither the Minister nor decision makers in National Defence and central agencies were kept informed of these problems and the associated risks of relying on the F-35 to replace the CF-18."
The report also notes "significant concerns about the completeness of cost information provided to parliamentarians."
In particular, it notes that in response to Parliamentary Budget Officer Kevin Page's estimate in March 2011 that Canada's purchase of 65 F-35s would cost $30 billion, the Defence Department "did not include estimated operating, personnel or ongoing training costs" in putting the cost at $14.7 billion.
The fact is, the report says, National Defence's own cost estimates put the program at $25 billion in June 2010.
Auditor General Michael Ferguson's scathing assessment, released Tuesday, puts the military's own cost estimates for Canada's involvement at $25 billion — instead of the publicly stated $16 billion — and questions assertions that Canadian industry stands to benefit from $12 billion in contracts.
The auditor general's report also says the F-35 was "clearly the fighter jet of choice" as early as 2006, and that officials intentionally played up the F-35's stealth capabilities to sidestep established purchasing guidelines.
"National Defence did not exercise the diligence that would be expected in managing a $25-billion commitment," Ferguson said. "It is important that a purchase of this size be managed rigorously and transparently."
The report is expected to usher in significant changes to the handling of the fighter program going forward, with the federal government reportedly preparing to promise more transparency and oversight into the multi-billion-dollar project.
Ferguson's report says Canada initially joined the F-35 program in 1997 not with the intention of purchasing the stealth fighter, but to ensure Canadian industry could win contracts associated with developing and producing the fighter.
That changed in 2006 when a memorandum of understanding was signed by Canada and eight other partner nations committing them to long-term participation in the project. By then, the military was knee-deep in the program.
"By the end of 2006, the (Defence) Department was actively involved in developing the F-35, and a number of activities had put in motion its eventual procurement," the audit report says.
The report says that in convincing the Conservative government to sign onto the MOU, the military talked up the potential billions in contracts Canadian industry could secure if the country continued to participate in the project.
However, "while ministers were told, correctly, that signing the 2006 MOU did not commit Canada to buy the F-35, we did not see evidence they were told that retaining industrial benefits depended on buying the F-35 as a partner in the [Joint Strike Fighter] program."
In addition, "in the majority of cases, only the most optimistic scenario was put forward, rather than a range of potential benefits that reflected the inherent uncertainties in the projections."
Defence Department officials also did not tell ministers that by signing the memorandum of understanding, the government would be hard-pressed to run a fair competition in the future to replace Canada's aging fleet of CF-18s.
Normal government procurement rules say departments must lay out their requirements so multiple companies can bid on the contracts. That, however, didn't happen with the F-35.
In fact, starting in late 2008, the report says, Defence officials "led a process to get a government decision to buy the F-35, partly in response to pressure from industry." Following Canada's signing onto the MOU in 2006, the report says, the Defence department began putting together necessary documents to support the eventual purchase of the aircraft.
To get around requirements for a competitive bidding process, officials intentionally played up the fact the F-35 was the only fifth-generation aircraft available to Canada.
In May 2010, the Public Works Department, which is supposed to provide oversight of all major government purchases, questioned the military's assertion that no other aircraft could meet Canada's requirements.
It eventually agreed to waive requirements for a competitive bidding process "if National Defence provided a letter confirming National Defence's requirement for a fifth-generation fighter and confirming that the F-35 is the only such aircraft available."
Over the four years between when the MOU was signed and the Conservative government's announcement in July 2010 that Canada would be purchasing 65 F-35s, the report says, military officials regularly downplayed or glossed over cost overruns and delays afflicting the stealth fighter program.
"Officials from National Defence who participated in the senior decision-making committees of the (Joint Strike Fighter) program were regularly informed of these problems," the report says. "Yet in briefing materials from 2006 through 2010 that we have reviewed, neither the Minister nor decision makers in National Defence and central agencies were kept informed of these problems and the associated risks of relying on the F-35 to replace the CF-18."
The report also notes "significant concerns about the completeness of cost information provided to parliamentarians."
In particular, it notes that in response to Parliamentary Budget Officer Kevin Page's estimate in March 2011 that Canada's purchase of 65 F-35s would cost $30 billion, the Defence Department "did not include estimated operating, personnel or ongoing training costs" in putting the cost at $14.7 billion.
The fact is, the report says, National Defence's own cost estimates put the program at $25 billion in June 2010.
SISTE:
Auditor general: F-35 funding frozen; Conservatives promise public review
Read more: http://www.canada.com/fighter+jets+Defence+officials+waged+stealth+campaign+jets+approved+auditor+general+report+says/6403024/story.html#ixzz1qzJdDr4c
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