Updated February 23, 2017
Title image: Royal Canadian Air Force CF-18 Hornet flies next to a U.S. Air Force BOEING KC-135 Stratotanker assigned to the 340th Expeditionary Air Refueling Squadron, while his wingman refuels, March 4, 2015, over Iraq. The Hornets are striking Da’esh targets in support of Operation Inherent Resolve. (U.S. Air Force photo by Staff Sgt. Perry Aston/RELEASED)
This week the Ministers of DEFENCE, PROCUREMENT, INNOVATION, SCIENCE, and TECHNOLOGY stood in the House of Commons to affirm their parts in the cabinet-cobbled CF-18 Super Hornet “interim fleet” acquisition. The Ministers of Global Affairs and Transport, a Quebec lieutenant, were no doubt wrapped in their own thoughts.
Nonetheless, they’re all mired in the weasel words of a political problem and sit in solidarity with the Prime Minister’s branding, exaggerated election promises to hold an open competition and at the same time exclude an obvious competitor, a problem of their own making.
The Minister of Innovation, Science, and Technology wished the Speaker happy birthday, some burst into song. Seemingly a timely diversion under questioning from the opposition. He, no doubt, is in “the return on investment” cross hairs.
He proclaimed support for Canadian Aerospace Industry and high-paying jobs. BOMBARDIER, tier suppliers, market potential and highly competitive global prospects in IRAN, for example, and CF-18 maintenance contracts are all Rubik’s cubes of different political colours amidst the TRUMP realignments yet to be unveiled.
U.S. small business set asides and access issues are always challenging under the defence production sharing arrangement, not withstanding Canada/Boeing civil aviation leveraged investments in this case. Aircraft overhaul and maintenance are contractually competitive and a political distribution challenge within Canada’s defence industrial base, depending on opportunity swings and who gets the high-tier brass ring or the investments to wear it.
In short, things have changed substantially since the days of the Prime Minister’s mandate letter in which the Minister of Innovation, Science, and Technology was instructed to fix the procurement system for the CF-18 replacement program, now moved downstream or at least till after the defence and Trump review, or even the next election and the mitigation of red ink budgets.
We all know that the House of Commons is a serious institution; it is also a chamber of drama, and a place for Members of Parliament to publicly show and stage the good work they are doing on behalf of their constituents and the people of Canada. Sometimes events and acts occur that befuddle, are laden with puffery and ambiguity undermining “authenticity” and “earnestness.”
Perhaps the Oscar Wilde play The Importance of being Earnest, a trivial comedy for serious people first performed in 1895, is a fitting reference to describe the “directed” acquisition of an “interim fleet” of CF-18 Super Hornet fighter jets to bridge a “capability gap,” described as Canada’s’ inability to “simultaneously” meet our NORAD and NATO commitments…
All the while, the defence policy review is still under “review” and the current government has decided to enter DISCUSSIONS with the U.S. supplier in the months ahead.
The question sometimes is what does this mean to the public; or is it merely a matter of trying to influence, capture public perception, displays of showmanship, and/or just overacting to grab attention even to the extent of “high fives” “crossing the floor,” “thumbs down on consular matters,” or overt gestures all in the name of repealing and relabeling the work of previous governments and at the same time claiming their inaction.
As for value for taxpayers’ money, the mandate of the Minister of Procurement and Government Services, the pitch was to get the best equipment for our Canadian Armed Forces. The F35 will be part of a subsequent “open competition and Canada will still continue with its substantial investments in the program,” thus kicking a five-year final jet selection decision well beyond the Government’s current mandate and the promise of a TRANSPARENT OPEN COMPETITION.
The Defence Minister characterized the procurement of the pre-announced “interim fleet of Hornets as an ‘investment.’” It would seem an incongruent term in the context of plugging a capability gap or even what a return on investment means, given sole sourcing before such discussions have commenced. More poignant was the $3.9 billion previously stripped from the defence 2016 budget.
It leaves very little room to for the current government to blame the previous government of botching the F35 procurement or criticize the Canadian investments they made to participate in the development program, now a state-of-the-art production aircraft with industrial benefits for Canada.
As for earnestness, a former senior Liberal Cabinet Minister in response to my question about his very ambitious targets for increasing the number of Canadian small business exports, he replied very candidly, as a member of cabinet “if I don’t do it someone else in cabinet will do it.” The cabinet was changed shortly afterwards.
On the face of it and in fairness, the current Minister of Defence has stated new measures for the existing CF-18s, expanded training and recruiting, as well as enhanced maintenance and operational measures in answer to the “CAPABILITY GAP,” whatever “that” is now or for the 5th generation future.
The appearance of cabinet solidarity on a political promise is bewildering given that “EARNEST” means showing feeling and serious intention.
It seems there is plenty of feeling but little serious intention, beyond a seat on the U.N. Security Council, GLOBAL BRANDING ENGAGEMENTS, PAY TO PLAY, and a plethora of documented broken election promises. Perhaps instead of process for process sake we are due for some openness and transparency on subsidies as well as investment returns…but that is evidently commercially and politically confidential.
Such displays of corporate cohesiveness have often resulted in cabinet changes when it comes to defence and capital equipment. Our Prime Minister is pledged to REAL CHANGE.
Competing concept cars, infrastructure, and information highways investments look out! The use of robotics helped us in space and gained Canada reputation there, however, the promised CF-18 replacement program is hardly out of the box or off the ground. That is a CREDIBILITY GAP.
Update: November 30th 2016.
Liberals Changed the fighter requirement-General. Lee Berthiaume Canadian Press: November 28th 2016 refers:
Liberals recently changed the number of fighter requirements-the Commander of the Royal Canadian Air Force Commander informed the Senate Defence Committee. The commander also said that he was not privy to the decisions behind the Policy Change.
The policy change was made subsequent to the withdrawal of CF 18’s from Iraq and to the Commander of the Air Force’s earlier testimony in April 2016 that he was comfortable with the Air Force’s current fleet of CF18s. The decision to consider the acquisition of 18 Super Hornets is the change in fighter inventory requirements.
According to the Defence Minister, the policy change was an “interim solution” to the Air Force’s “Capability Gap-until a competition could be held for the CF18 replacement.]-[The Liberals were not comfortable with the current level of risk because Canada was not capable of meeting requirements for NATO missions, to defend North America NORAD and have them available at the same time or on a moment’s notice.
The Minister reaffirmed this requirement for an interim solution in the House of Commons today-29th November 2016.
The Capability GAP and the Operational-Risk Gap seemingly provide the rationale for a “directed” procurement under the Defence Production Act.
Liberals Loiter on purchase of Super Hornets-David Pugliese-National Post in the Ottawa Citizen, November 30th 2016 (emphasis mine)
Saijan and Chief of Defence Staff General John Vance have raised the spectre of the military not having enough planes to deal with a terrorist attack […] Saijan said in the Commons that the GOVERNMENT “will not risk manage this gap”
In response to a question from the Ottawa Citizen, Public Service and Procurement Canada {PSPC} could not say when it expects the Super Hornets to arrive nor when it will begin negotiations
PSPC in consultation with the Department of National Defence and Innovation, Science and Economic Development will eventually “ENGAGE with the US GOVERNMENT and SUPER HORNET manufacturer BOEING.
After DISCUSSIONS PSPC will draft a letter of request to the U.S Government which will provide the Americans with a list of Canada’s “Capability requirements”. After a contract is signed it will take two to three years before the jets are delivered, industry sources said.
Conservative Defence critic James Bezan said the LIBERALS fabricated the “CAPABILITY GAP” to justify the purchase of the Super Hornets […] The Super Hornet purchase will allow the Liberals to DELAY a competition to acquire NEW FIGHTER JETS the conservatives have said
Editorial Note: Canada’s DEFENCE POLICY REVIEW is expected to be revealed in Spring 2017. Seemingly, the GOVERNMENT will be risk managing this operational gap until the SUPER HORNETS are delivered two to three or more years hence.
Opinion-Ottawa Citizen December 6th 2016.
How the Liberals are messing up defence spending: Cost, Liability and Time Tables are big issues. Alana Williams, former Assistant Deputy Minister of Materiel at the Department of National Defence. (emphasis mine)
The Governments Strategy to replace Canada’s CF-18s is reflective of a government that either has no comprehension of how to conduct the business of Defence Procurement or understands the business all too well-but has put- POLITICAL EXPEDIENCY ahead of the BEST INTERESTS OF THE MILITARY.
There are three fundamental problems with the decision to SOLE SOURCE for 18 Interim SUPER HORNETS….Capability GAP or Not- an open, fair and transparent competition can be concluded in a year…. The interim solution is illegal, the Government is wrong when it claims that an urgent need allows it to bypass competition….Finally a problem with acquiring the Super Hornets is the INCREMENTAL COST of such an option.
The Capital Budget of the Department of National DEFENCE is stretched to its limit-To impose upon it an EXTRA BURDEN OF BILLIONS OF DOLLARS is UNCONSCIONABLE and UNNECESSARY.
Ottawa Citizen-National Post 31st January 2017-Report on Jets Pulled from DND website-David Pugliese.
A report by Defence Research and Development Canada recommended against the purchase of an interim or bridging solution to deal with operational capability gaps, subsequently defined as the need to meet Canada’s NORAD and NATO requirements simultaneously, has been pulled.
The Liberal government has acknowledged the decision to buy the 18 Super Hornets will cost more in the long run-but blamed the previous Conservative government for bungling the CF-18 replacement.
“It is judged that given the current threat environment, the aggregate of information contained in the report speaks to the CAPABILITY of the CANADIAN ARMED FORCES and is sensitive in nature”. “For this reason, the report cannot be easily excised and will no longer be available to the public.”
The (DND) statement obtained by the Citizen did not explain how the threat environment in 2014-15 (Conservative time frame), when the report was public, was different from the situation in 2016 when the report was pulled down.
Defense Industry Daily January 30th 2017
US Deputy Secretary of Defense Bob Work has been tasked by new boss Jim Mattis to do a comparison analysis of the F-35C and F/A-18 Super Hornet The investigation’s spec tasks Work to do a review “that compares F-35C and F/A-18 E/F operational capabilities and assesses the extent that F/A-18 E/F improvements (an advanced Super Hornet) can be made in order to provide a competitive, cost effective, fighter aircraft alternative”.
In his war on costs, the Trump Administration has suggested the development of an advanced Super Hornet in order to get a better deal on defense procurements.
Defense Industry Daily 1st February 2017
While no contract details have been announced, US President Donald Trump has claimed that the Lot 10 production for 90 F-35s will be $600 million cheaper, thanks to his pressure. The comments come after weeks of hand wrangling with lead contractor Lockheed Martin over pricing.
Trump had criticized the fifth-gen fighter during his election campaign, but during his recent comments called the F-35 a “great plane” that’s “now in good shape.” Despite the detente, Trump added that Boeing will still be asked to compete for orders against the F-35 saying “they [Boeing] will be competing during the process for the rest of the planes because there are thousands of more airplanes coming.”
President Trump: Claims F35 cost reductions of $600 million. That figure suggests a $6.67 million per aircraft reduction for 90 F35’s in the Lot 10 contract-Lockheed Martin had committed to reducing to reduce the cost of the F35A to an average of $80-85 million per aircraft by Fiscal 2019, down from over $102 million last year.
The Costs of the CF18 Super Hornet-CBC Murray Brewster. (CBC-reports from Boeing St Louis and U.S. Naval Air Station Virginia, -1st February 2017)
According to Boeing Vice President the following Canadian dollar cost estimates for the Canadian “interim jet fighter sole source procurement” are a “good reflection of the ball park estimates for the “ Capability Gap requirement”, based on Pentagon data contained in U.S. DOD 2015 budget estimates.
In the aggregate, each aircraft could cost $85 million and between $115 million-$123 million inclusive of equipment, radar, engines, service and development charges. The interim replacement program of 18 CF 18 Super Hornets is in the $5-7 billion range. Canada and Boeing are still in the process of talking about “Customization options”. The eventual “Need” or “requirement” will require “U.S. Congressional Approval.”
The Canadian Global Affairs Institute have posited the view that the difference between the F35A and the CF18 Super Hornet may not be “too large” on the premise that the President of the United States is lowering costs. The Minister of Defence reiterated that there was “No price” The Defence critic suggested an open competition rather than a “sole source acquisition”. The Minister of Procurement reiterated Canada will ensure procurement of the best equipment for our ARMED FORCES.
Editorial note:
Given the need to meet NORAD and NATO requirements simultaneously, the awaited Defence Policy Review and the Canada-US relationship under the Trump Administration- Time-Lines on “customization options” and the “EVENTUAL STATEMENT of REQUIREMENTS” are the drivers of this procurement and strategy. They “Trump” cost estimates and eventual delivery of the best equipment for our ARMED FORCES at this juncture.
3rd February 2017 Defence Industry Daily.
The Canadian Government commenced talks with the Pentagon (U.S. Department of Defence) requesting delivery of CF 18 Super Hornets for their “interim capability requirement” to bridge an operational “capability gap”. The suggested acquisition cost will be between $5-7 billion over the life of the aircraft.
3rd February 2017 Ottawa Citizen–New Fighter Jets (CF 18 Super Hornets) may only fly for 12-15 years– David Pugliese.
[Defence Minister Harjit Sajjan noted in a written response to Conservative M.P. Diane Finlay: “The operational life span of the Super Hornet fleet will start at the delivery and not end before the completion of the transition to the CF 18 “permanent replacement aircraft”.] [Sajjan announced in November 2016, the Government’s decision to buy 18 Boeing Super Hornets as “interim” fighter jets until a permanent replacement for the existing CF 18 fleet could be bought.] [Conservative Defence critic James Bezan has questioned the Liberal claim that the existing CF18 aircraft are on their last legs. Military officers have stated those can operate effectively until 2025.] [Sajjan said the Government wants to get a “permanent fleet” delivered as quickly as possible with some estimates putting that by 2029 or as late as 2032.] [The Liberal Government has acknowledged the decision to buy the 18 (CF-18) Super Hornets will cost more in the long run but they haven’t provided details on what that amount might be]. [In addition Defence Department Officials had warned against buying an “interim” fighter jet. The report containing those warnings which have been on the department’s web site for more than a year was quietly removed after the Liberal Government announced its Super Hornet purchase.]
Defence Industry Daily: 6th February 2017
Lockheed Martin has announced the completion of negotiations with the Pentagon over the next batch of F35 Joint Strike Fighter Aircraft stating that President Trump’s personal efforts to get a better deal will see $728 million in savings and an 8% drop in price. The contract brings a conclusion to wrangling between Government and Industry and the agreement ensures men and women in uniform are equipped with the best technology available at the best value for the taxpayer.
http://www.lockheedmartin.com/us/news/speeches/0203-f35-lrip-10-statement.html
National Post-John Ivison, 23rd February 2017:
Ex-Air Chiefs, with countless decades of experience running Canada’s Air Force, in a letter to the Prime Minister urges the Liberals to ditch the Super Hornet interim buy-The plan to replace the CF18’s is “ill advised, costly and unnecessary” “We foresee that bringing in an interim fleet would create serious practical problems”.
Kevin Murray-Mourne is a former Trade Commissioner for Space, Aerospace, Defence and Security with the Department of External Affairs and International Trade Canada. He is a Veteran of Her Majesty’s Armed forces. He attended the Canadian Centre for Management Development, the Canadian Foreign Affairs Institute and is a Graduate of the American Management Associations Management Program.
Related Articles:
F35, IN CAPABILITY GAP BATTLE OF VICARIOUS METAPHORS AND INTERNECINE POLICY SKIRMISHES.
Withdrawal of CF-18s from NATO-Led Middle East Bombing Mission
Helpful Links:
Boeing in Canada – Boeing is dedicated to growing Canada’s economy and defence.
Canada Home – Lockheed Martin – Lockheed Martin created the IMPACT CENTRE with a vision to promote the growth of small Canadian Businesses
Lockheed Martin Canada IMPACT Centre
