F-35 Purchase: Bureaucrats Defend How They Determined Cost Of Jets

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F35 BUREAUCRACY COSTS
Bureaucrats are defending how they came up with cost estimates for the F-35. | AP

OTTAWA - The bureaucracy fired back Tuesday at Canada's budget watchdog over his suggestion the government kept two sets of books on the multibillion-dollar purchase of new stealth-fighter jets.

Parliamentary budget officer Kevin Page said in a weekend radio interview that it seemed as if one set of books inside the Department of National Defence contained a higher cost estimate for the F-35 fighters while another, lower number was presented to the public.

"You do get the sense there were different books being kept," Page told CBC Radio's The House on Saturday.

But a senior Defence official told a parliamentary committee his department kept only one set of books, and provided the full cost of the F-35 purchase to cabinet.

"There was one book," said deputy minister Robert Fonberg.

"There was a column on the left-hand side that went to cabinet for decision-making purposes. And the government decided to communicate exactly the same way they'd communicated since 2004 on the acquisition."

The Conservative government froze spending on the defence program last month after the auditor general produced a withering report accusing National Defence of keeping Parliament in the dark about the program's spiralling problems.

Michael Ferguson's report said the public estimate of $14.7 billion does not include the expected $10 billion operational costs, such as the salaries, fuel and other commodities used to keep the aircraft flying.

A parliamentary committee is now studying that report.

In July 2010, the Conservative government signalled its intention to buy the F-35 Lightning II, insisting it was the only fighter aircraft that meets the needs of the air force.

Officials from the departments of Defence, Industry, Public Works and the Treasury Board appeared at the House of Commons public accounts committee Tuesday morning to defend the costing of the F-35 purchase.

"I think it's been very clear that this is not a standard procurement. There is uncertainty in terms of total value. We've done our best to try to provide projections to the government of what the maximum value of the opportunities might be," said Simon Kennedy, senior associate deputy minister at Industry Canada.

"Could we have perhaps given a better breakdown and provided more detailed information? We'll certainly take that to heart."

The choice has been a political lightning rod ever since with opposition parties, the parliamentary budget officer and now the auditor general questioning the price tag and the method for selection.

But another senior official said Page's initial estimate was off the mark.

"If you have got the acquisition cost wrong, you're going to wind up with an estimate that is far, far off the mark," said Kevin Lindsey, an assistant deputy minister at National Defence.

"If you get the initial acquisition cost way wrong, your total estimated cost is going to be far off the mark."

The committee is expected to hear again from Page on how he arrived at his estimate.

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