One could reasonably have expected that somewhere in all the yakkity-yak the federal government used to present the new $46-billion price tag for the F-35 would have been an apology. It was after all this same Conservative cast of characters that told Canadians before the last election that the planes would cost $15-billion when the Defense Department's internal estimate was that the planes would cost at least $10-billion more. That is to mislead. And the the Defense Department number they didn't share ($25-billion) was still shy of a more accurate estimate (about $46-billion) by more than $20 billion, we now know. That's just plain incompetence.
But no...even after weeks away from the House of Commons, still no apology from the Conservatives.
That's because, despite Minister of Public Works Rona Ambrose's insistence that the government has "hit the reset button and [is] taking the time to do a complete assessment of all available options," the Tories have no true intention of "resetting" this process. It seems more likely they hit the "repeat" button, though we'll never know for sure -- like all operations performed by this government, the button was hidden behind closed doors. But certainly, this procurement remains in a tailspin.
The greatest tell is in their math. The government says $46-billion equals $25-billion equals $9-billion. And Defence Minister Peter MacKay says the KPMG independent audit validated the $9-billion number. That's just bizarre and doesn't accurately reflect what the KPMG Report does and says. The numbers were given to KPMG by the Department of National Defence. KPMG, as per its terms, was not to have an opinion of them.
But it's not just the Defence Minister. Our Prime Minister is also a proponent of the new math. Smirking, he explained to the House how $9-billion is the same as $46-billion: "It is always possible to say that something will cost more if one keeps lengthening the time span in which one is doing the analysis."
Well, no, that's not how it works. A very long list of Federal and international policies, standards and guidelines require that military equipment be costed on a lifecycle basis -- that is, from procurement to disposal. Costs don't continue to accrue beyond disposal. Of course, the Minister of Defence would want to deny this: "[I]t's the Treasury Board guidelines that we followed" he has said in his own defence.
Well, no....again. So said the Auditor General (AG) in his Spring Report on the F-35. And, that was more by way of a reminder than anything else. In 2010 it was his predecessor, Sheila Fraser -- on another matter of military procurement -- who reprimanded National Defence for its failure to follow "Treasury Board Contracting Policy" (as well as their own "Project Approval Guide"). Then came the Parliamentary Budget Officer's (PBO) Report on the F-35: same message. If there was any doubt left, the KPMG Report advises, "A life cycle cost planning document did not exist."
What the KPMG Report does validate is cause for discomfort. It tells us that there is no "substantive level of cost certainty" to the F-35 and that DND's model for assessing its cost "is not in accordance with leading practices." KPMG tells us the $46-billion dollar figure is a 50/50 proposition.
The numbers, one can be sure, only go up from here. The big upside risks include, of course, the production schedule of the F-35. Full development of the plane -- including mission systems and stealth coating -- is not scheduled until 2019. More developmental delays, fiscal challenges in the U.S. and in other partner countries are likely to be the most immediate cause of further production delays.
Perhaps the most problematic cost assumption embedded in the $46-billion number is the use of CF-18 costs for F-35 operating data. The US Department of Defence estimates F-35 costs to be, at present, 42% higher than the existing U.S, air fleet.
Other costs remain hidden in the government's secret Statement of Requirements. The basis for others, still, remains mysterious. Why assume a 30 year life cycle in this Report when the Auditor General has already advised that National Defence is planning 36 years of flying time?
Having been called out by the PBO, the AG and the official opposition, the government has delivered a report with overall cost estimates three times greater -- and lifecycle costs more than six times greater -- than any the government has acknowledged to date. And this, they tell us, is proof that they had it right all along.
The one question they won't answer is, "Why not go to an open, transparent competition to replace the CF-18?" Yes, that really was the repeat button they hit, not the reset.
Brace yourselves. We're still in a tailspin.
Follow Matthew Kellway on Twitter: www.twitter.com/MatthewKellway
What is the 2012-dollar cost per year required to get back to a zero-dollar total value in 20 years, or 40 years, or whichever timeframe you want? Why is it that nobody is willing to publish this figure? Because all see is two (and more) parties debating caricatures of each other, with figures that have no meaning and no merit, for a pathetically obvious purpose of personal gain; for seats in the Commons. All I want to see is one reasonable debate on an issue based on its merits.
So far, it appears that the next election will be an intentional spoiled ballot from me.
A cheap plane that won't do the job is no better then an expensive one that fails the same way.
If your Canadian and interested in this purchase I suggest this reading:
http://www.defenseindustrydaily.com/the-f-35s-air-to-air-capability-controversy-05089/
You will see what a fighting failure they want to put our pilots into. Pilots are very expensive btw.
"“Even without new problems, the F-35 is a ‘dog.’ If one accepts every performance promise the DoD currently makes for the aircraft, the F-35 will be: “Overweight and underpowered: at 49,500 lb (22,450kg) air-to-air take-off weight with an engine rated at 42,000 lb of thrust, it will be a significant step backward in thrust-to-weight ratio for a new fighter… "
Just one small point of many made on top of this we have to add the cost of outsourcing fueling,
the planes delicate nature and the places we want to use it in, It's single engine and short legs,
compromised stealth and the rumor China has the blueprints to the plane. Evident in the J20 nose.
This plane does nothing well and it costs an astronomical amount of money! Call France they have the plane our pilots need and deserve to have.
Jet fighters obsolescence is approaching
Drones are an add on not a substitute for maned aircraft at this point in time.
Real war breaks out watch the drones snuff it during the first few days.
Well, no, that's not how it works"
Actually it is, the planes have always cost about $1 billion per year, so no matter how you slice and dice it - every announcement has been at this cost only with different time lines or over-all breakdown.
As for an open compettion - this is just plain crazy - do you want pilots doing a mach 2 turn at 15,000 meters to have their windscreen crack because some manufacturer decided to cut costs by using cheaper plastic. Or how about we buy the Grippon and have to join NATO in a peace mission between India who have the PAK FA under development now and Pakistan who will have the much faster J-10 from China. Basically we would be grounded with our new planes.
We are a first tier country and deserve a first tier military (but the F-35 is not my choice). Articles like this want to take us back to the Chretien years where Chretien is photoed in Egypt wearing a combat helmet backward because he was too stupid militarily to know the right way.
Oh, but he put a helmet on backwards!
What happened to the fact that the previous Liberal Government started us down the path of the JSF program? We knew then that the CF18's needed replaced and the only game in town was going to be the JSF. There was a competition that seems to be forgot. Boeing competed against Lockheed for the right to build the JSF and Lockheed won.
I have one question for all the number crunchers on both sides of the argument. What has been Canada's cost on running the CF-18's from the day we signed the purchase order up to today? Only then can you really compare the numbers.
Additionally, if anyone thinks this is the first time a government has been blind sided by the folks at NDHQ on costs you are living in a fantasy world. The Arrow would be the first example and the CF5 upgrade program cancelled immediatly after we spent a billion dollars upgrading them would be another. I think we sold those planes to developing countries for 10cents on the dollar.
Unfortunetly as Politics goes we will just see all sorts of new numbers to both rationalize and dispute a new fighter while the CF18's continue to fall apart and put our pilots in danager.