JSF Nieuws.nl

Lockheed Martin Corp., Lockheed Martin Aeronautics Co., Fort Worth, Texas, is being awarded a not-to-exceed $17,106,385 undefinitized modification to the previously awarded F-35 Lightning II low rate initial production lot 5 contract (N00019-10-C-0002). This modification provides for the manufacture and delivery of initial air vehicle spares in support of F-35 Lightening III program LRIP lot 5 air vehicles for the Air Force. Work will be performed in Fort Worth, Texas (35 percent); El Segundo, Calif. (25 percent); Warton, United Kingdom (20 percent); Orlando, Fla. (10 percent); Nashua, N.H. (5 percent); and Baltimore, Md. (5 percent), and is expected to be completed in November 2015. Contract funds in the amount of $17,106,385 will be obligated at time of award, all of which will expire at the end of the current fiscal year. The Naval Air Systems Command, Patuxent River, Md., is the contracting activity.

Source: US Department of Defense

Lockheed Martin Corp., Lockheed Martin Aeronautics Co., Fort Worth, Texas, is being awarded a $48,000,000 cost-plus-fixed-fee, indefinite-delivery/indefinite-quantity contract (N00019-13-D-0005) to perform engineering, programmatic, and logistics tasks supporting investigations or studies to determine the feasibility, practicality, desirability, or supportability of various F-35 Lightning II air systems. Work will be performed in Fort Worth, Texas, and is expected to be completed in December 2015. Contract funds in the amount of $7,200,000 will be obligated at the time of award, none of which will expire at the end of the current fiscal year. This contract was not competitively procured pursuant to FAR 6.302-1. The Naval Air Systems Command, Patuxent River, Md., is the contracting activity.

Source: US Department of Defense

Lockheed Martin Corp., Lockheed Martin Aeronautics Co., Fort Worth, Texas, is being awarded a not-to-exceed $3,677,916,910 undefinitized modification to the previously awarded F-35 Lightning II low rate initial production lot 6 advance acquisition contract (N00019-11-C-0083) for the procurement of 18 conventional take-off and landing aircraft for the Air Force; six short take-off vertical landing aircraft for the Marine Corps; and seven Carrier Variant aircraft for the Navy. In addition, this modification provides for all associated ancillary mission equipment. Work will be performed in Fort Worth, Texas (35percent); El Segundo, Calif. (25 percent); Warton, United Kingdom (20 percent); Orlando, Fla. (10 percent); Nashua, N.H. (5 percent); and Baltimore, Md. (5 percent), and is expected to be completed in February 2015. Contract funds in the amount of $1,838,590,663 will be obligated at time of award, none of which will expire at the end of the current fiscal year. The Naval Air Systems Command, Patuxent River, Md., is the contracting activity

Lockheed Martin Corp., Lockheed Martin Aeronautics Co., Fort Worth, Texas, is being awarded a not-to-exceed $753,420,000 undefinitized modification to the previously awarded F-35 Lightning II low rate initial production lot 6 advance acquisition contract (N00019-11-C-0083) to provide non-recurring sustainment and logistics support for delivered and projected air systems. This modification includes site stand-up and depot activation activities and the procurement of Autonomic Logistics Information System hardware and software; training systems; support equipment and spares. Work will be performed in Fort Worth, Texas (35 percent); El Segundo, Calif. (25 percent); Warton, United Kingdom (20 percent); Orlando, Fla. (10 percent); Nashua, N.H. (5 percent); and Baltimore, Md. (5 percent), and is expected to be completed in December 2015. Contract funds in the amount of $375,160,000 will be obligated at time of award, none of which will expire at the end of the current fiscal year. The Naval Air Systems Command, Patuxent River, Md., is the contracting activity.

Lockheed Martin Corp., Lockheed Martin Aeronautics Co., Fort Worth, Texas, is being awarded a not-to-exceed $374,495,232 undefinitized modification to the previously awarded F-35 Lightning II low rate initial production lot 6 advance acquisition contract (N00019-11-C-0083) the manufacture and delivery of initial air vehicle spares in support of 60 low rate initial production lot VI and VII air vehicles (37 Air Force conventional take-off and landing (CTOL) aircraft; 12 Marine Corps short take-off vertical landing aircraft; and 11 Navy Carrier Variant aircraft. Work will be performed in Fort Worth, Texas (35 percent); El Segundo, Calif. (25 percent); Warton, United Kingdom (20 percent); Orlando, Fla. (10 percent); Nashua, N.H. (5 percent); and Baltimore, Md. (5 percent), and is expected to be completed in November 2015. Contract funds in the amount of $374,495,232 will be obligated at time of award, none of which will expire at the end of the current fiscal year. The Naval Air Systems Command, Patuxent River, Md., is the contracting activity.

Source: US Department of Defense

EGLIN AIR FORCE BASE, Florida, USA - Following an independent evaluation of Eglin’s capability to conduct F-35A Lightning II pilot training, Air Education and Training Command announced today the 33rd Fighter Wing can do so, starting in January.

“The preliminary results provided by the Joint Operational Test Team show the F-35A aircraft and its pilot training and sustainment systems, are robust enough to conduct the planned pilot transition and instructor upgrade courses,” said Air Education and Training Command commander, Gen. Edward A. Rice Jr.

AETC will initiate syllabus training in order to meet Air Force-defined requirements. A deliberate process will be used that continues to validate the training system’s effectiveness through advancing training blocks as they are made available by the military’s F-35 Program Office and Lockheed Martin.

The Operational Utility Evaluation, which started 10-sept-2012 and was slated to last 65 days, encompassed intensive classroom and simulator training along with six flights, for four primary and two backup upgrading student pilots.

With favorable conditions to include “good weather, an accomplished maintenance team and talented instructors to train the pilots, the OUE process lasted only 46 training days,” said Col. Andrew Toth, 33rd Fighter Wing commander, an F-35A instructor pilot who spearheads the joint and international F-35 efforts at Eglin.
“You are here making a lasting impression on how the team will execute F-35 both flying and maintenance training over the next 50 years,” he said during conversations to wing members following the successful OUE.

During the OUE, experienced pilots transitioned from the F-16 and A-10 aircraft, to the world’s first multi-role stealth fighter. Two pilots, Maj. John Wilson and Maj. Matthew Johnston were from Eglin’s 58th Fighter Squadron and two, Lt. Col. Brian O’Neill and Maj. Joseph Scholtz and were from operational test units at Edwards Air Force Base, Calif., and Nellis Air Force Base, Nev.
“Their performances were superb… that smile each student had after landing his first flight showed they were well prepared and the jet was easy to fly just as I had experienced with my first flight,” said Lt. Col. Lee Kloos, 58th Fighter Squadron commander, who is charged with overseeing the squadron’s daily flying operations. He is also the first non-developmental test pilot to fly the F-35.

The OUE was initiated by the Joint Strike Fighter Program Executive Officer based in Wash. D.C. and was intended to best arm the AETC commander with comprehensive data from an independent source so Rice could decide how to proceed with future F-35A pilot training at Eglin.
“The OUE showed the men and women at Eglin are ready,” said Rice. “I’m very proud of both those in uniform and the contracted support who put in years of hard work. The culmination of those labors was successfully demonstrating the Integrated Training Center can conduct safe and effective flying operations in addition to academic training.”
Training is slated to begin 7-jan-2013 with four 58th Fighter Squadron pilots and two operational test pilots.

The focus of the OUE evaluation team was on the ability to conduct pilot training but leadership agree they couldn’t do it without their maintainers.
“The maintainers are the backbone of the flight operations. Had they not performed the way they did, we could not have finished the OUE about two weeks ahead of schedule,” said Toth pointing to his skilled team in the 58th Aircraft Maintenance Unit and Lockheed Martin contracted logistics support.
With RFT declared, the wing’s integrated training center gets closer to running at full capacity of 100 military pilot students a year along with the 2100 maintenance students.
“We look forward to 2013 as we integrate the Navy’s ‘Grim Reapers’ and F-35C into our flying operations along with our international partners, the Dutch and UK. The pace of operations will not slow as we continue to grow and we are ready for the new challenges next year will bring to wing personnel and it’s F-35 Integrated Training Center.”
Approximately 36 Air Force pilots are expected to go through the training program next year.
“The team at Eglin went through a rigorous process to lead the way for F-35A training. We look forward to starting off the new year with more history in the making as they put the JSF Integrated Training Center to task to provide a world class training program,” said Rice.

Source: Press Release US Air Force, Eglin AFB; Maj. Karen Roganov; Team Eglin Public Affairs; issued 17-dec-2012

Lockheed Martin Corp., Lockheed Martin Aeronautics Co., Fort Worth, Texas, is being awarded a $127,740,214 fixed-price-incentive-fee and cost-plus-incentive-fee modification to the previously awarded F-35 Lightning II Program Air System Low Rate Initial Production (LRIP) Lot 5 contract (N00019-10-C-0002). This effort is required to complete the definitization for the previously announced Undefinitized Contractual Action (UCA) for a total of 32 F-35 Air Systems. This modification procures LRIP 5 production requirements including: manufacturing support equipment; two program array assemblies; ancillary mission equipment, including pilot flight equipment; preparation for ferry of aircraft; and diminishing manufacturing sources redesign. This effort includes requirements for the international partner governments as well as for the Air Force, Marine Corps, and Navy. Work will be performed in Fort Worth, Texas (35 percent); El Segundo, Calif. (25 percent); Warton, United Kingdom (20 percent); Orlando, Fla. (10 percent); Nashua, N.H. (5 percent); and Baltimore, Md. (5 percent), and is expected to be completed in October 2014. Contract funds in the amount of $127,740,214 will be obligated at time of award, $112,863,361 of which will expire at the end of the current fiscal year. The contracting activity is Naval Air Systems Command, Patuxent River, Md.

Source: US Government Defence Contracts 14-dec-2012

OTTAWA—The federal Conservative government has formally pushed “reset” on its search for a new fighter jet after revealing that the Lockheed Martin F-35s they had picked would cost more than $600 million apiece to own and operate over their lifespan.

Battered by opposition criticism, sticker shock and with the sharp critique of the auditor general ringing in their ears, Conservative cabinet ministers confirmed Wednesday that they were starting fresh in their search for a jet to replace aging CF-18 Hornets.

“We have hit the reset button and are taking the time to do a complete assessment of all available aircraft,” Public Works Minister Rona Ambrose told reporters.

Read more: The Star; 12-dec-2012; “F-35 deal scrapped”

NAVAL AIR SYSTEMS COMMAND, PATUXENT RIVER, Md., USA – Lockheed Martin F-35C (US Navy version) aircraft CF-5, flown by Navy test pilot Lt. Cmdr. Michael Burks, arrived on 11-dec-2012 at Patuxent River. The aircraft is the final permanently assigned F-35C for the Integrated Test Force at Naval Air Station Patuxent River and designated primarily for ship suitability and high angle of attack testing.

Source: US Navy, NAVAIR, PEO(JSF) Public Relations Officer, press release 12-dec-2012

Test activity
(SDD & LRIP) flight test activity totals for 2012 as of 5-december-2012, are provided below:
- F-35A conventional takeoff and landing (CTOL) jets have flown 869 times.
- F-35B short takeoff/vertical landing (STOVL) aircraft have completed 855 flights.
- F-35C carrier variant (CV) jets have flown 234 times.

Since December 2006, F-35s have flown 3,543 times and accrued more than 5,556 cumulative flight hours. This total includes 91 flights from the original test aircraft, AA-1; 2,539 SDD test flights; and 913 production-model flights.

Recent test flight highlights:
- On November 3, CF-2 flew an HMD Jitter FTR mission completing first pilot evaluation.
- On November 6, F-35 fleet flew 19 flights for the 4th time: 2 EDW, 2 PAX, 3 FTW and 12 Eglin.
- On November 14, during setup for a 45000 ft test point, AF-4 flew to 50000 ft, the design
altitude limit. This is the first time F-35 has flown to 50K.
- On November 15, the first weapon pit drop from an F-35C was conducted dropping a
2000 lb GBU-31 from CF-2.
- On November 15, the 33rd Fighter Wing completed the training and flying portion of
the F-35A’s operational utility evaluation at Eglin AFB.
- On November 19, AF-4 flew high AOA at 45 and 50 degrees.
- On November 20, Lockheed Martin delivered three F-35Bs to the Air Station Yuma.
- On November 20, F-35 began the integration phase of weapons testing.
- On November 20 & 28, CF-2 performed AIM-120, GBU-12 and GBU-31 pit drops
completing CV Block 2B weapons pit drop testing.
- On November 30, BF-1 accomplished the longest duration F-35 hover at 10 minutes.
- On December 3, BF-3 completed the first F-35 airborne GBU-12 separation test.
- On December 3, BF-1 accomplished its 200th vertical landing at PAX and completed
maximum weight hover, vertical landing and 90 degree translation on December 6.
- On December 4, AF-4 flew the first F-35 High AoA intentional departure mission at EDW.
- On December 4, AF-7 flew the first of three Logistics Training and Evaluation (LTE)
missions to support ALIS 1.0.3 A3.2 certification.
- On December 6, BF-4 flew the first STOVL mode night ops, including night hover.
- On December 7, BF-1 flew the 1000th STOVL SDD Flight (includes BF-17 and BF-18).

F-35 Fleet Status

F-35 Deliveries:
41 F-35s have been delivered to the Department of Defense:
- 12 System Development and Demonstration (SDD) aircraft
- 29 Low Rate Initial Production (LRIP) aircraft, including two international F-35s

System Development and Demonstration (SDD) Fleet
- 14 F-35s comprise the SDD test fleet.
There are six F-35As assigned to Edwards AFB, Calif.
Five F-35Bs along with three F-35Cs stationed at Naval Air Station Patuxent River, Md.

Low Rate Initial Production (LRIP) Aircraft
- There are 22 LRIP F-35s based at Eglin AFB, Fla.
- There are 2 LRIP F-35s based at PAX River NAS, Maryland.
- There are 2 LRIP F-35s based at Edwards AFB, Calif.
- There are 3 LRIP F-35s based at MCAS Yuma, Ariz.
- There are 7 LRIP F-35s undergoing checkout flights at the F-35 production facility in Fort Worth

UPDATED

Kesteren – Canada gaat vrijwel zeker de beslissing om de F-35 te kopen heroverwegen na diverse onafhankelijke rapportages over de veel hoger dan geplande kosten.

Onder druk van de oppositie en door diverse onafhankelijke Canadese rapporten over de veel hoger dan verwachte financiële lasten voor aanschaf en gebruik van de F-35 is de regering Harper gedwongen, zoals de Canadese pers dit meldt “pulling the plug on that nation’s embattled plan to buy 65 Lockheed Martin F-35 Joint Strike Fighters”. De regering is totaal reeds $710 millioen aan verplichtingen aangegaan in het JSF programma en betaalde circa $175 miljoen aan de Canadese industrie als subsidie (status april 2012).

Bronnen rond premier Harper hebben donderdag 6 december 2012 laten lekken naar de Canadese krant de National Post, dat de regering de beslissing zal nemen met een totaal nieuwe evaluatie te komen onder druk van het rapport van de onafhankelijke auditor KPMG inzake de F-35. Uit dit rapport zou blijken, dat de totale kosten voor het gebruik van 65 F-35 toestellen gedurende 30 jaar zal oplopen tot boven de $ 40 miljard. Ter vergelijking, dit is dus twee keer zoveel per toestel als waar de Nederlandse VVD-minister van defensie nu nog steeds mee rekent. Indien deze – onafhankelijke – cijfers juist zijn heeft Nederland een budget, dat toereikend is voor exploitatie van hooguit 32-35 JSF toestellen..

Dit nieuwe prijskaartje zou er volgens de National Post toe hebben geleid, dat het uitvoerend comité van de regering afgelopen dinsdag heeft besloten uit de JSF-coalitie van negen landen (US, UK, IT, TU, AUS, CAN, DK, NO, NL) te stappen. Een woordvoerder van regering Harper heeft dit vooralsnog “een op sommige punten niet geheel accuraat bericht” genoemd. Dat er zeker wel wat aan de han is, blijkt uit het feit dat de Chef-Staf van de Canadese strijdkrachten Thomas Lawson, die in het buitenland verbleef met spoed werd teruggeroepen naar Canada om met het kenrkabinet (uitvoerend comité) te spreken. Vrijdag 7 december 2012 wordt er in een breder kabinetsberaad over gesproken. Overigens kost het KPMG rapport, waarmee men in september 2012 is gestart totaal $705.854 in plaats van geoffreerde $643.535.

Voorgeschiedenis en beslissing

De JSF aankoopplannen – net als in Nederland het grootste verwervingsproject ooit voor de strijdkrachten – is sinds enkele jaren een roerig kolkende politieke vulcaan. De roering ontstond nadat de Auditor General (Rekenkamer) rapporteerde dat de defensie organisatie en in het verlengde daarvan de regering het Canadese publiek misleid had over de hoogte van de werkelijke kosten van de aanschaf en de exploitatie van de JSF.

Net als Nederland is Canada sinds 1997 betrokken bij de aanschaf van de JSF en tekende dezelfde overeenkomsten in 1997, 2002 en 2006 voor deelname aan de (door-)ontwikkeling door de industrie.
In juli 2010 maakte de regering Harper (Conservatieve Partij) bekend, dat ze hadden besloten de F-35 aan te schaffen, zonder enige daadwerkelijke kandidaten evaluatie, kosten aanschaf $ 9 miljard; kosten operating en support $ 6 miljard (voor 20 jaar), totale life-cycle kosten werden gerapporteerd als $ 15 miljard (omgerekend naar 30 jaar, circa $ 18 miljard (conform rapport Canadese parlement “An Estimate of the Fiscal Impact of Canada’s Proposed Acquisition of the F-35 Lightning II Joint Strike Fighter”, maart 2011, blz.10, noot 13).

Kritiek op berekeningen 2011 en 2012

In maart 2011 kwam de Canadese parlementaire rekenkamer (parliamentary budget officer, Kevin Page) met een rapport, waaruit bleek dat de kosten niet $ 18 miljard, maar $ 29 miljard zouden bedragen. Hierop reageerde Defensie en meldde opnieuw dat hun cijfers onveranderd juist waren. Vervolgens werd besloten verder onderzoek te doen en de werkelijke cijfers boven tafel te halen. Deze onderzoeken probeerde regering Harper zoveel mogelijk te vertragen en te bemoeilijken.

De Canadese auditor general Ferguson rapporteerde echter in april 2012, dat niet de berekeningen van defensie, maar van Kevin Page juist waren. Met inbegrip van de exploitatiekosten was de kostenschatting van defensie dus ruim $ 10 miljard te laag, dit bleek na herberekening minimaal $ 25 miljard te moeten zijn. Aanbevolen werd een nadere rapportage te maken en daarin de kosten niet voor 20 jaar, maar voor de totale levensduur (30 jaar) te berekenen.

Verwervingsproces weggehaald bij Defensie

Tevens werd besloten het verwervingsproces weg te halen bij de – vooringenomen en niet objectieve – defensie materieel organisatie en in handen te geven van de Canadese ministe van publieke werken Rona Ambrose. Zij heeft inmiddels al laten doorschemeren, dat ze volstrekt ongelukkig is, met de manier waarop de specificatie van vereisten voor de opvolger van de oude CF18 zijn samengesteld, deze zouden door defensie te veel toegeschreven zijn naar slechts één mogelijk oplossing, namelijk de F-35. Op 22 november 2012 zei Amrose nog in het Canadese Huis van Afgevaardigden, dat “we need a full evaluation of all choices, not simply a refresh.”

Andere indicaties voor onrust

Generaal Lawson, sprekend voor de vaste commissie voor defensie van het Huis van Afgevaardigden op 29 november 2012 bevestigde op een vraag van Parlementslid John McKay (Liberals), wat critici al langer hebben gezegd, namelijk dat de F-35 niet de enige moderne jager is die mogelijkheden (elektronica en sensoren) heeft om vijandelijke radarsystemen te ontwijken (en juist dit is het kernargument voor de JSF).
Een verslag van de bijeenkomst van de vaste commissie voor “Public Accounts” uit december geeft een goed beeld van de punten waarop onrust is ontstaan: industrieparticipatie; aanschafprijs; exploitatiekosten; manier waarop keuze heeft plaats gevonden.
Verdere financiering van de F-35 blijkt inmiddels met directe ingang te zijn bevroren. Zie verslag Standing Committee Public Accounts november 2012.

Minister van Industrie David Emerson publiceerde de afgelopen week een rapport inzake de aerospace en ruimtevaartsector, waarin de regering werd aangespoord agressiever te zijn in het verwerven van werk voor de JSF in diverse regio’s, omdat dit achterblijft bij de beloften die door Lockheed Martin zijn gedaan. Met name de overdracht van hoogtechnolisch werk en kennis zou achterblijven. Insiders in de industrie menen dat dit rapport van Emerson bij heeft gedragen aan de beslissing de JSF aan de kant te zetten en het hele keuzeproces voor de opvolger van de CF-18 Hornet opnieuw te beginnen.

Publicatie volgende week

Na bespreking op 7 december 2012, zal het rapport van de KPMG volgende week officieel naar buiten gebracht worden. Vervolgens zal het binnen het parlement besproken worden en pas dan worden definitieve besluiten genomen over de vervolgstappen. De grote lijn daarvan is echter al uitgelekt.

Volgende stappen

De regering Harper is nu gedwongen een deugdelijke competitie op te zetten.

Deze zal worden bewaakt en begeleid door vier onafhankelijke personen:
- Luitenant-Generaal b.d. Charles Bouchard, die in 2011 de NATO missie in Libië heeft geleid (LINK, achtergrond)
- Philippe Lagassé, professor aan de Universiteit van Ottawa, een uitgesproken criticus van de eenzijdige manier waarop de evaluatie in het verleden is uitgevoerd (LINK, achtergrond)
- Voormalig hoofd Communications Security Establishment Keith Coulter (LINK, achtergrond)
- Voormalig comptroller-general / minister Rod Monette (LINK, achtergrond)

Het voorstel zal zijn om het gehele verwervingsproces volledig opnieuw te doorlopen.
Dit zal beginnen met het uitwerken van de volgende vragen:
- Wat voor soort toestel heeft Canada werkelijk nodig?
- Hoe lang kan Canada de huidige oude CF-18 Hornet nog in de lucht houden?
- Welke toestellen voldoen aan de Canadese gebruikeisen?
- Welke toestellen passen binnen het Canadese budget?
- Is er een noodzaak andere toestellen te kopen of te leasen als interim oplossing?
- Is de F-35 nog wel het beste toestel?

Bij de volgende fabrikanten zal informatie aangevraagd worden:
- De Amerikaanse Boeing fabriek, voor de Super-Horne
- EADS consortium, voor de Eurofighter Typhoon
- Saab,producent van de vernieuwde Gripen NG
- Dassault, de bouwer van de Rafale.

De tijdlijn die een rol speelt:
- De regering wil uiterlijk eind 2013 een nieuw evaluatierapport hebben

Conclusie

De Canadese situatie vertoont grote parallellen met de Nederlandse situatie. Wellicht is het goed op basis van de Canadese rapporten lessen te trekken en een soortgelijk vernieuwd keuzeproces op te zetten, zonder eenzijdige bemoeienis van bij de JSF tunnelvisie betrokken mensen van Defensie (DMO), NLR, TNO en Minister van Economische Zaken (Comm. Voor wapenproductie). Een werkelijk onafhanhelijke “out-of-the-box” evaluatie lijkt zeer noodzakelijk te zijn.

Bronnen:

National Post; Michael den Tandt; 6-dec-2012; “F-35s scrapped by Conservatives as audit puts true cost past $30B”

Canadian Broadcasting Corporation; 7-dec-2012; “F-35 deal not cancelled, Tories insist”

Auteur: Johan Boeder

JSFNieuws121207-JB/jb

Canadian Standing Committee on Public Accounts of the Canadian House of Commons discussed the industrial benefits of the F-35.
However, the Auditor General found that the government’s estimated forecasted value for industrial benefits for Canadian companies:
- Has fluctuated from $5.2 billion to $16.6 billion.
- The estimates were based on projections by the prime contractors, which were not independently validated.
- The estimateds are to be divided in three levels: (1) contracts/Letters-of-intent; (2) opportunities as 2nd sources supplier and (3) possible quotations/so called challenges. This may be one of the reasons for the fluctuations in the predictions.
- Also, the estimated turnover is based on turnover, not on “added value”
- Canadian industry complains about low technology transfer to Canadian industry within F-35 work.

Read the original text:

NINTH REPORT of THE STANDING COMMITTEE ON PUBLIC ACCOUNTS CANADA

Pursuant to its mandate under Standing Order 108(3)(g), the Committee has studied Chapter 2, Replacing Canada’s Fighter Jets, of the Spring 2012 Report of the Auditor General of Canada and has agreed to report the following:
INDUSTRIAL BENEFITS

In his report, the Auditor General stated that for most defence acquisition contracts, the federal government’s Industrial Regional Benefits Policy applies. In effect, this policy guarantees work for Canadian companies, usually equivalent only to the acquisition cost of the contracts awarded. For the JSF Program, on the other hand, industrial benefits are not guaranteed or limited to the value of the acquisition. Rather, companies from partner countries are eligible to obtain contracts on a “best-value” basis. The benefits, though, are merit-based and contingent on remaining a partner country in the JSF Program. The JSF Program is led by the United States and involves eight international partners—Canada, Australia, Denmark, Italy, Netherlands, Norway, Turkey, and United Kingdom.

The OAG found that National Defence and Industry Canada developed an effective collaborative arrangement for managing industrial benefits. Their efforts to secure industrial opportunities for Canadian companies through the system development and demonstration phases of the JSF Program were significant and successful. The Auditor General stated, “We found that National Defence and Industry Canada did a good job of managing Canada’s participation in the US-led Joint Strike Fighter, or JSF, program to design and develop the F-35 aircraft.”

Simon Kennedy, an Assistant Deputy Minister at Industry Canada, spoke of the contracts that have been awarded to date, “Canadian companies have done well. Since Canada joined the joint strike fighter program in 1997, 70 Canadian companies have received $435 million U.S. in contracts. Participation in the JSF program provides the opportunity to compete for billions more over the program’s lifetime.” As of September 2011, the government had spent $335 million as part of its contribution to the costs of developing the F-35 and to provide support to Canadian industry.

Simon Kennedy also told the Committee of the total expected contracts for Canadian firms:

The estimate right now for the potential opportunities for Canadian firms is $9.85 billion U.S.; that’s for the production of the aircraft and does not include sustainment and some of the service. For the actual manufacture, if we have the 3,100 or so planes that are estimated to be produced, it’s just under $10 billion in terms of opportunities for Canadian companies.

Mr. Kennedy explained how his department arrived at its estimates:

Very briefly, the government receives, twice a year, from the prime contractors a very detailed list of all their requirements for the manufacture of the aircraft and a detailed list of all the Canadian companies that they believe can play a role. We sit down with the prime contractors twice a year to go through that list, discuss it, and validate it.

However, the OAG found that the government’s estimated forecasted value for industrial benefits for Canadian companies has fluctuated from $5.2 billion to $16.6 billion. Additionally, the estimates were based on projections by the prime contractors, which were not independently validated. The information put forward to decision-makers did not explain the limitations of the projections and only included the most optimistic scenario. The Auditor General told the Committee that “we felt it would have been appropriate that the industrial benefit numbers coming forward should have included a range of the estimated industrial benefits rather than just an absolute number.”

Mr. Kennedy acknowledged that improvements could be made, “I think we would agree, certainly in hindsight, that we probably could have provided more detailed information and perhaps presented the information differently.”[9] The Committee recommends:

RECOMMENDATION 1
As the government committed to doing in its seven-point plan, that by February 7, 2013, Industry Canada provide to Parliament an update explaining the industrial benefits consistent with the Auditor General’s findings.