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Canada’s F-35 Contracting Process Criticized

by: Matthew Potter
April 4, 2012

Category: Boeing, Business Line, Canada, Companies, Contract Awards, Countries, development program, Events, Lockheed Martin, Military Aviation, production program, Services | RSS 2.0

The Government of Canada’s Auditor General released a report this past week looking at how the country came to the decision to invest in Lockheed Martin’s (LMT) F-35 Joint Strike Fighter. The aircraft as with many other U.S. allies will be used to replace older American aircraft, in this case the CF-18 variant of Boeing’s (BA) F/A-18 fighter.

The report made clear that in the eyes of the Audit the government failed to provide legislators correct or sufficient cost and schedule information to support the decision. The decision made in the summer of 2010 will see Canada by up to 65 of the advance fighters. The estimated costs for acquisition will be about $10 billion and another $15-16 billion on maintenance and modernization.

The reports says that this cost estimate was not properly developed or reviewed and was not properly documented. Continued delays in the schedule for the aircraft which will be purchased in the thousands by the U.S., Canada, the U.K., Australia, Norway, Holland and other countries have already led the U.S. to delay production and caused large price increases. These would also have the potential to affect the price Canada will pay.

The government defended itself by stating that no formal contract has yet to be entered into for the aircraft leaving open either outright cancellation or re-negotiation. The Canadian military like others could look to existing platforms like the F/A-18 Super Hornet or Europe’s Eurofighter and Dassault Rafale.

The F-35 has proved controversial and the current price and schedule issues are not going away anytime soon. Canada like other planned buyers may be reviewing their commitments and plans.

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