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Canada Mulls Independent Report on F-35 Contract — Updated with Rumors of Cancellation Plans

Update – On the morning of 7 December reports were starting to be made that after reviewing the report and the latest cost estimates the Government of Canada had decided to cancel their procurement. This has yet to be confirmed by the Government. If the decision is true it will be the first of the planned participants to leave the program.

The Canadian Conservative government as part of their response to criticism of the analysis supporting the decision to go ahead and commit to their F-35 Joint Strike Fighter buy had commissioned an independent audit of the process by KPMG. They had also transferred the authority to review and make decisions about the contract to the Ministry of Public Works rather then the more traditional National Defence department.

Now the report supposedly is in government hands and there is speculation about the results and when they will be released to Parliament and the public.

There are concerns that if the report is not released soon it will have to be after the Christmas recess and then the cost figures involved will be over a year old.

The 2010 decision to go ahead with the buy has been controversial not only for the price of the aircraft, which is estimated at $14 billion Canadian for the procurement, but also concerns about the analysis and decision process that went into award to Lockheed Martin (LMT). An earlier report by the nation’s Auditor General revealed that the cost estimate used to support the purchase was arbitrarily lowered from earlier ones by not considering the sustainment and operating costs of the 65 aircraft reducing it by 10 billion.

Canada has been one of the original partners on the F-35 program contributing about $330 million in R&D funding. The F-35 has been considered the replacement for the current CF-18 aircraft. Now, though, the Defence Ministry has said that while the CF-18’s need to be replaced it may not be by the F-35 and other aircraft might be more cost effective.

The cost growth and schedule delays of the JSF program have been a major concern for several of the international partners in the program as they have delayed replacing aging systems as well as having to rework cost estimates and the number of aircraft they are buying.

Even so the program continues with training of pilots and ground crew from the U.S. and other nations on-going in the United States. The 5th production buy was just recently awarded and over 150 F-35 of all 3 variants are now either delivered or in production.

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