Saturday, July 17, 2010

The Conservative $16 billion fighter jet boondoggle

I should start off by noting that I was an Air Force brat, growing up on Canadian Forces bases in Summerside, Trenton, Baden and Comox. I was also an Air Cadet. I think fighter jets are cool, and the F-35 is a particularly kick-ass jet. The Conservatives, however, are making a boondoggle of replacing the CF-18.

We do definitely need to replace the CF-18, that’s not in doubt for me. I have little time for the argument that we somehow don’t need fighters anymore. If we’re a sovereign country, we do need the tools to protect ourselves, it’s that simple. The question we need to ask ourselves though is, what are the missions we want our air force equipped to handle, and what are the tools they need to fulfill those missions? As I see it, the primary mission is domestic: to patrol and protect our borders, such as intercepting and identifying unknown aircraft approaching our borders, escorting passenger aircraft under suspected terrorist threat, and so on. Secondary would be potential overseas combat missions which, I would agree, are becoming less likely of a threat. With the CF-18 we flew combat missions in the first gulf war and in the former Yugoslavia but, tellingly, not Afghanistan. This raises the question, do we need a ground-attack capability or is air superiority our primary mission?

The key question is to identify the mission, and then determine the best jet to fulfill it. There is some question if the F-35 is a too pricy and over-equipped choice to meet the primary mission I identified above. One oft-heard objection is if we really do need stealth technology for sovereignty patrols. The two most-mentioned alternatives are the F/A-18 Super Hornet and the Eurofighter Typhoon. I’d reject the Superhornet out of hand. It’s essentially a souped-up version of the F-18 that we already fly. It is a double-engine jet however, a key advantage over the single-engine F-35. Also double-engine is the Typhoon. I don’t really know much about it though. My concern with buying a European aircraft would be what industrial benefits would be available to Canadian industry.

What I’d like to see first is for the government to let us know what the mission is. What is the role that they see Canada’s Air Force playing in the 21st century? If you really want to build support with the public for the largest procurement project in Canadian history, your argument needs to be more than “it’s the best because we say so, and if you disagree with us you don’t support the troops and are a commie.” Treat us like adults and make an actual argument for why we need these jets. Because I think we do, and the ham-fisted way you’re doing this isn’t helping.

The even larger mistake they’re making here though is to not have a competitive tendering process for this purchase. I mean, to not put a potential $16 billion contract to competitive tender is the height of stupidity. Hell, even when you buy a used car you negotiate a little with the dealer. You say you saw this great car at another dealer for a lower price. You pretend to walk away. You get them to come down off sticker, maybe throw in new seat cushions or something. You don’t just walk into the dealer, say I'm not looking at any other cars, this is the only car and I want, and offer to pay full sticker. It’s madness.

A competitive tender lets you identify and clarify your needs and evaluate the options. It forces the competing companies to actually compete and put together the best bid they can. Sole source it and there’s no competition at all.

And this is more than just buying X fighter jets. With a military procurement of this level, what will set one bid apart from another, and where the competition between bids really comes, is around the industrial benefits. Where biders usually compete the most is around what portion of the contract work will be done in the purchasing country, creating jobs and giving business to local businesses. These contracts can mean a lot of work for Canadian companies. Don’t put it to tender and we’ll see less spinoffs in Canada, less jobs for Canadians.

And then there’s the maintenance contract, which will be worth as much as $7 billion (that’s how we get from $9B for the jets to $16B overall). The government hasn’t even bothered to negotiate that yet. That’s right, they’re buying the jets from Lockheed but they’ll negotiate the contract with Lockheed later. And just what leverage will they have, given that they’re already agreed to buy the jets? Little to none. It will be uphill battle to maximize the Canadian content of that contract. And for those that don’t think fighter maintenance is important, go take a look at the role CF-18 maintenance contracts played in the creation of the Reform Party.

Now, the Conservatives say there has already been a competitive process with the F-35, and the Liberals initiated that process. They’re being deliberately obtuse. The F-35 is the result of the Joint Strike Fighter Program, which saw Boeing and Lockheed-Martin develop prototype aircraft for the next-generation of fighter aircraft, primarily for the U.S. and the British. Canada was one of a number of investing partners, a decision that was made under the Liberals, and the process saw the Lockheed-Martin aircraft selected.

That, however, did not commit industrial investors such as Canada to purchase any aircraft. Canada’s investment in the program secured access to contracts for Canadian aerospace companies, and the industry has reaped many contracts from the investment. But there was no commitment to purchase, no evaluation of this aircraft versus other options as to which will best meet Canada’s defence needs, no comparison for value for dollar, and no competition to provide industrial benefits to Canadian companies in exchange for purchase. To say otherwise is to deliberately mislead, or worse.

I’ve listed a myriad of reasons why it makes good sense to put this contract to competitive tender. I have yet to hear a compelling argument for why it needs to be sole-sourced. We have time left in the operational life of the CF-18 to do this thing right, so there seems little need to rush through a $16-billion process. Particularly with the economy and the budget in the state it’s in, if we’re going to do a deal of this magnitude (and I think we do need to) we should be ensuring we’re getting the right aircraft and that we’re delivering maximum benefit to the Canadian economy in terms of jobs and contracts.

Instead, the Conservatives seem determined to rush head-first with their eyes closed into a potential $16 billion boondoggle, at a time when the rest of the country is about to asked to tighten their belts as we enter a time of austerity. Doesn’t seem like a recipe for success.

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17 comments:

RuralSandi said...

Check out blogger "Impolitical" on this subject and a PBS video

ridenrain said...

It looks like the folks who were hounding the V22 need to find womething else to bitch about.

Gene Rayburn said...

Ah Ridofbrain. Never a fan of differing opinions of democratic debate, or thinking now that you mention it.

ridenrain said...

This project was started by Chretien, just like Afghanistan. The Liberals started each of these and now some want to walk away for political reasons. These flip-flops just make the Liberals look foolish.

Jeff Jedras said...

Did you even read the post you're commenting on, ridenrain? Try learning exactly what the involvement was that the previous government had in the JSF, and then come back and try again. It had nothing to do with buying jets, or evaluating for our needs, it was about investment in the aerospace industry. You are wrong.

Mark Francis said...

Oh, we need interceptors, but these are quite possibly the wrong ones. Short range (shorter than the CF18), no external fuel tanks, single engine, stealth abilities not really something we need to pay for -- not an ideal choice for a country this large.

And, are we buying into a lemon? This over-engineered jet is shiny and new, and doesn't come with much of an operational history.

It's likely that all we need is a 4th-generation jet, not a 5th like this one.

And, who really thinks that the price tag will be this cheap? Costs will likely climb. Everything about this jet is already horribly over budget.

ridenrain said...

http://www.thestarphoenix.com/sports/golf/Grit+indignation+contract+disingenuous/3151253/story.html?id=3151253

Spin away.

Jeff Jedras said...

Indeed ridenrain, that editorial by some random editorial writer in Saskatoon does really spin away. Unfortunately, it spins badly, and it doesn't change the central facts that you haven't yet bothered to contradict.

* No agreement was made by the last government to buy the JSF. The investment was merely to secure investment for our aerospace industry, and to be ahead of the line should we decide to buy following an evaluative process. And, as the article showed, this investment has reaped substantial benefit for Canadian industry, so kudos to the LPC.

* The "competition" between Boeing and Lockheed Martin was to meet US requirements, and was decided by the US.

* There has been no evaluation of the F-35 versus others on the market when it comes to meeting CANADIAN requirements, which differ from those of the U.S.

* By not putting the largest procurement contract in Canadian history to a competitive tender, the Conservatives have no way of knowing if they're getting value for money, if it's really the right plane for our needs.

* And the Cons are giving away all leverage to negotiate the best possible deal for Canada, at the best possible price, with the best possible industrial benefits for the Canadian aerospace industry.

Those are the facts, and they haven't been spun away.

Boondoggle.

Jeff Jedras said...

Mark I agree, I think air superiority is likely to be our primary need, and I'm not convinced the F-35 is necessarily the right choice for that mission.

Pearce said...

No, the F-22 would be the best choice, but we can't buy that jet... Sadly...

Terence said...

jeff, I agree with your summations.

My guess is that Harper will ultimately bow to the will of parliament but needs to keep "red meat" issues in front of his base and steal some of the limelight from Iggy's tour. The libs have made a simple statement. They will review it if in office and will demand much more committee work and a possible house vote either way

Nasty piece of work as usual from these unethical reformatorts.

The Mound of Sound said...

Jeff, you'll know that from the F-5 to the 104 and the 101 to the Bomarcs, Canada has a rich history of getting saddled with the wrong equipment and then writing a mission around what we become stuck with. The F-18, sourced under Trudeau, was a break with that pattern. There's something eerily CF-104 to the F-35 with purchasers seemingly being herded to the "default option."

The F-35 project has come to exemplify today's American military/industrial/private warwaging complex - overcost, overdue and short on meeting initial performance requirements.

It has considerable strengths and qualities but just how do we foresee exploiting those with a piddling fleet of 65-airframes? What will that inventory support - three squadrons, maybe even less?

This would be, all-things to all-men aircraft may present a great many expensive qualities we won't be able to exploit while being deficient in areas we need.

marie said...

ridenrain: This project was started by Chretien, just like Afghanistan. The Liberals started each of these and now some want to walk away for political reasons. These flip-flops just make the Liberals look foolish

Chretien and Martin were defeated and are no longer in power but your brainwashing Harper still is and he has done a good job of creating mindless supporters who can't see past their noses let alone use a little common sense. Accept the facts Bud, Canadians defeated the liberals for their shenanigans and they will do the same for this freaky controlling PM.


If its money your talking about with the past liberal Pm’s, they were small fry compared to your run away Harper who has totally lost control of himself and his lame brained idea’s. Surely he must understand that Canadians will not put up with him much longer or ever with him.

Canada is in a recession, carrying a huge deficit that all Canadians and yes, even you and your family will have to live with by paying more taxes, less health care, education, social programs and a whole lot less good paying jobs for the thousands who have no jobs because of the economy yet you are to blind and brain drained to even notice.

Try to remember if you possibly can that Chretien and the liberals are not the governing party anymore but your idol Harper is and he is totally out of control with spending Canadians money and I for one can’t wait to see the last of him and his inept government.

Quit playing the blaming game because this is 2010, the liberals were defeated in 2005 and your reckless idol Harper is running the show doing a poor job of making sure Canadians are treated fairly right across Canada and not only in cow country and try and understand that Canadains are fed up with him

Are you ridenrain so blind that you can’t see or clueless when you are being screwed?

marie said...

Furter to my post

Democracy cannot be maintained without its foundation: free public opinion and free discussion throughout the nation of all matters affecting the state within the limits set by the criminal code and the common law."

-The Supreme Court of Canada, 1938

© Copyright (c) The StarPhoenix

Mark, Ottawa said...

A post at Unambiguously Ambidextrous making many similar points (from a conservative viewpoint):

"Canada’s new fighter, the F-35: What the government is and isn’t saying"

Mark
Ottawa

Jeff Jedras said...

Interesting points, Mark. I agree on interoperability, it's a complete red herring. The Brits also plan to operate both the Lightning and the Typhoon.

I also find the "just trust the Air Force" argument uncompelling when the government has no problem over-ruling them to prioritize the C-17 over the C-130J.

The Rat said...

Mark I agree, I think air superiority is likely to be our primary need

Then what do you say to our air force pilots who tell of war gaming the F-22 and not even seeing them before they were shot down? Who exactly are you expecting the be "superior" to if our planes are not stealthy? Yes the Brits will run the Typhoon but they will have a front-line stealth fighter. Are you suggesting we shouldn't? Or are you hoping that the Americans will do the dirty work for us again?

If so I guess we could buy the Typhoon or the Gripen except that we would be dependent on our European allies for support and parts. How dependable have they been in Afghanistan? And the Gripen is Swedish and the Swedes are neutral. What chance spare parts when we really need them if they suddenly become "neutral" towards us? Should we buy an unproven and speculative Russian plane from the very people who are most likely to be threat to our sovereignty?

So yes, we could open tenders, take the usual 10 years to make a decision and hope that our soldiers don't end up dead because we're so concerned about optics, industrial benefits, and other non-military concerns. We could do exactly what Chretien did when he canceled the EH-101. Tell me Geoff, did the Liberal party send their regrets to the families of those who died in Sea Kings while your government waffled? Are you proud of that decision?