CF-18 Hornet replacement: Fix in for F-35?

Further to this post,

CF-18 Hornet replacement update: Can Canada afford the F-35? (Can anyone?)

things may be moving a lot faster than suggested in the May 29 story covered at this post. The latest from Le Devoir (via Norman's Spectator, edited Google translation):

Fighters: the air force has made its choice
The six billion contract is to be awarded to Lockheed Martin without proper bidding. There is surprise in defence circles.

Photo: Lockheed Martin
The Canadian Forces want to acquire the F-35 Joint Strike Fighter made by the U.S. multinational Lockheed Martin. The company would be willing to ensure to Canada a price just under 100 million dollars each. The plane, which is not yet in production, will feature the latest technology and will be stealthy (difficult to detect by radar).

The issue of replacement aircraft for the CF-18 is moving faster than expected. According to information obtained by Le Devoir, the Canadian Forces recommend that the government purchase the F-35 Joint Strike Fighter, made by Lockheed Martin the U.S. multinational. The tender would be drafted so that other manufacturers will find it difficult to qualify.

There is surprise in defence circles. The purchase of new Canadian fighter planes was not expected until 2013, since the Air Force wants new planes in 2017. Generally, the government signs contracts three or four years before receiving aircraft.

The cabinet committee on economic growth should address the issue on Wednesday. If all goes well, the powerful cabinet plans and priorities committee, headed by the Prime Minister, would be seized of the matter next week. The Cabinet could then take a decision before the summer holidays and an announcement could be made this summer, according to our sources.

The document to be submitted to the government this week contains a recommendation to proceed with an advance contract award notice (ACAN). This procedure shows that the government intends to contract to a particular supplier [more here]...

Other companies therefore have few weeks to demonstrate their interest and to demonstrate that they can also meet the selection criteria--the latter very rarely happens since the government sets the criteria to suit a specific product.

The office of Defence Minister Peter MacKay refused to comment yesterday...

According to our information, the government is moving ahead on this issue for two reasons. First of all, Lockheed Martin is ready to guarantee a fixed price for each aircraft that will be acquired between 2013 and 2017. All cost overruns would be borne by the U.S. multinational. A tantalizing promise for Ottawa, since the F-35 is in its final stages of development, which has sputtered. Reports from the U.S. Department of Defense claimed that the aircraft could cost more than $120 million unit once production started [see earlier post mentioned above]. However, Lockheed Martin would be willing to guarantee a price in Canada - kept secret for now - of just under 100 million each [emphasis added]. For 65 fighters a bill of nearly six billion [more actually] to the Canadian government [that's fly-away cost only, not life-cycle].

Then, if Ottawa quickly proves its interest to buy the F-35, Lockheed Martin could allow more Canadian companies to participate in the assembly of the aircraft, mass production of which is to begin in 2012. It is also with this possibility in mind that the Canadian Forces will submit the issue this week to the cabinet committee on economic growth, not the one responsible for security and defense, which was the natural way [indeed].

Canada is an economic partner of the F-35 since 1997, in collaboration with other countries (U.S., Great Britain, Australia, etc..) [more here]. Ottawa has promised to inject $710 million in the project over a period of 40 years to allow Canadian companies to win contracts in developing this new generation of aircraft. So far, 80 companies have received contracts totaling 325 million dollars.

On May 27 in a Commons' committee, Minister Peter MacKay made several slips which gave the impression that the government's choice is made. "The Joint Strike Fighter, in which Canada has already made significant investments, will the next generation of combat capability. Canada will participate in this program and provide a device whose capacity will exceed current capacity. It's a beautiful device," he said, before adding:" This fighter will be subject to an open, competitive and transparent acquisiton process. " [This below is from the May 29 story noted above:

...MacKay went on to suggest the decision would be between the Joint Strike Fighter and another aircraft he didn't name [lots more here, with info on possible competitors--another one?]...]

Lockheed Martin is not alone in the race. The most serious competitor is Boeing and its new [sic] F-18 Super Hornet (USA), in production since 1999. Boeing estimates that the price of the device to Canada between $55 and $70 million. For 65 fighters, it would cost about four billion [fly-away again].

European EADS and its Eurofighter Typhoon are also under consideration, like the Saab Gripen. One of these three manufacturers, whose name was not disclosed at this time, promises to assemble the aircraft in Canada [!?!], which would be a sizeable economic argument, officials said.

The Canadian Forces estimate that in 2014 no other plane on the market will be comparable, hence the interest in an ACAN to accelerate the process. The military believe that the Typhoon will be too expensive (it is over 120 million dollars per unit) and that Boeing will no longer produce its Super Hornet, as the company expects its backlog will be empty in 2014 [maybe 2015]. If the assembly is closed, no need to consider, says a military source. But Boeing disagreed. Starting today, a letter will be sent to the Canadian government to ensure delivery capacity after 2014, because other orders should be added in coming months [Brazil? India? Australia has already bought 24, see end of this story] .

The Devoir piece looks pretty solid. In response to a question in the Commons today, obviously based on it, the MND replied "Stay tuned"--clearly implying a decision soon.

One wonders how the US Congress will feel if Canada gets F-35s at a lower price than the Americans are paying. One also wonders how our government will be able to afford the considerably advanced and very sizeable up-front purchase costs if a contract is signed for much earlier delivery than previously planned (budget crunch stuff here and here--figures at second link do not even include the new fighter; and then there's that mythical $35 billion for shipbuilding). And one wonders to what extent our Air Force--clearly in love with the plane--really needs the F-35's stealthy bomb truck capabilities for its most likely missions. After all its name, Joint Strike Fighter, reflects its primary role.

If the government goes ahead with an ACAN there will certainly be quite a political ruckus--well deserved in my view in the absence of a true competition based on realistically required mission capabilities. I mean, there is no rush for new fighters (the Hornets having just been upgraded): other than to be able to promise those politically delightful industrial and regional (Quebec esp.?) benefits sooner--and for the Air Force to lock in the plane it craves.