F-35 program to get overhaul after scathing AG report

mentalfloss

Prickly Curmudgeon Smiter
Jun 28, 2010
39,778
454
83
F-35 program to get overhaul after scathing AG report

Canada will re-examine the F-35 jet fighter program following the release of an auditor general's report today that slams the Defence Department regarding its compliance with procurement policies.

CBC News has learned that Auditor General Michael Ferguson will focus his criticism on the air force and on procurement officials inside the Defence Department.

His report is expected to say that officials inside the Defence Department misled government ministers and did not provide accurate information about everything from the cost of the Lockheed Martin fighters to the delivery date.

The government is expected to strip the Defence Department of its responsibility for the program and set up a special secretariat of deputy ministers inside the Public Works Department to manage the program.

The Treasury Board will review all Defence Department documents in order to ensure accuracy and more oversight, as well as to better inform both the government and the public about the F-35 program.

Julian Fantino, the associate minister of national defence, first suggested to the House defence committee in March that the purchase of the F-35 was not a foregone conclusion.

Canada would remain involved in the Joint Strike Fighter program, he said, but "the decision, the determinate decision, has not as yet been made as to whether or not we are going to actually purchase, buy, acquire, the F-35."

Prime Minister Stephen Harper said later that Canada has participated in the F-35 development program with its allies for 15 years and the aerospace industry had received "hundreds of millions of dollars in contracts" because of it.

"We haven't yet signed a contract, as you know, we retain that flexibility but we are committed to continuing our aerospace sector's participation in the development of the F-35."

Canada had originally planned to buy 65 jets for $9 billion, though escalating costs for the fighter have thrown that into doubt.

The estimated lifetime cost of the entire U.S. F-35 program , the most expensive ever, has crossed the $1.5-trillion mark.

Over the course of the U.S. program, the cost of acquiring each F-35 should average $162 million.

The Canadian government estimated its 65 F-35s would cost just $75 million each to acquire, but the parliamentary budget officer has pegged that number at $148 million.

F-35 program to get overhaul after scathing AG report - Politics - CBC News
 

#juan

Hall of Fame Member
Aug 30, 2005
18,326
119
63
Countries that have already signed contracts to buy these aircraft are paying about 150 million per copy. I don't know how we can expect to get them for 75 million each. The cost is going to go up not down.
 

mentalfloss

Prickly Curmudgeon Smiter
Jun 28, 2010
39,778
454
83
BOOM! HEADSHOT!

Defence officials misled ministers in F-35 fighter jet whitewash: Auditor General

OTTAWA — Department of National Defence officials twisted government rules, misled ministers and Parliament, and whitewashed cost overruns and delays in a determined effort to ensure Canada purchased the F-35 stealth fighter jet.

Auditor-General Michael Ferguson’s scathing assessment, released today, puts the military’s own cost estimates for Canada’s involvement at $25 billion — instead of the publicly stated $16 billion — and questions assertions that Canadian industry stands to benefit from $12 billion in contracts.

The Auditor-General’s report also says the F-35 was “clearly the fighter jet of choice” as early as 2006, and that officials intentionally played up the F-35’s stealth capabilities to sidestep established purchasing guidelines.

“National Defence did not exercise the diligence that would be expected in managing a $25-billion commitment,” Ferguson said. “It is important that a purchase of this size be managed rigorously and transparently.”

The report is expected to usher in significant changes to the handling of the fighter program going forward, with the federal government reportedly preparing to promise more transparency and oversight into the multi-billion-dollar project.

Ferguson’s report says Canada initially joined the F-35 program in 1997 not with the intention of purchasing the stealth fighter, but to ensure Canadian industry could win contracts associated with developing and producing the fighter.

That changed in 2006 when a memorandum of understanding was signed by Canada and eight other partner nations committing them to long-term participation in the project. By then, the military was knee-deep in the program.

“By the end of 2006, the (Defence) Department was actively involved in developing the F-35, and a number of activities had put in motion its eventual procurement,” the audit report says.

The report says that in convincing the Conservative government to sign onto the MOU, the military talked up the potential billions in contracts Canadian industry could secure if the country continued to participate in the project.

However, “while ministers were told, correctly, that signing the 2006 MOU did not commit Canada to buy the F-35, we did not see evidence they were told that retaining industrial benefits depended on buying the F-35 as a partner in the [Joint Strike Fighter] program.”

In addition, “in the majority of cases, only the most optimistic scenario was put forward, rather than a range of potential benefits that reflected the inherent uncertainties in the projections.”

Defence Department officials also did not tell ministers that by signing the memorandum of understanding, the government would be hard-pressed to run a fair competition in the future to replace Canada’s ageing fleet of CF-18s.

Normal government procurement rules say departments must lay out their requirements so multiple companies can bid on the contracts. That, however, didn’t happen with the F-35.

In fact, starting in late 2008, the report says, Defence officials “led a process to get a government decision to buy the F-35, partly in response to pressure from industry.” Following Canada’s signing onto the MOU in 2006, the report says, the Defence department began putting together necessary documents to support the eventual purchase of the aircraft.

To get around requirements for a competitive bidding process, officials intentionally played up the fact the F-35 was the only fifth-generation aircraft available to Canada.

In May 2010, the Public Works Department, which is supposed to provide oversight of all major government purchases, questioned the military’s assertion that no other aircraft could meet Canada’s requirements.

It eventually agreed to waive requirements for a competitive bidding process “if National Defence provided a letter confirming National Defence’s requirement for a fifth-generation fighter and confirming that the F-35 is the only such aircraft available.”

Over the four years between when the MOU was signed and the Conservative government’s announcement in July 2010 that Canada would be purchasing 65 F-35s, the report says, military officials regularly downplayed or glossed over cost overruns and delays afflicting the stealth fighter program.

“Officials from National Defence who participated in the senior decision-making committees of the (Joint Strike Fighter) program were regularly informed of these problems,” the report says. “Yet in briefing materials from 2006 through 2010 that we have reviewed, neither the Minister nor decision makers in National Defence and central agencies were kept informed of these problems and the associated risks of relying on the F-35 to replace the CF-18.”

The report also notes “significant concerns about the completeness of cost information provided to parliamentarians.”

In particular, it notes that in response to Parliamentary Budget Officer Kevin Page’s estimate in March 2011 that Canada’s purchase of 65 F-35s would cost $30 billion, the Defence Department “did not include estimated operating, personnel or ongoing training costs” in putting the cost at $14.7 billion.

The fact is, the report says, National Defence’s own cost estimates put the program at $25 billion in June 2010.

That wasn’t the only time the military provided incomplete information, according to the Auditor-General’s office.

“We observed that National Defence told parliamentarians that cost data provided by U.S. authorities had been validated by U.S. experts and partner countries, which was not accurate at the time,” the report says. “At the time of its response, National Defence knew the costs were likely to increase but did not so inform parliamentarians.”

Ferguson’s report says National Defence “has been overly confident” about the F-35 program’s budget and schedule, and raised concerns that the stealth fighter would not be ready by the time Canada’s CF-18s are due to retire by 2020. It notes that “decisions taken to date as well as those yet to come will have impacts for the next 40 years.”

In a rare move, the Defence and Public Works departments both said they disagreed with the Auditor-General’s report, arguing they had conducted due diligence in managing the program.

Still, the government was expected to announce Tuesday that it is moving the F-35 program out of the military’s hands and giving it to the Public Works department It will also provide annual updates to Parliament on the progress of the stealth fighter program and establish a committee of senior bureaucrats to monitor the project.

The government will also promise to look at all alternatives to replacing Canada’s aging fleet of CF-18 fighters, which are due to retire within the next decade. This could include revisiting Boeing’s Super Hornet.

The Conservative government initially announced in July 2010 that Canada would buy 65 F-35s for $9 billion to replace the country’s ageing fleet of CF-18s, a decision it steadfastly supported for the next year and a half, including during the last federal election.

The announcement was made without an open bidding process and would be this country’s largest-ever military purchase.

But recent months have seen the Conservative government back away from that commitment, with Associate Defence Minister Julian Fantino admitting last month that the government hasn’t closed the door on walking away from the F-35.

This isn’t the first time an Auditor-General has blasted the military for its conduct in the purchase of a major piece of equipment. Previous reports in 2006 and 2010 criticized the Defence Department for deliberately low-balling costs in order to get the equipment it wanted.

Two years ago, Sheila Fraser concluded National Defence knew the Chinook heavy lift helicopter it wanted to buy was not an “off the shelf” model, with a relatively low risk of cost and time overruns.

Yet the department did not reveal this to Treasury Board when it sought project approval. As a result, the cost of the 15 Chinooks more than doubled to $4.9-billion and the helicopters still have not been delivered.

A similar story accompanied the purchase of 28 maritime helicopters, according to Ms. Fraser, who lamented the gaps in the fullness of information supplied to MPs. “[DND] under-estimated and under-stated the complexity and developmental nature of the helicopters it intended to buy,” she said.

F-35 fighter jets: Defence officials misled ministers and twisted rules over purchase | News | National Post
 

mentalfloss

Prickly Curmudgeon Smiter
Jun 28, 2010
39,778
454
83
I doubt any of them were in that war and if they were around it would be pushing pencils from one side of the desk to the other.

I think you underestimate the importance of having a good government.

John Ivison: Auditor-General’s report shows flaw in Tories’ reflex to never retreat or apologize

The chapter in the new Auditor-General’s report on replacing Canada’s fighter jets presents a Strangelovian vision of a Defence Department that viewed government contracting rules, Treasury Board guidelines and the oversight of Parliament as irritants to be trampled upon or ignored.

Michael Ferguson, the new Auditor-General, concluded that National Defence did not exercise due diligence in managing the process to replace the aging CF18 jets — and neglected to fully inform ministers and parliamentarians about the full costs and risks involved in the government’s commitment to buy the F-35 Lightning 11 aircraft as a replacement.

“Problems relating to development of the F-35 were not fully communicated to decision-makers and risks presented to decision-makers did not reflect the problems the JSF (Joint Strike Fighter) Program was experiencing at the time. Full life-cycle costs were under-stated in the estimates provided to support the government’s decision to buy the F-35,” the report, to be tabled in the House of Commons Tuesday, concluded.

In the clipped language of the bureaucracy, this is political equivalent of Justin Trudeau’s memorable pre-Christmas chastisement of Environment Minister, Peter Kent.

The saving grace for the Conservatives is that Gordon O’Connor and Peter MacKay, the defence ministers on whose watch these procedural abuses occurred, are made to look like stooges, rather than complicit.

The report said that officials from National Defence who participated in decision-making committees of the JSF program were informed of the cost overruns and delays facing the F-35.

“Yet in briefing materials from 2006 through 2010 that we have reviewed, neither the Minister nor decision-makers in National Defence and central agencies were kept informed of these problems and the associated risks of relying on the F-35 to replace the CF-18.”

Mr. Ferguson is clear he believes National Defence decided the F-35 was the aircraft it wanted very early in the process and was determined to get it, regardless of cost or contracting regulations. He states his audit does not question the capacity of the plane — “We did not audit the merits of the F-35 aircraft” — but is concerned about the “significant weaknesses in the decision-making process” used by DND.

The Department of Public Works, which acts as the government’s procurement authority, is implicated for its decision to endorse the purchase of the F-35 without an open competition or the documentation required to permit the CF-18 replacement be sole sourced. The government announced its decision to buy the F-35s in July 2010. Yet Public Works did not receive National Defence’s statement of operational requirements, that laid out why the F-35 was the only plane capable of performing the contract, until one month later.

But the report makes clear that the Department of National Defence had made its choice by the time Canada signed a memorandum of understanding with Lockheed Martin, the manufacturer of the F-35, in November 2006. (The project was already nine years old at that stage and Canadian companies had already benefited from Canada’s participation. But the report suggests that by signing the 2006 MOU, Canada was committed irrevocably to the F-35).

Mr. Ferguson cited a June 2006 operational requirement document from National Defence as evidence that it had already dismissed the prospect of buying any of the four other candidate aircraft that were being assessed. “It concluded a strong preference for the F-35, stating: ‘It is not only the aircraft that best meets Canadian Forces’ requirements, with the longest life expectancy, but also is the most affordable’.”

These conclusions were approved by the Chief of the Air Staff and the Assistant Deputy Minister (Materiel) and formed part of the basis upon which National Defence recommended to the Minister, at that time Mr. O’Connor, that the 2006 memorandum of understanding be signed. At the time, ministers were told, correctly, that signing the MOU did not commit Canada to buy the F35. But they were not told that retaining industrial benefits for Canadian companies depended on buying the F-35. “Also, while ministers were told that the 2006 MOU did not prevent Canada from having a competition in the future, they were not told of the practical limitations of doing so.”

Even as problems began to emerge with the F-35, officials at National Defence continued to re-assure their political masters that all was well. In 2008, the department again looked at three contender aircraft and concluded, without providing documentation, that the F-35 offered “best value” because it provided “exceptional capability at the lowest cost”.

While its capability remains unknown due to development problems, we now know that the costs have ballooned. A Reuters report Monday, based on a Pentagon document, suggests the average cost per plane will be more than US$130-million – nearly double the amount National Defence has claimed.

One of the Auditor-General’s most damning criticisms was over the consistent failure to accurately estimate the life-cycle costs of the F-35. In the May 2008 Canada First Defence Strategy document, the department said it would acquire 65 aircraft for $9-billion. A budget of $16-billion was established to operate and maintain the fleet over 20 years. Yet, the Auditor-General suggests this is an extremely conservative number that ignores that the full life of the F-35 is estimated to be 36 years. National Defence has also made no allowance for replacement aircraft – the AG suggests Canada may need to ruby an additional 14 planes to replace those lost to attrition – nor for system or weapons upgrades.

Mr. Ferguson is particularly critical of National Defence’s response to a report by the Parliamentary Budget Officer in March 2011, which ignores nearly $1-billion in costs for operating, personnel and training costs. “At the time of its response, National Defence knew the costs were likely to increase but did not so inform parliamentarians.”

The Conservatives are already in denial mode, indicating they will re-evaluate the F-35 program, freeze its budget and provide regular reports to Parliament on its future progress. Mr. O’Connor and Mr. MacKay are likely flagging down buses on Wellington Street, so they can hurl senior National Defence bureaucrats and uniforms under their wheels. Public Works will take the lead on the F-35 project going forward, with a secretariat in the department reporting to a committee of deputy ministers.

Yet, while they may have been misled by their bureaucrats and senior military officials, the government is in deep because of its reflex response to bulldoze opposition and demonize opponents. The Conservatives are always on transmit, never receive. They never retreat and they never apologize. On this file, that strategy has betrayed them.

http://fullcomment.nationalpost.com...-tories-reflex-to-never-retreat-or-apologize/
 

mentalfloss

Prickly Curmudgeon Smiter
Jun 28, 2010
39,778
454
83
I never said you did.

 

mentalfloss

Prickly Curmudgeon Smiter
Jun 28, 2010
39,778
454
83
Glad I can put a smile on some faces. :)

Here are some more highlights (non f-35 related) from the audit:

OTTAWA—Highlights of the auditor general’s spring report to Parliament, delivered Tuesday:
[SIZE=+2]•[/SIZE] National Defence failed to inform Parliament about the full costs of new jet-fighters, broke key procurement rules, and put the fix in for buying F-35s.
[SIZE=+2]•[/SIZE] Canada’s border agency allowed forbidden medical devices and other health-related products to slip into the country, largely because it hasn’t been communicating properly with Health Canada.
[SIZE=+2]•[/SIZE] Canada Revenue Agency needs to be sharper in identifying Canadians who fail to pay their income taxes.
[SIZE=+2]•[/SIZE] Transport Canada is not properly targeting high-risk flying operations for safety inspections and procedures.

Canada News: Highlights of the federal auditor general
 

mentalfloss

Prickly Curmudgeon Smiter
Jun 28, 2010
39,778
454
83
F-35 program now a plague for the Tories

The Conservative government found itself grappling Tuesday with the fallout from a scathing auditor general's report that found major problems with the Defence Department's handling of the troubled, multi-billion-dollar F-35 project.

The government reacted quickly by promising to take the stealth fighter program out of the military's hands and to conduct a complete and public review of the program, all while opening the door to potential competitors.

But opposition parties demanded to know whether the government was guilty of negligence by refusing over the years to press the Defence Department on the very public problems that have afflicted the F-35 program, or whether it intentionally misled Canadians.

Auditor General Michael Ferguson's report, tabled in the House of Commons on Tuesday morning, indicated Defence Department officials twisted government rules, withheld information from ministers and Parliament, and whitewashed cost overruns and delays on the F-35 program.

Between 2006 and July 2010, when the Conservative government announced Canada would be purchasing 65 F-35s for $9 billion, military officials regularly downplayed or glossed over cost overruns and delays on the delivery of the stealth fighters in briefings to the government, the audit report said.

"Officials from National Defence who participated in the senior decision-making committees of the (Joint Strike Fighter) program were regularly informed of these problems.

"Yet in briefing materials from 2006 through 2010 that we have reviewed, neither the Minister nor decision makers in National Defence and central agencies were kept informed of these problems and the associated risks of relying on the F-35 to replace the CF-18."

The Defence Department's response to Parliamentary Budget Officer Kevin Page's estimate in March 2011 that 65 F-35s would cost Canada $30 billion was particularly noteworthy.

The military fired back that the actual cost would be $14.7 billion - even though Ferguson later found that the Defence Department's own cost estimates, which didn't include Canada-specific modifications, attrition and full maintenance costs, put the program at $25 billion as far back as June 2010.

Ferguson told reporters Tuesday that the response to Page's report "would have been a prime opportunity for National Defence to bring forward to Parliament the full costing of the project, and they didn't do that."

The F-35 was "clearly the fighter jet of choice" as early as 2006, Ferguson's report said, and officials not only contravened established policies by creating documentation after the fact to support the plane's purchase, but they also played up the F-35's stealth capabilities to sidestep requirements for a competitive bidding process.

Despite his criticisms, Ferguson refused to identify either the government or Defence Department as being to blame.

Instead, he put the onus on the government to clean up the process to ensure transparency and proper oversight as the country moves to replace its aging fleet of CF-18s.

The Conservative government confirmed Tuesday it is taking the project out of the Defence Department's hands and giving it to Public Works, with a committee of senior bureaucrats from different departments providing oversight.

F-35 program now a plague for the Tories


Heads must roll after F-35 audit

Here's what a sober-minded, fiscally responsible and cautious prime minister would do, given the outrageous chronicle of incompetence, stupidity and duplicity revealed by Auditor-General Michael Ferguson's report on the F-35 fighter program: He would demand and receive the resignation of Chief of the Defence Staff Walter Natynczyk. He would demand and receive the resignation of Defence Minister Peter MacKay.

Such a prime minister would remove and replace these two men now, regardless of their past contributions and regard-less of whether they were directly responsible for the outrages outlined in Ferguson's report, because it happened on their watch.

Such a prime minister would then lick his wounds and move on, the caucus and senior civil service chastened but secure in the knowledge that really big mistakes have consequences.

That Prime Minister Stephen Harper does not appear inclined to do this - that the government apparently intends to snort and bluff and bluster its way through this latest stink bomb, just as it has done with such resounding success on the robocalls file - is astonishing.

Minority Harper, the man who ditched former minister Helena Guergis on a rumour, would not have done so. Minority Harper would have thrown several of his associates under an eighteen-wheeler Tuesday, without so much as a backward glance.

If you take the time to read the audit, my bet is that you draw the same conclusion I did: Heads must roll.

How could they not, when there is a clear pattern of National Defence Department officials, unnamed, misleading government ministers, Parliament and by extension the Canadian people?

How could someone not be held accountable, particularly since the government has had ample reason to know, not for months but for years, that something was deeply awry?

Alan Williams, a former assistant deputy minister (matériel) at DND, and the man who originally shepherded the Chretien government into the first phase of the program in 1997, has been sounding the alarm about his former department's procurement practices virtually since the day he retired in 2005.

I can personally confirm, since I am on his mailing list, that over the past six months Williams has sent out missives virtually daily, with links to various F-35 delay, technical-glitch or cost-overrun stories floating in from the far corners of the world (because there are nine consortium partners grappling with soaring costs and technical delays, including the United States).

All through the period when Associate Defence Minister Julian Fantino and his putative boss, MacKay, were standing up in the House of Commons, or in interviews, to reiterate that the program was sound, there has been a growing cloud of ack-ack fire around their heads, credible reports confirming that their math - $9 billion for 65 planes, not including service costs - no longer held up, if it ever had. Indeed, many of the auditor-general's findings were previously raised by Williams months ago.

Are we to believe that no one in the government was aware of these reports? Perhaps no one in the Prime Minister's Office thought to ask Williams, a civil servant with 33 years' experience, out for a cup of coffee and a chat? Last month at last, ahead of the coming audit, Fantino began hedging. But it was too little, much too late.

The government may say Williams is partisan. He's not. He was as critical of DND aircraft procurements in the waning days of the Paul Martin government, as he has been of Harper. If Williams has had a singular recurring concern it's the degree to which former chief of the defence staff Rick Hillier, who retired in April 2008, bent the traditional procurement model into a new shape, which he defined, to suit the exigencies of wartime.

Hillier was a superb leader in many ways, in my view, one of a kind - beloved by the troops and immensely likable. But he had a habit of saying, "This is the plane I need, this is the plane I want." He did this in the case of Chinook helicopters, which he deemed the only machine capable of withstanding the Afghan dust and altitude. If you already know what you need, why go through the whole bothersome tendering process, which can take years? Get the job done.

Except that this philosophy apparently carried through in DND's approach to the F-35, which unlike the Chinook, had not been tested in com-bat. "Fifth-generation fighter?" Anyone familiar with the aero-space industry will tell you that is a brand, and not a technical specification. There are other aircraft with similar capabilities. But how would the government know this unless it held a full and fair competition?

Given Ferguson's audit, the government is honour-bound to hold a complete and open bidding process, managed independently of political decision-making, as was done with the military shipbuilding contract last fall. If it does not, it runs a real risk of seeing its reputation for decent management permanently tarnished.

http://www.vancouversun.com/news/Heads+must+roll+after+audit/6408764/story.html#ixzz1r4uTCAMB
 

mentalfloss

Prickly Curmudgeon Smiter
Jun 28, 2010
39,778
454
83
Harper names new communications chief amid F-35 storm

The Prime Minister's Office has quickly replaced its director of communications, promoting spokesman Andrew MacDougall.

The 36-year-old aide was named Wednesday morning to replace Angelo Persichilli, who resigned last week after just seven months on the job.

Mr. MacDougall will be Stephen Harper's eighth director of communications and his seventh since becoming Prime Minister in 2006.

The affable Mr. MacDougall is bilingual, unlike his predecessor.

He has worked on Parliament Hill since 2006, moving up through the ranks as he gained respect among his colleagues and the media alike.

Most recently, under Mr. Persichilli, he was associate director of communications and Mr. Harper's spokesman – the most visible member of the Prime Minister's large and powerful communications team.

Mr. MacDougall will be put to the test immediately. Mr. Harper and his cabinet are under intense scrutiny after the Auditor-General found that Parliament was kept in the dark about the true cost of the F-35 fighter jet program.

Harper names new communications chief amid F-35 storm - The Globe and Mail
 

#juan

Hall of Fame Member
Aug 30, 2005
18,326
119
63
This whole thing is very confusing. Away back when, we bought CF-18s for 35 million dollars each. Our government now wants to buy F-35s for 75 million dollars a copy but it looks like they are going to cost at least 150 million each. Isn't it time somebody stood up and said, "We can't afford these bloody airplanes". We don't even know for sure the Americans aren't going to drop the whole F-35 program because of continual problems with the aircraft.
 

petros

The Central Scrutinizer
Nov 21, 2008
108,748
11,087
113
Low Earth Orbit
This whole thing is very confusing. Away back when, we bought CF-18s for 35 million dollars each. Our government now wants to buy F-35s for 75 million dollars a copy but it looks like they are going to cost at least 150 million each. Isn't it time somebody stood up and said, "We can't afford these bloody airplanes". We don't even know for sure the Americans aren't going to drop the whole F-35 program because of continual problems with the aircraft.
The CF-18 is an excellent proven platform. Other than stealth what does the F-35 have that the CF-18 doesn't?
 

#juan

Hall of Fame Member
Aug 30, 2005
18,326
119
63
The CF-18 is an excellent proven platform. Other than stealth what does the F-35 have that the CF-18 doesn't?

How about bankrupt owners....:roll::smile:

The CF-18 is an excellent proven platform. Other than stealth what does the F-35 have that the CF-18 doesn't?

The Super Hornet was the obvious choice. Mostly the same airframe as the F-18 and a lot of common parts. A bit more speed and range plus some stealth additions.