CV32: Being the good neighbours we are, Canada has dived head first into a commitment to buy 65 F-35A JSF ... first, the "touchy feely" news releases ...

 

From Defense Aerospace

 

Government of Canada Strengthens Sovereignty While Generating Significant Economic Benefits

(Source: Canadian Department of National Defence; issued July 16, 2010)

 

(All monetary amounts are in Canadian dollars unless otherwise stated)

 

OTTAWA --– The Government of Canada today announced it is acquiring the fifth generation Joint Strike Fighter F-35 aircraft to contribute to the modernization of the Canadian Forces, while bringing significant economic benefits and opportunities to regions across Canada.

 

“The F-35 Joint Strike Fighter is the best aircraft we can provide our men and women in uniform to face and defeat the challenges of the 21st century,” said the Honourable Peter MacKay, Minister of National Defence. “This multi-role stealth fighter will help the Canadian Forces defend the sovereignty of Canadian airspace, remain a strong and reliable partner in the defence of North America, and provide Canada with an effective and modern capability for international operations.”

 

“A lengthy and intense competition was completed in 2001 for who would build the F-35,” said the Honourable Rona Ambrose, Minister of Public Works and Government Services and Minister for Status of Women. “Canadian companies and the Canadian government helped develop the F-35, and now we are exercising our option under the Joint Strike Fighter memorandum of understanding to acquire it.”

 

“Canadian participation in the Joint Strike Fighter program will bring high-value jobs and other economic benefits to our country,” said Jacques Gourde, Parliamentary Secretary to the Minister of Public Works and Government Services and to the Minister of National Revenue and Member of Parliament for Lotbinière-Chutes-de-la-Chaudière. “This government is delivering on our plan to strengthen Canada’s defence industry, leverage Canada’s competitive advantage and work with industry to help position Canadian companies for success in the global marketplace.”

 

The Government of Canada has committed approximately $9 billion to the acquisition of 65 F-35 aircraft and associated weapons, infrastructure, initial spares, training simulators, contingency funds and project operating costs. Delivery of the new aircraft is expected to start in 2016.

 

To date, Canada has invested approximately $168 million in the Joint Strike Fighter program. Since 2002, the Government’s participation in the program has led to more than $350 million in contracts for more than 85 Canadian companies, research laboratories, and universities – a clear demonstration of the significant benefits this program has for Canada.

 

“The Joint Strike Fighter program allows Canadian companies to build on existing strengths and establish strategic capabilities,” said the Honourable Tony Clement, Minister of Industry. “Canadian companies will have direct involvement in the design of equipment in the short term, while also setting in motion opportunities for decades to come.”

 

The Canada First Defence Strategy identifies Canada’s need for a next generation fighter aircraft to protect the safety and security of Canadians, while supporting foreign policy and national security objectives. The acquisition of the F-35 helps the Canadian Forces defend against the threats of the 21st century at home, across vast distances and in harsh environmental conditions, and abroad.

 

The F-35 Lightning II has been developed by Lockheed Martin and partners through the Joint Strike Fighter program, a multinational effort to build and sustain an affordable, multi-role, next generation stealth fighter aircraft. Canada, the United States, the United Kingdom, the Netherlands, Italy, Turkey, Denmark, Norway, and Australia are all partners in the program.

 

As a partner in the Joint Strike Fighter program since 1997, Canada participated in the extensive and rigorous US-led competitive process, which led to the selection of Lockheed Martin and its partners as the Joint Strike Fighter manufacturer in 2001.

 

(EDITOR’S NOTE: Canada is the first JSF partner country to commit to buying the aircraft. Other prospective buyers, such as the U.K. (Level 1, risk-sharing partner) and the Netherlands have postponed their decision until the flight test program is more advanced and confirms the promised technical performance. Prospective buyers also have expressed doubts about the prices promised by Lockheed Martin, but the Canadian government obviously takes these figures at face value.) (ends)

 

Canada’s Next Generation Fighter Capability – The Joint Strike Fighter F-35 Lightning II

(Source: Canadian Department of National Defence; issued July 16, 2010)

 

(All monetary amounts are in Canadian dollars unless otherwise stated)

 

The Canada First Defence Strategy states that the Canadian Forces will acquire a next-generation fighter capability that will help them carry out their core missions of defending the sovereignty of Canadian and North American airspace through the North American Aerospace Defense Command (NORAD), and providing Canada with an effective and modern capability for international operations.

 

Canada will acquire an aircraft fully interoperable with our key allies to effectively conduct joint operations through the North Atlantic Treaty Organization (NATO) or a coalition. At home, the Canadian Forces will acquire a robust aircraft, capable of operating across Canada’s vast geography and under harsh and varying weather conditions. A next generation fighter with stealth technology is an extremely effective deterrent against challenges to Canadian sovereignty.

 

In July 2010, the Government of Canada announced it is acquiring the Joint Strike Fighter (JSF) F-35, a fifth generation fighter jet, to replace its fourth generation fleet of CF-18s, which are expected to reach the end of their operational life in the 2017-2020 timeframe. Delivery of the new aircraft is expected to start in 2016.

 

The F-35 is the only available fifth generation aircraft that meets the Canadian Forces’s need for a next-generation fighter. The acquisition of the F-35 will help the Canadian Forces operate effectively to defend against the threats of the 21st century at home and abroad.

 

The F-35 is less visible to radar, providing very low observable stealth, has integrated sensor fusion that provides the pilot with all available information at a glance, and high-capacity, secure net-enabled operations that allows all F-35 aircraft to communicate with each other and share data in a secure environment.

 

What constitutes a fifth generation fighter?

 

There are three key capabilities that distinguish a fifth generation fighter aircraft from a fourth generation:

 

-- Interoperability: a fifth generation aircraft provides a unique combination of stealth, long-range high-resolution sensors, and secure high-capacity networks that allow all F-35 aircraft to communicate with each other and share data in a secure environment;

 

-- Sensors/Data fusion: fifth generation incorporates a system that consolidates tactical information from the sensors and off-board sources to provide pilots with a clear understanding of the tactical situation at a glance;

 

-- Survivability: the survivability of a fifth generation aircraft is significantly increased by very low observable stealth, advanced sensors and secure data-link, which means a fifth generation aircraft can accomplish more in a mission with fewer supporting assets required.

 

A fourth generation aircraft cannot be upgraded to a fifth generation; the capabilities of a fifth generation aircraft, such as stealth technology, long-range high-resolution sensors, automated data fusion and secure high-capacity networks, must be built in.

 

A fifth generation fighter provides Canada with the highest probability of mission success, as well as the highest probability that the Canadian Forces pilot and aircraft will return home safely from the mission.

 

The Joint Strike Fighter Program and Canada’s History of Participation

 

The F-35 has been developed by Lockheed Martin and partners through the Joint Strike Fighter (JSF) program, a multinational effort to build and sustain an affordable, multi-role, next generation stealth fighter aircraft. Partners in the program include: the United States, Canada, the United Kingdom, the Netherlands, Italy, Turkey, Denmark, Norway, and Australia. Purchasing the F-35 will ensure Canada remains interoperable with these major allies – including the US, our NORAD partner – well into the middle of this century.

 

JSF is the single largest fighter aircraft program in history. The total value of the program is expected to exceed US$383 billion, with production expected to top 5,000 aircraft; JSF partners are anticipated to acquire more than 3,000 aircraft, and export sales are estimated by Lockheed Martin at more than 2,000 aircraft. Based on these predictions, royalties from the export sales amounting to approximately $130 million will accrue to the Government of Canada’s Consolidated Revenue Fund.

 

The JSF program is comprised of three distinct phases: the Concept Demonstration Phase (1997 – 2001) which involved two competing bidders developing prototype aircraft (Lockheed Martin was selected as the prime contractor); the System Development and Demonstration Phase (2001 – 2013), developing and testing the aircraft systems and components to be used; and finally, the Production, Sustainment and Follow-on Development Phase (2007-2051), initiating production of the aircraft and sustaining parts for the serviceable life of the aircraft and follow-on development.

 

Canada has been a participant in the JSF program since 1997, when the Department of National Defence signed on to the Concept Demonstration phase with an investment of US$10 million. As part of this phase, Canada participated in the extensive and rigorous U.S.-led competitive process where two bidders, Boeing and Lockheed Martin, developed and competed prototype aircraft. This process led to the selection of Lockheed Martin as the JSF manufacturer in 2001.

 

In 2002, Canada joined the System Development and Demonstration phase with a monetary investment of U.S. $100 million, with an additional U.S. $50 million contributed through federal Canadian technology investment programs. The System Development and Demonstration phase runs through 2015.

 

In 2003, the United States invited the current partners to participate in the Production, Sustainment and Follow-on Development phase of the program. In December 2006, Canada signed the JSF Production, Sustainment and Follow-on Development Memorandum of Understanding (MOU). The cost for Canada to participate in this phase is approximately U.S. $551 million over the course of the 2007-2051 timeframe. This contribution will be used to cover Canada’s portion of production, sustainment and follow-on development costs, including common tooling, sustainment, and follow-on development activities.

 

Acquiring a Next Generation Fighter Capability

 

In 2008, the Government of Canada announced its intent to replace the CF-18 fleet with a Next Generation Fighter Capability (NGFC). This was announced as a key commitment under the Canada First Defence Strategy.

 

In 2010, the Government of Canada exercised its options under the JSF program memorandum of understanding with the partner nations to acquire the F-35 to meet Canada’s operational requirement, while providing the best value for Canada.

 

By acquiring a next generation fighter aircraft through the JSF program, Canada will see a significant reduction in the cost of acquisition and savings throughout the life-cycle of the aircraft, due to the collaborative approach to the sustainment and follow-on development.

 

The Government of Canada has committed approximately CAD$9 billion to the acquisition of 65 F-35 aircraft and associated weapons, supporting infrastructure, initial spares, training simulators, contingency funds and project operating costs. This is funded through the Canada First Defence Strategy and the National Defence Investment Plan.

 

The majority of the expenditures will not be required until the 2015-2020 timeframe, when Canada will begin to take delivery of the aircraft. Canadian industry will begin to benefit immediately, providing a near-term boost to the Canadian aerospace and defence sector.

 

Sustained Economic Benefits for Canadian Industry

 

Canada’s participation in the JSF program brings significant benefits to Canada. This program is delivering on the Canada First Defence Strategy’s commitment to a renewed relationship with Canada’s defence industry, leveraging Canada’s competitive advantage and working with industry to help position Canadian companies for success in the global marketplace. With a long-term investment in this aircraft, Canada’s defence industry has a rare and unique opportunity to be a part of the JSF global supply chain, advancing its technology, while bringing jobs and sustained economic benefits to regions across Canada.

 

In order to maximize industrial benefits and minimize costs, partner countries agreed to a best-value approach to industrial participation in the JSF program. In accordance with the JSF memorandum of understanding and in support of Canadian industry, Industry Canada has signed agreements with Lockheed Martin and partners. These industrial participation agreements have provided unprecedented access to a significant multinational defence program for companies across Canada, including small and medium enterprises.

 

Participation in the JSF program has already provided Canadian industry with long-term, high technology industrial opportunities, such as advanced composite manufacturing, mission systems and high speed machining. To date, Canada has invested approximately CAD$168 million in the JSF program. Since 2002, the Government’s participation in the JSF program has led to more than CAD$350 million in contracts for more than 85 Canadian companies, research laboratories, and universities—meaning that Canada has already seen a two-to-one return on its investment.

 

Now that Canada has committed to purchasing the F-35, Canadian industrial opportunities could exceed CAD$12 billion for the production of the aircraft. Sustainment and follow-on opportunities for Canadian industry are emerging and will be available over the 40-year life of the program. For instance, in accordance with the industrial participation agreements, all 19 Canadian companies manufacturing items for the F-35 will also repair and overhaul those components for the entire global fleet.

 

Not only does the F-35 meet all of the Canadian Forces operational requirements for a next generation fighter aircraft, the F-35 offers the best value by providing exceptional capability at the lowest cost with excellent benefits and opportunities for the Canadian defence industry. This acquisition will equip the Canadian Forces with the aircraft it needs to defend Canada’s sovereignty and contribute to the defence of North America and international security.

CV32: Now some commentary from the F-35's "number one" fan , who appears to have returned to covering his seemingly favorite topic ...

 

Aviation Week Ares Blog

 

Canada Commits To JSF

Posted by Bill Sweetman at 7/16/2010 2:50 AM CDT

 

Canada is expected to announce today that it will "commit" to buying 65 Lockheed Martin F-35A Joint Strike Fighters. Just to save the fans time and effort, here's how it will be presented: another world-class military has decided that the JSF is the world's best fighter, proving the critics wrong.

 

First, some facts: The commitment will not be a contract. Even under the most recent version of the production, sustainment and follow-on development (PFSD) memorandum of understanding, which pre-dates the slippage of the JSF development program announced in March, Canada is not expected to sign a contract for its first JSFs until 2014.

 

By that time, today's duel of JSF price projections will be long settled by reality. However, it's interesting to note that the New York Times - a newspaper whose overweening pride in its own journalism seems to get in its eyes like smoke - swallows LockMart's price estimates whole in its report of the Canada deal, basing its "$4 billion" estimate on the lowest Fort Worth projection of the unit recurring flyaway cost.

 

Canada's Liberal-led opposition - not in a strong political position today - is criticizing the expected announcement on the grounds that there has been no competition. The response from the office of defense minister Peter McKay is illuminating:

 

"Contrary to Liberal myths, this was a competitive process. Canada participated in an extensive and rigorous competitive process where two bidders developed and competed prototype aircraft."

 

It might be worth asking the minister to explain how much of a vote Canada had in the outcome of the JSF competition a decade ago.

 

This is mainly a setback for Boeing, which of all competitors probably considered that it had the best chance in Canada. Unless Boeing can sell more Super Hornets to the US Navy or elsewhere, production will be running down by the time Canada revisits this decision.

Related news ...

 

From Aviation Week Ares Blog

 

JSF - Buy Now Or Else (Reprise)

Posted by Bill Sweetman at 7/19/2010 7:50 AM CDT

 

Lockheed Martin and the US government are getting ready to send a "strong message" to international partners on the F-35 program, warning them of sharply increased costs if they delay placing firm orders for the fighter, according to F-35 executive vice-president Tom Burbage.

 

"We will be looking for reaffirmations over the next few months," Burbage said. "It's very important that partners keep to the program of record. They need to understand that a large movement of quantities can have a big effect on the total cost of the buy."

 

Eight international partners are expected to account for more than a third of F-35 orders between 2011 and 2015 and some (like Denmark) have delayed their commitment to the project.

 

This is the second time that the JSF office has played this card, having made similar comments in 2008.

 

It has also emerged that the under-negotiation contract for the fourth F-35 production batch will be a fixed-price incentive (FPI) contract, and Lockheed Martin could still make a profit even if the ultimate cost is closer to what government auditors estimate, as Burbage confirmed here today.

 

Lockheed Martin has cited its bid prices as proof that the aircraft is on track to a $60 million unit recurring flyaway cost, comparable to an F/A-18 and much less than the numbers produced by the Pentagon's Cost Analysis and Program Evaluation (CAPE) group.

 

As detailed today, though, the company's numbers are "target" prices. The FPI includes both a target price and a ceiling price, which historically has been as much as 30 per cent above the target. Typically, under a formula called the "incentive ratio", the government picks up the greater part of the difference between the target and the ceiling, and the contractor retains a positive margin until the ceiling price is reached.

 

Burbage declined to disclose the price-to-ceiling ratio or the incentive ratio, but said that those numbers would be revealed when the contract was signed.

 

The FPI also limits the contractor's risk in the event that test flights reveal problems that have to be fixed, expensively, on the production line. The contract includes a certain allowance for these "engineering change orders", he said, but if that allowance is exceeded the changes would be paid for separately as an engineering change proposal or ECP.

 

Risk on both sides is a big factor in the long contract negotiations surrounding the fourth low-rate initial production (LRIP-4) batch, Burbage said. "We want to make sure that we don't assume a contract that we can't execute."

Kopp's take on JSF and Canada ...

 

F-35 JSF: Can it meet Canada's needs?