From DefenseNews

 

Norway Chooses F-35 To Replace F-16s

AGENCE FRANCE-PRESSE

Published: 20 Nov 11:50 EST (16:50 GMT)

 

OSLO - Norway has agreed on a multi-billion euro deal to buy jet fighters from the U.S. defense firm Lockheed Martin, the government announced Nov. 20.

 

Norway chose to order an unspecified number of the Joint Strike Fighter (JSF) plane, also known as the F-35, instead of the Swedish-built Gripen jet, which was also under consideration.

 

"The JSF is the only one of the two candidates to fulfill the operational requirements that the government set out for Norway's new fighter planes," a government statement said.

 

The JSF order cost six billion kroner (6.7 billion euros, $8.4 billion) less than its Swedish competitor, the Norwegian government said without giving precise figures on the total value of the deal.

 

Norway wants to replace its aging fleet of U.S. F-16 warplanes over the next decade.

 

The Eurofighter consortium, a joint venture between Britain, Germany, Spain, and Italy, pulled out of talks at the start of the year. The group claimed Norway was biased in favor of Lockheed Martin.

Does this seem as shocking to the rest of you as it does to me? Gripen should have won this hands down on cost, probably environmental conditions as well (just how stealthy is an icy JSF? can you maintain the stealthiness of a frozen JSF...).

Does this seem as shocking to the rest of you as it does to me? Gripen should have won this hands down on cost, probably environmental conditions as well (just how stealthy is an icy JSF? can you maintain the stealthiness of a frozen JSF...).

 

With Eurofighter pulling out for apparent bias, and the result being in line with it, chalk up one more military acquisition on the "old boys system".

It indeed makes no sense that they can't bring the price down for Euro built fighters for a European nation, to boot neighbor to the Grippen builders.

As I said, the reek of back room shenanigans is not obscured by the scent of Jet Ax or JP6+, hehe

I'm sure Norway is looking to take advantage of the fixed price offer that Lockheed Martin was floating as a "now or never" option awhile ago.

From Defense Aerospace

 

Joint Strike Fighter Recommended to Replace the F-16

(Source: Norwegian Prime Minister’s Office; issued Nov. 20, 2008)

 

Norway has picked the F-35 Joint Strike Fighter to replace its F-16 combat aircraft, and plans to buy 48. (Lockheed photo)

The Minister of Defence recommends that the F-16 is replaced by the F-35 Lightning II Joint Strike Fighter (JSF).

 

The JSF is the only candidate which fulfils all the operational requirements specified by the Norwegian Government and is furthermore offered at a lower price than the Gripen NG. The selection of the Joint Strike Fighter rests upon a clear recommendation from Project Future Combat Aircraft Capability. External auditors have concluded that the evaluation has been carried out in a professional and ethically sound [manner].

 

“Combat aircraft is a crucial capability for Norway’s defence. The procurement of new combat aircraft is therefore an essential element in the Government’s Long-term Defence Plan,” states Prime Minister Jens Stoltenberg.

 

“Both candidates’ performance have been evaluated against a number of different scenarios. The scenarios used in this evaluation are the same as the ones used in the Long-term Defence Plan, “says Minister of Defence Anne-Grete Strøm-Erichsen.

 

“The Joint Strike Fighter is considered to be the better of the two candidates regarding intelligence and surveillance, counter air, air interdict and anti-surface warfare,” says Strøm-Erichsen.

 

“An investment of this magnitude offers substantial opportunities for Norwegian industry. Throughout the process, the Government has communicated clearly to the candidates the significance of securing industrial opportunities, and the result of that focus is clearly evident today,” states Minister of Defence Anne-Grete Strøm-Erichsen.

 

The Government underlines that from a Norwegian security policy viewpoint, both candidates have been fully acceptable. Nordic defence and security cooperation will proceed independently of the procurement of new combat aircraft and will receive our continued support.

 

“We are pleased that we have conducted a transparent, just and credible competition and that the candidates themselves so far have confirmed this. I would also like to credit the Swedish and American authorities and the suppliers, SAAB and Lockheed Martin, for the professional manner in which they have supported this demanding process,” declares Strøm-Erichsen. (ends)

 

 

Norway to Negotiate with Saab’s Competitor

(Source: Saab AB; issued Nov. 20, 2008)

 

Norwegian Defense Minister Anne-Grete Strøm-Erichsen today announced that the Norwegian Government recommends to negotiate with a to Saab competing company.

 

"I’m disappointed and surprised about the Norwegian Governments decision, because Gripen fulfills all the operational requirements, to a fixed and known price. In addition to this, we have offered a wide and strong industrial cooperation package," says Saab CEO Åke Svensson.

 

"Gripen is a very competitive combat aircraft on the international market and we will now continue to focus on all the other countries were procurement processes are ongoing and Gripen is an alternative," says Svensson.

 

The Norwegian Government’s procurement of new fighters to replace the current F-16 fleet was initiated in 2005. During the last months two offers have been compared, one for the American Joint Strike Fighter and one for Gripen.

 

Fighter procurement processes where Saab is involved:

-- Switzerland: Proposal handed in, July 2008

-- The Netherlands: Saab invited to participate in the procurement process, August 2008

-- Brazil: Gripen chosen as one of three candidates, October 2008

-- Denmark: Binding proposal handed in, November 2007

-- India: Binding proposal handed in, April 2008

-- Romania: Binding proposal handed in, 2008

-- Bulgaria: A proposal is being prepared

-- Croatia: A proposal is being prepared

 

Countries which have chosen Gripen:

--Sweden

-- South Africa

--Czech Republic

--Thailand

-- Hungary

 

Saab serves the global market with world-leading products, services and solutions ranging from military defence to civil security. Saab has operations and employees on all continents and constantly develops, adopts and improves new technology to meet customers´ changing needs.

From Defense Aerospace

 

Norway’s JSF Price Tag is $3.2 Billion and Rising

(Source: defense-aerospace.com; published Dec. XX, 2008)

 

PARIS --- Norway did not obtain a firm price from Lockheed Martin for the Joint Strike Fighter, and the price it was quoted will change substantially before the contract is signed in 2014, Norwegian government and industry officials say.

 

Price information provided by these officials paints a quite different picture from that provided by initial media reports, and illustrates many apparent inconsistencies.

 

For example, the $2.57 billion figure widely quoted as the cost of the 48 aircraft is wrong because it is based on the wrong exchange rate. Maj. Jarle Ramskjaer, head of information for the Norway’s Project Future Combat Aircraft Capability office, told defense-aerospace.com Dec. 2 that Lockheed Martin’s price is based on January 2008 exchange rate.

 

Using this rate (5.5 Norwegian kroner to the dollar), the JSF’s 18 billion kroner cost works out to $3.27 billion, or $68.12 million per aircraft, substantially higher than the $54 million (wrongly based on Nov. 2008 exchange rates) unit price that was widely reported.

 

Asked to clarify how Norway had computed the JSF price, Ramskjaer said in a Dec. 5 e-mail that “Conversion between NOK and USD is somewhat more complex than multiplying with the exchange rate. The net present value is then derivated as follows: First, we periodize expenses according to the payment plan and adjust for the escalation indices. Then we create a “currency future” based on the money marked interest rates in the two currencies, as advised by the Norwegian Ministry of Finance. Those “currency futures” are then used for each period, converting foreign currencies to NOK. Last, we discount with a factor to get real time yearly cost.”

 

Additionally, Norway has calculated that the life-cycle cost for 48 JSF will total 145 billion Norwegian kroner (or $26.3 billion at January 2008 exchange rates) over 30 years, Ramskjaer said. This is also substantially higher than previously reported.

 

The $3.27 billion price tag is also incomplete. It covers “48 fly-away aircraft (Unit Recurring Flyaway, or URF, price) including Alternate Mission Equipment (AME) but not weapons or spares,” Ramskjaer said. In addition, the agreement with Lockheed Martin includes “an escalation clause to update the price at the delivery of the aircraft (when payments are due). We have based our estimates on historical development of the indices, and future predictions”, he added.

 

“Cost information provided to Norway in response to a Request for Binding information in April 2008 was a ‘budgetary estimate’ in 2008 US dollars,” Lockheed JSF spokesman John Kent said in a Dec. 4 e-mail. The cost “includes aircraft Unit Recurring Fly-away cost plus Ancillary Mission Equipment, e.g., fuel tanks, weapon pylons, safety pins, weapons racks, etc.”

 

When these factors are added to the basic price, Norway will end up paying substantially more for its 48 JSFs. And, as the price is quoted in dollars, currency fluctuations over the next six years will substantially affect the final price.

 

“We do not understand how the Norwegians came to the figures that they presented,” Lasse Jansson, a spokesman for Gripen International, said in a Dec. 5 e-mail. He added that officials from Gripen parent company Saab AB and the Swedish Defence Matériel Agency, FMV, had been debriefed by Norwegian officials on Dec. 4, and that “we are now trying to sort out if what we got out of that meeting made things [any] clearer to us.”

 

Norway has made provisions for other cost variations, such as “future growth (material and labor) indices, currency terms, net present value of the future investment etc, all which has been calculated according to Ministry of Finance directions,” Ramskjaer said.

 

Given these uncertainties regarding prices, and the fact that the contract will not be signed until 2014, Norwegian JSF price figures are pretty meaningless. It is thus difficult to understand how Norway’s Parliament can usefully debate the proposed JSF acquisition during the debate it has scheduled for Dec. 19.

 

Other prospective JSF customers are no better informed regarding JSF prices. Asked whether he was “any clearer about the unit cost of a Joint Strike Fighter” than during a previous hearing in January 2008, General Sir Kevin O'Donoghue, Britain’s Chief of Defence Materiel, told the House of Commons Defence Committee on November 25, 2008 that “No, I do not think I am, am I?”

 

Another apparent inconsistency is that Norway’s basic $68.12 million unit price tag is substantially lower than the price the US Air Force expects to pay for the F-35s it plans to order in FY 2013, one year before Norway expects to sign its contract.

 

According to USAF FY2009 budget documents (page 43), the US Air Force’s 48 F-35s planned for FY2013 will cost $4.336 billion, or $90.3 million per aircraft.

 

When advance procurement costs ($468.8 million) and initial spares ($372.7 million) are added, the USAF’s total bill for the 48 aircraft increases to $ 5.177 billion, or $107.8 million per aircraft, about 57% more than the URF price offered to Norway.

 

Ramskjaer declined to comment on the price differential with the USAF order, but said that “on a general basis we can say that the learning curve could have an effect on the acquisition cost (low rate initial production vs. mass production). It all depends when the aircraft is ordered, and which block/batch they will [originate] from.” Lockheed’s John Kent referred questions on this subject to the US government JSF program Office.

 

Thus, contractual price information will not be refined until the contract is signed in 2014, and many factors can change substantially over those six years. Ramskjaer says, for example, that Norway did not receive, nor did it expect, a firm price at this stage, and that contractual prices, escalation clauses and penalty clauses for late delivery “will be addressed in the contract.”

Saab's reply to the Norwegian decision to pick JSF over Gripen:

 

Incomplete and faulty - a comment to the Norwegian aircraft procurement (a PDF document)