Friday, April 8, 2011

"F-35 Shoots Down Canada's Government"

From: Ares, "Defense Technology Blog" at Aviation Week and Space Technology

Posted by Bill Sweetman at 3/25/2011 6:21 AM CDT

Canada is likely to be headed for new national elections by the end of the day, following a vote of no confidence inspired, in part, by the majority Conservative party's handling of the F-35 issue. Update: As predicted.

The outcome hasn't made the incumbents look very competent -- particularly in view of the fact that there was no need to pick this fight at this time, since even the JSF's proponents don't argue that there is a need to order aircraft until 2015 at the earliest.

Last week's press conference performance by assistant Deputy Minister of Materiel Dan Ross probably did not help. Ross, as reported here, initially waded into the debate last October with an impassioned but not very professional appeal to the voters' grandparently instincts.

Last week, Ross was assigned to defend the government's position that the JSF will cost Canada about $75 million per unit.

This figure was challenged by a Canadian reporter who noted that the U.S. Government Accountability Office, in its latest report, is projecting an average acquisition cost of $133 million. No, Ross said, that number includes research and development -- a direct misstatement of facts.

Canada's defense of its cost numbers -- detailed here -- is a combination of the Pentagon's Selected Acquisition Report (SAR) numbers from two years ago and year-old Lockheed Martin talking points. As Lockheed was doing last spring, Canada is showing a set of descending learning curves and trying to show that the contracts signed for the first four low-rate initial production (LRIP) lots define a line below those curves, pointing at the magic $75 million price.

Let's enumerate the basic problems with that approach.
First of all, LRIP 2 and LRIP 3 are cost-plus contracts, far behind schedule, and have not delivered yet. When they do, the cost will be above the contract value.
The LRIP 4 contract provides for an overrun of 40 per cent, and so far the program has yet to deliver any aircraft on time or on cost.
A lot has changed since SAR 09, including a delayed and shallower LRIP ramp. The USAF's acquisition chief, David van Buren, has confirmed that the average unit procurement unit cost has "almost doubled" and that it is "simply unacceptable and must be reduced".
DoD acquisition czar Ashton Carter has also made it clear that, absent new management initiatives and efficiencies ("should cost") the program is headed ("will cost") towards a price that the customer cannot afford in planned numbers.

The Pentagon itself does not have an official, approved acquisition baseline beyond fiscal 2016 (in which year the USAF plans to spend $120-plus million for each of 70 F-35As, close to full rate). That needs to be established to re-establish Milestone B authority for the program to proceed: the original Milestone B from 2001 was rescinded last year.

Although most observers expect the Conservatives to emerge on top in the election, the questions are not going to go away.

Conservative leader Stephen Harper has won a reputation for borrowing the opposition's ideas to stay in power - under pressure, will the party back off from its uncompromising opposition to a fighter competition? Their argument that this would delay the replacement of the CF-18 has been pretty much exploded by the latest program delays.

Another issue: whether the defence department will release the statement of requirements, which was seen by the PBO, is not classified but is considered "sensitive."