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Procurement update: fighter jet replacement still a problem for feds, say experts, auditor general

By Neil Moss      

Canada's procurement projects range from the much talked about Canadian Surface Combatant to an upgrade to a mid-life upgrade of the CH-149 Cormorant search and rescue helicopter.

Defence policy expert Martin Shadwick called the F-35, pictured, the 'de facto standard for the vast majority of Canada's allies.' It was initially planned to be procured under the previous Conservative government before being cancelled by the Liberals. Photograph courtesy of Widimedia Commons
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The plan to replace Canada’s aging fleet of fighter jets has been a failing of both the Harper and Trudeau governments, say defence procurement observers. And, according to the federal auditor general, even if the planes are purchased, it will be tough to get them off the ground without enough pilots.

“Successive governments haven’t really covered themselves in glory in taking a smart approach to getting on with a fighter replacement,” said David Perry, a defence procurement expert and vice-president of the Canadian Global Affairs Institute.

Canada introduced its current fighter jet fleet of CF-18s in 1982, and out of the original 138 aircraft there are currently 77 in use. The Canadian government announced last December that they would buy 18 used F-18s from Australia to bide time until new fighter jets could be procured, and upped that order to 25 this summer.

The procurement of new fighter jets has a blemished history. In 2010, Stephen Harper’s Conservative government pledged to buy 65 F-35s, but the project was paused after criticism from the federal auditor general.

“In our view, many of the steps and documents used to support the government’s 2010 decision were of little consequence, because the key questions of whether to procure the F-35 and whether to run a competition were effectively determined by decisions taken much earlier, calling into question the integrity of the process,” read the 2012 report from Michael Ferguson, his first as auditor general.

In the 2015 election campaign, the Liberals announced they would not buy F-35s, instead pledging to launch a procurement competition that would be “open and transparent,” and reduce the budget for Canada’s next fighter jet fleet. However, Lockheed Martin’s F-35 was included as a pre-approved bidder when they formed government and launched a procurement process for the planes.

Prior to choosing to buy used F-18s from Australia, the government planned to buy 18 Super Hornets from the American airplane manufacturer Boeing, but they cancelled the procurement due to a spat the company had with Canadian builder Bombardier.

Mr. Perry called the decision by the Liberals to originally announce that they wouldn’t buy F-35s “imprudent.”

“The actions of successive governments on this file have kind of left people generally with the concern that this file specifically—more than any of the other procurement files—had a lot of political overlay,” Mr. Perry said.

Lockheed Martin, whose booth is pictured at the yearly CANSEC defence expo in Ottawa, is the arms manufacturer behind the F-35 and part of the team that was chosen for the Canadian Surface Combatant procurement. The Hill Times file photograph

Over the last 20 years, Canada has paid nearly half a billion dollars into the development of the F-35 program.

“The F-35 has the attributes of [having] the newest technologies… it has become the de facto standard for the vast majority of Canada’s allies,” said Martin Shadwick, a defence analyst and York University strategic studies professor.

Prof. Shadwick said the F-35 or Boeing’s Super Hornet would give the Canadian fleet “instant compatibility” with the U.S. military. Something that the European pre-approved bidders wouldn’t have.

The government released the draft of the request for proposals for the procurement on Oct. 26, giving the defence industry eight weeks to provide input before the release of a formal proposal request.

It is not only issues with the future procurement of Canada’s next fighter jets that have caused concern for the future of the Air Force.

In his fall report, released Nov. 20, Mr. Ferguson said that if the Department of National Defence doesn’t focus on recruiting and retaining personnel, it will have a difficult time meeting the government’s new operational requirement regardless of what plane it buys.

“Over and above existing budgets, National Defence expects to spend almost $3-billion on extending the life of the current fleet and to buy, operate, and maintain the interim aircraft, without a plan to deal with its biggest obstacles to meeting the new operational requirement: a shortage of pilots and the declining combat capability of its aircraft,” the report concludes. “Although National Defence has plans to address some risks, these investment decisions will not be enough to ensure that it can have the number of aircraft available daily to meet the highest Norad alert level and Canada’s NATO commitment at the same time.”

The focus of the audit was to “determine whether National Defence managed risks related to Canada’s fighter fleet to meet government commitments to the North American Aerospace Defence Command (Norad) and the North Atlantic Treaty Organization (NATO) until an operational replacement fleet is in place.”

Mr. Ferguson concluded that bar hadn’t been met, between staffing issues and the CF-18s being old and requiring increased maintenance. The government’s proposed solution, buying the interim Australian F-18s, wouldn’t help solve either issue.

In 2016, the government directed DND to have enough aircraft available each day to meet Norad’s highest alert level, and staff NATO requirements simultaneously, which would require DND to increase the number of fighter aircraft available for operations by 23 per cent. From March 2014 to November 2016, DND made Norad its first priority, and the number of aircraft it needed depended on Norad’s alert level. When the alert level was low, there was the flexibility to train personnel or deploy aircraft to NATO if needed, the report explained.

While DND has annual recruitment plans, the report said “there was no plan to specifically address the serious problem of CF-18 pilots.” In September, DND said it approved a plan to address declining levels of experience amongst fighter pilots, but the plan does not address increasing the overall number of pilots.

“If CF-18 pilots continue to leave at the current rate, there will not be enough experienced pilots to train the next generation of fighter pilots” or meet the NATO-Norad requirement, said the report.

Additionally, the report said DND had no plan to upgrade the combat capability of the CF-18, even though it’s expected to fly until 2032. They haven’t been significantly upgraded since 2008, said the report, in part because the were only expected to be flying until 2020. In 2032, the CF-18s will be about 50 years old and have fallen “an additional 15 years behind combat technology if no upgrades are made.”

In his opinion, Mr. Ferguson said that no upgrade plan would mean less important roles for the fighter force, and will pose a risk to Canada’s ability to contribute to Norad and NATO operations.

Fighter planes aren’t the only military procurement project on the government’s shopping list. Here are some of the biggest ones on the currently on the go:

Project name: Future Fighter Capability Project

Type: Air

Number: 88

Estimated Cost: Between $15- and $19-billion

The first replacement aircraft is projected to be delivered in 2025 for the Future Fighter Capability Project, after a contract is anticipated to be awarded in 2021 to 2022. Initial proposals are due between the winter of 2019 and 2020.

There were five pre-approved bidders: American Lockheed Martin and Boeing, British Airbus Defence and Space, Swedish Saab, and French Dassault Aviation. The French firm has already pulled out of the competition, according to a Reuters report. As of last summer, Boeing had not decided whether to participate in the procurement, as it questions on how competition will be run, according to a Canadian Press report.

Project Name: Canadian Surface Combatant

Type: Sea

Number: 15

Estimated Cost: Between $56- to $60-billion

Canada is replacing its 12 Halifax-class frigates with 15 surface combatants. The HMCS Vancouver is pictured in Pearl Harbor. Photograph courtesy of the U.S. Navy/Daniel L. Zink

The Canadian Surface Combatant procurement, the largest purchase in Canadian defence history, will form the backbone of the Canadian Navy, as Canada will purchase 15 warships to replace the 12 aging Halifax-class frigates and the four retired Iroquois-class destroyers.

The procurement is currently in the “due diligence process” after the government selected the Type 26 design put forward by a team composed of BAE and Lockheed Martin, among others. The next phase is to have negotiations with the team, the government, and Irving Shipbuilding, which will build the 15 ships.

The design and specifics of the ship will still be revised to meet the government’s needs.

When negotiations are complete, the ships still have to be built and tested, and that “generally runs smoothly,” says Mr. Perry.

Canada is the third country to select the ship design after the United Kingdom and Australia.

According to Public Services and Procurement Canada (PSPC), construction will begin in the early 2020s, and the procurement is expected to last 20 to 25 years.

Project Name: Arctic Offshore Patrol Ship (AOPS)

Type: Sea

Number: Six

Estimated Cost: $9.6-billion

The AOPS will provide armed surveillance of Canadian waters, which includes the North, and help enforce Canada’s sovereignty with its defence partners.

The first ship was launched in September, and construction on the second and third ship are underway with the fourth and fifth to start in 2019, and the sixth to begin in 2020. The program will have have initial operational capability by 2020, and be all the way there by 2025.

The procurement has been subject to near constant criticism from the price of the ships, to the use of Chinese steel in its hull, and the price of the sixth ship, which is double the price of each of the first five at $800-million, according to a report in the Ottawa Citizen.

The initial plan was only to build a sixth ship if it could fit into the initial budget.

The government has made it a priority to end “boom and bust” ship cycles, according to the national shipbuilding strategy. The ships are the largest ships that have been built by Canada in the last 50 years, according to its builder.

The ships are being built by Irving Shipbuilding at its Halifax shipyard.

Project Name: Joint Support Ship

Type: Sea

Number: Two

Estimated Cost: $3.4-billion

The two Joint Support Ships are replacing auxiliary oiler replenishment vessels that were decommissioned in 2016.

The ships are far more than simple replenishment ships, Prof. Shadwick said. They’ll support Canada’s naval task group and allow it to be at sea for a longer period of time. Each will have the ability to transport cargo, and perform limited support onshore operations.

Steel was cut on construction of the ships in June, and vessels will be delivered between late 2022 and early 2023, according to PSPC.

“I think you need three [of them],” Prof. Shadwick said. With only two ships it complicates matters if one of the ships needs to be fixed or refitted.

To bide time until the joint support ships arrive, Canada is currently leasing the MV Asterix from Federal Fleet Services Inc., as its support ship.

The Joint Support Ships are being built by Seaspan Shipyards.

Project Name: Fixed-Wing Search and Rescue Aircraft Replacement Project

Type: Air

Number: 16

Estimated Cost: $2.4-billion (for the first 11 years)

Sixteen Airbus Defence and Space CC-295 aircraft are being built to replace Canada’s current search and rescue CC-115 Buffalo and CC-130 Hercules planes, which perform around 350 missions per year.

The first plane is expected to be delivered in late 2019, with the final aircraft in 2022, which will also mark the beginning of the long-term maintenance and support of the aircraft, according to PSPC.

Training for the aircrews will start in 2019.

The planes will be stationed where current search and rescue missions are performed in Comox, B.C., Winnipeg, Man., Trenton, Ont., and Greenwood, N.S.

The planes will have the ability to detect and classify people and objects with state-of-the-art sensors in bad weather conditions and poor visibility, as well as conduct searches at low altitude and low speed.

They will have a minimum crew of six, with two pilots and two search and rescue technicians, one air combat systems officer and one flight engineer.

The plans will be responsible with covering 18-million square kilometres, which is one of the largest and most challenging search and rescue areas in the world, according to DND.

Project name: Canadian Multi-Mission Aircraft

Type: Air

Number: Unknown

Estimated Cost: Unknown

The CP-140 Auroras, pictured, will be replaced sometime after 2035. Photograph courtesy of the Department of National Defence

The Canadian Multi-Mission Aircraft replacement will be a procurement to replace Canada’s fleet of maritime patrol aircrafts. Canada currently has 18 CP-140 Aurora’s that it procured in the early 1980s.

The planes perform surveillance of Canada’s coasts, anti-submarine warfare, search and rescue missions, disaster relief, among other missions.

The procurement will start its option analysis between 2021 and 2022, according to the defence capabilities blueprint. Initial delivery will be between 2032 to 2033, and final delivery after 2035.

Prof. Shadwick says if the government cannot sell the importance of the multi-mission aircraft, they can’t “sell anything,” as all Canadians would agree on the importance of coastal surveillance.

Project Name: CH-149 Cormorant Mid-Life Upgrade

Type: Air

Number: 21

Estimated Cost: Unknown

The CH-149 Cormorants, pictured, will be upgraded so they can be extended to 2040. Photograph courtesy of the Department of National Defence/Johanie Maheu

The mid-life upgrade to Canada’s fleet of 14 CH-149 Cormorants will extend their life until 2040, according to PSPC. The size of the fleet will be supplemented by up to seven additional aircraft.

The program is in the definition phase of the procurement, and a cost is unknown, but it has a funding range of $1-billion to $4.99-billion, according to the defence capabilities blueprint.

The anticipated final delivery of the upgrade is between 2027 and 2028, with delivery starting between 2022 and 2023.

The helicopters operate out of the search and rescue base in Trenton, Ont.

Project Name: Victoria-class Modernization

Type: Sea

Number: Four

Estimated Cost: Unknown

Canada’s four Victoria-class submarines, pictured, will go through a modernization to extend their life to the mid-2030s. Photograph courtesy of the Department of National Defence/Kenneth Galbraith

The modernization of Canada’s four Victoria-class submarines is projected to start its definition by 2020 and 2021.

The cost of the modernization is unknown, but the defence capabilities blueprint lists the funding range between $1-billion to $4.99-billion

The submarines are a 1970s British design that the British Royal Navy used from 1990 to 1994 before they were decommissioned. Canada bought the underwater vessels in 1998 and they have been in service since October 2000.

Under Strong, Secure, Engaged, Canada made a commitment to procuring new submarines, but press reports indicate that they don’t want to start a purchasing project at this time. That delay could impact the Canadian Navy’s submarine capability because if procurement doesn’t begin by the mid-2020s, submarines won’t be delivered before the Victoria-class subs are decommissioned, according to Norman Jolin, a 37-year veteran of the Canadian Navy and an associate consultant at CFN Consultants. But added that Canada could push the Victoria-class submarines’ life until new submarines are procured to keep the capability.

—with files from Emily Haws


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