Ottawa has made a multimillion-dollar payment as part of a renegotiated deal that Canada is expected to take more from the F-35 development bill than in previous years.
The $ 99 million payment and the renegotiated deal come despite the fact that the Liberal government has said Canada may not actually buy the stealth fighter, and as US officials raise new concerns about the price and development of the F-35.
The government announced in late March that it was in talks with the United States and Lockheed Martin to buy the 88 F-35 after years of competition showed that the stealth fighter was emerging as the leading contender.
But while the government said it hoped to have a finalized contract by the end of the year, it left the door open to buy the Swedish-made Gripen fighter if negotiations with the United States and Lockheed Martin fail.
Canada is one of eight countries involved in the development of the F-35, and its latest contribution means it has so far thrown $ 712 million into the 1997 pot to stay on the table with the United States, Britain, Australia, Italy and Norway. , Denmark and the Netherlands.
Ministry of Defense spokeswoman Jessica Lamirande said the updated deal extended the agreement that Canada and other partners signed in 2006, pledging to share the cost of developing the F-35 between them.
The new deal reflects Canada’s desire to buy 88 new fighter jets, rather than its original plan of 65, she added, as well as Turkey’s withdrawal from the F-35 program.
The news of the payment and the renegotiated agreement came after the U.S. Government’s Accountability Office, the equivalent of Canada’s chief auditor, released a new report last week highlighting problems with the development of the F-35.
The report specifically raises concerns about delays in the delivery of a simulator to properly test the full capabilities and shortcomings of the F-35, as well as current problems with the delivery of the right stealth fighter software, known as Block 4.
The development of Unit 4 “continues to experience rising costs and delays,” the report said. “The cost of Unit 4 continued to rise in 2021 due to higher costs related to upgrading important hardware and testing upgrades, among other things.
However, while the simulator and Block 4 are not expected to be delivered for several years, the GAO report notes that the United States continues to buy the F-35 with a record-breaking clip, leading to increased risks and potential costs in the long run.
“For example, this means that more aircraft will have to be corrected later if more performance problems are identified, which will cost more than if these problems were resolved before these aircraft were produced,” the report said.
“At the same time, when (the Ministry of Defense) buys planes with these high prices, those that are already in the fleet are not performing as well as expected.
Despite what Defense Secretary Anita Anand described as a “tough” competition to get the best aircraft at the lowest price with the greatest economic benefits, officials said the scope of talks with Lockheed Martin and the US government would be wide.
This includes the cost of purchasing the new fighters and any necessary Canadian-specific modifications, as well as the delivery schedule. Officials say they hope the first fighter will arrive by 2025 and the last in the early 2030s.
Public Services and Public Procurement spokeswoman Michelle Larose did not directly answer questions about the content of the GAO report, but said in an email that Lockheed Martin will have to prove that it can fulfill any contract with Canada.
“The selected entrant will need to demonstrate successfully that entering into its proposed agreements and arrangements will provide Canada with value for money, flexibility and protection against risks, as well as performance and delivery guarantees,” she said.
“As this competitive procurement process is still ongoing, further information on the bidder’s proposal and negotiations cannot be provided at this time.”
This report by The Canadian Press was first published on May 6, 2022.
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