DTN News - CANADA DEFENSE NEWS: Canadian Defence Minister Peter MacKay Goes Defensive Account F-35 Costs

Asian Defense News: DTN News - CANADA DEFENSE NEWS: Canadian Defence Minister Peter MacKay Goes Defensive Account F-35 Costs
*Defence minister goes on the defensive 
Source: DTN News - - This article compiled by Roger Smith from reliable sources By Kristy Kirkup ,Parliamentary Bureau
(NSI News Source Info) TORONTO, Canada - April 8, 2012: Defence Minister Peter MacKay stood up for himself and his department Sunday, insisting the F-35 fiscal flub outlined in a recent auditor general's report was a miscommunication matter.

Auditor general Michael Ferguson published his debut report last week, indicated the stealth fighter jets would cost $25 billion -- not $15 billion as indicated by the federal government.

But in an interview with CTV's Question Period, MacKay blamed accounting issues for a $10 billion gap between the government's account of F-35 costs and the auditor general's projections.

"The $10 billion is money we are paying right now," MacKay said. "That is the money that goes to pay the pilots of the F-18 program and fuel, oil, upkeep of the existing fleet."

MacKay said he knew the full estimated cost of the jets in 2010 but insists Canadians were not misled.

"We have included that figure in estimates and information provided to the auditor general and that information goes back to 2010. Those figures are there for all to see," he said. "I don't agree that there was a manipulation of information."

Opposition parties disagree.

"We're talking about mismanagement here as well as dishonesty," NDP defence critic Jack Harris said on the same Sunday broadcast.

MacKay said the government and the auditor general worked from different timelines, causing the confusion.

The auditor general and a parliamentary budget officer used a 36-year model for their evaluations of the fighter jet program, but the Department of National Defence used a 20-year period.

The F-35s are expected to have a 36-year lifespan.

The government hasn't signed a contract with F-35 manufacturer Lockheed Martin, but it has penned a memorandum of understanding (MOU). If the government decided to change course, penalties would be attached.

"There are obligations under the MOU and by that I mean there would be consequences for withdrawing from it," MacKay said.

The minister indicated the government has accepted the auditor general's conclusions but he doesn't plan to offer his resignation over the controversy.

Kristy.Kirkup@sunmedia.ca

*Link for This article compiled by Roger Smith from reliable sources By Kristy Kirkup - Parliamentary Bureau
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DTN News - CANADA DEFENSE NEWS: Canada May Re-Think Acquisition Of F-35 JSF On Damning Report By Auditor General

Asian Defense News: DTN News - CANADA DEFENSE NEWS: Canada May Re-Think Acquisition Of F-35 JSF On Damning Report By Auditor General 
*DND's buying power curbed after AG says military kept Parliament in dark on F35
Source: DTN News - - This article compiled by Roger Smith from reliable sources Mike Blanchfield, The Canadian Press
(NSI News Source Info) TORONTO, Canada - April 4, 2012: The Harper government froze spending Tuesday on the multi-billion-dollar plan to buy new jet fighters minutes after the auditor general produced a withering report accusing the Department of National Defence of keeping Parliament in the dark about spiralling problems with the F-35 purchase.

The government also announced it would take away DND's ability to buy new weapons systems and hand it to Public Works — all in an effort to shield itself from the ensuing assault in the House of Commons that followed the release of the report by new Auditor General Michael Ferguson.

The Defence Department faced wide-ranging scorn over its management of the a plan to buy 65 new F-35 radar-evading stealth fighters for what the military initially insisted would cost $9 billion. The cost of the purchase, which is already the largest single purchase of military hardware in Canadian history, will almost certainly be far higher than originally budgeted, Ferguson said.

He added that Public Works should have done a better job of overseeing the purchase, but Ferguson was particularly scathing about DND's failure to come clean on potential problems with buying the F-35.

“Briefing material did not inform senior decision makers, central agencies, and the Minister of the problems and associated risks of relying on the F-35 to replace the CF-18," Ferguson said in his report. "Nor did National Defence provide complete cost information to parliamentarians."

DND pointedly rejected criticism that it did not exercise due diligence in managing the project.

The auditor general's criticism does not mean the government will scrap the F-35 purchase or even consider opening up the sole-source procurement to other competitive bids.

Ferguson's mandate limits his criticism to the conduct of bureaucrats, but his findings could be incendiary for the Harper government. The audit came just one week after Finance Minister Jim Flaherty announced $5.2 billion in cuts to public spending in his deficit-fighting budget.

NDP Leader Thomas Mulcair said the report raised ethical questions with its "litany of poor public administration, bad decision making and lack of accountability by Conservative ministers.

"But the key question to the prime minister is: how could he allow Parliament to be intentionally misled on the F-35s? Either he knew, and it's unconscionable, or he didn't know and it's incompetence. Which is it?"

Prime Minister Stephen Harper said that was a misrepresentation of Ferguson's findings.

"The government has not yet purchased this airplane, and has not yet signed a contract. The auditor general has identified a need for greater independence and supervision over some of the activities of the Department of National Defence. in this regard, the government will put that supervision in place before we proceed."

Harper left the remaining barrage of questions from the NDP and Liberals to two of his ministers, Associate Defence Minister Julian Fantino and Public Works Minister Rona Ambrose. Both ministers stuck closely to the government's earlier talking points — the freezing of funding and the creation of a new secretariat of top bureaucrats to shepherd the jet purchase from now on. Defence Minister Peter MacKay did not respond to any queries on the auditor general's report.

The Conservatives steadfastly defended the F-35 purchase during last year's election campaign that gave them a majority despite a growing body of evidence that suggested the project could never be kept on budget. The program is designed to replace the country's aging fleet of CF-18 jet fighters.

The late NDP leader Jack Layton, as well as ex-Liberal leader Michael Ignatieff, repeatedly attacked the F-35 purchase during last year's election campaign.

At one campaign event, Harper affirmed his support for the F-35 purchase, and said "latitude" had been built into the government's cost estimates.

"I think it's in a way sad that the new jets have become an issue in this campaign," the prime minister said during an April 8, 2011, stop in British Columbia.

"We've got our men and women in uniform up there flying airplanes that we know at the end of this decade are going to have to be replaced, and the thing we owe to them is to replace those airplanes.''

Ferguson's report vindicates parliamentary budget officer Kevin Page, who became embroiled in a heated public battle with the Defence Department in March 2011 when he released a report that said the cost of the F-35 could reach $30 billion over three decades.

An assistant deputy minister at Defence told an elaborate briefing for journalists that Page made a "mathematical error'' in calculating the unit cost of the planes, and that his estimates on long-term maintenance were erroneous as well.

Ferguson said Tuesday that Defence should have come clean with the real figures at that time. He pegged the projected 20-year cost of the program, including maintenance, at $25 billion.

"As a response to what the Parliamentary Budget Office did, that's when National Defence should have brought forward that full costing," Ferguson said.

Liberal defence critic John McKay accused the government Tuesday of trying to hide the true cost of the program from Canadians.

"Now they appear ready to throw bureaucrats and our armed forces under yet another bus, but Canadians won't be fooled. Responsibility for this fiasco lies squarely on the prime minister's desk."

The United States oversees the nine-country Joint Strike Fighter Program. The planes would be built by the U.S. defence giant Lockheed Martin, but the rollout of the plane has been plagued by delays, technical problems and a 64-per-cent cost increase. Those problems have been well-documented in reports by the U.S. Government Accountability Office, an investigative branch of Congress.

Harper and his government were briefed in advance on the criticisms in the auditor general's report, allowing them to prepare their response in advance. Along with a freeze on spending above $9 billion, the government created a new oversight mechanism for the F-35 procurement — an inter-departmental secretariat of deputy ministers to oversee the project.

The Tories received accolades for establishing such a secretariat to administer its recently announced $33-billion National Shipbuilding Program.

The Harper government has said it expects to pay US$75 million dollars for each of the F-35s. But others — including Canada's parliamentary budget officer — have said the actual cost could be close to double that figure.

The government has not signed a contract with the U.S. to buy the F-35s. But it has invested $335 million so far to meet various commitments over the 15-year history of the U.S.-led JSF initiative.

*Link for This article compiled by Roger Smith from reliable sources Mike Blanchfield, The Canadian Press
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DTN News - CANADA DEFENSE NEWS: F-35 Stealth Fighter Program Faces Day Of Reckoning

Asian Defense News: DTN News - CANADA DEFENSE NEWS: F-35 Stealth Fighter Program Faces Day Of Reckoning

Source: DTN News - - This article compiled by Roger Smith from reliable sources CTV

(NSI News Source Info) TORONTO, Canada - April 3, 2012:  National Defence and Public Works face a day of reckoning today as the auditor general releases a much anticipated report on the troubled F-35 stealth fighter program.

A draft copy of Auditor General Michael Ferguson's report has been making the rounds in Ottawa for weeks.

Sources say it criticizes the government for not doing its pricing homework and failing to follow procurement rules in the largest ever military hardware purchase.

The Canadian Forces wants to buy 65 stealth fighters to replace the aging fleet of CF-18 jet fighters.


The Conservative government says it will pay US$75 million per aircraft when it starts buying them in 2016, which some critics say is too low by half.

The U.S. and Britain signed contracts for the delivery of early-production aircraft at between US$140 million and US$145 million each, but Canadian officials have long insisted that the price will drop as the assembly line ramps up.

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*Link for This article compiled by Roger Smith from reliable sources CTV
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