Swedish jet maker complains Ottawa is negotiating to buy F-35 | National
OTTAWA – Swedish fighter jet maker Saab is complaining about Ottawa’s negotiations with Washington and US defense giant Lockheed Martin to buy the F-35, saying such talks weren’t meant to be part of the process .
The federal Liberal government announced in March that the F-35 had beaten Saab’s Gripen in the $19 billion competition to buy 88 new fighter jets to replace Canada’s aging CF-18s.
Ministers subsequently launched final negotiations with the US government and F-35 manufacturer Lockheed Martin to determine the cost, delivery schedule and economic benefits to Canada.
They also stressed that the deal for the F-35 was not finalized, with the government reserving the possibility of speaking with Saab if talks with Lockheed Martin bogged down.
Nevertheless, during a parliamentary committee appearance this week, Saab Canada chairman Simon Carroll complained that there should be nothing to negotiate at this stage of the game.
“Recent government statements have indicated that Canada is negotiating costs, delivery schedule and economic benefits with our competitor,” Carroll told the House of Commons Committee on Government Operations and Estimates on Thursday.
“There should be no negotiation on these critical elements. These elements of the bidders’ response were to be committed to and then evaluated as part of the competitive process.”
Carroll later accused the government of not following the process for organizing the contest that was presented to Saab.
“Canada’s decision to proceed to the finalization phase to negotiate with the competitor to determine the costs, benefits and deliveries which are mandatory requirements under the program is inconsistent with the Procurement Guidelines (Fighter Aircraft ) given to us.”
In a statement on Friday, the federal department responsible for leading the competition and negotiations pushed back, saying it is following the steps that were presented to companies when they were asked to submit their bids during the competition.
“The finalization phase is still ongoing and is being executed as stated in the tender documents,” said Public Services and Procurement Canada spokeswoman Michele LaRose.
“During this phase, the top-ranked bidder must successfully demonstrate that the resulting contract will meet all of Canada’s requirements and deliverables, including value for money, flexibility, protection against performance and delivery risks and assurances. »
Lockheed Martin declined to comment, saying it would be inappropriate given ongoing negotiations.
When the government announced the launch of negotiations for the F-35 in March, Defense Minister Anita Anand called the competition “rigorous”. Still, a senior procurement official said the scope of the negotiations would nonetheless be broad.
“We need to discuss capability requirements, we need to discuss costs, we need to discuss timelines, when are we going to get these aircraft,” Public Services and Procurement Canada Assistant Deputy Minister Simon Page said.
“So there are still quite a few metrics and variables to bring back to the business.”
As for the projected cost of $19 billion, which the government first announced in 2017, Anand said it would be “further refined”.
And while officials at the time expressed optimism that a deal could be finalized by the end of the year and the first F-35 delivered by 2025, Lockheed said negotiations could extend into next year, with the first aircraft delivered in 2026 at the earliest.
Retired Col. Alan Stephenson, who now works as a defense analyst for the Canadian Institute of Global Affairs, said talks between Ottawa, Washington and Lockheed Martin have been “opaque”, with few updates or details.
But he said if Saab was really concerned about the process, there are legal avenues such as the Federal Court and the Canadian International Trade Tribunal with which he can challenge the competition results.
“If Saab disputes that, then they have the means to formally contest it,” Stephenson said. “So overall they’re playing a bit of a game here. And if they really believe they’ve been hit hard, then they can challenge it.”
On Friday, Saab spokeswoman Sierra Fullerton did not respond to a question about whether the company had filed or planned to file a lawsuit.
“As noted during our appearance yesterday, Saab has provided firm commitments to Canada on pricing, delivery schedule and economic benefits to Canadian industry. We support this offer,” she said in an email. .
“Saab participated in the committee because we are committed to serving the Canadian government and the Armed Forces, and we felt that we could contribute to the study of air defense procurement projects.”
As to why details such as cost and delivery schedule were not included in the F-35 offer, Stephenson said that procuring military equipment is much more complex than items like pencils, given various factors that must be taken into account.
For the F-35, that includes the fact that Canada is just one of many countries considering buying the plane. This means that both parties must determine when the first Canadian aircraft will roll off the production line, which affects costs.
Philippe Lagassé, a professor at Carleton University who has been tasked with overseeing government-appointed military procurement plans, said Saab’s remaining in contention while those details are ironed out is an improvement over procurement previous ones.
“My feeling is that this is a lesson learned from past purchases,” he said. “If all of this is left until a winner is announced, Canada loses a lot of leverage.”
This report from The Canadian Press was first published on September 30, 2022.