Aleksi Korpela Procurement

The F-35 and Canadian Defence Procurement: Part I

The Joint Strike Fighter (JSF) program has been widely criticized in Canada for being behind schedule, above budget, and technologically faulty. While some of the criticism is justified, others are based on misconceptions about the JSF program’s history and Canada’s procurement efforts to replace the aging CF-18s.

In fact, the main driver of Canada’s early involvement in the JSF program was the opportunities made available to the defence industry. The JSF offered occasions for Canadian companies to conduct advanced research and development, enhance relationships with U.S. defence companies, and provide bidding opportunities for a substantial number of contracts over a forty-year period.

Program creation 1993-1997

In 1993, the Pentagon launched two programs to replace the U.S. Navy’s (USN) A-6 aircraft and the U.S. Air Force’s (USAF) F-16s. The Common Affordable Lightweight Fighter (CALF) program was jointly run between the USN and the Defense Advanced Research Projects Agency to create an aircraft for the Navy and the U.S. Marine Corps (USMC) that was capable of vertical and short takeoff and landing (VSTOL).

The Joint Advanced Strike Technology (JAST) program was designed to develop common aviation technology for the services and thereby reduce expenditure by eliminating multiple development chains. In 1994, JAST had absorbed CALF, and studies were conducted into developing a uniform airframe for the Marine Corps, Navy, and Air Force. After a review process, JAST was reorganized with the objective of producing three variants of the aircraft. In 1995, U.S. Department of Defense (DOD) officials renamed JAST the Joint Strike Fighter program, which would develop a fighter platform for the USMC, USN, USAF, and the armed forces of participating states.

Phase I: Concept Demonstration and Planning 1997-2001

On November 16, 1996, DOD announced a design competition for the JSF between Boeing and Lockheed Martin. McDonnell Douglas’ bid was excluded due to complexities in its design proposal.

Following a statement of intent in 1997, Canada officially joined the first phase of the JSF program on January 2, 1998. As an observer of the program’s management innovations, Chrétien’s government agreed to contribute US $10.6 million to the program. This did not entail a commitment to purchase the aircraft produced, and the JSF was not originally expected to be the CF-18’s replacement – this decision was made in 2008.

By 2000, the JSF had already run into problems. The program was downsized due to delays and cost overruns at both Boeing and Lockheed Martin during the design phase. That year, Canada’s Department of National Defence and Industry Canada launched a marketing campaign to encourage Canadian defence and aerospace companies to join the JSF program. In early 2001, a Canadian interdepartmental team was created in the JSF program to help promote investment, research, and development opportunities for Canadian companies.

On October 26, 2001, the Pentagon announced Lockheed Martin’s X-35 as the winner of the design competition for the JSF over Boeing’s X-32. Lockheed Martin had significantly outperformed Boeing in VSTOL and there were notable differences in the program risk assessments of the two projects.

Industrial benefits

Canada’s defence industry has gained significantly from its involvement in the JSF. Between 2002-2014, Canadian companies have gained US $637 million in contracts due to Canada’s participation in the program. As regards further opportunities, future production contracts amount to US $9.62 billion and sustainment contracts worth $556 million.

Thus far, the value of contracts gained and the amount spent by Canadian governments on the JSF is largely zero-sum in terms of explicit gains and expenditures. Formal program spending by the government is an estimated US $711.6 million through to 2051 – $288.7 million as of 2015. This will likely be offset as Canadian companies gain further contracts during the development, production, and sustainment phases of the F-35. Additionally, if Canada does decide on the F-35 as the CF-18’s replacement, then companies will have better opportunities to gain further contracts.

By participating in the program, Canadian companies were provided opportunities to research and develop high-end technological and manufacturing capabilities, such advanced composite manufacturing, high-speed machining, and mission systems development. These benefits provide the defence industry with technological advantages with long-term relevance for defence manufacturing and development throughout the 21st century. The fulfilment of contracts also makes Canadian companies attractive subcontractors for global defence corporations such as Lockheed Martin and major procurement programs in the U.S. Moreover, a thriving industrial base leads to more jobs, lucrative exports, higher tax revenues, and a more stable economy. Canadian involvement in the JSF program is therefore not just of military importance, but an industrial and economic imperative as well.

[Continue to Part II.]

Photo courtesy of U.S. Air Force (WikiCommons).