Countdown begins as Ottawa 'Canadianizes' F-35 figures

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Last week, as MPs bickered on Parliament Hill over the true costs of the F-35 fighter, Department of National Defence officials made an under-the-radar trip to Washington to gather the figures needed for an updated per-jet estimate of the war planes Canada wants to buy.

The federal government is working to translate this U.S. data into figures that reflect Canada's purchase plans and hopes to make these public before Parliament rises in June, sources say.

The Conservatives recently promised to be more open about plans to acquire new fighters for Canada in the wake of a damning Auditor General's report on the handling of the decision to purchase 65 leading-edge jets made by Lockheed Martin.

The political pledge made in April was that the Conservatives would provide Canadians with an updated estimate for the per-plane costs of the jets within 60 days of receiving forecast information from the Joint Strike Fighter Program office in the United States.

In 2010, Ottawa told Canadians the planes would cost up to $75-million each. This forecast price, which federal officials freely admit is outdated, is a relatively bare-bones estimate that merely includes basic equipment on the plane such as the airframe, the engine and such.

Canada's per-plane estimate will likely rise into the $80-million to $90-million range, even using Ottawa's minimalist approach to costing the jets. The development of the F-35 Lightning has been riddled with cost overruns and technical problems.

Officials are privately confident that overall jet purchase price will still not exceed the $9-billion Canada set aside to buy the planes.

This figure, however, doesn't include maintenance, upgrades or operating costs.

It's still unclear when, or if, the Harper government will yield to critics and release a full life-cycle cost estimate for the F-35 including upgrades and maintenance and operating expenses over its full 36-year lifespan.

The Treasury Board Secretariat has pledged to commission an independent review of project costs but this agency, which manages the government, signalled last week it is fine with estimates that only span the first 20 years of a purchase.

Sources say Department of National Defence officials visited the JSF program office in Washington early last week to acquire the information needed before they "Canadianize" the estimates, meaning convert them into figures that reflect precisely that Ottawa is buying. Officials say the trip spanned two days – May 1 and 2 – and that bureaucrats are still reviewing what they received to ensure it's complete.

Under the government's pledged timetable, this would leave Ottawa 60 days, until early July, to release new cost estimates.

But officials are accelerating plans in hopes they can release the information before MPs quit the Commons in June for summer break.

Separately, recently released documents show Department of National Defence officials tried to get federal Auditor General Michael Ferguson to tone down his hard-hitting report on the F-35 acquisition before it was released.

At the request of the Common's public accounts committee, the government has made public correspondence between the Auditor General's Office and Defence and Public Works bureaucrats in the months leading up to the April 3 report.

Letters show top bureaucrats disputed criticism of their departments in Mr. Ferguson's report, arguing that adequate levels of due diligence were exercised during the acquisition.

DND's deputy minister, Robert Fonberg, said in a Feb. 7 letter that while the department could have generated a bigger paper trail, it wouldn't have altered the decision to pick the F-35.

"Certain traditional steps and documentation may not have been available at the time of the audit, but there is no reason to believe that the lack of this evidence would have resulted in any material change to the government's decision as due diligence was exercised," Mr. Fonberg wrote.

The deputy minister of Public Works, François Guimont, added that he rejected the Auditor General's characterization of the sequence of events in the acquisition process.

"We do not agree with the conclusion that PWGSC did not demonstrate due diligence and endorsed a key decision in the absence of required documentation and completed analyses," Mr. Guimont said on Feb. 24.

He added that in the report, which was released to the public in April, the Auditor General did not lay out "specific laws, policies and/or regulations" that were breached by his department.

"We would appreciate clarification on this issue as our own analysis of relevant legislation, policy and regulatory documents has not identified any gaps," Mr. Guimont said.

Separately, there was political outrage in the Commons over a newly released document that shows the Department of National Defence offered up fewer than 160 words to make its justify why Canada should forgo a competition to select the country's next fighter jet and select the F-35.

Canada's federal spending watchdog cited this June 1, 2010, letter in a report last month that criticized Ottawa's handling of the $25-billion F-35 purchase. It was made public last Friday.

NDP MP Christine Moore accused the government of manipulating the process in favour of an aircraft that is "still in development, facing delays and offering no guaranteed economic spinoffs."

Defence Minister Peter MacKay responded that his government is going beyond the Auditor-General's recommendation in dealing with the controversial purchase.

"We have now in place much more transparency, accountability, and reporting to Parliament and to the public. We also have independent oversight," Mr. MacKay said.