OTTAWA ---Canada’s government is trying to address complaints about its military procurement process that have prompted threats from Washington to block Ottawa from buying Lockheed Martin Corp’s F-35, the Canadian air force’s preferred option for its new fighter jet, a government source said on Tuesday.
U.S. unhappiness about the way Ottawa is handling the race to supply 88 new jets is the latest challenge for a trouble-plagued process that has dragged on for more than a decade, embarrassing Conservative and Liberal governments in Canada.
The affair could be another problem for Liberal Prime Minister Justin Trudeau ahead of an election in October, on top of allegations of interference in a corporate corruption case.
Canada’s procurement rules say bidders for the jet contract - worth between C$15 billion and C$19 billion ($11.1 billion-$14.1 billion) - must promise to give Canadian businesses billions of dollars in so-called industrial benefits.
But this contradicts rules of the consortium that developed the F-35 fighter, a group of which Canada is a member.
The U.S. military’s F-35 office wrote to Ottawa last December to say the plane would not take part in the competition unless Canada dropped the demand for benefits. The letter was obtained by the Ottawa-based Macdonald-Laurier think tank.
Still, dropping the demand would likely infuriate the other firms in the race: Boeing Co, Airbus SE and Saab AB - and could prompt them to scrap their bids. (end of excerpt)
Click here for the full story, on the Military.com website.
(EDITOR’S NOTE: The Canadian government has painted itself into a corner with its haphazard management of its fighter replacement program.
Despite an election promise to leave the F-35 program, Canadian Prime Minister Justin Trudeau did not pull out so Canadian industry could continue to make parts for the aircraft.
However, as a program member, it cannot require any industrial offsets for the F-35 as it is requesting from the other competitors.
So, now it only has two alternatives: keep the requirement for offsets, which means the F-35 will not compete, or change its rules, and forfeit offsets, thereby losing their value, estimated at 50% of program cost, or about C$5-7 billion.)