Back to news

November 7, 2018 | Local, Aerospace

French firm Dassault pulls out of fighter-jet competition: Sources

By Lee Berthiaume

The long effort to replace Canada's aging fighter jets took another surprise twist on Tuesday, as multiple sources revealed that French fighter-jet maker Dassault is pulling out of the multibillion-dollar competition.

The decision comes just over a week after the federal government published the military's requirements for a replacement for Canada's CF-18s as well as a draft process by which a winning supplier will be chosen.

Dassault had repeatedly pitched its Rafale aircraft to Canada over the years as successive governments in Ottawa have wrestled with selecting a new fighter jet. Dassault's pitch included significant promises, including that it would assemble the planes in Canada.

But sources tell The Canadian Press that Dassault's decision to withdraw was related to the fact France is not a member of the Five Eyes intelligence-sharing network, which counts the U.S., Britain, Australia, New Zealand and Canada as members. The five members have very specific requirements for how their equipment works together.

The French government, which had been closely working with Dassault as the most recent iteration of Canada's fighter-replacement program has inched along over the past year, was preparing to notify Ottawa of the company's withdrawal.

The move leaves four companies — U.S. aerospace giants Lockheed Martin and Boeing, European competitor Airbus and Swedish firm Saab — competing for the $19-billion contract to replace Canada's 76 CF-18s with 88 new fighters.

A contract isn't expected to be awarded until 2021 or 2022, with delivery of the first new aircraft slated for 2025. In the meantime, the government is planning to upgrade its CF-18s and buy 25 used fighters from Australia as a stopgap.

Dassault faced several significant challenges in meeting Canada's requirements for a new fighter, said defence analyst David Perry of the Canadian Global Affairs Institute, and while they weren't insurmountable, they would have cost time and money.

Those challenges included meeting those Five-Eyes intelligence-sharing requirements, which Perry said put Dassault at a distinct disadvantage in the competition when compared to Lockheed Martin, Boeing and, to a certain degree, Airbus.

"For any of the non-American companies, solving the Five-Eyes interoperability issues is going to be challenging," he said, noting that the U.S. in particular is very sensitive about data-sharing.

"And it costs companies a lot of money to mount and pursue bids. So if they think at this point in time that it's not a realistic prospect, then pulling out is pretty understandable."

That could explain why Dassault never established a strong presence in Canada during the many years when it was trying to sell the Rafale as a replacement for the CF-18, he added.

The CF-18s are about 35 years old. Canada's attempts to buy a new fighter jet have dragged on for nearly a decade after the previous Conservative government announced in 2010 that Canada would buy 65 F-35s without a competition, with the first to be delivered in 2015.

But the Tories pushed the reset button in 2012 after the auditor general raised questions about the program and National Defence revealed the jets would cost $46 billion over their lifetimes.

After campaigning on a promise not to buy the F-35s, the Trudeau Liberals announced in November 2016 they would take their time with a competition to replace the CF-18s, and buy 18 "interim" Boeing Super Hornets without a competition because Canada needed more fighter jets badly.

But then Boeing's trade dispute with Canadian rival Bombardier saw the Liberals scrap their plan to buy Super Hornets and instead begin talks to buy 18 used fighter jets from Australia. A contract for those used planes is expected in the coming weeks.

The formal competition to replace the CF-18s is scheduled to begin next spring.

https://www.nationalobserver.com/2018/11/07/news/french-firm-dassault-pulls-out-fighter-jet-competition-sources

On the same subject

  • U.S. government again urges Canada to acquire American fighter jets, despite Pentagon threats

    May 8, 2019 | Local, Aerospace

    U.S. government again urges Canada to acquire American fighter jets, despite Pentagon threats

    DANIEL LEBLANC The American government is once again urging Canada to acquire U.S.-built fighter jets to replace its fleet of CF-18s, one day after it emerged the Pentagon recently threatened to pull the F-35 out of the $26-billion competition for new aircraft. The contradictory messages from the U.S. government showcase how the Americans are trying to prevent a tendering process that would favour European manufacturers at the expense of either the Lockheed Martin F-35 or the Boeing Super Hornet. The Canadian government is weeks away from launching a competition for 88 new fighter jets, with the two American firms set to enter into a competition against the Swedish Gripen and the Eurofighter Typhoon, which is built by a consortium that includes Airbus. In a statement on Tuesday, the American government called on Canada to make sure its fighter jets can operate alongside U.S. military aircraft around the world. The “crucial” point, according to the American government, is Canada's participation in the North American Aerospace Defence Command (NORAD) that controls the Canadian and American airspace. Only U.S.-built fighter jets currently operate in NORAD and European aircraft would face technological hurdles in gaining the ability to fully integrate into the bi-national military alliance. “We continue to believe in the importance of NATO and NORAD interoperability as a crucial component of Canada's acquisition of defence assets,” said Joseph Crook, a spokesman for the U.S. embassy in Ottawa. Mr. Crook added the American government remains “hopeful that U.S. firms are able to participate in open and transparent competition processes that can support Canada's NATO and NORAD obligations, especially when it comes to co-operative engagement capabilities.” On Monday, the Macdonald-Laurier Institute published letters from American officials who warned their Canadian counterparts last year that the F-35 might be pulled from the competition unless Canada's requirements for industrial benefits were modified. The American government is concerned about Canada's Industrial and Technological Benefits (ITB) policy, which requires the winner of the contract to invest the equivalent of the acquisition cost in Canada. Built by Lockheed Martin, the F-35 is a stealth aircraft developed by an international consortium of allied militaries under a program that specifically rejects the application of traditional industrial benefits. Canada has been a member of the program since 2006. In an interview after a cabinet meeting on Tuesday, Defence Minister Harjit Sajjan said he has sought to reassure the Americans by pointing out that the Canadian government will focus mostly on technical capabilities in deciding which aircraft to purchase. “First of all, the capabilities of the aircraft is the number one priority. Making sure we meet the needs of the Canadian Armed Forces – the Air Force in this particular case – is the number one priority. We will always make sure that will happen,” Mr. Sajjan said. He added that obtaining benefits for the Canadian economy is also important, while suggesting the matter will have less importance in the final weighting of the bids. “This obviously factors into the equation, but the capability requirements for the Canadian Armed Forces is always the number one priority,” he said. In a speech laying out his foreign-affairs policy on Tuesday, Conservative Leader Andrew Scheer said he will seek to modernize the NORAD alliance if his party forms the next government, including through the purchase of fighter jets that can defend North America alongside the U.S. fleet. “I will act to select a new fighter jet through an open competition and make sure the new jets are interoperable with our American allies,” Mr. Scheer said. Vice-Admiral Mathias Winter of the U.S. Navy said in a letter last December that Canada has received US$1.3-billion in economic benefits from its participation in the F-35 program to this point. “The F-35 supplier team will submit an F-35 offer only if (1) the ITB requirement is waived entirely and (2) there is no future ITB obligation arising from selecting the F-35,” Vice-Adm. Winter said in his letter. https://www.theglobeandmail.com/politics/article-us-government-urges-canada-to-acquire-american-fighter-jets-in-2/

  • Military officer AWOL from Ukraine mission returns to Canada; DND confirms he has been released from the Canadian Forces

    August 21, 2023 | Local, Land, Security

    Military officer AWOL from Ukraine mission returns to Canada; DND confirms he has been released from the Canadian Forces

    Canadian soldier training Ukrainian troops disappeared for six months before resurfacing back home. He's now been released from the military

  • Feds closing in on winning bidder for $60-billion warship project

    September 25, 2018 | Local, Naval

    Feds closing in on winning bidder for $60-billion warship project

    By BEATRICE PAEZ Some industry observers say there are rumblings that the multibillion-dollar announcement on the Canadian Surface Combatant could happen in a few weeks' time, but Defence Minister Harjit Sajjan says he hopes a decision will be announced on the design by 'the end of the year.' Ottawa could be close to settling on the winning bid for the $60-billion procurement of multi-purpose vessels that will form the backbone of the Canadian Navy, with rumours swirling that a decision could come in a few weeks' time, although Defence Minister Harjit Sajjan says the government will announce it by the end of the year. Some industry observers have heard rumblings that the multibillion-dollar announcement on the Canadian Surface Combatant (CSC) project, the biggest procurement in the federal government's history, could happen as early as the upcoming defence and aerospace convention in Halifax, otherwise known as DefSec, slated for Oct. 2-4. Asked if the government plans to announce the winner in Halifax, Byrne Furlong, press secretary to Mr. Sajjan (Vancouver South, B.C.) said, the minister would be attending the convention as he does every year. Mr. Sajjan, in an interview with The Hill Times earlier this month said, the preferred bidder will be named by the end of the year. “We wanted to make sure that we gave industry enough time so that the right bid process is done correctly and we're hoping that by the end of this year, we will be able to make the announcement and a selection will be made on the design,” Mr. Sajjan said in a phone interview on Aug. 29. Three companies are competing to help deliver 15 warships over the next 25 years. Those ships will eventually replace Canada's aging fleet, namely, the 12 Halifax-class frigates and the four Iroquois-class destroyers, which have been decommissioned. In its entirety, the CSC project is estimated to cost between $56-billion and $60-billion. The cure process—a chance for the contenders to adjust their bids to fit the government's criteria—wrapped up in July. “I don't expect there to be another cure process. I think they've got a decision ready to go,” said Brian Botting, principal at Earnscliffe Strategy Group. He added there are rumours suggesting the “evaluation has been completed, and it's a matter of getting the right announcement put together,” while noting that the chance of there being an announcement is 50-50. Mr. Botting is a defence-industry consultant, whose client, Naval Group, submitted a bid outside the competitive process. The bid was rejected. DefSec is a major attraction in defence circles, and unveiling the winner in that venue would be a good play, from a communications perspective, Mr. Botting said. Still, one observer said that Mr. Sajjan's noncommittal response on the precise timing of the announcement leaves the department some wiggle room. Dave Perry, vice-president and senior analyst at the Canadian Global Affairs Institute, said he'd be surprised if the government had chosen a winner by then. The preferred bidder will work with Irving Shipbuilding, which won a separate competition to build the 15 ships in the company's Halifax shipyard. Three vessels in the running Three bidders are competing to supply the ships' design: a coalition that includes shipbuilder BAE Systems, Lockheed Martin, and L3 Technologies; Alion Science and Technology; and Navantia, a state-owned corporation in Spain. Mr. Botting said that BAE Systems' Type 26 frigate appears to have an edge over the other two companies, thanks to the support it enjoys in the navy ranks, “There's a lot of supporters of Type 26 in the navy. It's not that much different than what the royal navy operates on. ... We tend to have a strong focus on submarine warfare, which this ship operates as.” Type 26 is under construction in the U.K. for its navy and would be the first of its class. Construction under the CSC program is expected to start in the mid-2020s. That the navies of Canada and the U.K. face similar environments and needs makes for a compelling case in Type 26's favour, even in the face of criticism that BAE and Lockheed Martin's offer is still a design on paper, according to Mr. Botting. In addition to landing a contract with the U.K., BAE was also selected by Australia to build a new generation of warships. Multiple requests for an interview with Lockheed Martin's executive were declined. A company spokesperson touched base with The Hill Times briefly on background. In contrast, one of Alion's biggest selling points, as characterized by the company's chief operating officer, Bruce Samuelson, is that the company's offer is a “proven, off-the-shelf design” and does not carry the risks of going with a new design. Unlike its competitors, Alion is not in the business of making products, but rather it takes a “vendor-agnostic” approach as an integrator. That means that, as the designer and engineering firm, Alion works to select the different components, from the sensors to the combat-management system, which make up the ship through what's available in the marketplace. “The reason you'd buy straight off the shelf is like going to a car lot and buying a car. You know exactly what you're getting,” said Mr. Samuelsen. “Why do you change it a little bit? Because you have slightly different needs, but you really want to take advantage of what everyone else has done for that car.” The anchor to its overall design is the De Zeven Provinciën-class frigate, which has been in service in the Dutch navy for more than a decade. Damen Schelde Naval Shipbuilding, the Netherlands-based company, has had experience tucking under another shipyard to produce its design, said Mr. Samuelsen. The winning subcontractor will have to work with Irving. When the warship is eventually built it will resemble a mini-city. The ship has to have the trappings of a town: there has to be a functional sewage system, provide food, shelter, medical care, and at the same time, it has to be built to respond to the hostile environment that is the ocean, said Mr. Samuelsen. Navantia's proposal, which is a partnership with Saab Australia and CEA Technologies, is also based on an existing model, the F-105 frigate. Seven are in service with the Spanish and Australian navy, and there are five “smaller variants” in the Norwegian navy, according to the company. In an email response to The Hill Times, Emiliano Matesanz Sanz, the company's business development manager, said Navantia is in the “best position to face the challenging task of working with the local industry,” given that it has operated in a similar scenario as the one set up under the CSC project. Its ship was built in a new shipyard in Australia, by ASC. Two frigates have, so far, been delivered, Mr. Matesanz Sanz said. (Navantia initially agreed to a phone interview, but said due to the sensitivity of the file, an email Q&A was the only possible option.) The government had initially stated a preference for a mature design—one that was already in operation in a NATO country, for example—to mitigate the risks of cost overruns that could, for example, tie up production. But the government appeared to have been convinced by the team behind Type 26 to consider its bid because it changed the parameters for considering bids, said Mr. Botting. Due to inflation, for every year of delay, the program is projected to cost $3-billion or more, according to the Parliamentary Budget Officer. If going with an untested design carries more risks, why would Canada potentially sweep those concerns aside? Part of the answer lies in the argument that while there isn't a “physical ship in the water” yet, Type 26 stands to have “some of the most modern technology,” said Mr. Perry. The chance to hold the intellectual property rights to the design is also cited as a possible point in its favour. “People would make the argument that if you have a ship that hasn't sailed and been tested yet, you can offer up the IP, because you don't have an understanding of what its full value is. Whereas if you have something that's more of a known quantity, you can put whatever premium you want on it,” he added. Conflict-of-interest concerns flared up in late 2016 when it was announced that Irving Shipbuilding planned to work with BAE Systems to bid on a $5-billion contract to provide maintenance and support for Arctic patrol vessels and resupply ships, according to a CBC report, while BAE was pursuing the CSC project that Irving is involved in overseeing. Both Irving and Ottawa said at the time that they have taken steps to ensure the process is fair. Mr. Perry dismissed conjectures that suggest changes to the bidding process have been made with the “explicit goal” of giving Type 26 the upper hand. “I don't think that's accurate. Because that's not the way the procurement system is set up. What the government has done is to try and make this environment as competitive as possible,” he said. “But you can never totally level the playing field. ... Some bids are always gonna be better than others in different respects.” Billed as the most-complex, most-expensive procurement on record in Canadian history, CSC, and more broadly, Canada's shipbuilding strategy, has raised questions about whether the country has chosen the right approach in preserving its shipbuilding culture over working to develop the high-tech side of the business. “We protected the lower-tech end of the business and not the higher-tech [end]. All the missile systems, sensors, all that stuff is being imported and assembled at the Irving yard,” Mr Botting said. “It's a different way of approaching it. The U.K. is slowly getting out of that business, but it's painful when you close down a yard.” https://www.hilltimes.com/2018/09/24/feds-closing-winning-bidder-60-billion-warship-project/169844

All news