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December 13, 2017 | Local, Aerospace

Government launches CF-188 replacement program with interim Hornet buy

Canada will acquire 18 F/A-18 Hornets and associated spare parts from the Royal Australian Air Force (RAAF) to augment its fleet of CF-188 fighter jets until a replacement is selected and brought into service in 2025.

Government ministers and senior officials confirmed the widely anticipated plan to buy 30-year-old F/A-18A/B legacy Hornets at a press conference on Dec. 12, putting to rest a previous proposal to acquire 18 F/A-18E/F Super Hornets.

The Liberal government had announced in November 2016 a plan to buy the Boeing-built Super Hornets as an interim measure to address an urgent capability gap in the fighter fleet. Although the possible sale was approved by the U.S. State Department in September, the government ceased all discussions with Boeing after the company issued a trade complaint against Montreal-based Bombardier over the sale of the C Series jetliner to Delta Air Lines.

“We have received a formal offer for sale of F-18 aircraft from the government of Australia, which we intend to pursue. And we have received an offer of Super Hornets from the U.S. government, which we intend to let expire,” said Carla Qualtrough, Minister of Public Services and Procurement.

At the same time, the government officially launched a $15 to $19 billion competition to procure 88 aircraft to replace the entire fleet of Royal Canadian Air Force (RCAF) legacy Hornets by inviting interested governments and manufacturers to join a suppliers list.

Qualtrough said the list would allow the government to identify and “share sensitive information” with eligible governments, manufacturers and suppliers able to meet Canada's needs.

“All suppliers are welcome to participate in the process. No firm is excluded,” she said.

Engagement with industry, which has been ongoing since 2012, is expected to lead to a request for proposals by the spring of 2019, followed by a contract award in 2022. Delivery of the first aircraft would begin in 2025.

While ministers and senior officials stressed an “open and transparent” competition, the government also introduced a new criterion in the evaluation of company's bid: Its impact on Canadian economic interests, a measure journalists quickly dubbed the “Boeing clause.”

“This new assessment is an incentive for all bidders to contribute positively to Canada's economy,” said Qualtrough. “When bids are assessed this will mean that bidders responsible for harming Canada's economic interests will be at a distinct disadvantage compared to bidders who aren't engaged in detrimental behaviour.”

A government official, speaking on background, acknowledged that “many of the suppliers we deal with on defence procurements have several business lines and global reach. We are seeking to leverage (these) procurements to incentivize favourable economic conduct towards Canada and discourage detrimental actions by commercial suppliers.”

Qualtrough said the assessment, which will be used in future procurements, would be developed through consultations with industry. “All proposals will be subject to the same evaluation criteria.

“The assessment of economic impact will be done at the time of the assessment of the bids,” she added, an indication that much could change between the government and Boeing by 2019.

The eventual CF-188 replacement program will include aircraft, sustainment, infrastructure, and aircrew and maintenance training, and will generate billions for Canadian industry in industrial and technological benefits, said Navdeep Bains, Minister of Innovation, Science and Economic Development, noting that the industrial and technological benefits (ITB) policy has already generated over $40 billion in economic investment.

“If you think that sounds impressive, the economic benefits of these new fighter jets will add significantly to those ITB numbers. This is an enormous investment in a very important sector for us. That's why our government feels it's important to do business with trusted partners.”

MINDING THE GAP

The Liberal government has faced pointed criticism on a number of fronts for claiming a capability gap. During Question Period on Tuesday, Conservative Member of Parliament Tony Clement suggested the capability gap does not exist.

“It's a fairy tale created by Liberals to justify their political decisions,” he said.

Gen Jonathan Vance, Chief of the Defence Staff, countered that criticism during the press conference, claiming the RCAF cannot generate enough mission-ready aircraft to meet North Atlantic Treaty Organization (NATO) and North American Aerospace Defense Command (NORAD) commitments simultaneously.

“The RCAF cannot concurrently meet those obligations now without some form of supplemental capability until a future fighter fleet is in place,” he said. “The acquisition of Australian F-18s is a logical choice.”

Senior officials with the RCAF and Department of National Defence (DND) said the Australian Hornets would “integrate seamlessly” with the CF-188s. Both fleets have similar operating requirements and share comparable training systems, all of which can be supported by existing supply chains and frontline maintainers.

Both countries have cooperated on fleet management and system upgrades, and shared test data, “so we know the jets well,” said the DND official. “We know the state of their aircraft and what modifications may be needed to operate them until the [new] fleet is in place.”

Montreal-based L3 MAS, responsible for maintaining Canada's CF-188s since they first entered service in the 1980s, has also performed centre barrel replacements on a number of Australian jets as part of a fuselage life extension program.

However, Canada recently began additional structural modifications to ensure the Hornets can operate through 2025, and the Australian F-18s will need to be modified to a similar standard.

The government must still negotiate the final price tag for the 18 jets, modifications and spare parts, but a senior official estimated it would be about one-tenth the cost of 18 Super Hornets and associated mission and weapon systems and support, which the U.S. State Department estimated at US$5.23 billion.

“Specific dollar amounts will be available once we have finalized an agreement with Australia,” he said.

If an agreement is reached, the first Australian Hornets would begin arriving in 2019 and the capability gap would be closed by the end of 2021, two years faster than the planned delivery of the Super Hornets, officials said.

The RCAF had planned to deploy the Super Hornets as a standalone squadron at 4 Wing Cold Lake, Alta. The senior Air Force official said the force structure had not yet been finalized, but would likely involve aircraft being placed across the operational and training squadrons at 4 Wing and 3 Wing Bagotville, Que.

He also acknowledged that more aircraft would mean a need for more pilots and technicians, and that “retention and recruitment efforts were underway to meet this requirement.”

https://www.skiesmag.com/news/government-launches-cf-188-replacement-program-interim-hornet-buy/

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Our goal through this open and transparent process is to maximize competition, and therefore governments are encouraged to submit responses for more than one fighter aircraft manufacturer, as defined in the Suppliers List invitation The decision to submit more than one response rests with the foreign government or defence organization How can Canadian industry participate in the Suppliers List? The Suppliers List will identify key suppliers that will be eligible to submit a proposal, namely a foreign government or defence organization and a fighter manufacturer These suppliers will be required to submit a Value Proposition in their bid outlining their economic commitments to Canada As a result, suppliers will be motivated to form partnerships with Canadian industry and post-secondary institutions over the coming months in order to develop a strong Value Proposition The government will engage with foreign governments, fighter aircraft manufacturers and the Canadian aerospace and defence sectors to ensure they are well-positioned to participate What are the criteria that suppliers will need to meet, to be accepted on the Suppliers List? Each team must identify a government or nation to act as Canada's main point of contact, and have a current defence material cooperation agreement with Canada The team's fighter aircraft manufacturer, must meet the criteria as defined in the Suppliers List invitation The foreign government or one of the participating nations must be an operator of a fighter aircraft produced by the proposed fighter manufacturer Canada will review response submissions to determine if they have met all the Suppliers List criteria and reserves the right to request clarification, if needed Following review of the responses, suppliers will receive email notification of Canada's decision Can Canada remove or add a supplier to the Suppliers List? Once a team has been added to the Suppliers List, it may withdraw at any time by written notification to Canada Similarly a foreign government or defence organization can add or remove a company from its team at any time by written notice to Canada, subject to Canada's approval Canada reserves the right to remove, at any time, any team or entity that is listed on the Suppliers List if it presents potential, perceived or real issues that may be injurious to Canada's national security Does this procurement include industry engagement and discussions related to Industrial and Technological Benefits for Canada? The Government's Industrial and Technological Benefits Policy will apply to this procurement, requiring contractors to make investments in Canada equal to the value of the contract The Government is engaging with fighter aircraft manufacturers and Canadian industry towards the development of a Value Proposition strategic objective that will support the long-term growth of Canada's aerospace and defence sectors This includes promoting growth and innovation of Canadian industry through investments in research and development, providing supplier development opportunities, especially for small and medium-sized businesses and providing export opportunities for Canadian firms The necessary time will be taken to engage with foreign governments, fighter aircraft manufacturers and the Canadian aerospace and defence industries to ensure they are well-positioned to participate How will Canada evaluate the proposals? Proposals will be rigorously assessed on cost, technical requirements and economic benefits Our government feels it is important to do business with trusted partners. As such, the evaluation of bids will also include an assessment of bidders' impact to Canada's economic interests When bids are assessed, any bidder that is responsible for harm to Canada's economic interests will be at a distinct disadvantage The new assessment, as well as guidelines for its application as an ongoing procurement tool, will be developed through appropriate consultations Why are you assessing impact on Canada's economic interests? We are continuously looking for ways to enhance our procurement processes and improve outcomes for Canadians Procurements are about forming effective and long-term partnerships and we want to ensure that we are doing business with suppliers whose activities align with Canada's economic interests This approach is consistent with direction in Minister Qualtrough's Mandate Letter, which outlines direction to modernize procurement practices to support our economic policy goals, among other objectives How will the government ensure that no aircraft supplier has an unfair advantage during the competition? The government is committed to conducting an open and transparent competition to replace Canada's fighter aircraft This process is overseen by an independent fairness monitor to ensure a level playing field for all suppliers Canada will also engage other stakeholders to review, gather and share general information related to the procurement throughout this competition Supplementing the Existing Fleet What is Canada doing to ensure that the Canadian Armed Forces has the equipment it needs while the competition is underway? Until permanent replacement aircraft are in place and fully operational, Canada must ensure that the Canadian Armed Forces has the equipment it needs to continue to deliver its missions, and meet its international obligations Canada has received a formal offer for sale of F-18 Hornets from the government of Australia, and intends to pursue it Will buying these F-18 aircraft require changes to Canada's existing infrastructure? The Department of National Defence is currently reviewing its existing infrastructure to evaluate if any changes are required How can you be confident these planes will be reliable, safe and effective? Ensuring the safety and security of our women and men in uniform is our top priority The Australian aircraft are similar in age to Canada's CF-18 fleet Australia and Canada have both made significant investments in the development of structural modifications that have allowed the structural life of their respective F-18s to be extended More recently, Canada invested in the development of additional structural modifications that Australia did not Canadian companies have the experience required, and are already performing most of the maintenance work on our existing fleet. Any supplemental aircraft would be maintained through these existing arrangements Just as we do with our current fleet, we will make necessary investments in these aircraft to ensure they meet all requirements of the Royal Canadian Air Force More information Fighter Jets Integrating Australian Jets into the Current Royal Canadian Air Force Fighter Fleet https://www.tpsgc-pwgsc.gc.ca/app-acq/amd-dp/air/snac-nfps/CF-18-eng.html

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