Was Canada’s F-35 procurement rigged?

For staunch critics, the only fair outcome would have been the F-35 losing.

Canada’s acquisition of the F-35 was uneventful when it was announced in 2022. After more than a decade of controversy, the selection of the Lockheed plane was met with a collective shrug. Most Canadians, one suspects, didn’t care all that much. Those who did were relieved that the government was finally replacing the CF-18s. Like the cancellation of the Avro Arrow by Prime Minister John Diefenbaker in 1959, though, some people will forever remain convinced that there was a nefarious plot involved.

John Ivison has reported that the National Post has been given evidence that the process to replace the CF-18 was tilted in favour of the F-35 from the start. Ivison avoids calling the process corrupt, but whoever provided the Post with internal documents seems to think that it was.

What evidence is there of bias in the process?

First, the RCAF appears to have concluded that the F-35 was the best fighter for Canada in 2006. This view isn’t too surprising, given that Canada had been part of the Joint Strike Fighter consortium since the late 1990s, and the RCAF saw the F-35 as the most advanced fighter out there. In fact, the F-35 was the only next generation fighter being produced by a Canadian ally. While there were updated current generation fighters out there, such as the Super Hornet and the Eurofighter, the RCAF was strongly in favour of the nascent F-35.

This part of the story is well known. When the RCAF prepared the Statement of Requirement to replace the CF-18s in the late 2000s, only the F-35 could meet it. This is why the Harper government initially decided that it should sole-source the F-35: because it was the only platform that met the military’s requirements, and Public Works and Government Services was satisfied that this was the case. This story is well established and nothing new.

A good deal of controversy and debate followed the government’s intent to sole-source the F-35. Critics demanded to know why there wasn’t a competition. They rightly pointed out that the American decision to go with Lockheed Martin over Boeing to build the United States’ next generation fighter didn’t preclude Canada holding a competition, nor did Canada’s membership in the F-35 consortium. The Office of the Auditor General wasn’t impressed with the process that led to the decision, and most importantly, it criticized the government for only highlighting the acquisition cost ($9 billion), instead of the full life-cycle cost of buying and operating the fleet (about $26 billion). It was this accounting disagreement that arguably derailed the whole thing.

In response to these critiques, the Harper government reset the fighter procurement process and undertook a two-year study (2012-2014) of the options to replace the CF-18s (disclosure: I was involved as an independent reviewer of the RCAF’s options analysis work.) This effort was one of the most transparent defence procurement analyses Canada’s ever seen. If you look back at the reports that this reset effort produced, you’ll see that it looked at everything from the threat environment, to operational military requirements, to fleet sustainment issues, to industrial benefits. Many of the things that were looked at in these reports, in fact, have become critical considerations when Canada acquires new military capabilities today, such as the global fleet size of what’s being bought, which tell us how many of the platforms are being built and what that means for the cost of parts and upgrades.

In the end, the Harper government opted not to make a decision on replacing the CF-18s. This situation ensured that the issue was debated during the 2015 election. As part of their campaign, the Liberal Party pledged to both hold a competition to replace the CF-18s and not buy the F-35. These two promises were basically incompatible; holding a competition meant that the Lockheed could compete, and that the F-35 might win. When they formed the government in 2015, the Liberals quickly learned that excluding the F-35 from an open competition was a non-starter.

In 2017, the Future Fighter Capability Project (FFCP) was launched. FFCP was crafted to maximize competition. It involved multiple consultations with potential competitors, with the aim of getting their feedback on the eventual request for proposal (RFP). It’s at this stage where the accusations of bias run into trouble.

Why didn’t the companies who were consulted on the RFP cry foul if there was an evident bias? Yes, Dassault and Eurofighter withdrew after they reviewed the RFP, but they didn’t argue that the competition was rigged. Instead, Eurofighter stated that “a detailed review has led the parties to conclude that NORAD security requirements continue to place too significant of a cost on platforms whose manufacture and repair chains sit outside the United States-Canada 2-EYES community.”  Dassault expressed similar concerns. Translation: meeting the NORAD security requirements would have made their bids too costly to win.

What about the other competitors? Boeing remained after reviewing the RFP, but was disqualified for not meeting the all requirements. That left Lockheed’s F-35 and the Saab Gripen. Like the other competitors, Saab had a chance to review the RFP and provide feedback. Unlike Dassault and Eurofighter, it decided to stay in the competition, and unlike the Super Hornet, the Gripen wasn’t disqualified.

Canadian defence procurement bids are evaluated on three board criteria: capability, cost, and industrial benefits. I don’t know exactly how these were weighted in the FFCP, though capability usually carries the most weight, often about 60%. What we do know is that the F-35 got the highest score, and therefore won the competition.

As I’ve written elsewhere, most defence observers were convinced that the F-35 would inevitably win the competition to replace the CF-18. The F-35 will have the largest global fleet size of all the possible competitors. It has a clear upgrade path and will be supported by Lockheed for decades. It’s the most technologically advanced of the competitors that Canada considered. The F-35 has been selected as their next fighter by nearly all of Canada’s allies. Does that mean that no other plane could have won the FFCP competition? Not at all. But the F-35 had several advantages when entering the race.

So, if the F-35 had all these advantages, doesn’t that prove that Canada’s fighter replacement was rigged and unfair? I suppose it comes down to what we mean by fair. If we mean that FFCP allowed all the competitors to put their best bids forward and to be judged on their merits, then yes, it was fair. For it to be judged unfair, we’d need to define fair as a competition where bidders are penalized if they have an inherent advantage. This second sense of fairness should have no place in defence procurement. It’s one thing to ensure that there’s an open competition, it’s another thing to force one competitor to tie one hand behind their back to reduce their chances of winning.

When acquiring military capabilities, you want the best capability for the price you can afford. You owe it to the military to get them the best possible kit. We don’t always do this, of course. In many cases, we allow political and economic considerations to undermine the best capability, even when we can afford it. When we do stick to principle of buying the best capability, we should applaud the decision, not complain. That’s what a fair, merit-based competition should look like, and that’s what the FFCP did.

For staunch critics of Canada’s CF-18 replacement, only one outcome would prove that the competition was fair: the F-35 losing. Because it won, there’s no convincing them that the result wasn’t preordained owing to bias or corruption. Maybe the CF-18 replacement will get a Canadian Heritage Minute, too.