F-35s to cost more than forecast: DND

The Department of National Defence says it's been told the unit price of the F-35 stealth fighter will be higher than the $75 million it planned for, but the military insisted late Monday it can still deliver the program on budget.
A F-35 Joint Strike Fighter is seen in the hangar waiting for an announcement by Minister of National Defence and Minister for the Atlantic Gateway Peter MacKay in Ottawa, Friday July 16, 2010. (Adrian Wyld/Canadian Press)

The Department of National Defence says it's been told the unit price of the F-35 stealth fighter will be higher than the $75 million it planned for, but the military insisted late Monday it can still deliver the program on budget.

The Pentagon, in a recent report to the U.S. Congress, outlined a laundry list of cost increases in the $382 billion US development of the advanced fighter-bomber.

"Canada is not a recipient of the report, however, as an international partner in the Joint Strike Fighter (JSF) project, we have been advised that it forecasts an increase in production costs for the JSF Program," said a written statement released to The Canadian Press.

"Once we have an opportunity to see the details of the report, we will be able to assess how it may impact the cost of Canadian production aircraft."

The statement downplayed the impending price hike, saying "a degree of cost variation is envisaged in any program" and defence bureaucrats had built a contingency into the estimated $9-billion purchase price.

For weeks, the Harper government has insisted it will pay around $75 million for each F-35 and furiously rejected criticism from Kevin Page, the parliamentary budget officer, who estimated in March that the sticker price for the radar-evading plane would be more like $148 million apiece.

Alarmed by the uncertainty, the Liberals have promised to cancel the purchase.

The acknowledgment of the price change came as another American report suggested the cost of operating the jets could be billions of dollars more than expected.

An estimate by a Pentagon cost-analysis unit projects it will cost $915 billion to keep the U.S. fleet of 2,443 jets flying for 30 years.

The document, leaked to Bloomberg in Washington, forecasts a lifetime maintenance bill of roughly $375 million per aircraft.

Alan Williams, a former senior Canadian defence official, said the costs would be comparable for the 65 planes the Conservative government intends to purchase, starting in 2017.

Using the Pentagon numbers, the 65 planes would cost more than $24 billion to maintain over 30 years, well above Canadian government estimates.

The cost-analysis group works directly for the U.S. defence secretary and challenges the numbers and assumptions of the Pentagon's project offices. It based its projection on the operating costs of the existing fleets of F-18s, F-16s and U.S. marine corps Harrier jump jets.

Pentagon orders cost review

Much of the debate in Canada over the highly computerized planes has centred on the eye-popping purchase price and only passing attention has been paid to long-term maintenance and service, which the Conservatives have projected at no more than $7 billion over 20 years.

The parliamentary budget officer, in a report just before the Harper government was defeated, pegged service for the F-35 at $19.5 billion over 30 years or roughly $301 million per plane.

Kevin Page faced a storm of criticism from Conservatives in March for suggesting the overall program could cost taxpayers $29.3 billion, but if the new figures from the Pentagon hold, the price tag could go even higher. 

"The Pentagon's new forecast represents a significant increase even over what the U.S. expected," said Williams, who is an outspoken critic of the program. "The simple fact is we just don't know how much we'll spend. It just lends more weight to the argument that we should wait."

Repeated warnings about costs spurred the F-35 project office at the Pentagon to commit last week to a sweeping review of what it will take to maintain the aircraft over the long haul.

The study, ordered by project executive officer Vice-Admiral David Venlet, will look at the design of the aircraft to try to figure out what is driving the costs into the stratosphere.

"The service chiefs look at the estimates of the maintenance cost and it makes their knees go weak," said Venlet, according to an April 22 transcript of his remarks. "There is an estimate. We know that is not the right number." 

A second, separate report prepared two years ago by the U.S. naval air systems command said long-term support could hit $443 billion, but that estimate was in 2002 dollars.

Venlet said even that is too high.

Williams said there's a lot of uncertainty in the numbers because the plane is still in development and has no maintenance history.