This Reeks of Desperation

The JSF Program Office is looking to accelerate deliveries of the F-35 to Canada in an attempt to induce them to finish their purchase of the aircraft:

A radical fast-track plan to jump-start Canada’s stalled effort to buy the Lockheed Martin F-35 Joint Strike Fighter is revealed in a briefing document obtained by Aviation Week.

The Oct. 27 brief from JSF Program Executive Office director USAF Lt. Gen. Chris Bogdan to Air Force secretary Deborah James calls for Canada to receive four F-35s next year, by diverting them from U.S. Air Force low-rate initial production (LRIP) Lot 7 orders. Canada would then buy four Lot 9 aircraft that would be delivered to the Air Force in 2017. According to the briefing, Canada would sign a letter of intent within days — "mid-November" — and Congress would be notified by the end of November.

Neither the JSF Program Office nor the Canadian Department of National Defense responded to repeated inquiries about the planned deal this week. The legal basis for such an exchange, absent an urgent operational need, is uncertain. The proposed LRIP 9 replacement aircraft are not on contract, and as far as is known, negotiations for them have not started.

According to the briefing, the Air Force has said it can spare four aircraft — budgeted at more than $160 million each — but with "no flex left" in the schedule for the aircraft to achieve initial operational capability. Aircraft availability is already a risk factor in meeting the objective initial operational capability date of August 2016.

Canada is a founding partner in the JSF program, with one of the largest near-term export orders. Its plan to buy 65 F-35As has been controversial since 2010, when prime minister Stephen Harper’s government attempted to bypass Canadian law that states that all major government acquisitions must be competed. The government asserted that the F-35 was the only aircraft that could meet Canadian requirements, but was forced to back down after Canada’s auditor-general reported in 2012 that the project’s costs had not been presented correctly and the air force’s "statement of requirements" had been compiled after the decision to make a sole-source procurement had been made.

The program to acquire new fighters has been supervised since 2012 by a special secretariat within Canada’s public works department. The most recent development was the announcement at the end of September of a plan to extend the life of Canada’s Boeing Hornet fleet to 2025. This was seen as confirming that Harper’s team had accepted the need to defer the JSF decision past the next general election, which is due no later than October 2015.

According to one Canadian industry observer close to the fighter program, the F-35 swap proposal is being pushed by Lockheed Martin and the JSF Program Office. "It would be a huge game changer," the source says, and another observer, former procurement official Alan Williams, calls it "explosive." The industry source is dubious that it can happen as scheduled: "The decision to go with the F-35 has not been made. This requires three key ministers to sign off and that hasn’t happened yet." A Harper attempt to lock Canada into the F-35 program before the election would risk an electoral backlash, sources say. "The fighter file is simply toxic right now," the industry observer says.

This reeks of desperation.  The Air Force is sacrificing its margin in an attempt to prevent Canada from cancelling its order.

If Canada, or for that matter any of the the Nato countries that have signed on, cancels its F-35 order, it's going to set off a death spiral of cancellations and unit price escalation.

The problem is that the F-35 is too expensive, not just for Canada, and not just for the US, but the entire f%$#ing world.

BTW, the Canadian government is categorically denying this report:

Canada's Public Works Department denied reports it's decided to purchase F-35 fighter jets from the U.S.

Reports suggested a leaked U.S. Defence Department document revealed Canada agreed to buy up to four of the controversial planes from the U.S., to be delivered as early as 2016.

The Conservative government shelved its plan to buy the F-35 from Lockheed Martin in 2012 after a scathing report from the auditor general that highlighted cost overruns and other mismanagement problems in the procurement process.

Like I said, desparation.