And, in a new development in the controversy over the minimum $25-billion project to acquire 65 F-35 fighter jets, the opposition and a leading critic of the plan say the government also intends to rewrite Auditor General Michael Ferguson’s scathing report on the planned acquisition with an independent review that MPs say is designed to contradict the findings Mr. Ferguson tabled in Parliament last April.
The Public Works Department last Friday posted a request for bids for an outside audit of the F-35 acquisition process up to last June, to confirm whether the steps taken up to then “were in accordance with the applicable policies, procedures and regulations.”
The request for proposal says bids asking more than $200,000 for the work will not be accepted. The government earlier awarded a contract worth $643,500 to the accounting firm KPMG to audit National Defence costs forecasts for a fleet of 65 F-35 aircraft, bringing the total spent so far on outside audits after Mr. Ferguson's report to nearly $900,000.
The KPMG contract came under fire over allegations of a conflict of interest because its British parent firm is the retained auditor for BAE Systems, an F-35 sub-contractor that builds parts of the air frame. KPMG Canada was hired by the Canadian Association of Defence and Security Industries, whose members include Canadian aerospace firms that are contracted in F-35 development and production, to prepare a report this year on the economic benefits of the defence and security industries in Canada.
While the work description for the contract states the review “should not question the observations already made by the auditor general,” it also states the independent audit is to confirm whether “the steps taken and the documentation produced were complete, appropriate, properly documented and approved by the correct approval authority.”
The bid documents say the review will also provide “lessons learned” in what has become a fiasco for National Defence and propose recommendations to improve similar acquisitions in the future.
But Alan Williams, a former chief of procurement at National Defence who was involved in the early stages of the F-35 project before it reached the acquisition decision stage under the government of Prime Minister Stephen Harper (Calgary Southwest, Alta.), argued that the government, despite what it is claiming to be a fresh start in reaction to Mr. Fraser’s report, is still intent on going ahead with procurement of the F-35s.
With costs continuing to escalate and pressure on the U.S. Department of Defence to reduce the number of aircraft it intends to acquire, Lockheed Martin Corp., the prime contractor and also the biggest defence supplier to the U.S. military, last week was forced to file a notice with the U.S. Securities and Exchange Commission that it faced a potential termination liability of $1.1-billion unless it received additional funding for a sixth batch of F-35 fighters by the end of this year.
Canada is part of a consortium, along with seven other countries, that has been developing the F-35 aircraft for more than a decade. Each member country has an option of buying the aircraft, and Canada has not yet signed a purchase agreement.
Mr. Williams noted that despite recent statements by Public Works Minister Rona Ambrose (Spruce Grove, Alta.) that the government will look at alternative aircraft as part of its reaction to Mr. Ferguson, it has not changed the description of operational requirements for new fighter jets, which can only now be met by the F-35 stealth fighter and its sophisticated avionic and weapons systems as well as a state-of-the-art pilot flight sensor system.
“Unless and until they change the statement of operating requirements, everything is a red herring,” Mr. Williams told The Hill Times. “This [the F-35] is the only one that can likely meet the operational requirements. They have to rewrite those, to allow for a fair and open competition.”
NDP MP Matthew Kellway (Beaches-East York, Ont.), who questioned Ms. Ambrose in the Commons Monday about the terms of the outside review, said he believes the government intends to paper over Mr. Ferguson’s criticism of the acquisition.
“It most certainly does look like they’re covering a lot of the same turf,” Mr. Kellway said in an interview.
The Public Works Department, after first informing The Hill Timeslast August it would be posting a request for bids for a review of the past stages in the acquisition process, said the review would only cover the period from July, 2010—when Cabinet approved the procurement—to June, 2012.
But there is no start date specified in the bid request or terms of work in the documents posted by Public Works last week.
“The few months, post-auditor general’s report, nothing changed substantially in the way they were conducting their acquisition, other than the creation of the F-35 secretariat,” Mr. Kellway said.
Public Works on Monday appeared to reject the claims by critics that only the F-35s can match the operational requirements for the new fighter jet.
“A full evaluation of options is underway,” Mylène Dupéré, a communications officer with the department said in an email to The Hill Times.
But, once again, it seemed that the F-35 might again be the only aircraft that will be able to meet National Defence operational requirements.
“The report will include whether an option meets the [operational requirements], and if it does not, it will clearly state what the associated capabilities, costs, and risks are,” Ms. Dupéré’s email said.
“The conclusions will be presented to the government for decision. The government will then be able to review the full range of options and decide on a course of action based on consideration of the risk, cost, and capability associated with that choice, compared to all other options,” the email said.
The request for bids on the outside review of the acquisition documents and decisions to last June also suggests the contractor audit firm must take the special circumstances of the F-35 acquisition into account.
The bid document says the contractor must review the work done so far in light of specific government procurement rules for military acquisitions, but goes on to say: “However, the Contractor will need to take into account the unique aspects of the application of the government policies, procedures and regulations in the context of this major military acquisition.”
Original Article
Source: hill times
Author: TIM NAUMETZ
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