REFILE-U.S., Canada eye option for 4 F-35 deliveries in 2017-sources

Fri Nov 7, 2014 5:02pm EST
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(Refiles to fix dateline)

By Randall Palmer and Andrea Shalal

OTTAWA/WASHINGTON Nov 7 (Reuters) - Canada could take delivery of an initial four F-35 fighter jets built by Lockheed Martin Corp in 2017 under an agreement with the U.S. military, although no final decision has been made, sources familiar with the matter said on Friday.

An Oct. 27 briefing chart prepared by the Pentagon's F-35 Joint Program Office maps out plans for the U.S. Air Force to defer four of 26 F-35A purchases in a ninth batch of low-rate production jets, which would allow Canada to take those slots, said the sources, who were not authorized to speak publicly.

Canada is one of eight international partners who helped the U.S. military fund development of the advanced warplane, and it announced a sole-source contract to buy 65 planes in 2010.

But Canada's plans were put on hold in 2012 after a parliamentary watchdog faulted the government's process. Sources familiar with the issue have told Reuters that a comprehensive review that ended this spring put the jet ahead of the competition and that European bidders were effectively ruled out. They said a decision still had to be made.

The latest news, first reported by Canadian media, rekindled controversy in Parliament, where an opposition lawmaker immediately criticized the Conservative government for appearing to plow ahead with the F-35 purchases and not permitting a more transparent bidding process.

Canada announced in September that it would extend the life of its existing CF-18 fighters built by Boeing Co to 2025, instead of retiring them in 2020 as initially planned. Critics suspect the government could delay its decision about new fighters until after a federal election in October 2015.

The swap outlined in the Oct. 27 briefing chart would preserve Canada's option to proceed quickly with F-35 orders once that decision is made and announced, said the sources. They said Canada could also begin training F-35 pilots as early as 2016.   Continued...