Exclusive: Canadian review will recommend buying Lockheed F-35 fighter jet - sources

Thu Jun 5, 2014 6:49pm EDT
 
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By Andrea Shalal

WASHINGTON (Reuters) - Canada is poised to buy 65 Lockheed Martin Corp F-35 Joint Strike Fighter jets, sources familiar with the process told Reuters, marking a major renewal of Canada's fighter fleet and helping contain costs of the expensive defense program.

An 18-month review of Canada's fighter jet needs has concluded that the government should skip a new competition and proceed with the C$9 billion ($8.22 billion) purchase, three sources said.

The decision must still be finalized by Prime Minister Stephen Harper's cabinet. The government is likely to face fierce criticism from opposition politicians concerned that the contract is being awarded without an open competition. Similar concerns over sole-sourcing and costs derailed the purchase two years ago.

A spokesman for Harper's office said there was nothing to announce yet.

However, the sources said the recommendation was expected to lead to formal approval of the F-35 purchase. They said Harper and key cabinet members supported the decision.

Canada's planned purchase is the 6th-largest by a country and would further safeguard the $399 billion program. Its rising costs had sparked fears of a "death spiral," in which countries cut plane orders, driving up the price of remaining planes and triggering further cancellations. (Full Story)

The Pentagon recently estimated the average price per plane at $139 million, about twice the original estimate in 2001, but said the projected cost to operate and maintain the jets was down 9 percent from earlier estimates.

Ottawa announced in 2010 it would buy 65 jets but scrapped the decision in late 2012 after an official watchdog said Canadian officials had grossly downplayed the high cost of maintaining and operating the jets.   Continued...

 
Workers can be seen on the moving line and forward fuselage assembly areas for the F-35 Joint Strike Fighter at Lockheed Martin Corp's factory located in Fort Worth, Texas in this October 13, 2011 handout photo provided by Lockheed Martin.   REUTERS/Lockheed Martin/Randy A. Crites/Handout