A letter from the Public Works deputy minister revealing internal concern about sole-sourcing the $25-billion F-35 stealth jet project, while defending the decision against criticism from Auditor General Michael Ferguson, was originally classified as “secret” when it was sent to Mr. Ferguson last February.
The secret classification, which Mr. Ferguson’s office told The Hill Times on Wednesday would have prevented the auditor general’s office from using the information or revealing it, was downgraded two weeks later at the AG’s office’s request and resent with a lower security classification, according to a note at the bottom by Public Works deputy minister François Guimond.
The letter was among several Mr. Guimond and National Defence deputy minister Ron Fonberg sent to assistant auditor general Jerome Berthelette as they were protesting a report on the F-35 project that accused National Defence and Public Works of failing to exercise due diligence. In Public Works’ case, the auditor general’s report said it did not demonstrate due diligence during the process that led Prime Minister Stephen Harper (Calgary Southwest, Alta.) and his Cabinet to select the expensive and sophisticated Lockheed-Martin F-35 stealth fighter and attack plane to replace Canada’s aging CF-18 fighter jet fleet.
Mr. Ferguson’s report last month harshly criticized Public Works for accepting a one-page letter, containing no technical details or other evidence, from National Defence as justification that competitive-bid requirements of the federal Government Contract Regulations could be avoided because the F-35 was the only aircraft on the market that met all of the operational requirements for the new jet that National Defence had established.
The Auditor General’s report argues that despite the National Defence letter claiming the F-35 was the only aircraft that could meet the needs the Air Force set, a complete statement of operating requirements had not yet been written.
The Feb. 16 letter from Mr. Guimond to Mr. Berthelette confirms that Public Works depended on the word of National Defence, in the form of the one-page letter from Dan Ross, assistant deputy minister for procurement, to justify its sole-source decision. Mr. Ross wrote the letter to Tom Ring, assistant deputy minister for acquisitions at Public Works, on June 1, 2010, only two weeks before the Harper government announced it had selected the F-35 fighters to replace Canada’s CF-18 jets.
Mr. Ferguson’s report accused the government of withholding a minimum of $10-billion worth of ongoing maintenance and sustainment and operating costs in a report to Parliament about the acquisition. Mr. Fonberg told the Public Accounts Committee, during an inquiry into Mr. Ferguson’s findings, that Cabinet made the decision to use the $10-billion in future costs for internal decision-making, while disclosing a cost of $14.7 billion for acquisition and maintenance to Parliament and the public.
“To confirm the requirements of the technical authority, PWGSC [Public Works and Government Services Canada] officials ensure that the Department of National Defence provided formal documentation of its key requirements, which, at that time, took the form of an official letter,” Mr. Guimond’s letter states.
“These requirements were identified as a fighter aircraft that met two very specific key operational requirements: very low observable stealth capability and an extremely high degree of sensor fusion. This letter also confirmed that the F-35 Lightning II aircraft was the only fighter jet available to Canada that had the capabilities to meet the two key operational requirements,” the letter to the auditor general’s office states.
“The implication, in the report, that senior decision makers signed off on the 2010 policy decision while knowing they did not have sufficient justification is factually inaccurate and misleading,” Mr. Guimond writes.
“This implication is based on a concern raised by PWGSC staff to senior management that the department had not reviewed the statement of operational requirements,” his letter says. “However, in the absence of the final statement of operational requirements, we obtained written confirmation of the two key operational requirements that ultimately distinguished the F-35 from its competitors.”
Delays and setbacks at the F-35 Lockheed-Martin production facilities in the U.S. have resulted in costs that are now predicted to take the price of each aircraft for Canada to at least $120-million, nearly double the price National Defence has been using for the past two years. Since the government has frozen a $9-billion acquisition budget, experts and critics say Canada will not be able to acquire the number of planes it needs to replace the CF-18 and still fulfill all of the country’s defence and sovereignty needs.
Mr. Ferguson stuck to his criticism of the two departments despite the last-minute lobbying by Mr. Fonberg and Mr. Guimond last February.
A spokesperson for Mr. Ferguson said Mr. Guimond’s letter said its original security designation of secret would have prevented the auditor general from making its contents public, as was done with the tabling of the letters at the Public Accounts Committee.
“Normally we do not disclose or comment on documents obtained during an audit,” Ghislain Desjardins, manager of media relations at the auditor general’s office, told The Hill Times. “Since your question relates to process, and the letter you refer to has been made public by the department, we can confirm that we requested that the letter’s designation of secret be changed. The letter represented the departmental response to our audit conclusions. We would not be able to use the information in the letter if it was designated secret.”
A spokesperson for Public Works was unable to say late Wednesday why the original version was designated as secret.
NDP MP Malcolm Allen (Welland, Ont.) said the secret classification on the letter to the auditor general is yet another unusual document amendment in the case. National Defence last month retroactively amended a report on the F-35 project it tabled in Parliament, to change the project’s phase to a much earlier stage than it had first reported last June. Mr. Allen said internal concern by the hands-on managers of the project cannot be discounted as the committee inquiry continues.
“Cleary when questions are asked and then refuted, we need to have the source come back. Clearly they deserve the opportunity to defend themselves or not,” Mr. Allen said. “We’ve got all kinds of conflicting testimony here.”
Mr. Allen noted that he’ll recommend the committee take as much time as it needs to do the study. “If that means coming back in the fall session to start again, then we ought to be doing that,” he said.
Liberal MP Gerry Byrne (Humber-St. Barbe-Baie Verte, Nfld.) said the letter’s reference to internal Public Works division, as well as the decision to designate the information as secret, shows the government will resist opposition attempts to call lower-level managers to testify at the committee hearings.
“I knew the trail I am pursuing to get mid-level managers to appear is getting quite hot, red hot and too hot for the government’s liking,” Mr. Byrne told The Hill Times. “That’s why they have done everything and anything to stop the full witness list that I proposed from appearing before us.”
Original article on Hill Times website (subscription required)