National Defence Committee on Nov. 4th, 2010

[The Chair, Conservative, Maxime Bernier]

Mister Mathews, you have the floor.

[Kory G. Mathews]

Sir, each country has their own unique requirements and/or capability needs. Each country would make those decisions on their own.

We've had numerous discussions with several of those countries, and those continue on an informal basis. What I think is important for this committee would be that in any analysis, I believe it is critically important that the analysis take into account a full complement of capabilities.

When I stand here today and share that I know that full complement of capabilities has not been provided, I cannot attest to the specifics of the detailed analysis that has gone on. What I can say is that any analysis like that is absolutely dependent upon the input, and that input needs to be a full complement of capabilities.

[The Chair, Conservative, Maxime Bernier]

Thank you, Mr. Mathews.

Mister LeBlanc, the floor is yours.

[Dominic LeBlanc, Liberal, Beauséjour, NB]

Thank you, Mister Chair.

Mister Mathews, We are particularly concerned by the fighter's price tag. I mean the actual purchase price and the cost of maintaining the aircraft operational over a period of 20 years.

You talked to Mr. Hawn about specific aircraft requirements, such as rockets, missiles, etc. If the Government of Canada were to supply your company with a comprehensive list of requirements, which apparently you have not yet received ... Well, let us imagine for a moment that the Government of Canada were to provide your company with detailed technical specifications, including, as you have said, information on the various systems and missions.

Would you be in a position to provide the Government a fixed price? Were you to have all the necessary data, could you offer a fixed price? Would you be able to specify the price of the aircraft? Would you be able to provide a fixed price for the aircraft operational maintenance program? Could you provide this information to the Canadian taxpayer if you had all the necessary specifications in hand?

[Kory G. Mathews]

Absolutely, sir. Yes.

[Dominic LeBlanc, Liberal, Beauséjour, NB]

A fixed-price, fixed-dollar figure. If the Government of Canada doesn't then change its options, like adding heated seats or a DVD or a sunroof, or something--

[Voices]

Oh, oh.

[Dominic LeBlanc, Liberal, Beauséjour, NB]

We had that problem with the Chinook helicopters.

But if the requirements remain the same, the price is fixed. There's a guaranteed delivery date on a fixed price.

[Kory G. Mathews]

Yes, sir. On the fixed price, one thing that would be worth noting there is if you are also talking about fixed prices for 20 years of support, not just the procurement.

[Dominic LeBlanc, Liberal, Beauséjour, NB]

And you'd be able to offer that fixed price as well.

[Kory G. Mathews]

I would share with you, sir, that would certainly be an option. We would likely submit to you that a more affordable option, because of some of the incumbent risks that occur over 20 years, might be to go ahead and price commensurate with aircraft delivery and then options beyond that. If the desire and the mandatory approach would be firm fixed price, that would certainly be something we could entertain, and we would provide supporting data for that.

[Dominic LeBlanc, Liberal, Beauséjour, NB]

Thank you.

[The Chair, Conservative, Maxime Bernier]

Thank you very much.

Now I'll give the floor to Mr. Hawn.

[Laurie Hawn, Conservative, Edmonton Centre, AB]

I want to stick with the Aussies for a second. We're talking about fourth-generation and fifth-generation airplanes. The Aussies sole-sourced the F-18E/F to replace the F-111, as a bridge to their fifth-generation airplane, which they sole-sourced as the F-35, after whatever evaluation they did, which, as part of the MOU, obviously we were involved with, as were the other eight countries that were involved with the similar evaluation.

The fact that the Aussies sole-sourced the Hornet, for whatever purpose, and they sole-sourced a fifth-generation airplane, which is not the Super Hornet, doesn't that suggest to you that the Super Hornet is not a fifth-generation airplane?

[Kory G. Mathews]

No, sir, it does not. Again, I would say this discussion around fourth and fifth generation has now almost become pure marketing, so I think a better discussion would be around very specific requirements and what weapon system best meets those requirements at the best price.

[Laurie Hawn, Conservative, Edmonton Centre, AB]

Exactly. That's what ten countries have done, I would suggest to you.

I want to go back to costing for a minute, and my colleague can ask a question. Would you be prepared...? I know it's not your call, but would you have a concern if the U.S. Navy released the costing data that we received from them on Super Hornet publicly, and we could do a side-by-side comparison publicly tomorrow with the costs of Super Hornet as received from the U.S. Navy and the costs of F-35?

[Kory G. Mathews]

Sir, again, as I answered previously, I believe, depending upon the level of that pricing information, I would need to go back and ensure that there was not Boeing proprietary information that was released in that publicly. Again, that would be more up to the United States Navy.

One other point, though, sir, that I believe is important to make here is that, as with anything and as we are specifically now talking about cost, I would believe there is a difference between known guaranteed pricing and projected pricing. So I believe that in any dialogue that would need to be considered, sir.

[Laurie Hawn, Conservative, Edmonton Centre, AB]

Okay, I agree.

I'm sorry, you probably can't, but can you tell me the cost of an EF-18 in 2016 dollars, fully equipped?

[Kory G. Mathews]

Sir, at this point in time, the multi-year two price was approximately $52.3 million. The current multi-year three price without engines is $42.3 million in then-year dollars, so I would have to go back and make sure and do the math to equate it to.... And that is a domestic price to the United States Navy. Again, multi-year three, excluding engines, because those are procured separately, for this discussion here is $42.3 million.

[Laurie Hawn, Conservative, Edmonton Centre, AB]

But that's not the cost of the airplane. Those multi-year prices are minus a whole bunch of things that the airplane needs to have to operate.

[The Chair, Conservative, Maxime Bernier]

Shortly.

[Laurie Hawn, Conservative, Edmonton Centre, AB]

Guns, jammers, engines. So that price means nothing. What's the full-up, go-to-war price of the airplane?

[Kory G. Mathews]

The full-up, go-to-war for a multi-year two pricing, come down again 10% on that, was approximately $53 million, sir.

[Laurie Hawn, Conservative, Edmonton Centre, AB]

Okay. That's not with all the equipment.

[The Chair, Conservative, Maxime Bernier]

Okay, thank you.

Thank you very much, Mr. Mathews.

We'll have to give the floor to another Conservative member.

Mr. Hawn, you still have two minutes, if you want to take it, or Mr. Braid. That's the last member.

Mr. Braid, three minutes.