National Defence Committee on Dec. 7th, 2010

[Antony Ogilvy]

It's simply an option, just in case. We're realists. We know that you are very close to the F-35 program. If there's no way you're going to separate yourselves from that program, then we would offer another option. We still believe we could save you a considerable amount of money. We're just asking you to have a look at it. If these experts come up with exactly the same answer, i.e., that it's more expensive, then obviously that's the end of that one.

[Patrick Palmer]

First and foremost, we're concerned with mission success and the requirements from a Canadian perspective. If the F-35 doesn't meet all of those requirements, then maybe a mixed fleet might. That's what we're putting on the table.

[Laurie Hawn, Conservative, Edmonton Centre, AB]

I understand. It's vastly more expensive, though, not cheaper.

The Indian competition is coming up. Do you know when they are going to go to a short list?

[Antony Ogilvy]

I'm not sure they'll ever go to a short list. I was running that campaign for three years. They may just run straight through with all six competitors. They have the capacity to do that. They've also shown that they have the capacity to do the dynamic flight tests and run them all. The Indians would not necessarily short-list as the Brazilians have done.

[Laurie Hawn, Conservative, Edmonton Centre, AB]

Just for the sake of argument, if you didn't survive the competition in India, what impact would that have on your program?

[Antony Ogilvy]

We'd look at not winning in India as a concern. It certainly would not be a terminal blow to us. We have enough other campaign opportunities to make our minimum total fleet requirement, which is not less than 600. We're looking for 750 aircraft globally by the end of all our sales campaigns. If we lost India, we'd lose a large chunk of that, but it wouldn't be fatal.

[Laurie Hawn, Conservative, Edmonton Centre, AB]

Thank you.

[The Chair, Conservative, Maxime Bernier]

Thank you very much.

I give the floor to Mr. Dryden.

[Ken Dryden, Liberal, York Centre, ON]

You mentioned that you have five nations who participate with the Gripen. What are those five nations?

[Antony Ogilvy]

They are Sweden, South Africa, the Czech Republic, Hungary, and the Thai air force.

[Ken Dryden, Liberal, York Centre, ON]

I don't understand the problem with the competition. Canada has been part of the development of the F-35. I understand that. We have as part of our obligation some $170 million that we have committed as part of that development. I understand that. But I don't understand why that prevents going to a competition. It's not as if going to a competition will lose you any more than you've already sunk into the development of an F-35.

In the kind of testimony that we heard today, and other days, there are a lot of assertions made. You've made assertions, and so have previous people. We don't really have the opportunity or the capacity to sift through all those assertions and make comparisons. If we were to go to a competition and we decided to go with the F-35, it's not as if we would be penalizing ourselves. The $170 million is already sunk in. Why would we not be going to a competition where those making the decisions would be experienced in assessing all the assertions, as opposed to a committee?

Can you help me understand why we would not have gone to a competition?

[Antony Ogilvy]

I can only assume, sir, that the technical experts in your air force were satisfied that they did not require to look beyond one particular solution for their next generation, for whatever reason. That's obviously their decision.

All we are doing in coming here and testifying is to say that even a very fast look at the competition.... The high-level issues and elements that each of the other aircraft could bring into Canada would probably serve everyone extremely well, rather than simply going straight down the sole-source route.

It doesn't take long. It's not complicated to work out exactly why you should be doing this and the fact that you can get the information in very quickly, very accurately to make a very quick first-pass assessment on whether you do want a competition. You don't have to go into the full RFI, full RFP, but we would certainly suggest that you take a much more profound look at what we can offer.

[Ken Dryden, Liberal, York Centre, ON]

Thank you.

[The Chair, Conservative, Maxime Bernier]

Thank you very much.

I will give the floor to Ms. Gallant.

[Cheryl Gallant, Conservative, Renfrew—Nipissing—Pembroke, ON]

Thank you, Mr. Chairman.

When all the countries--it's ten so far--that have had military and civilian experts extensively study the requirements for the next-generation fighter over several years at a very highly classified level have come to the conclusion that the F-35 is the only aircraft that meets the requirements, and at the lowest cost, and with the best industrial opportunities for their industries, can they all be wrong?

[Antony Ogilvy]

Certainly I would put a question mark over the cost element. I think you would be very well advised--please, forgive me for suggesting this--to take a forensic look at exactly what these costs are and drive out of the people involved much more precisely how much it is going to cost you to acquire and run these particular assets.

Now, we can give you these figures. We will give you very precise figures and you can look at them very closely. You can benchmark everyone against us if you wish. But I do feel that when one particular supplier says they are the best, the cheapest, and the only selection to be made, there's probably a question mark that you should have over that, and it's probably in your best interests. Forgive me for saying so, but you need to take a forensic look, as I say, even if it's a fast-pass look at what's available and what may be your better interests. There's nothing to lose. It may well be that the F-35 is the right aircraft for your country. But what we would say is perhaps you might be best served to check first on a number of criteria.

[Cheryl Gallant, Conservative, Renfrew—Nipissing—Pembroke, ON]

I understand that Norway was seriously looking at the Gripen but they changed their minds once the qualitative differences between the F-35 and the Gripen became clear. To what qualitative differences would they be referring?

[Antony Ogilvy]

They didn't actually expand on that. Although we were quite clear in our own minds that we again met the Norwegian requirements, we did not get from the Norwegian authorities a definitive answer as to exactly why we suddenly fell short, having been all the way through that very long competition, if you like, neck and neck on pretty well every one of the criteria with the F-35A. It was a very late decision, as you know, which went against us. It was probably a political decision. We feel that the words they used indicated there was not any great technical issue in what we could offer. It wasn't so much technical and we believe it was a political decision.

[Patrick Palmer]

And our role here is not really to comment on political decisions or to comment on Canada's political decision, but to give you as much information as possible as it relates to what the alternatives are and what some of the capabilities are out there so that you have the information.

[Cheryl Gallant, Conservative, Renfrew—Nipissing—Pembroke, ON]

I guess with respect to the cost comparison, not in U.S. dollars, it wasn't the supplier who said that, it was our experts.

How can we have confidence in Saab's ability or willingness to sustain a fleet of 65 orphan aircraft if no other country decides to purchase the aircraft?

[Antony Ogilvy]

Sweden will decide, so you will not be a “launch or loan” customer, and there will be at least 100 aircraft operated by the Swedish air force. We would very much hope that you would not be the only export customer, and we would certainly say that even if you were, we would most definitely support you in every way you required to keep your fleet fully operational and fully serviceable.

[Cheryl Gallant, Conservative, Renfrew—Nipissing—Pembroke, ON]

Do you think that the Gripen could be interoperable with the F-35 over the long term, until 2050 and beyond?

[Antony Ogilvy]

We believe so. We believe our software program is as good as any in the world. It's certainly the most up-to-date in the world. We change our standard every 18 months, and that would align with anything that the F-35 is doing.

We would make sure it had to because in the NATO alliance you simply have to make sure you can talk and operate with your allies in the airspace on everything: communications, data link, transfer of information, etc. I believe that we would be able to maintain that level of interoperability right through to the end.

[The Chair, Conservative, Maxime Bernier]

Monsieur Bouchard.

You have the floor for two minutes.

[Robert Bouchard, Bloc, Chicoutimi—Le Fjord, QC]

Mr. Ogilvie, one of your competitors mentioned that, if their company got the contract to provide Canada with 65 fighters, they would be prepared to commit to establishing an assembly line. Would your company be prepared to establish an assembly line if you got the contract?

What would you see as the advantages for Canada of having an assembly line for these aircraft?