Public Accounts committee  Good morning, Mr. Chair. I am pleased to be here again to discuss chapter 2 of my spring report. I am accompanied by Assistant Auditor General, Jerome Berthelette. We have followed the committee's deliberations and will be pleased to answer your questions. I would like to take

Public Accounts committee  We decided to do this audit primarily because of some of the other work we had done in National Defence. We felt that we could provide the most value by doing the audit before the purchase was completed in order to identify any weaknesses that could be rectified during the proces

Public Accounts committee  Thank you, Mr. Chair. The item in the chapter that speaks to that is that, in 2008, National Defence, themselves, said it would be exceedingly difficult to hold a fair competition that includes the F-35. That's why we were concerned, in the chapter, that many things were taken

Public Accounts committee  Thank you. I don't think that's something I can comment on. You know, we did say in the report that it was important for National Defence to consider the risks and to make sure they had appropriate risk-mitigation strategies in place.

Public Accounts committee  In actual fact, we found—and it's quoted in one of the paragraphs, though I don't remember exactly which one—that it wasn't until late in the program that they finally increased the risk assessment up to medium. I don't think at any point in time the overall project was designate

Public Accounts committee  We didn't do a comparison of the F-35 to operational requirements. What we were looking at was process and whether the operational requirements were prepared when they should have been prepared. We weren't trying to assess whether or not the F-35 was the right jet.

Public Accounts committee  I'll respond to that simply by saying that the department agreed with the one recommendation we did make in the report. They disagreed with our conclusions, but they did agree with our recommendation.

Public Accounts committee  That question is a bit too general for me to make a statement on. Again, the department disagreed with our conclusions. We felt that we laid out very clearly in the report where there were significant weaknesses in the due diligence. They did agree with our recommendation.

Public Accounts committee  Certainly we received letters from the deputy ministers of the departments indicating that the departments disagreed with our conclusions. That's always a concern for us. That's why we did have a discussion with them towards the end of the audit. We felt that we arrived at the ap

Public Accounts committee  Certainly, we have seen testimony in the United States where there was one estimate that the cost of operating the F-35 would be more than the cost of operating the CF-18, simply because of the technical sophistication. I don't know specifically, and I think that's again somethin

Public Accounts committee  Again, for clarity, I think it's best if the department answers that question of how they develop those numbers.

Public Accounts committee  Thank you. Certainly, that was one of the prime issues we raised in the whole chapter: things seemed to be out of sequence. We really felt that some of these processes or some of these things needed to have been put in place earlier than they were. It wouldn't have been a matter

Public Accounts committee  Certainly life cycle costing is an estimating process. But the mismatch that was occurring in all of this was that, as the decisions seemed to be taking the government closer to the actual acquisition of the F-35 and the announcement in 2010 of the intention to acquire the F-35,

Public Accounts committee  I don't have the details of that. I will ask Mr. Reed to tell you what he might know on that.

Public Accounts committee  What we did was we conducted an audit that was looking at the question of whether due diligence was applied. We defined what we meant by “due diligence”. We went through that process, and we came to the conclusion that there were enough weaknesses in what occurred—and we lay thos