The full lifecycle cost of the F-35 remains elusive.
DND’s deputy minister, Robert Fonberg, said his department is sticking with its estimated cost of $15-billion for the acquisition and the sustainment over 20 years of the F-35 jets. He insisted that long-term operating costs for the jets, which are still eight years away from delivery, will be “firmed up over time,” but will be similar to those for the existing fleet of CF-18s.
He added that his department was not yet in a position to determine the exact cost of the program over its planned 36-year lifespan, saying that using 20-year scenarios is a well-entrenched position at DND and avoids making risky, long-term predictions. “Life-cycle costing is not a simple issue,” Mr. Fonberg said.
Lifecycle costing is what the Department of National Defence agreed to pursue two years ago in response to a previous report of the auditor general. Lifecycle costing is what Treasury Board guidelines seem to require. “All documents that outline … lifecycle costs” is what the House of Commons demanded in November 2010. And an estimate of what the F-35 will cost over a lifespan of 36 years is what the auditor general suggested last week that the Department of National Defence already had.
Here, from that hearing last week and for the record, is the auditor general’s exchange with Chris Alexander, parliamentary secretary to the Minister of Defence.
Chris Alexander: On life cycle, you described the reasons for selecting 36 years as opposed to the DND previous standard of 20 years. Has the Auditor General’s office in previous audits used this longer life-cycle framework, or was this the first time?
Michael Ferguson: Thank you, Mr. Chair. The 36 years is not our number, not our estimate of the life cycle. It was in fact National Defence’s estimate of the life cycle. Therefore, by definition to apply life cycle costing we felt that it should include the whole 36 years, since that is the estimated life cycle.
Chris Alexander: So in fact National Defence had two life cycle projections—one for 20 years and one for 36 years?
Michael Ferguson: Thank you, Mr. Chair. My understanding is that National Defence does have the numbers for 36 years, but the numbers that have been brought forward for decision-making purposes, and used for example in response to the parliamentary budget office numbers, were based on 20 of those 36 years.