= Politics, procurement and policy: Australia’s procurement of the Joint Strike Fighter
Steven L. Jones
A thesis in fulfilment of the requirements for the degree of
Doctor of Philosophy
School of Humanities and Social Sciences
Faculty of Arts
March 2016
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Date ……………………………………………...... Contents = Acknowledgements ...... iv Abbreviations ...... vi List of Tables ...... x List of Figures ...... xi Abstract ...... xii
Chapter 1: Introduction ...... 1 Methodology ...... 5 Chapter Outlines ...... 11
Chapter 2: Literature Review ...... 19 Australian Defence Procurement Reforms ...... 21 Rational Model of Defence Procurement ...... 27 Organisational and Bureaucratic Models of Procurement ...... 30 Procurement and Defence Industry ...... 42 Defence Procurement and the US Alliance ...... 48 Multi-causal Framework ...... 51 Joint Strike Fighter Procurement ...... 53 Conclusion ...... 55
Chapter 3: Development of the Joint Strike Fighter ...... 57 Transformational Capabilities ...... 61 Software ...... 72 Training ...... 75 Autonomic Logistics Information System ...... 80 Joint Advanced Strike Technology Program ...... 82 JSF Program Phases ...... 89 Costs and Concurrency Issues ...... 92 Conclusion ...... 104
Chapter 4: International Politics of the Joint Strike Fighter ...... 105 Co-production ...... 10 8 Interoperability and Alliances ...... 11 1 JSF Program Governance ...... 11 5 International Partner Program Participation ...... 123 Industry Policies ...... 129 Informal Politics ...... 134 Conclusion ...... 145
Chapter 5 - International Governance and National Capabilities ...... 148 US Congress ...... 149
ii = = Cancelling the F136 Alternate Engine ...... 151 Drag Chute Variant ...... 154 Canada’s Satellite Communications ...... 156 Source Code ...... 157 Australian and Turkish Technology Transfer Contexts ...... 16 2 British Efforts for JSF Source Code Access ...... 16 8 Australia and JSF Source Codes ...... 17 5 Conclusion ...... 180
Chapter 6: International JSF Procurement Approaches ...... 182 Norway ...... 18 3 Turkey ...... 19 9 Israel ...... 20 5 Conclusion ...... 211
Chapter 7: Australia’s Procurement Approach: ...... 214 Early Interests and Assessments ...... 21 6 Analysis of 2002 Selection Decision ...... 222 Australian National Audit Office Assessments ...... 233 Procurement, Sustainment and Follow-On Development Phase ...... 23 5 Conspiracy of Optimism ...... 23 8 Australia’s Industry Approach ...... 24 8 Conclusion ...... 25 9
Chapter 8: Australia’s Strategic Needs and JSF Capabilities ...... 262 Replacing the F/A-18 and F-111 ...... 26 3 Capability Requirements ...... 26 9 Number of aircraft ...... 27 6 Fifth-generation capabilities ...... 27 8 Catalyst for Capability Development ...... 291 Interoperability ...... 29 4 Capability Costs ...... 29 9 Conclusion ...... 301
Chapter 9: Conclusion ...... 304
Bibliography ...... 311 Government sources ...... 311 Books and Monographs ...... 326 Articles, Book Chapters and Papers ...... 328 Internet sources ...... 339
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Acknowledgements
For my mother, May Jones. Despite everything, I’m here, because of you.
I owe particular thanks to my supervisor, Clinton Fernandes, whose sage advice has proven invaluable, and Michael McKinley, who helped guide me onto this path.
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Abbreviations
A2/AD Anti-Access/Area Denial ADF Australian Defence Force ADHQ Australian Defence Headquarters AECA Arms Export Control Act AESA Active electronically scanned array AEW&C Airborne early warning & control AFB Air Force Base AIG Australian Industry Group AII Australian Industry Involvement AIPP Australian Industry Participation Program AL Autonomic logistics ALIS Autonomic Logistics Information System ASPI Australian Strategic Policy Institute ASR Air staff requirements ASTOVL Advanced Short Take-Off Vertical Landing ATA Advanced Tactical Aircraft ATF Advanced Tactical Fighter AUSMIN Australia–US Ministerial Consultations BVR Beyond Visual Range CAIG Cost Analysis Improvement Group CAIV Cost as an independent variable CALF Common Affordable Lightweight Fighter CAS Close air support CATOBAR Catapult assisted take off but arrested recovery CBO Congressional Budget Office CDDR Concept definition and design research CDG Capability Development Group CDP Concept Demonstration Phase CNI Communication, navigation and identification CPP Cooperative Project Personnel CTOL Conventional takeoff and landing
vi = = DAO Defence Acquisition Organisation DARPA Defence Advanced Research Project Agency DAS Distributed Aperture System DCDM Defence Capability Development Manual DCIC Defence Capability and Investment Committee DCMA Defense Contract Management Agency DITR Department of Industry, Tourism Resources DMO Defence Materiel Organisation DMRT Deployable Mission Rehearsal Trainer DMS Diminishing Manufacturing Sources DND Department of National Defence DoD Department of Defence DOT&E Director, Operational Test and Evaluation DSTO Defence Science and Technology Organisation EA Electronic Attack EC Executive Committee EMD Engineering and manufacturing development EOTS Electro-Optical Targeting System ET Embedded Training EVM Earned value management FGF Fifth-generation fighter FMS Foreign Military Sale FMS Full Mission Simulator FPS Function and Performance Specification FOC Final operating capability GAO Government Accountability Office IAI Israel Aerospace Industries IAB Investment Analysis Branch ICT Industry capability teams IFF Identification friend or foe IOC Initial operating capability IRST Infrared search and track ITS Integrated Training System
vii = = JAF Joint Attack Fighter JESB Joint Strike Fighter Executive Steering Board JET Joint Estimating Team JAST Joint Advanced Strike Technology JSF Joint Strike Fighter JSM Joint Strike Missile JSOW Joint Stand-Off Weapon = JPO Joint Strike Fighter Program Office LoI Letter of Intent LHD Landing helicopter docks LRIP Low-rate initial production MADL Multi-function advanced datalink MILCON Military construction MoD Ministry of Defense MoU Memorandum of Understanding MRF Multi-Role Fighter NSM Naval Strike Missile MUOS Mobile User Objective System NACC New Air Combat Capability NATF Naval Advanced Tactical Fighter NAVAIR Naval Air Systems Command NCA Netherlands Court of Audit NIFARP Netherlands Industrial Fighter Aircraft Replacement Platform OAG Office of the Auditor General OCD Operational Concept Document ONI Office of Naval Intelligence ORD Operational requirements document PEO Program Executive Officer PSFD Production, sustainment and follow-on development QDR Quadrennial Defense Review RAAF Royal Australian Air Force RAF Royal Air Force RFP Request for Proposal
viii = = RUSI Royal United Services Institute RWR Radar warning receiver SAM Surface-to-Air Missile SAR Synthetic aperture radar SATCOM Satellite communication SBVS Strategic Best Value Sourcing SCP Security Cooperative Participant SDD System design and develop SSM Savunma Sanayi Mustesarligi STOVL Short take off and vertical landing TAI Turkish Aerospace Industries UCAV Unmanned combat aerial vehicle UHF Ultra high frequency UK United Kingdom US United States USAF United States Air Force USG United States Government USMC United States Marine Corps USN United States Navy VDE Virtual development environment VHF Very high frequency VLO Very Low Observable VPDI Virtual Product Development Initiative VT Virtual Training WCDMA Wideband Code Division Multiple Access
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List of Tables
Table 1: Lockheed Martin F-35 variant specifications ...... 65 = Table 2: JSF Partner Financial Contributions, SDD Phase ...... 128
Table 3: Estimated JSF Procurement Quantities ...... 146
Table 4: Australia’s PSFD Contributions ...... 236 =
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List of Figures
Figure 1: JSF Program Relationships ...... 107 = Figure 2: JSF Program Management Structure ...... 119 = Figure 3: JSF PSFD MoU Organisation Chart with CPP Manning ...... 125 =
xi = = Abstract
This thesis shows that the current range of analytic tools for assessing Australian defence procurements is not adequate to comprehensively understand Australia’s procurement of the JSF. This requires an analysis of the politics which shape procurement outcomes and the political and economic outcomes of procurement approaches and policies. The international nature of the JSF Program requires analytical tools that incorporate political competition between international, national and sub-national actors. These politics are examined in this thesis by expanding the scope of bureaucratic-organisational models used previously, and ontologically varying the level of analysis to include international political dynamics. The value of the broader analytical framework proposed by this thesis is demonstrated by its ability to contrast Australia’s actions and policies against those of other JSF international partners. Australia’s adherence to the JSF Program’s competitive best value principle places it in a position of significant disadvantage in terms of industrial workshares, and Australia’s defence industry policy is largely incompatible with the nature of the JSF Program and the continuing use of industrial offsets. Australia has not used its political leverage as a participant in the JSF Program to push for additional economic, industrial and strategic benefits in the same manner as other nations. A comparison with other nations allowed the assumptions made by Australia in signing on the JSF Program to be tested, and the analysis conducted found many assumptions to be flawed. This thesis demonstrates that the nature of the JSP Program creates interdependencies between the US, Lockheed Martin, and all other partner nations that are not features of Australia’s previous defence procurements. The dependency of allies on the US has increased through US management of the Program on behalf of allies, particularly with regard to the single maintenance system and global supply chain. The level of alliance interoperability facilitated by the JSF contributes to reinforcing US leadership in international politics and coalition operations.
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CHAPTER 1: INTRODUCTION
The Joint Strike Fighter (JSF), the Lockheed Martin F-35 Lightning II, is a family of fifth-generation multirole strike aircraft. As a concept, the JSF Program was intended to revolutionise the way major defence projects were developed and procured at the international level. Synergistically, the F-35 aircraft itself represents a fundamental change in developing a 21 st century network-centric weapons system. In procuring the JSF, Australia has embarked on its most expensive defence procurement during a period of fiscal constraint and rapidly changing strategic environment. Essentially, Australia military and civilian defence organisations are responsible for ensuring Australia’s national security in a cost-effective manner. A key question for Australia is how well it has adapted its defence procurements to suit 21 st century development and procurement processes, particularly in a post-Cold War globalised world, while ensuring an efficient use of public monies. Answering this question requires an analytical approach to procurement suited to 21 st century changes and contexts, and this thesis examines whether existing analytical approaches to procurement are adequate to address the new characteristics of the JSF Program.
While matters of defence and security are prominent features of Australia’s political and social landscape, the specific issue of defence procurement has received relatively little public or academic attention beyond the occasional media headline. There has been sporadic public debate over the past five decades regarding controversial procurements, such as the F-111, Collins Class submarines and recently the JSF. Similarly, the academic analysis of defence procurement of the past half a century has also been limited. While the benefits of particular weapons systems to Australia’s national security are widely assessed in the academic environment, and the flaws discussed in the public arena, the processes and politics of procurements have received little academic attention. This paucity is somewhat surprising given the centrality of major weapons systems to Australia’s strategic policy, and the large share of the defence and national budgets they consume. Australia’s planned procurement of up to 100 Joint Strike Fighters is a major component of Australia’s defence arsenal for the next forty years, and currently is Australia’s most expensive defence procurement.
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As defined by Stefan Markowski, Peter Hall and Robert Wylie, procurement is ‘another word for describing the activity of purchasing or acquisition, and defence procurement refers to these activities in relation to providing a country’s national security’. 1 Defence procurement ‘links together government demand for new military capabilities and industry supply of the equipment and materiel inputs that help form those capabilities’. 2 Despite the simple economic description of procurement, the reality of processes for major procurements are often characterised by complex political interactions. Rather than being a unitary and purely rational purchaser, government defence procurements of high cost products are the outcome of competition between different actors with different interests and influence. Within military organisations, services vie for resources, and there can also be disagreement and competition within individual service arms. Civilian agencies can contend with each other, and with military services, as can governments, industry actors and international governments. With the JSF, this complex web of national political interactions is transplanted to the international arena.
Notwithstanding two limited assessments of the procurement of the Collins Class submarine, there has not been a systematic or rigorous analysis of Australia’s defence procurements since the late 1990s. Although Australia began favourably looking at the JSF in the late 1990s and committed to procure it in 2002, critical assessments of Australia’s procurement have been sparse at best. Beyond the need to address the significant academic gap with regard to Australian defence procurement, particularly over the past two decades, there is a specific academic need to assess Australia’s latest and most expensive procurement in a comprehensive manner.
As a general body of work, Australian defence procurement analysis is fragmented in nature, with a varying quantity and quality of analyses over the past five decades. Generally, existing approaches to understanding Australian defence procurements adopt a limited approach in examining a broad issue or range of procurements, lacking a systemic analysis which draws together the various themes into a coherent whole
======1 Stefan Markowski, Peter Hall and Robert Wylie, ‘Procurement and the chain of supply’, in Stefan Markowski, Peter Hall and Robert Wylie, eds., Defence Procurement and Industry Policy: A Small Country Perspective (New York: Routledge, 2010) 11. 2 Stefan Markowski and Robert Wylie, ‘Industry case study: Australian naval shipbuilding’, in Defence Procurement and Industry Policy, 323.
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with a specific focus. While there is an individual multi-causal analysis which provides a broader scope, it is primarily limited to domestic determinants. To understand Australia’s procurement of the JSF, and its strategic and economic outcomes, it is necessary to develop a new approach which can assess a high-technology, high-cost and internationally cooperative 21 st century weapon system procurement.
In broad international terms, the Joint Strike Fighter represents a different type of procurement. Mike Cosentino, Lockheed Martin’s JSF international programs director, stated that the JSF is a transformational weapon system that will change the way the world thinks and operates, from the corporate boardroom to the future battle space. The participation of international industry in the development of one of the most technologically advanced US weapons programs will set new standards for cooperation and communication between government, industry and people around the world. 3 In the US during the early years of the JSF Program, it was the ‘centerpiece’ for Department of Defense (DoD) procurement and ‘viewed by many within the … DoD to be a model acquisition program, as well as a new model for cooperative development and production between DoD and US allies’. 4 As well as for Australia, it is the most expensive procurement for the US and the other partners. With the exception of the United States, the JSF will be the first ‘fifth-generation fighter’ to enter operational service with air forces around the world. It is arguably the first genuinely joint aircraft developed from the beginning for the US Air Force, Navy and Marines, as well as the British Navy. Whereas the US has traditionally developed and produced its own aircraft, then made them available to allies internationally, allies have partnered with the US in the development and early production of the aircraft. The JSF Program involves a broader range of actors, particularly a range of international actors, and a higher degree of interdependency than with previous
======3 Smiths Aerospace, ‘F-35 International Partners Strengthened in Agreement with Turkey’, Business Newswire
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defence projects. Under US leadership, the JSF Program includes eight partner nations, the United Kingdom, Italy, Netherlands, Turkey, Canada, Australia, Denmark, and Norway, as well as two Security Cooperative Participants (SCPs), Israel and Singapore.
The structure of the international JSF program was described by the US General Accounting Office (GAO) as one ‘based on a complex set of relationships involving both government and industry from the United States and eight other countries’. 5 During the factory rollout ceremony for Australia’s first two F-35As, Frank Kendall, US Undersecretary of Defense for Acquisition, Technology and Logistics, described the combined efforts required ‘to accomplish something as significant as the F-35’: 6 In this case it takes a community of nations, it takes a community of companies, it takes a community of militaries and departments within the US and around the world, and all of our partners. It takes a community of industry to come together. 7 This thesis examines political interactions of various international companies, militaries, departments and governments involved in the development and procurement of the Joint Strike Fighter, with a focus on Australia’s procurement activities and policies.
The central research question of the thesis asks if the current analytic approaches for assessing Australian defence procurements are adequate to comprehensively understand Australia’s procurement of the JSF. The thesis will test the hypothesis that while there are benefits in using existing analytic approaches, singly or combined, they are inadequate to do so in a comprehensive manner. The thesis will evaluate the extent to which the characteristics and determinants identified by previous analyses are still evident, and identify new or changed determinants and influencing factors.
The core aim of this thesis is to demonstrate that a comprehensive understanding of Australia’s procurement of the JSF requires a broader use of the analytical tools ======5 GAO, Cooperative Program Needs Greater Oversight to Ensure Goals Are Met, 1. 6 Cheryl Pellerin, ‘Kendall: F-35 Rollout Marks US-Australia Partnership Milestone’, US Department of Defense
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available in the academic literature. While combining the current analytical tools into a single multi-method framework to examine Australia’s procurement of the JSF would address a significant gap in the literature, it would be inadequate to address the new aspects of the development of the JSF and the JSF Program. A comprehensive understanding of the procurement of the JSF requires the identification of the interests and influences of the varied actors and an analysis of the political dynamics between the different nations and organisations, which is not supported by current approaches.
The thesis will demonstrate that the JSF Program represents a different type of procurement, with a new set of opportunities and costs, requiring a different type of analysis. The resulting analysis will be broader and deeper than could be achieved by using the analytical tools currently available, as described in the literature review chapter. As the core aim of the thesis is not to examine Australia’s procurement of the Joint Strike Fighter per se, it is not capable of providing a comprehensive examination of Australia’s procurement due to reasons of scope and the availability of information. The extended breadth and depth of analysis will draw out implications of Australia’s procurement and foregrounds questions that become apparent, but not all implications and questions can be addressed with equal measure. Ultimately, the analytical tools and analysis of this thesis should serve as a springboard for subsequent targeted subset analyses of the JSF and Australia’s other major defence procurements. The timeframe of the analysis extends from the late 1990s to 2015, both for Australia and the international context.
The remainder of this introduction will outline the methodology used, specifically the bureaucratic-organisational approach to politics, as well as outlining the sources from which the analysis is derived. Following the methodology section, it will provide an outline of the analysis and main issues addressed in each of the chapters to follow.
Methodology
This thesis will use a broad analytical framework addressing the central research question, based on the bureaucratic-organisational concepts developed by Graham T. Allison’s and Morton H. Halperin, and used in the Australian literature. The analytical
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approach is a framework in the sense that it consists of a range of qualitative models and analytical tools which are used in a generalised and ad hoc manner rather than using them in the precise and detailed manner in which they were developed and used by their authors. Rather than prescribing under what circumstances they will be used, they will be applied where relevant and to an appropriate degree.
Analytical Framework The analytical framework for the thesis will be based on the bureaucratic- organisational conceptual model developed by Allison and Halperin, but will expand it to include international organisational and bureaucratic actors. Implicitly and explicitly, and to varying degrees of utility, political organisational-bureaucratic models have often been used for analysing defence policy in Australia, including by Desmond Ball, 8 Graeme Cheeseman, 9 Cheeseman and Ball, 10 Paul Earnshaw 11 and John Bruni. 12 The models used by these authors recognise and examine the political dynamics of defence policies and procurement decision, but without using Allison and Halperin’s model in detail. While the conceptual models used by Allison and Halperin, as well as Ball, Cheeseman, Earnshaw and Bruni consider the domestic political environment, and indeed their analyses are strictly national in focus, this thesis will apply the bureaucratic-organisation model to other relevant nations as well, creating an international bureaucratic-organisational conceptual and analytic model. Additionally, while current approaches minimise the role of the thing to be procured in determining the politics of the procurement process, this thesis will have a greater focus on the JSF as an interdependent factor.
In the early 1970s, a ‘theory of bureaucratic determinism’ emerged in the US as an approach to understanding US foreign policy, of which Allison and Halperin were
======8 Desmond Ball, ‘The Role of the Military in Defence Hardware Procurement’, in The Military and Australia’s Defence, ed. F.A. Mediansky (Melbourne: Longman Cheshire, 1979) 41-66. 9 Graeme Cheeseman, Selling Mirages: The Politics of Arms Trading (Canberra: Australian National University, 1992). 10 Graeme Cheeseman and Desmond Ball, ‘Australian Defence Decision Making: Actors and Processes’, in Desmond Ball and Cathy Downes, eds., Security and Defence: Pacific and Global Perspectives (Sydney: Allen and Unwin, 1990) 250-267. 11 Paul Earnshaw, Billion Dollar Business: Strategies and Lessons in Australian Arms Acquisition . (Canberra: Australian Defence Studies Centre, 1998). 12 John Bruni, Reasons for Choice: Understanding the Direction of Australian Weapons Procurement Since 1963, Doctoral thesis, University of New South Wales, Canberra, Australia, 1998.
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principal theorists. 13 The theoretical models of bureaucratic politics stood in contrast to rational models of foreign policy decision making which ‘depend[ed] primarily on the assumption that events in international politics consist of the more or less purposive acts of unified national governments’. 14 As Allison and Halperin note, the ‘rational approach’ has conceptual and analytical benefits of reduc[ing] the organizational and political complications of government to the simplification of a single actor [in which] ... the confused and even contradictory factors that influence an occurrence become a single dynamic. 15
From this rational model, when a nation takes a particular action, ‘that nation must have had goals and objectives towards which the action constituted a value maximizing means’. 16 However, the simplification of the decision making processes obscures the persistently neglected fact of bureaucracy: the ‘maker’ of government policy is not one calculating decision-maker, but rather a conglomerate of large organizations and political actors who differ substantially about what their government should do on any particular issue and who compete in attempting to affect both governmental decisions and the actions of their government. 17 Allison and Halperin argued that the ‘public imagery and academic orthodoxy’ of rational decision making, and subsequent neglect of bureaucratic conceptualisations, stems from the desire to avoid national security policy decision making to be seen as outcomes of political games. 18 Allison and Halperin provide a good example of how different individual actors and organisations can view a singular issue in different and potentially conflicting ways: a proposal to withdraw American troops from Europe is to the Army a threat to its budget and size; to the Budget Bureau a way to save money; to Treasury a balance of payments gain; to the State ======13 Desmond Ball, ‘The blind men and the elephant: A critique of bureaucratic politics theory’, Australian Outlook 28:1 (1974) 71. 14 Graham T. Allison and Morton H. Halperin, ‘Bureaucratic Politics: A Paradigm and Some Policy Implications’, World Politics 24:S1 (March 1972) 41. 15 Ibid, 42. 16 Ball, ‘The blind men and the elephant’, 75. 17 Ibid, 76. 18 Allison and Halperin, ‘Bureaucratic Politics’, 43.
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Department Bureau of European Affairs a threat to good relations with NATO; to the President's Congressional adviser an opportunity to remove a major irritant in the President's relations with the Hill. 19
In contrast to rational models of foreign policy decision making, Allison and Halperin developed alternate organisational and bureaucratic models, of which the latter, Ball suggests, ‘is the model closest to Allison's own heart’. 20 The bureaucratic political model sees no unitary actor but rather many actors as players—players who focus not on a single strategic issue but on many diverse intra- national problems as well. Players choose in terms of no consistent set of strategic objectives, but rather according to various conceptions of national security, organizational, domestic, and personal interests. 21 In Allison’s bureaucratic model, ‘the manoeuvrings of individuals within the bureaucracy is determinate’. 22 The politics of decision making involves ‘bargaining along regularized circuits among players positioned hierarchically within the government’, 23 or in Ball’s blunter words, ‘decisions result from infighting among the participants’. 24
However, individual actors are located within organisations which have their own ‘parochial priorities and perceptions’. 25 Allison’s aphorism that ‘where you stand depends on where you sit’ recognises that an individual’s position on a particular issue can be approximately determined by what organisation they belong to, and where they belong in that organisation. 26 For the organisational model, Allison argues that ‘Government behavior’ can be understood ‘less as deliberate choices and more as outputs of large organizations functioning according to standard patterns of ======19 Allison and Halperin, ‘Bureaucratic Politics’, 48. 20 Ball, ‘The blind men and the elephant’, 76. 21 Allison and Halperin, ‘Bureaucratic Politics’, 43. 22 Ball, ‘The blind men and the elephant’, 76. 23 Graham T. Allison, Essence of Decision: Explaining the Cuban Missile Crisis (Boston: HarperCollins, 1971) 162. 24 Ball, ‘The blind men and the elephant’, 76. 25 Allison, Essence of Decision, 81. 26 Ibid , 177.
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behavior’. 27 The options available to government are a product of the established routines of organisations, dependent on the capabilities and resources available to the organisation. 28 In this way, ‘organizational outputs structure the situation within the narrow constraints of which leaders must contribute their ‘decision’ concerning an issue’. 29
As Ball notes however, Allison and Halperin at times conflate organisational and bureaucratic models 30 due to the difficulty in clearly delimitating bureaucratic and organisational models as exclusive, and this thesis will use a combined concept of bureaucratic-organisational politics without differentiating between them. Despite this, the analytical framework for the thesis will integrate and expand on those previously developed in the literature on Australian defence procurement. While the analytical approaches used by authors to examine Australia defence procurement are discussed in detail in the literature review chapter, it primarily involves applying the bureaucratic- organisation model to political activities to identify patterns or types of behaviours, such ‘buying-in’, inter-service rivalry and dominance the ‘replacement’ and ‘requirements’ syndromes, and the ‘kid-brother/poor relation’ syndrome. It will apply the bureaucratic-organisation approach to the three main themes of Australian defence procurement literature: 1. the bureaucratic and organisational politics of procurement, particularly service domination in the procurement processes; 2. the weakness of Australia’s defence industry and the tensions between domestic and overseas procurements; and 3. ‘how Australia’s relationship with the US has coloured its acquisition strategies’. 31 These broad themes, however, are not exclusive, and there is often overlap between them, and are discussed in greater detail in the literature review chapter.
======27 Ball, ‘The blind men and the elephant’, 75. 28 Allison, Essence of Decision, 7 9. 29 Ibid. 30 Ball, ‘The blind men and the elephant’, 84. 31 Bruni, Reasons for Choice , 1.
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The application of the model in this thesis is predicated on the assumption that rational or formal models are of limited utility and do not accurately identify key determinants in defence procurement policy and decision making. However, it will not treat the economic and defence aspects as discrete from the politics of the defence establishment, and will not treat external influences as monolithic ‘black boxes’. Instead, it will examine the political-bureaucratic factors internationally and how they influence Australia’s political-bureaucratic dynamics, as well as examining the political dynamics of defence industry in the context of Australia’s procurement. In demonstrating that the JSF Program is a new type of procurement requiring a new type of analysis, the analysis will involve a detailed examination of the JSF Program, JSF systems, and the F-35 aircraft. To a limited extent, the broader analytical framework will also encompass full lifecycle maintenance and sustainment, which are a critical part of current procurement practices, but have not been addressed in detail with previous analytical methods. The thesis’ hypothesis will be tested by applying the analytical framework to an assessment of Australia’s procurement of the JSF, and determining if the new framework provides a greater understanding of the politics and determinants than would otherwise be the case.
In addition, examinations of defence procurements are usually explicitly or implicitly normative in nature as political gaming, divergent political interests and other varying determinants are considered contrary to the rational process of determining actions and policy. This thesis will include an implicitly normative approach in its analytical framework as the syndromes and other determinants explored in Chapter 2 are contrary to the rational conceptualisation of efficient defence procurement based on an objective assessment of national needs.
Information/evidence sources The research methodology involves the review and analysis of public documents in order to determine key actors in Australia’s procurement, as well as political dynamics, actions and policies which reflect determinants in the procurement process. Primary documents includes official government, defence, and aerospace industry documents, including policy documents, media releases, interview transcripts and parliamentary hearing transcripts from Australia and internationally. Secondary sources include
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analyses from non-government organisations, and media reports from Australia and internationally.
The thesis was limited by information availability and the issues examined were shaped, in part, by the extent to which information was publicly available. As the JSF is a technologically advanced weapons system currently under development, national security issues limit the information that is made publicly available, and this is particularly the case in Australia. However, the limited material available from Australia was compensated through reviewing the international literature, which often contains more information than Australian sources. While a complete examination of the development of the JSF and Australia’s procurement of it cannot be conducted due to information deficiencies, this is often the case in procurement studies, and there was sufficient information publicly available to sustain a rigorous examination and allow a detailed assessment.
Chapter Outlines Chapter 2: Literature Review Chapter 2 provides a critical analysis of the academic literature on the topic of Australian defence procurement with the aim of identifying gaps in the literature and limitations of the approaches used. It will identify the broad themes in the literature, outline the broad conceptual and analytical approaches used, and detail the analytical contributions made to understanding Australian defence procurement. This chapter also demonstrates that the procurement process extends before and after a contract is signed and/or product delivered, and includes the assessments made in defining need and assessing options before narrowing the options for a final decision. Additionally, the contemporary procurement processes undertaken by government and the Australian Defence Force involves a consideration of full lifecycle and sustainment costs, not simply the costs for acquiring the hardware. However, there is little critical analysis of this broader conceptualisation of procurement in the literature.
The primary core of the Australian literature on defence procurement consists of the analyses of Desmond Ball, Stanley Schaetzel, Fred Bennet and Paul Earnshaw using bureaucratic-organisational models, each of which builds on the conceptual
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frameworks of the analyses that came before it, adding concepts and increasing the scope of analysis. It is evident that there are a range of pervasive characteristics, or ‘syndromes’, of defence procurement in Australia over the decades covered by this literature. The main characteristics include ‘gold-plating’, inter-service rivalry and service dominance, the ‘replacement’ and ‘requirements’ syndromes, the ‘kid- brother/poor relation syndrome’ and ‘buying in’, although there are variations on these behaviours. Gold-plating occurs when weapons are designed to be more technologically sophisticated than needed be for the task specified. The replacement syndrome involves the replacement of ageing hardware without appropriate consideration of changed strategic needs and environment. The kid-brother or poor relation syndrome, as described by Schaetzel, is the need of the service arms to have the same quality equipment as major allies, which was a result of frequent operations with the US and UK. 32 Buying-in is the process where a bid is submitted, in the knowledge that it is too low, in order to win a contract, but with confidence additional funding will be subsequently provided to make up the shortfall. Additionally, technology as an end itself is a characteristic of Australia’s defence procurements.
Within the broad theme of defence procurement and defence industry in Australia, of which the literature primarily consists of analyses by Stefan Markowski, Peter Hall and Robert Wylie, the central issue in this theme is the inability of Australian defence industry to support Australian procurement efficiently, resulting in a tension between cheaper sourcing from overseas and the desire to maintain a domestic industry for defence self-reliance. The third major theme in the Australian literature is the influence of the US alliance on Australian procurement, consisting primarily of analyses by Graeme Cheeseman and Gary Brown. With the exception of Maryanne Kelton’s examination of the Collins class submarine acquisition, which includes an analysis of the influence of the US Navy, the literature on this theme is limited.
Chapter 3: Development of the Joint Strike Fighter Chapter 3 will detail the development of the of the JSF as an ‘Air System’, including Lockheed Martin F-35 Lightning II and its integrated autonomous logistics system, as well as the JSF Program more broadly, demonstrating the new approaches to defence ======32 Stanley S. Schaetzel, Local Development of Defence Hardware in Australia (Canberra: Strategic and Defence Studies Centre, 1986) 4.
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procurement undertaken for the project. It will provide context and background information as a ‘benchmark’ for the analysis of Australia’s procurement. While focused on the US role in the development of the JSF, this chapter will also outline the role and importance of international partnership arrangements of the development and production of the aircraft.
The capabilities of the JSF, particularly in the area of information and electronic warfare, can be seen to have been a product of the transformation process the US Air Force (USAF) undertook in the late 1990s and early 2000s, representing a change from industrial to information age warfare. A brief outline of the core principles of the USAF transformation is provided, which allows a comparison to Royal Australian Air Force’s (RAAF) transformative plans assessed in Chapter 8. Despite the broad transformation of the USAF, and the rest of the US armed services, the JSF was not the product of a clearly defined set of requirements, but was the result of severe post-Cold War budget cuts which conflated several different Cold War era development programs across different services into a single program. The joint nature of the JSF was less an intentional objective, and more a product of White House and Congressional directives. With numerous development projects being cut in the late 1990s, the issue of cost became a critical element of the JSF program; for the program to progress, it was essential that costs were minimised. The chapter will outline the concept of concurrency in the development and production of the JSF, which involved development and testing taking place during early production, which was considered a key strategy for improving acquisitions. The cost section of this chapter examines early assessments, Lockheed Martin’s cost containment strategies, and the reasons for cost escalations and schedule slippages, which provides a basis for examining the issues of cost in relation to Australia’s procurement, and the effectiveness of Australia’s assessments.
This chapter also outlines a range of general features of the JSF that have significant effects on Australia. One important element described is that the JSF air system consists of an air vehicle, the F-35, as well as an Autonomic Logistics system for all F-35 aircraft produced. In effect, Australia’s procurement of the JSF inherently includes a global but US-managed logistics and sustainment system. This outline informs the
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analysis of the consequences of this for Australia, particularly with regard to sovereign capability and dependency, undertaken in Chapter 5.
Chapter 4: International Politics of the Joint Strike Fighter This Chapter will apply the broad analytical framework based on the general bureaucratic-organisational model to international partners in the JSF Program. An examination the international and intra-national politics of JSF nations will demonstrate the utility of such an approach, and provide a ‘benchmark’ for assessing the international factors in Australia’s procurement. As well as the political dynamics between nations, and between actors in different nations, this thesis examines the political dynamic between actors in a single nation, particularly the US, which affect partner nations. Whereas standard procurement analyses examine interests, influence and decision making from a national perspective, this thesis examines the international dimensions of JSF procurement, and in a similar way that Ball indentifies formal and informal processes.
As the JSF Program is an international collaboration, it involves multi-national governance arrangements. Formally, the JSF Program Office (JPO) and the JSF Executive Steering Board (JESB) are the core governance organisations for the JSF program, with international arrangements for each phase established via Memoranda of Understandings (MoUs) as well as production agreements with contractors. This chapter will outline the political structure of these governance relations, and explore Australia’s involvement in them, with a focus on costs and benefits to Australia. In addition, this chapter examines ‘informal’ international influences on national procurements, specifically the extent to which US actors have influenced the JSF procurement decisions and processes of Norway.
In the post-Cold War strategic environment, international interventions based on coalitions have become a norm for Western countries, and this chapter will examine the politics of the concept of interoperability with the US as a key feature of the JSF program. While all military procurements inherently include a political element, this chapter will also examine the principle of alliance building deliberately incorporated into the JSF Program, as well as the broad dynamics of international alliances involved in the international procurements. This chapter will examine the extent to which the
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JSF Program transforms interoperability into integration on a military level, linking to the multi-national governance arrangements of this chapter, and its influence on international political relationships, particularly for Australia’s relationship with the US.
Chapter 5 – International Governance and National Capabilities This chapter will assess the political dynamics of determining and acquiring national capabilities, including international negotiations. By using the broad conceptual and analytical framework, this chapter will explore examples of other nations negotiating particular capabilities in order to provide a benchmark for assessing Australia’s activities in pursuing capabilities to address Australia’s strategic requirements. A key theme of this chapter is the ability and willingness of Australia to expend political capital to obtain strategic objectives in the context of US-led multi-national political structures. In examining the issues of operational sovereignty for the JSF, this chapter will build on the political and strategic analyses of previous chapters.
The chapter begins outline the role of the US Congress in limiting access to advanced technologies. In examining the workings of JSF international governance, it examines the successful efforts of Norway to develop a drag chute variant of the JSF, and Canada’s problems with gaining satellite communications for their aircraft. Chapter 5 also assesses the willingness of partner nations to exercise their authority as partners in the JSF Program by looking at their actions during debate between the Pentagon and Congress in cancelling the JSF alternate engine program. A specific issue which will be examined in detail is access to the source codes for the JSF, which was pursued by Australia, the UK and Turkey. Outlining the previous experiences these nations have had with limited access to source code reducing their strategic capabilities, this chapter will compare the approaches the three nations have taken to acquire access as part of their JSF procurements.
Chapter 6 - International JSF Procurement Approaches An examination of the procurement approaches adopted by the partner nations, as well as a non-partner nation, allows Australia’s procurement to be evaluated comparatively. This chapter provides a detailed examination of the procurement approaches of JSF partner nations Norway and Turkey, and non-partner nation Israel. The analysis will
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include a focus on the methods and successes of political bargaining between the different nations and the US with regard to achieving economic, industrial and strategic benefits.
The recurrent themes which characterise Norway’s and Turkey’s procurements include operational concerns, economic/industrial interests, and long term assessment processes. By not committing to the JSF in the early years of the program, and actively keeping other aircraft options as viable alternatives open, Norway and Turkey created political leverage in which it could promote its own interests against those of the US and Lockheed Martin. Signing on to the JSF System Development and Demonstration (SDD) and Production, Sustainment and Follow-on Development (PSFD) phases without committing to purchasing the aircraft allowed them to retain political leverage for future negotiations, and to reap additional economic and strategic benefits.
Examining the procurement approaches and industrial involvement of non-partner nation Israel facilitates the testing of some of the assumptions made by Australian officials in cost-benefit analyses during the long-term JSF procurement process. The advantages Australia considered when joining the SDD and PSFD phases of the JSF program can be compared those of benefits attained by Israel, who did not sign on the SDD and PSFD phases. Israel had expressed interest in the JSF since its early development, but it conducted lengthy negotiations, reversing the US position on issues important to Israel, and attained a considerable quantity of industrial offsets.
Chapter 7 – Australia’s Procurement Approach Building on the themes in international procurement processes identified in previous chapter, this chapter will examine the decisions and processes of Australia’s assessments and procurement of the JSF. All current Australian JSF procurement narratives begin with the 2002 decision to join the SDD phase and effectively cancel the competition for new aircraft. However, this thesis begins in the late 1990s, when options to replace Australia’s F/A-18s and F-111s were explored and Australian officials first began to express interest in the JSF. Using the assessments developed in Chapters 2 and 3 regarding US-led international governance and integration, this chapter will examine the extent to which the evolved strategic relationships shaped by JSF procurement was considered by Australia.
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The value of the broad conceptual and analytical frameworks will be demonstrated by examining Australia’s procurement approach comparatively, with assessments of real and potential costs and benefits. A specific area of investigation includes evaluating Australia’s assessments of costs and risks against subsequent outcomes. Also, this chapter will evaluate the validity of assumptions made by Australia in 2002 underlying its cost/benefit analysis in the context of actual outcomes, and in comparison to the outcomes experienced by other nations.
In comparison with Chapter 6, this chapter will assess Australia’s approach in gaining economic and industrial benefits from its participation in the JSF program, specifically evaluating the costs and benefits of the Australia policy of not using industrial offsets. This chapter will assess if Australia’s early, concrete and continuous support for the JSF undermined it ability to negotiate for advantageous outcomes. Related to this analysis is an assessment of the extent to which Australia considered the procurement simply as a solution to strategic needs independent of economic benefits, and without considering the procurement itself as a political lever for economic and strategic benefits.
Chapter 8 – Australia’s Strategic Needs and JSF Capabilities While Chapter 7 broadly examined Australia’s procurement approach, highlighting problems and contrasting it with the approaches of other nations described in Chapter 6, this chapter will conduct a detailed and critical examination of capabilities in terms of the requirements of AIR 6000, the capabilities of the F-35, and the RAAF’s assessments of F-35 capabilities and Australia’s capability requirements. In a similar way that Chapter 7 tested the assumptions which underpinned the 2002 decision, finding many to be flawed, this chapter will test the capability assumptions which informed the 2002 decision. This chapter examines Australia’s procurement through the lens of the analytic framework advocated by this thesis, which is based on an expansion of the ‘syndromes’ outlined in Chapter 2. Particular attention will be given to the process of defining the quantity of aircraft needed to meet Australia’s strategic requirements. In contrast, this chapter will also examine the JSF procurement as a catalyst for capability transformation in the RAAF in the context of the RAAF’s Plan Jericho. =
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The chapter begins by outlining the requirements envisaged in the late 1990s to replace Australia’ F/A-18 and F-111 fleets, and also examines timeframe assumptions in phasing out legacy aircraft and introducing the F-35. The Australian National Audit Office’s assessment of the AIR 6000 procurement process was outlined in the previous chapter, but this chapter will conduct a detailed examination of the assessments and capability requirements specified in the AIR 6000 project. Specifically, this chapter will examine the change in capabilities sought by AIR 6000 before and after the 2002 decision.
In examining Australia’s procurement of capabilities, this chapter will assess the extent Australia was willing to actively pursue critical capabilities, such as long range and maritime strike, against a passive desire to acquire the aircraft. It will also conduct a critical assessment of the concept of ‘fifth-generation’ capabilities in terms of the JSF and Australia’s declared needs, and argues that the term functions as a marketing tool to promote a specific product, and simplifies the process of capability assessment. To complement the cost analysis of Chapter 7, which focused on escalating costs for procuring the JSF, this chapter will examine the costs of gaining the New Air Combat Capabilities, which includes infrastructure costs, the costs of maintaining an interim capability and extending the life of Classic Hornets, and the procurement of the EA-18G Growler to address the electronic warfare deficiencies of the JSF.
Whereas procurement analyses are often focused on procurement costs solely in terms of unit costs, this chapter will adopt a broader conceptualisation of procurement costs to include a brief examination of sustainment and military construction (MILCON) infrastructure costs. As well as being the most costly defence procurement in total, the infrastructure cost is also the largest for Australian defence capital works. Operating the JSF, with its particular characteristics, incurs particular costs not needed for previous fighter procurements, including runway extensions and higher security facilities, with the necessity of meeting specific US security requirements.
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CHAPTER 2: LITERATURE REVIEW
This chapter provides a critical analysis of the academic literature on the topic of Australian defence procurement with the aim of identifying gaps and limitations of the approaches used. The material examined spans a period from the late 1960s to 2015, and while international literature has been reviewed for relevance to the Australian context, for the most part, the available literature has been written by Australian authors. While there is a greater body of work in which procurement is examined as a side-issue, this review is limited to material with a specific and critical focus on procurement, as opposed to historical or force structure material. This chapter will identify the themes in the literature, and detail the conceptual and analytical approaches used in understanding Australian defence procurement.
A review of the literature indicates the fragmented nature of the analysis of Australian defence procurement, the varying quantity and quality of analyses over the past five decades, and the paucity of analysis over the last two decades. Notwithstanding two limited assessments of Collins Class submarine procurement, there has not been a systematic or rigorous analysis of Australia’s defence procurements since the late 1990s. What a review of the literature does demonstrate, however, is the wide range of conceptual tools which can be broadened in scope and combined to provide a sound conceptual framework to assess a high-technology, high-cost and internationally cooperative 21 st century weapon system procurement such as the Joint Strike Fighter (JSF). Although Australia began favourably looking at the aircraft in the late 1990s and provided a public commitment to procure the aircraft in 2002, the literature examining Australia’s procurement of the JSF has been sparse.
Generally, existing conceptual frameworks for understanding Australian defence procurements adopt a limited approach in examining an issue or range of procurements. John Bruni’s multi-causal analysis provides a broader scope even as it considers the domestic determinants of procurement. While combining the existing conceptual frameworks into a single multi-method framework to examine Australia’s procurement of the JSF would address a significant gap in the literature, this thesis recognises the necessity of building on Bruni’s methodology and conceptual
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framework to provide an adequate understanding of Australia’s procurement of the Joint Strike Fighter given the contemporary Australian defence environment and the JSF’s unique developmental aspects.
This Chapter begins with an outline of the major Defence reforms which have had major implications for procurement over the past forty years, specifically outcomes from the Tange, Kinnaird, Mortimer and First Principles Reviews. The intention is not to provide a comprehensive description of defence procurement reform in Australia, but to provide an indication of some of the problems in procurement, general trends in procurement reform and specific reform actions undertaken, and to provide the reform context for current defence procurements. Fred Bennett notes that ‘Weapons system projects are characterized by internal conflict because defence ministries in the Western world are houses divided against themselves’, 33 and Australia’s numerous defence reforms reflect ongoing attempts to manage the tensions between civil and military management of defence procurement, and mitigate inter-service rivalries.
The chapter then examines the three main themes Bruni identified in the literature on Australia defence procurement: the bureaucratic and organisational politics of procurement, particularly Service domination in the procurement processes; the weakness of Australia’s defence industry and the tensions between domestic and overseas procurements; and ‘how Australia’s relationship with the US has coloured its acquisition strategies’. 34 These broad themes are not mutually exclusive, and there is often overlap between them.
First, the rational versus bureaucratic-organisational models of understanding defence procurement are introduced before outlining formal/rational processes for defence procurement. Formal processes represent an introductory and baseline step in understanding procurement. Following the formal processes, the bureaucratic- organisational models used by Ball, Schaetzel, Bennet and Earnshaw are examined, each of which builds on the conceptual frameworks of the analyses that came before it, adding concepts and increasing the scope of analysis. As the primary core of the ======33 F. N. Bennett, The Amateur Managers: A Study of the Management of Weapons System Projects (Canberra: Strategic and Defence Studies Centre, 1990) 11. 34 John Bruni, Reasons for Choice: Understanding the Direction of Australian Weapons Procurement Since 1963, doctoral thesis, University of New South Wales, Canberra, 1998, 1.
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Australian literature on defence procurement, the analyses of each of these authors are examined in detail, but the analyses of the procurement of the Collins class submarine of Ryan, and Yule and Woolner are also examined. It is evident that there are a range of pervasive characteristics, or ‘syndromes’, of defence procurement in Australia over the decades covered by this literature.
The next section examines the broad theme of defence procurement and defence industry in Australia, of which the literature primarily consists of analyses by Stefan Markowski, Peter Hall and Robert Wylie. The central issue in this theme is the inability of Australian defence industry to support Australian procurement efficiently, resulting in a tension between cheaper sourcing from overseas and the desire to maintain a domestic industry for defence self-reliance. The use of industrial offsets has been a key method of addressing the procurement tensions, and the history and current uses of offsets is examined. The third major theme in the Australian literature is the influence of the US alliance on Australian procurement, but with the exception of Maryanne Kelton’s analysis of the Collins class submarine acquisition, the literature on this theme is limited.
The subsequent section examines the multi-causal analysis conducted by John Bruni, who combines the three previously discrete broad themes into a single conceptual framework. In combining the different themes into a single analysis spanning three and a half decades, Bruni’s work represents the pinnacle of the literature embodying the continuing development of a conceptual framework evident in the bureaucratic- organisational models. This thesis builds on Bruni’s methodology and conceptual framework, and incorporates new insights, in order to provide an adequate understanding of Australia’s procurement of the Joint Strike Fighter. The last section of this chapter examines the limited quantity and quality of assessments of Australia’s procurement of the JSF.
Australian Defence Procurement Reforms In November 1973, Defence Secretary Arthur Tange submitted Australian Defence: Report on the Reorganisation of the Defence Group of Departments to the
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Government, more commonly known as the Tange Report. 35 In August 1973, while the report was being developed, Tange outlined problems in defence procurement to senior Army officers in what became known as the ‘Tange harangue’: 36 each Service is still making claims on resources to equip itself to fight wars according to its own independent strategy … I have read submissions supporting weapons bids from Services that have had little relation with current Defence Committee strategic doctrine; or that failed to provide any strategic basis at all beyond an assumption that replacement of present technology available to the Western World was a duty to the nation – and a requirement to protect Australian serviceman from unreasonable hazard … The organizational link between strategic assessment … on the one hand and the Services’ bids for equipment on the other, is, in my view, slow in response … and sometimes inaccurate in others. 37 Tange’s recommendations resulted in the abolition of the Service Boards, and the amalgamation of the separate Departments of Navy, Army, Air and Supply into the Department of Defence. 38
With regard to defence procurement, Tange introduced new ‘techniques of systems analysis and program budgeting’ which was considered ‘crucial to moving away from a ‘requirements’ approach, in which the services specified the weapons systems they intended to purchase with little or no regard to cost. 39 Tange’s administrative reforms sought to apply a ‘disciplined framework … which balanced system capabilities with costs and took full account of substitution possibilities between alternative ways of achieving a military objective’.40 The procurement process reforms were aimed at establishing checks and balances to manage the benefits and risks of major
======35 David Horner, Making the Australian Defence Force (South Melbourne: Oxford University Press, 2001) 46. 36 Peter Edwards, Arthur Tange: Last of the Mandarins (Sydney: Allen & Unwin, 2006) 212. 37 Arthur Tange, ‘Notes for address to senior Service Officers’, CGS Exercise, Duntroon (14 August 1973), 4, 9, 13. Quoted in Desmond Ball, ‘The Role of the Military in Defence Hardware Procurement’, in F.A. Mediansky, ed., The Military and Australia’s Defence (Melbourne: Longman Cheshire, 1979) 55. 38 Arthur Tange (Peter Edwards ed.), Defence Policy-Making: A Close-Up View, 1950-1980: A Personal Memoir (Canberra: University Printing Services ANU, 2008) vii. 39 Henry Ergas, ‘Australia’s Defence: A Review of the ‘Reviews’’, Agenda 19:1 (2012) 63. 40 Ibid.
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procurements while limiting the inherent biases of the Services. Tange accepted that high technology procurements had inherent risks with the potential for cost escalation, but he considered it prudent for the Department of Defence ‘to judge when a Service’s ambition to acquire the highest technology used by major allies (rather than, as they would say, ‘buying obsolescence’) involved unacceptable cost risks’. 41 Henry Ergas argues that despite some improvements made to the procurement processes in the 1970s and 1980s, ‘by the late 1990s those gains had been lost, and capabilities selection had returned to being largely based on ‘wish lists’. 42 More critically, Cheeseman and Ball argued that ‘the basic legacy of the Tange reforms has been to institutionalise bureaucratic politics … and to ensure that policy outcomes will be determined more by adversary processes than the application of reasoned argument’. 43
In 2002, a review team chaired by Malcolm Kinnaird published the Defence Procurement Review , commonly known as the Kinnaird Review, in response to ‘concerns about the procurement process for major Defence acquisitions’. 44 The major themes of the Kinnaird Review were ‘communication with government, so that capability is linked to strategy; defining and assessing capability; the management of capability; and the procurement and on-going support of defence equipment’. 45 Within these themes, Kinnaird identified the permeating issue as ‘the need to focus adequate attention on managing and costing defence capabilities on a whole-of-life basis’. 46 Of the 10 recommendations, one important recommendation adopted by government was a ‘strengthening the then existing two pass approval process for Defence’s major capital equipment acquisitions’, 47 specifically by implementing a ‘a rigorous two-pass system for new acquisitions with government considerations dependent on comprehensive analyses of technology, cost (prime and whole-of-life) and schedule
======41 Tange, Defence Policy-Making, 87. 42 Ergas, ‘Australia’s Defence: A Review of the ‘Reviews’’, 63. 43 Graeme Cheeseman and Desmond Ball, ‘Australian Defence Decision Making: Actors and Processes’, in Desmond Ball and Cathy Downes, eds., Security and Defence: Pacific and Global Perspectives (Sydney: Allen and Unwin, 1990) 265. 44 Australian National Audit Office, Planning and Approval of Defence Major Capital Equipment Projects (Canberra: Australian National Audit Office, 2009) 13. 45 Department of Defence, Australia, Defence Procurement Review 2003 (Canberra: Department of Defence, 2003) 3. 46 Department of Defence, Defence Procurement Review 2003 , 3. 47 ANAO, Planning and Approval of Defence Major Capital Equipment Projects, 13.
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risks subjected to external verification’. 48 The two-pass approval process was ‘intended to give government greater control over capability development’ 49 and ‘form[ed] the backbone of capability development and materiel acquisition within Defence’. 50
In 2008, following on from the Kinnaird Review, David Mortimer conducted a review of Defence procurement and sustainment with the aim of ‘avoiding a repeat of past problems through an ongoing reform program’. 51 The Defence Procurement and Sustainment Review , commonly known as the Mortimer Review, ‘evaluated progress made under the Kinnaird reforms and examined current acquisition and sustainment processes’. 52 It acknowledged the ‘marked improvements in the capability development process’ in Defence, and the acquisition process in Defence Materiel Organisation (DMO), resulting from the implementation of these reforms, but concluded that ‘reform in acquisition and sustainment should continue’. 53
Building on the Kinnaird and Mortimer reforms, the processes of defence procurement have been regularly refined. In 2008, the government established the Projects of Concern process ‘to focus the attention of the highest levels of Government, Defence and industry on remediating problem projects. 54 Following the failure of the Super Seasprite helicopter acquisition project, DMO introduced Gate Reviews to ‘mitigate project risks and to obtain assurance of a project’s continued viability’ by assessing a project’s readiness to proceed to the next stage through a project ‘gate’, which is ‘a major project decision point or milestone.’ 55 The Australian Government declared that it ‘accelerated the full implementation of all the Kinnaird and Mortimer
======48 Department of Defence, Defence Procurement Review 2003 , v. 49 Australian National Audit Office, Capability Development Reform (Canberra: Australian National Audit Office, 2013) 16. 50 Ibid , 17. 51 Department of Defence, Australia, Media Release, ‘Defence Procurement and Sustainment Review’, Department of Defence
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recommendations’ in 2011, 56 and further reforms to strengthen the Projects of Concern process was announced in May 2011. 57
In what is ‘arguably the most significant review of the defence establishment’ the Tange reforms of the 1970s, the Australian Government reshaped Defence following the release of the First Principles Review in 2015. 58 The First Principles Review found that the current organisational model and processes are complicated, slow and inefficient in an environment which requires simplicity, greater agility and timely delivery. Waste, inefficiency and rework are palpable. Defence is suffering from a proliferation of structures, processes and systems with unclear accountabilities. 59 Adopting the review’s recommendations, the Government disbanded DMO and with a new Capability Acquisition and Sustainment Group replacing it in Defence, and disbanded the Capability Development Group, ‘dispersing its functions to more appropriate areas’ in the Department. 60
Models of Understanding Defence Procurement At the beginning his description of Australian’s defence procurement processes, Ball provides two statements which represent the extreme poles in the conceptualisation of defence procurement. The first, by Air Commodore Ronald T. Susans, who was RAAF Director-General of Operational Requirements (Air Force), represents the rational model defence procurement processes. 61 Susans stated Aircraft and their equipments [do] not just ‘happen’ into service with the RAAF, nor is their existence in the RAAF inventory a tribute to international salesmanship. They [are] selected specifically to meet Australian defence requirements and fed into squadron service
======56 Department of Defence, ‘Defence Capability Reform’. 57 Ibid. 58 Australian Strategic Policy Institute, ‘Reviews and Contestability: New Directions for Defence’, Australian Strategic Policy Institute (May 2015) 1. 59 Department of Defence, Australia, First Principles Review (Canberra: Department of Defence, 2015) 13. 60 Ibid, 9. 61 Desmond Ball, ‘The Role of the Military in Defence Hardware Procurement’, in F.A. Mediansky, ed., The Military and Australia’s Defence (Melbourne: Longman Cheshire, 1979) 41-42.
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through a thorough management system which is effectively planned, intelligently executed and progressively monitored.62 The second, by Roy Braybrook, who Ball described as ‘a member of an aerospace company frequently involved in dealing with the Australian Department of Defence on the sale of aircraft to Australia’, 63 represents an informal bureaucratic and organisational model. Braybrook stated the people who really select military aircraft are (with obvious reservations on funding and political constraints) simply one-time fighter pilots …. Provided they are satisfied the iron bird will actually leave the ground and their engineering advisers are not literally tearing their hair out, then all they want to know is how fast and how much ? Of course, there are defence departments full of systems analysts who are all working around the clock on computer aided fighter comparisons, but this effort is nothing more than window dressing. In each case, the CAS [Chief of Air Staff] … has already made up his mind. 64
As Ball notes, ‘In explaining actual procurement outcomes from the decision making process, the truth invariably lies somewhere between these alternate characterisations.’ 65 A rational approach based on the formal process is an important foundation to understanding procurement processes as ‘the formal process is invariably followed’. 66 However, it is inherently limited as ‘There are always, at the very least, some informal relationships and arrangements which impact substantively on decision- making outcomes, not to mention the inevitable political and bureaucratic-political factors.’ 67 As Ball argues the outcomes of that process can be fully understood only in the context of an ongoing bureaucratic/political exercise involving the
======62 R. T. Susans, ‘New equipment doesn’t just happen’, Aircraft (September 1968) 46. Quoted in Ball, ‘The Role of the Military in Defence Hardware Procurement’, 42. 63 Ball, ‘The Role of the Military in Defence Hardware Procurement’, 42. 64 Roy Braybrook, ‘The military aircraft marketplace’, Air International (July 1976) 15. Quoted in Ball, ‘The Role of the Military in Defence Hardware Procurement’, 42. Emphasis in original. 65 Ball, ‘The Role of the Military in Defence Hardware Procurement’, 42. 66 Cheeseman and Ball, ‘Australian Defence Decision Making, 262. 67 Ball, ‘The Role of the Military in Defence Hardware Procurement’, 42.
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interests, perspectives, practices and relative bureaucratic/political strengths of the principal actors. 68
Rational Model of Defence Procurement In their paper discussing the short falls and challenges experienced in the DMO’s implementation of performance based contracting, Elizabeth Barber and Nathan Parsons provide a description of the Capability Life Cycle, ‘defined commonly as the cradle-to-grave of a capability’, which consists of ‘five distinct phases: needs, requirements, acquisition, in-service and disposal’. 69 Procurement is concerned with the needs, requirements and acquisition phases. The purpose of the needs phase is to ‘to determine the military capability needed to improve the overall capacity of the existing military capabilities’, which may include completely new hardware or upgrades and expansions of existing capabilities. 70
The requirements phase ‘develops the characteristics of the capability solution’; the concept developed in the needs phase is converted into a project, and the ‘project team then works on developing the capability to gain a first-pass approval from the government’. 71 To emerge from the requirements phase as an ‘Approved Project’, the project must pass through two distinct approval stages. 72 It is within this phase, and via the two stages, that the project team in the Capability Development Group (CDG) will ‘determine what capability will match the expressed ‘need’ the most successfully’. 73 The purpose of the first-pass approval stage is to provide the government with a set of capability options detailed enough to allow them to make a decision on whether the project should progress [and] first-pass approval means that the government
======68 Ball, ‘The Role of the Military in Defence Hardware Procurement’, 50. 69 Elizabeth Barber and Nathan Parsons, ‘A Performance Model to Optimise the Capability Choices Made in the Procurement Phase within the Australian Defence Force’, International Journal of Defense Acquisition Management Vol. 2 (2009) 34. 70 Ibid, 37. 71 Ibid. 72 Ibid, 35. 73 Ibid, 38.
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agrees that the capability options presented should be investigated or developed further. 74 At the first-pass decision point, the National Security Council of Cabinet ‘considers alternatives presented and approves a capability development option(s) to proceed to more detailed analysis and costing’. 75 Following government first-pass approval, the CDG ‘further refines the options agreed to by government’ and ‘selects a specific capability solution’. 76 CDG develops a business case to present to government for second-pass approval, which is in essence a ‘a total plan of acquisition and use. 77 Second-pass approval is the ‘point at which the government agrees to fund the actual acquisition with a well-defined budget and schedule and to allocate provision for sustainment costs’ 78 and ‘means that the government has given approval to acquire the capability’. 79
Stefan Markowski compared the formal defence acquisition systems Australia, Japan, South Korea, Singapore and the United States in 2000, which for Australia is between the Tange and Kinnaird reforms. Markowski details the role of the Defence Acquisition Organisation (DAO) responsibility ‘for the procurement and delivery into service of the weapons systems and other major systems and equipment required by the ADF to preserve and enhance its combat capabilities’. 80 A primary objective of the DAO was to meet the Government's priorities for the development of Australian defence capabilities through the timely and cost effective (‘to budget and on schedule’) acquisition and delivery to users of appropriate equipment and services’ 81
======74 Barber and Parsons, ‘A Performance Model to Optimise Capability Choices’, 35-36. 75 Ibid, 41. 76 Ibid, 36, 42. 77 Ibid. 78 Ibid, 42. 79 Ibid, 37. 80 Stefan Markowski (Tony Kausal, ed.), A Comparison of the Defence Acquisition Systems of Australia, Japan, South Korea, Singapore and the United States (Fort Belvoir, VA: Defense Systems Management College Press, 2000) 1-39. 81 Ibid.
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At the end of the Tange reforms, D.H. Eltringham provided an outline of Australia’s formal defence procurement process in the context of debate over Australia’s procurement of the Tactical Fighter Force and the FFG project resulting in the acquisition of the Dassault Mirage fighter and the Adelaide Class frigate respectively. Eltringham lamented ‘Most discussion is confined to what is to be procured; little has been written on the philosophy and methodology involved in the procurement process in Australia’. 82 Eltringham’s aim was to provide an explanation to the organisation and sub-groups created from reforms of the Defence Organisation in the previous year, and to demonstrate the effectiveness and efficiency of the new processes. Eltringham stated The procedures are designed so that full value is obtained from the Defence Dollar and all reasonable safeguards of propriety are observed. In all, a system of considerable complexity has been quite deliberately established to ensure that a variety of professional opinion, both military and civilian, including an ‘outside’ purchasing agency, and incorporating the necessary checks and balances, is brought to bear on the equipment procurement process … The procedures setup within the Department of Defence are designed to ensure that recommendations made to the Minister and the Government on the purchase of a particular item of equipment, its supply by a particular organization, and its suitability to meet an assessed requirement are all exposed to thorough scrutiny by the various elements of a system established within the Department of Defence to carry out these tasks. 83 A focus on stating the appropriateness of checks and balances remains a key element of the analysis of formal procurement processes with Markowski noting in his five nation comparative analysis that while needs are identified by military organisations, final decisions are made by civilian political executives or legislatures because military organisations are not best placed to make objective decisions regarding necessity and cost effectiveness. 84 Eltringham’s description details the main committees in the
======82 D. H. Eltringham, ‘Defence Procurement in Australia’, Defence Force Journal No. 4 (May/June 1977) 31. 83 Ibid, 31, 39. 84 Markowski, A Comparison of the Defence Acquisition Systems, 6-8.
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middle of the procurement process, but minimises the initial stages of procurement where strategic assessments and capability documents are created.
Organisational and Bureaucratic Models of Procurement While defence issues were examined in the 1960s, it was generally done as a broad topic, and procurement issues were generally examined as a side topic or a subset of holistic approach to Australian defence policy. For example, T. B. Millar noted that in peacetime, Australia’s defence factories operate below full capacity leading to increased unit costs, giving rise to the ‘complaint of the Services that when they are required to purchase arms or equipment from the Department of Supply at costs which are sometimes noticeably higher than for the identical or equivalent materiel if bought overseas’. 85
In assessing the costs and benefits of the US alliance, H. G. Gelber identified the reasons for the increasing trend of procuring weapons from the US. Since the 1950s, Australia had undertaken ‘a deliberate if somewhat spasmodic programme of integration, of standardisation of equipment and procedures with the United States’. 86 The ‘strong impulse’ for standardisation has been driven by ‘the kinds of threat Australia envisages require particular emphasis upon the development of advanced weapons systems’ and the ‘broad strategic alignment’ Australia has adopted with the US. 87 In addition, the Australian Government ‘clearly believes that in most fields of sophisticated weaponry the best cost/effectiveness ration lies in the procurement from the US’, as well as the quickest route for developing weapons. 88 Rather than supporting domestic industry, Gelber argues that Australia’s development of advanced weapons ‘might well inflict severe injury on the domestic economy’ by diverting Australia’s limited supply of skilled scientists and engineers. 89 Procuring weapons or
======85 T. B. Millar, Australia’s Defence (Carlton, Vic.: Melbourne University Press, 1965) 134. 86 H. G. Gelber, The Australian American Alliance: Costs and Benefits (Harmondsworth, UK: Penguin, 1968) 34. 87 Ibid , 35. 88 Ibid. 89 Ibid , 36.
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equipment from another nation, according to Gelber, ‘may create undue difficulties of integration’ into US force structures. 90
Ian Bellany and James Richardson’s 1970 ‘systematic study’ of Australian defence procurement from 1950 was the first analysis to focus on procurement itself as an issue. Bellany and Richardson argue that despite the public debate over Australia’s decision to acquire the F-111, ‘There [was] little awareness of the experience of weapons procurement in the post-war period as a whole, due to a lack of relevant studies and the exceptional secretiveness of Australian government on defence matters’. 91 One of the main criticisms of Australia’s defence procurement policies was their haphazardness, their apparently stop-gap character, their neglect of long-term planning, manifested in delays in reaching and implementing decisions, in sudden reversals of policy, and failure to achieve stated goals. 92 Bellany and Richardson acknowledge the frequent criticisms of a ‘faulty’ defence organisation, but attribute the ‘discontinuity’ in Australian defence procurement policy to of failures of government, with failures of the defence organisation a secondary issue. 93
Rather than attributing the ‘weaknesses’ of Australian procurement policies in the late 1950s to organisational deficiencies, Bellany and Richardson argue they ‘were part of the wider failure to think through to a consistent conception of the functions of the Australian forces and to act on such a conception’.94 Bellany and Richardson argue that the government was prepared to tolerate ‘deficiencies which kept forces below strength and operational readiness’, while ignoring or overriding proposals by the defence services to remedy the problems. 95 A decade later, Ball’s assessment of Australia’s defence procurement policies and practices echoed many of the themes
======90 Gelber, The Australian American Alliance, 37. 91 Ian Bellany and James Richardson, ‘Australian Defence Procurement’, in H. G. Gelber, ed., Problems of Australian Defence (Melbourne: Oxford University Press, 1970) 244. 92 Ibid, 259. 93 Ibid, 260-261. 94 Ibid, 261. 95 Ibid.
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raised by Bellany and Richardson, however, Ball attributes the defence Services a much greater agency and capacity to shape procurement policy in their interests.
Despite the apparent checks and balances in the procurement processes, and civilian contributions and oversight, Ball provided a critique of the processes in which the defence Services are able to shape the outcomes of procurement decisions through service preferences. Ball argues that it was readily apparent that from the description of the formal equipment procurement process not only that the Services are integrally embedded in the organizational and procedural structure, but also that in the some sense they are the dominant actors in the process. 96 Cheeseman and Ball argue that the ‘Services are able to exert considerable influence because they determine which equipments and weapons systems enter the process, and are able to use their numbers and superior technical expertise to ensure their passage through the programming phase … [and] flowing through the formal procurement process’. 97
Ball identifies ‘four major inadequacies’ in the Strategic Basis documents which formed the basis of procurement decisions: ‘bureaucratic language … with many qualifications’; a short-term perspective which does not allow for long-term force structure decision making; a restricted focus; and that ‘it does not address ... fundamental defence questions’, which allow ‘the military [to] regard the strategic guidance as irrelevant for force structure decision making’. 98 Ball claims that the defence service proposals ‘are prepared and put forward according to the required format, with appropriate lip-service accorded to the strategic guidance, but with little substantive relationship to that guidance’. 99 Two decades later, Markowski and Hall expanded on Ball’s line of argument, stating that while procurement has increasing focused on the needs of defence force customers, it is a difficult task given that defence organisations are set multiple, often conflicting and frequently changing, objectives and numerous complications arise
======96 Ball, ‘The Role of the Military in Defence Hardware Procurement’, 50. 97 Cheeseman and Ball, ‘Australian Defence Decision Making’, 263. 98 Ball, ‘The Role of the Military in Defence Hardware Procurement’, 55. 99 Ibid.
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when national security agendas are mixed with other objectives (e.g. civil emergencies, employment, industry assistance, balance of payments). 100
Ball also identified a ‘disdain of the Services for local industry and their preference for off-the-shelf procurement from overseas’. 101 Ball argues that there is ‘a general and quite strong feeling with the Australian defence industry’ that the Services prefer to acquire equipment from overseas rather than domestically, and this feeling is occasionally supported by explicit statements given by senior serving officers. 102 In November 1976, Air Vice Marshal L. S. Compton, who was Chief of Air Force Technology Services, stated Certainly in the RAAF we generally are not over-enthused about something being made in Australia, or we have not been in the past or on occasion some people have not been, because it usually leads to delays in deliveries, cost over-runs, failure to meet performance on occasions and so on. 103 With fixed capital expenditure budgets, Australia’s defence Services had ‘no incentive to pay premium prices for Australian manufactured equipment’. 104 Another advantage for overseas off-the-shelf procurement is that the equipment incorporates latest developments in technology; a history of service life is available; purchasing is clean and delivery is quick; and there are logistic advantages in having equipment in common with our allies. 105 Despite the advantages, Ball argues that there seems to be little consideration of the implications of sourcing equipment from overseas for Australia’s strategic environment, noting Tange’s confession that I wonder whether an Australian propensity for imitation and derivation leads us to accept too readily American or British views
======100 Stefan Markowski and Peter Hall, ‘Challenges of defence procurement’, Defence and Peace Economics 9:1-2 (1998) 29. 101 Ball, ‘The Role of the Military in Defence Hardware Procurement’, 55. 102 Ibid, 55-56. 103 Ibid, 56. 104 Ibid. 105 Ibid, 57.
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on weapons or deployment that may not be very closely related to the military problems of this island continent. 106
Ball argues that most claims that the ‘Services write staff requirements and particular weapons specifications around their preferred brand names’ are ‘unfounded’, but that some allegations ‘contain more than a germ of truth’. 107 While this practice ‘was much more widespread in the 1950s and 1960s’, despite the ‘adoption of procedures consciously designed to make it more difficult’, Ball notes some examples which indicate the practice continued into the 1970s. 108 In early 1971, as the RAAF was preparing its Air Staff Requirements (ASR) for it’s a replacement of the Dassault Mirage, the ‘principal drafter of the ASR had been a Mirage pilot and had followed it French successor with interest’, and the ASR was ‘written around the capabilities and performance of the [Dassault] F-1’. 109 When the RAAF issued its Request for Proposal (RFP) for the Tactical Fighter Aircraft, ‘the Air Staff’s preference was decidedly towards the F-15, and this was reflected in certain parts of the RFP such as range, radar specifications, and ‘most peculiarly, that the aircraft have single-wheel nose-landing gear’. 110
Ball also indentified the extent to which ‘gold-plating’, the ‘replacement syndrome’, an ‘emphasis on teeth rather than tail’, and an interservice rivalry for funding were evident in Australia’s defence procurements. Ball notes that military services have an inherent bias toward what is called ‘gold-plating’ – the design of weapons that are more sophisticated technologically than they need be for the task specified. The logic of ‘nothing but the best is good enough for our boys’ leads inevitably to a tendency towards over-ambition for what is wanted. 111 However, Ball does not provide an examination of whether gold-plating has been a factor in Australia’s front-line military procurements, but does note that overseas
======106 Tange, ‘Notes for address to senior Service Officers’, 57. 107 Ibid. 108 Ball, ‘The Role of the Military in Defence Hardware Procurement’, 58. 109 Ibid. 110 Ibid. 111 Ibid, 60.
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equipment is modified to suit Australian conditions. 112 Ball argues that the ‘proximate impetus for most Service equipment proposals is that extant equipment is nearing its ‘life of type’ or becoming obsolescent – and ‘therefore’ must be replaced’. 113 The replacement syndrome is evident in the title of Air Staff Target and Staff Requirements, such as the 1970 ‘Air Staff Target (Air) 74 for a Mirage Replacement’ or the ‘Dakota Replacement’. 114 Ball noted that while explicitly indicating a replacement became less common, the ‘Mirage Replacement’ was renamed ‘Tactical Fighter Force’ in 1974, but the contents of the requirements documents were ‘essentially the same’. 115 Ball argues that the replacement syndrome is more than a matter of semantics or a short hand description, but a ‘way of thought’ as senior RAAF officers still referred to the project as the ‘Mirage Replacement’. 116 For Ball, the danger of the replacement syndrome is that ‘many of the equipments acquired in the context of the former policy are themselves irrelevant to the present needs’. 117
Regarding an emphasis on teeth rather than tail, ’Ball notes there is a ‘natural bias in the military Services toward interest in weapons systems themselves rather than the logistic systems upon which they depend for their full effectiveness’, and that ‘in the Australian case, the emphasis is not just teeth, but on big teeth rather than the whole mouth’, leading to a distorted force structure. 118 Finally, Ball argues that the ‘lack of any current basic national strategic policy has allowed, if not necessitated, each Service to design its equipment programmes according to its own independent strategy’, 119 but does provide any details on this point.
Similar to Ball, Schaetzel argued that the ‘culture’ of the development of defence hardware in Australia contains a number of ‘intangible’ attitudes or ‘syndromes’ which have real effects 120 in creating a preference for off-the-shelf purchase from overseas. 121
======112 Ball, ‘The Role of the Military in Defence Hardware Procurement’, 60. 113 Ibid. 114 Ibid, 61. 115 Ibid. 116 Ibid. 117 Ibid. 118 Ibid, 61-62. 119 Ibid, 62. 120 Stanley S. Schaetzel, Local Development of Defence Hardware in Australia (Canberra: Strategic and Defence Studies Centre, 1986) 4.
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In what Schaetzel terms the ‘colonial cringe’, products sourced from overseas ‘have connotations of quality’, as distinct from domestically developed products. 122 Schaetzel argues that The decades of joint operations with the UK and US have introduced, in the minds of the Services, the feeling that unless they have front line equipment equal to that of their erstwhile brothers-in- arms, the feel like poor relations or kid brothers using discarded toys, without regard to the fact that these toys may be used in very different playgrounds. 123 Like Ball, Schaetzel argues that ‘the ‘replacement syndrome’ was, until very recently the main driver of new procurement’. 124
In 1990, Fred Bennett, who was Chief of Capital Procurement and architect of the Capital Procurement Organisation in the Australian Department of Defence, provided a critique of the management of Australia’s defence project management. 125 While Bennett focuses on the role of the project manager over the full life cycle of a project, his analysis provides some useful insights into procurement practices. Bennet argues that the efficient procurement of weapon systems is hampered is the lack of central authority in an environment of where the different organisations and sub-groups involved in the procurement process have different cultures and different objectives. For civilians, ‘the prime responsibility of the procurement organization is efficient management of procurement projects’, whereas for the military, ‘an understandable ambition of a single Service is to obtain equipment that will maximise the operational role of that Service vis-à-vis the other two; it will favour the expanding of the capability of the weapons systems procured for it. 126 Alternatively, the role of the military headquarters is to ‘maximise the effectiveness of the defence as a whole; it
======121 Stanley S. Schaetzel, Fourteen Steps to a Decision – or, The Operations of the Defence Department (Canberra: Strategic and Defence Studies Centre, 1989), 6. 122 Schaetzel, Local Development of Defence Hardware in Australia , 4. 123 Ibid, 4. 124 Schaetzel, Fourteen Steps to a Decision, 5. 125 Bennett, The Amateur Managers . 126 Ibid , 17.
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will try to balance the capability of weapons systems against the operational role that is seen as appropriate for each Service. 127
Acknowledging that ‘Weapons system projects are notorious for the tendency of costs to overrun budgets’, Bennett outlines factors in the procurement process that either underestimate or increase costs. Bennet notes that ‘because a set of mutually reinforcing motivations, the cost estimates are biased towards the lower limits of the range’. 128 The motivations for minimising estimated costs include military services seeking the approval of new weapons, fixed Defence budgets unable to accommodate the range of projects considered necessary, and project managers, governments and ministers looking to appear efficient in managing resources. 129 Other factors leading to cost increases include ‘the infallible requirement’, which reflects a reluctance to reduce requirements to better manage costs once a Service Chief has approved the operational requirement, and ‘the requirements creep’, which is a variation of gold-plating where the requirements of a project increase as the project matures and opportunities are presented. 130 Related to costs overruns is ‘the technology trap’, in which new technologies offer the benefits of ‘avoiding premature obsolescence’, and the technological edge provides Australia the opportunity to ‘multiply the effectiveness of [its] armed forces’. 131 Bennet argues that new technology ‘has a seductive appeal’, with ‘Politicians prone to bask in [the] glory’ of wonderful new weapons, and that a new weapon system should only be based on new technology when benefits outweigh the inherent risks. 132 Bennet acknowledges that ‘the drive to incorporate new technology into new weapons systems is fundamentally sound’, but also warns that ‘New technology is not only the servant of new weapons systems projects, sometimes it is their raison d’être ’. 133
An alternative perspective is Paul Earnshaw’s argument that ‘component parts’ of the procurement decision making process, the various Defence committees, ‘are placed
======127 Bennett, The Amateur Managers, 17. 128 Ibid , 74. 129 Ibid. 130 Ibid , 75-76. 131 Ibid , 64. 132 Ibid , 62-63. 133 Ibid , 62.
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together in a way that is complementary and which is designed to approve new weapons systems proposals on a continuing basis’. 134 In 1998, Earnshaw assessed Australia defence procurement policies and procedures with the explicit normative aim of providing lessons to improve the rationality of procurement decision-making. Earnshaw drew together the ‘syndromes’ and other determinants from Ball, Schaetzel and Cheeseman and Ball to create a normative framework from which the ‘rationality’ of case studies were assessed with ‘bargaining’ and ‘disjointed increment’ decision making models. 135 Earnshaw’s analysis focused on the project planning and decision making, primarily conducted by procurement committees for the procurements of the RAAF/Army’s Blackhawk transport helicopter, the Army’s Perentie light vehicle, and the Navy’s Australian Frigate Project individually, and comparatively to determine general features of Australia’s defence procurement decision making. 136 Earnshaw introduces the concepts of ‘user pull’ and ‘technology push’, where ‘user pull’ is based on deficiencies in existing weapons system performance or changing strategic threats that need new means to combat them [and] ‘technology push’ which advocates a newly developed technology because it supposedly offers a military advantage over a potential enemy. 137 Earnshaw argues that ‘user pull’ can create procurement ‘deficiencies’ as it ‘does not usually consider or carefully calculate the implications for cost and schedules for acquiring new technologies’, while ‘technology push’ can create ‘deficiencies’ as government or industry, with vested interests, push the technology ‘for its own sake’. 138 Earnshaw suggests 139 that the combination of these two drivers supports Cheeseman and Ball’s claim that ‘Australia’s relationship with the US ... tends to encourage our preference for state-of -the-art weapons systems’. 140
Earnshaw’s comparison of the three case studies provides evidence that the syndromes articulated by Ball and Schaetzel were evident in the decisions made by the higher ======134 Paul Earnshaw, Billion Dollar Business: Strategies and Lessons in Australian Arms Acquisition (Canberra: Australian Defence Studies Centre, 1998) 120. 135 Ibid , 6-9. 136 Ibid , 6. 137 Ibid , 10. 138 Ibid. 139 Ibid. 140 Cheeseman and Ball, ‘Australian Defence Decision Making’, 251.
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Defence committees. The ‘replacement syndrome’ was evident as the justifications made by the sponsoring Service for all three procurements were based on arguments that the ‘existing weapon system was ageing and increasingly difficult and expensive to maintain [and] ... no longer met operational capability needs’. 141 The proposals were ‘typically for a new, more sophisticated and capable weapon system’, and as this justification was accepted by the committees, the outcome was a refinement of the proposals. 142 In the three cases, the options available to the committees were limited by the framing of the proposals such that ‘the alternative option to the preferred system was not really an option’. 143
Earnshaw’s analysis supports Ball’s argument that a strength of the Services in the decision making process was their ability to develop specifications which suited their preferred weapons system. In Earnshaw’s analysis, the options available to committees represented either choosing the product preferred, or ‘the progressive deterioration of strategic defence capability’, or a high-risk or suboptimal alternative. 144
All the proposals ‘sought a far greater number of weapon systems units than was eventually approved’, and Earnshaw argues that in ‘a more rational process, sponsors would conduct comprehensive research early enough to determine the actual numbers of weapons systems needed for strategic operational purposes before entering the committee process’. 145 Earnshaw argued that for each project, the ‘trading horse’ was the number of units required, while the ‘Services were not prepared to trade off the type of weapons system sought or state-of-the-art technology’. 146 As the Services are the acknowledged ‘experts’’ in determining what technologies are required to meet strategic and operational needs, civilian committee members, and committees on the whole do not compromise on technology or quality. 147
======141 Earnshaw, Billion Dollar Business, 70. 142 Ibid. 143 Ibid, 100. 144 Ibid. 145 Ibid , 98. 146 Ibid , 99-100. 147 Ibid , 111.
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Earnshaw argues that ‘the fact that [committees] were prepared to trade off numbers to obtain a particular type of high-technology system reveals a preference for the type of system rather than the operational capability’, and the option of acquiring a large number of less sophisticated systems ‘was not often discussed in committee. 148 In each case, the ‘Service sponsor tried to convince the committees that their proposal was urgent and therefore needed an early and favourable decision’ 149 limiting time to investigate the proposals more thoroughly, 150 and proposals were ‘developed almost entirely within the [Service], each with a vested interest in achieving its own goals’. 151 Echoing Bennet’s analysis on the factors leading to procurement cost increases, the cost estimates for the Blackhawk and Perentie were ‘over-optimistic, and, Earnshaw suggests, ‘perhaps underbid and so hiding the real impact’ on long term costs. 152 Such behaviour, the submission bid known to be too low in order to win a contract, is known as 'buying in', and occurs when there is confidence that once the contract has been signed and the government has committed to a procurement, additional funding will be subsequently provided to make up the shortfall.
Similar to Earnshaw’s rational approach, Mark Ryan assessed the procurement of Australia’s Collins Class submarines in 2005, arguing that it ‘does not fit well with a rational policymaker model because the decisions made at the analytical, technical and support stages of the acquisition did not minimise the associated risks’. 153 In the context of defence procurement, Ryan considers rationality to encompass maximising benefits in terms of cost effectiveness and minimising costs through risk management and risk aversion strategies. 154 Echoing Ball’s criticism of the Strategic Basis documents, Ryan argues that the lack of clear strategic guidance between the 1972 and 1987 Defence white papers ‘produced an ad hoc planning process and confused the aims of the Collins project’. 155
======148 Earnshaw, Billion Dollar Business, 112. 149 Ibid , 73. 150 Ibid , 100. 151 Ibid , 99. 152 Ibid , 99. 153 Mark Ryan, ‘Australian defence procurement: Have the lessons from Collins sunk without a trace?’, Dialogue 3:3 (2005) 42. 154 Ibid, 41. 155 Ibid, 43.
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While the initial tender requirements for a new submarine to replace Australia’s Oberon Class required a submarine that had proven performance in service, and that the tenderer had to have ‘experience in building submarines for countries other than their home nation’, Kockums did not meet these requirements. 156 Ryan suggested that the relationship between the Australian Navy and manufacturer contributed to a lack of objective rationality in the selection of Kockums, leading to a risky acquisition. Ryan claimed the selection of Kockums was (perhaps) founded more in its representatives’ personal demeanour and willingness to tell Navy what Navy wanted to hear, rather than any obvious satisfaction of the design and product suitability …. The decision to ignore the tender guidelines and select an unproven design with untested state-of-the- art technology was a risk. The decision to select a tender that did not comply with any of the procurement requirements was more risky, was not a rational approach for policymakers, and increased the likelihood of acquiring a product that was ill-suited to needs and purpose. 157 The deviation from the initial procurement strategy of acquiring the best available submarine to developing one which suited the Navy’s ideal requirements 158 indicates that the tendency of ‘gold plating’. Ryan argues that the Navy’s requirements for the new submarine, in terms of underwater speed, endurance and its combat system was ‘beyond the capabilities of any conventionally powered submarine in the world’ creating ‘unrealistic demands’. 159
While Ryan identifies some of the recurrent themes and practices of Australian defence procurement, he does not identify the bureaucratic-organisational dynamics and politics of the issue. Ryan’s methodology of assessing rationality during the analytical, technical and support stages is aimed at determining the rationality, via a simplistic dichotomy, in a general sense for each phase rather than exploring the political dynamics that lead the determination of rationality.
======156 Ryan, ‘Australian defence procurement’, 44. 157 Ibid. 158 Ibid. 159 Ibid, 45.
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Peter Yule and Derek Woolner provide a much more detailed and comprehensive description of the procurement of the Collins Class submarine, and while their analysis highlights many of the issues recurrent in the procurement literature, it lacks an explicit examination of the issues in the broad context of Australian defence procurement. However, Yule and Woolner do note that ‘much of the dissonance within the submarine project stemmed from the differing aims and ambitions of groups and organisations involved’, 160 suggesting a bureaucratic-organisational model. Among the Navy, there was division between the submariners and surface sailors, ‘many of whom saw the submarine as taking money that could be used for surface ships, while the submariners ‘assumed that the only purpose of the project was to give them fabulous new submarines’. 161 The Labor Party and the trade unions considered that ‘the purposes of the project were to give jobs to metal workers [and] revive the manufacturing industry’. 162 In the Department of Defence, ‘many bureaucrats opposed the fundamental premises of the project, notably the requirement for large, long-range submarines and the arguments for building in Australia’. 163
Procurement and Defence Industry Stefan Markowski and Bob Wylie note that smaller countries such as Australia face the problem that domestic sources of procurement will often be limited by domestic industrial capacity, technologically limited, economically uncompetitive, and for foreign sourcing, smaller nations lack the market power to negotiate favourable terms or have their requirements fully met. 164 After the Second World War, the ‘domestic defence industry was vital to Australia’, with Labor and Liberal governments ‘maintain[ing] the nucleus of a naval shipbuilding and military aircraft industry which could be expanded in an emergency’. 165 As discussed previously, there is a preference for overseas procurement as the equipment is often cheaper, more technologically
======160 Peter Yule and Derek Woolner, The Collins Class Submarine Story: Steel, Spies and Steel (Port Melbourne: Cambridge University Press, 2008) 326. 161 Ibid. 162 Ibid. 163 Ibid. 164 Stefan Markowski and Robert Wylie, ‘Industry case study: Australian naval shipbuilding’, in Stefan Markowski, Peter Hall and Robert Wylie, eds., Defence Procurement and Industry Policy: A small country perspective (New York: Routledge, 2010) 323. 165 Bellany and Richardson, ‘Australian Defence Procurement’, 261.
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advanced and can be entered into service more rapidly. The small size of the Australian Defence Force ‘can generate neither sufficient demand nor sufficient continuity of demand to system economically viable production runs’ to support domestic industry. 166
Bellany and Richardson note that, since the 1960s, there has been an increasing trend in sourcing technologically sophisticated equipment from overseas. 167 They argue that a ‘feature of the aircraft sector is the tendency for equipment to remain in front-line service with Australia forces for longer than in other advanced countries. 168 While the Sabre jet fighter first flew in 1948 and the Canberra bomber in 1949, they did not enter Australian service until 1956 and 1954 respectively. 169 Both aircraft were built under license in Australia, and although both design were modified to improve their characteristics over the original versions, the domestic production and modified designs increased production times and costs. 170 The cost per aircraft of the Australian built Canberra was estimated to be A$950,000, while the cost of British built Canberra was reported to be in the range of A$400,000 to A$500,000. 171 In 1956, when around 60 of the total of 112 Sabres had been built in Australia, they were estimated to have cost A$510,000 each, which was reported to have been $160,000 more than purchasing the standard Sabre from overseas. 172
While Australia’s defence industry capacity has been a perennial issue, defence industry became ‘very closely identified with the concept of defence self-reliance’ since The Defence of Australia 1987 white paper. 173 In a speech to Parliament in May 1989, Minister for Defence Kim Beazley stated Government policy of defence self- reliance was based on the twin pillars of a force structure matching Australia’s strategic environment, and ‘a competitive, technologically proficient and adaptable
======166 Gary Brown, Australia’s Security: Issues for the New Century (Canberra: Australian Defence Studies Centre, 1994) 72. 167 Bellany and Richardson, ‘Australian Defence Procurement’, 261. 168 Ibid, 245. 169 Ibid. 170 Ibid, 255. 171 Ibid. 172 Ibid, 255-256. 173 Stewart Woodman, Defence and Industry: A Strategic Perspective (Canberra: Strategic and Defence Studies Centre, 1992) 1.
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industry base to be able to supply and support the changing requirements of Australia’s Defence Force’. 174 Markowski and Hall note that ‘Domestic sourcing of defence equipment and consumables has long been encouraged in most countries in the name of 'self-reliance', but question ‘how much self-reliance is desirable, particularly in smaller countries’. 175 Despite the effects of globalisation and the restructuring and downsizing of global defence industries during the 1990s, the Australia Government ‘continued to adhere to its intent to rely on the national support base as a means of underpinning national defence’. 176
As Markowski and Hall note, the 1990s saw ‘a resurgence in the interest in the economics of defence procurement [with] A new and growing research literature … now focusing on the efficiency challenges posed by weapons acquisition’. 177 Markowski and Hall suggest the trend has occurred because of a ‘convergence of heightened general concern about perceived inefficiencies in government provision on the one hand and developments in economic theory relevant to addressing such problems on the other’, as well as the ‘size of defence budgets and the promise of ‘peace dividends’ following the end of the Cold War’. 178
Hall, Markowski and Thomson argued that the central challenges of defence procurement for Australia include how to put sufficient pressure on suppliers to deliver at prices which do not include excessive profits or cost padding while ensuring that contract specifications are met in a market dominated by few and often foreign suppliers [and] deal with international suppliers who enjoy an informational advantage in relation to production methods and product specification and do not depend for their future survival on further orders from the nation's government. 179
======174 Graeme Cheeseman, ‘Introduction: Establishing the ‘Second Pillar’ of Australia’s Defence’, in Graeme Cheeseman, ed., Fostering an Indigenous Defence Industry? Defence Industry Policy after the ‘Price Review (Canberra: Australian Defence Studies Centre, 1994) 1. 175 Markowski and Hall, ‘Challenges of defence procurement’, 6. 176 Ibid, 6. 177 Ibid, 3. 178 Ibid, 4-5. 179 Peter Hall, Stefan Markowski and Douglas Thomson, ‘Defence procurement and domestic industry: The Australian experience’, Defence and Peace Economics 9:1 (1998) 137-138.
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While these are, to varying degrees, challenges for all nations, ‘large players have sufficient bargaining power to exert real pressure on suppliers’, and medium countries such as Australia ‘have to work out how, where and whether their purchasing power might count’. 180
Since the 1950s, ‘compensatory contractual arrangements (‘offsets’) have been increasingly used around the world in the context of procurement of major weapons and support systems’, with around 15 countries using offset arrangements in 1972, increasing to around 130 in 1992. 181 In 1997, Hall and Markowski assessed Australia’s defence offsets policy, which aimed to secure ‘access for Australian industry to advanced technology, skills and overseas markets so as to help establish internationally competitive industries within Australia’. 182 Hall and Markowski define defence offsets as ‘compensatory procurement arrangements designed to offset the cost of purchasing defense equipment from overseas by means of a reciprocal (countertrade) commitment by suppliers in support of a purchaser's domestic economy’. 183 Offset activities are intended to ‘generate net benefits additional to those that would have occurred without the offsets policy’, in large part allowing ‘governments can use their buying power to counteract the unwillingness of large international (monopoly) suppliers to yield valuable technological information to potential users’. 184 While Australia's defence industry policy is intended to ‘develop and sustain industrial capability to support the Australian Defence Force (ADF)’, a complementary objective is to transfer technological knowledge to the broader Australian economy. 185 As Hall and Markowski note, offsets may be direct or indirect: Direct offsets require the participation of industry in the buying country in the manufacture or assembly of the item around which the sales contract is written and may include licensed production, coproduction or subcontractor production. Indirect offsets involve goods and services unrelated to the exports referenced in the sales ======180 Hall, Markowski and Thomson, ‘Defence procurement and domestic industry’, 138. 181 Peter Hall and Stefan Markowski, ‘On the normality and abnormality of offsets obligations’, Defence and Peace Economics 5:3 (1994) 173. 182 Peter Hall and Stefan Markowski, ‘Some Lessons from the Australian Defense Offsets Experience’, Defense Analysis 12:3 (1996) 289. 183 Ibid. 184 Ibid. 185 Ibid, 290.
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agreement and may include some forms of foreign investment, technology transfer, and countertrade. 186
Hall and Markowski note that, over the previous 25 years, ‘Few countries which have used offsets have experimented as widely with this type of policy’ as Australia has, with policy ranging from ‘voluntary offsets obligations through a mandatory offsets scheme, to no offsets policy at all’. 187 Australia’s original offset arrangements, under the Australian Industry Participation Program (AIPP) established in the 1970, 188 ‘were aimed primarily at overseas suppliers of military aerospace equipment, with the aim of their placing work with Australian industry to develop local, defense oriented manufacturing and support capabilities’. 189 These original offset arrangements, which ‘came to be seen as a mechanism for extracting from suppliers technological information with which they would otherwise be reluctant to part with’, 190 were left essentially to the ‘best endeavors’ of overseas (prime) contractors [and] did not specify compulsory offsets requirements [which] made the achievement of agreed offsets obligations more of an honorable undertaking than a contractually enforceable agreement. 191 However, relying on a policy of ‘best endeavours’ had ‘a poor achievement rate and as result defense offsets were imposed as a mandatory countertrade requirement from 1986 until the end of 1992’. 192
After a comprehensive review, the AIPP was replaced with the Australian Industry Involvement (AII) program in 1986, with the broad aim make prime contractors maximise local content and establish through-life support capabilities to the ADF’. 193 Specifically, the AII program consisted of two elements: Defense Designated and Assisted Work, which required overseas contractors to engage in locally based activities; and defense offsets’. 194 For non-Australian companies, the offsets ======186 Hall and Markowski, ‘On the normality and abnormality of offsets obligations’, 176. 187 Hall and Markowski, ‘Lessons from the Australian Defense Offsets’, 290. 188 Ibid, 291. 189 Ibid, 290. 190 Ibid, 291. 191 Ibid, 290. 192 Ibid. 193 Ibid, 292. 194 Hall and Markowski, ‘Lessons from the Australian Defense Offsets’, 292.
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obligations was ‘set at 30% of the imported content of contracts’ and included offset activities ‘were required to have technological significance to manufacturing, software development, research and development, design, technology transfer and certain types of training’.195 The AII program placed ‘a strong emphasis on the long-term viability and international competitiveness of offsets-related activities’ with production activities ‘expected to be sustained after the initial fulfilment of offsets obligations’. 196 The AII program stipulated that offset obligations ‘should not result in any price increase for goods and services procured’ so contracts should not be ‘padded’ to account for offset requirements. 197
From 1993, the involvement of Australian industry was to be ‘generally achieved by more focused provisions within contracts, with the aim of ensuring continuing capabilities in areas of importance’, while explicit offsets remained as a ‘last resort’, used only to ‘address high priority capability requirements’. 198 Following the 1992 study on Defence Policy and Industry , the 1993 Strategic Review and the 1994 Industry Commission Defence Procurement report, reliance on offsets as an instrument of defence industry policy was been reduced’, and by 1997 ‘procurement guidelines contain no reference at all to "offsets" as a desirable means of achieving defense procurement objectives’. 199
Hall and Markowski were critical of the effectiveness of Australia’s offset policies over 25 years, with their analysis indicating little few real and long terms benefits and a general failure to achieve the objectives of the policies. Economically, they argue that a government policy of mandatory offsets ‘undermines their own best interests by restricting their options’. 200 In addition, they argue that governments have persisted with mandatory offsets for reasons which are essentially political, but with potentially detrimental implications for economic efficiency ... governments with the market
======195 Hall and Markowski, ‘Lessons from the Australian Defense Offsets’, 292. 196 Ibid. 197 Ibid, 293. 198 Ibid, 294. 199 Ibid, 290. 200 Ibid, 309.
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power to mandate offsets should be able to achieve similar outcomes by means of normal commercial negotiation.’ 201
Defence Procurement and the US Alliance The US alliance is ‘considered the cornerstone of Australia's defence’, 202 and facilitates ‘privileged access to US technology’ providing Australia a ‘formidable technological edge over the military capabilities of its South-East Asian neighbours’. 203 While there is a significant volume of literature examining the US alliance in general, it is primarily been focussed on the broad international political aspects and the benefits for Australian defence policy, an analysis of the consequences of the US alliance for Australia’s procurement policies and practices has been limited. With the exception of Maryanne Kelton’s analysis of the international politics of Australia’s procurement of the Collins Class submarine, such analyses of procurement issues have been minor points within a wider political or strategic analysis.
In a 1969 pamphlet arguing for a change for Australia defence policy in terms of aims and alliance commitments, Lance Barnard (who would be Australia’s Defence Minister in the 1970s) argued for a more independent Australian procurement policy and an expanded defence industry. 204 Barnard argued that the Australian Government had not ensured a sufficient domestic gain from its large defence budget through measures such as exports or domestic industrial offsets. 205 Unlike Australia, the UK negotiated an offset arrangement for the F-111 when it was ordered, although the UK later cancelled the order, and Barnard argued that there ‘has been a significant lack of toughness in the bargaining of Australia’s weaponry, particularly with the United States’. 206
======201 Hall and Markowski, ‘Lessons from the Australian Defense Offsets’, 309. 202 Gary Brown and Laura Rayner, Upside, Downside: ANZUS After Fifty Years (Canberra: Department of the Parliamentary Library, 2001) 27. 203 William T. Tow, ‘The ANZUS Case: Alliance Interests, Costs and Benefits in a 9/11 Context’, Australian Army Journal 3:2 (Winter 2006) 32. 204 L. H. Barnard, ‘ Australian Defence - Policy and Programmes (Melbourne: Victorian Fabian Society, 1969) 34. 205 Ibid , 30. 206 Ibid.
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During the late 1980s and early 1990s authors such as Gary Brown and Graeme Cheeseman argued that Australia’s declared policy of self-reliance was limited by an increasing dependency on the US. However, defence procurement is largely overlooked as the literature on this issue tended to focus on the broad political and strategic factors. In 1989, Gary Brown assesses the Australian-US alliance and argues that the benefits of the alliance are insubstantial, and argues for an independent and self-reliant position. On the issue of defence procurement, Brown’s analysis is limited to arguing that Australia’s reliance on US military equipment creates a dependency on US good will to provide logistical and materiel support given the weaknesses of the ANZUS Treaty and cooperative logistic support Memoranda of Understanding. 207 Similarly, Cheeseman argued that Australia’s continuing and relatively high level of dependence on the United States for both its military equipment and logistic support is not only inconsistent with our desire to be self-reliant in defence, it also leaves up open to American influence or coercion in peacetime and makes us potentially vulnerable in war. 208 More recently, Christopher Hubbard’s analysis of defence procurement in the context of the US alliance is limited to recognising the economic burden of acquiring and maintaining a defence force with a comparable technological standard as the US in pursuit of regional security and interoperability. 209 While Hubbard does not support the arguments made by Brown and Cheeseman, he shares a focus on the broad political and strategic factors without a detailed examination of procurement issues.
Kelton's 2004 analysis of the Collins Class submarine does not reflect the common approaches to defence procurement described previously, but rather focuses on how the procurement of the submarine shaped and was shaped by external relations with the US. Unlike Ryan or Yule and Woolner, Kelton does not offer a critical analysis of the strategic and operational requirements for the submarine, simply reiterating former RAN Commander and Collins project planning manager Andrew Millar's statement
======207 Gary Brown, Breaking the American Alliance: An Independent National Security Policy for Australia (Canberra: Strategic and Defence Studies Centre, 1989) 66-69. 208 Graeme Cheeseman, The Search for Self-Reliance: Australian Defence since Vietnam (Melbourne: Longman Cheshire, 1994) 187. 209 Christopher Hubbard, Australian and US Military Cooperation: Fighting Common Enemies (Alsershot, UK: Ashgate: 2005) 125-129.
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that ‘the size and range of Collins was determined, after lengthy analysis and study, in order to meet Australia's unique strategic circumstances in our own area of interest’. 210 The requirement for range, endurance, speed and weapon load, as well as the ability to ‘function in environments with great variations in temperature, density, salinity, humidity and climate ... created the intricate complexity of the design’. 211
The strength of Kelton’s analysis lies in the detailed examination of the deliberate use of the Collins Class submarine procurement as political tool or conduit for enhancing Australian-US strategic relations, and the ‘government’s objectives in welding together their relationship with the US’ overrode a rigorous selection process. 212 Kelton argued that ‘greater intimacy [with the US] was integral to the government’s management of threat and played to its domestic audience as much as allaying any international risk’, 213 and the Collins Class provided an opportunity to achieve this objective. The examination of the Collins procurement project brings into relief the Howard Government’s intent to ‘further entrench Australia’s strategic and cultural ties’ with the US. 214
Yule and Woolner suggest that while the Liberal Government’s commitment to the US alliance was a factor in the decision to procure the American combat system, ‘probably the most critical element in the final decision was the emphatic conviction of navy chief David Shackleton of the importance to the navy of collaboration with the Americans’. 215 The decision to ignore the official selection process and acquire the American system ‘was almost universally opposed by Australian submariners’, especially as it would delay upgrading the combat system. 216 For Shackleton, the vitally important factor was ensuring a close relationship with the US Navy and it submariners, particularly with regard to the sharing of intelligence and technology. 217
======210 Maryanne Kelton, ‘New Depths in Australia-US Relations: The Collins Class Submarine Project’, South Australian Policy Online (March 2004)
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Multi-causal Framework Previous analyses focused on defence procurement as an issue in itself, as opposed to a sub-topic in a broad examination of defence or industry policy, and were based on bureaucratic-organisational models. John Bruni’s 1998 analysis expanded the defence procurement framework to include bureaucratic-organisational politics as one factor in a multi-causal approach. Bruni’s analytical framework consisted of six variables: the Political Environment, the Defence Policy Environment, the Bureaucratic Environment, the State of Australian Defence Industry, the Strategic Environment, and Key Global Technological Events. 218 These variables represented a pre-theoretical framework in which an acquisition would be assessed to determine which variable had the most effect on particular decisions. While Bruni’s pre-theoretical variables are implicit in many of the previous conceptual frameworks, such as the technological driver, alliance relationships, the role of government and domestic industry, Bruni foregrounds these variables to be evaluated as major determinants. Bruni’s intent is not to reject the bureaucratic-organisational model, but to broaden the scope of determinants examined to those beyond Australia’s Defence bureaucracy. While Ball, Schaetzel and Earnshaw have been effective in examining Australia’s defence procurement in terms of bureaucratic-organisational factors, as Bruni demonstrates, major determinants sit outside this model.
Bruni applies his multi-causal framework to assess major front-line procurements by Australia in the decades from 1930 to 1996, and case studies examining the procurement, or proposed procurement, of the Army’s Leopard tanks, the Navy’s Aircraft Carrier Replacement Programme, and the RAAF’s F-111C strike aircraft. In this way, Bruni tests his conceptual framework at the macro and micro levels of procurement, allowing an assessment of ‘how, over time, fluctuations in [the] variables have affected what the country has bought to further enhance its national security’. 219
For the period from 1963-72, Bruni found that the dominant variable for Australia’s defence procurements was the Strategic Environment, influenced by the perception of threat from Indonesia’s confrontational policies and the rise of Asian Communism, as
======218 Bruni, Reasons for Choice , xiv. 219 Ibid, x.
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well as assisting the US in containing the spread of Asian Communism. 220 In response to the perception of threat, this period was also characterised by the deliberate modernisation of Australia’s military equipment. 221 From the period 1973-82, Bruni argued Defence Policy was the dominant variable, resulting from the change Forward Defence to Self-Reliance, 222 while for 1983-92, the State of Australian Defence Industry was the dominant variable, 223 particularly with regard to the Australian Frigate Project and the Collins Class submarines. 224 Finally, in the short period from 1993-96, Bruni found the dominant variable for Australia’s defence procurements was the Political Environment with a policy shift from Self-Reliance to Regional Engagement. 225
Bruni’s assessment of the broad determinants of Australia’s defence procurements over three and a half decades is cogent. It is, of course, necessary to peer further into the gap between the macro and micro assessments when specific procurements are examined, as a result of the periodisation he uses, and the long process of procurements extending into two different decades. While the Strategic Environment as the dominant variable for 1963-72 corresponds to the Indonesian threat as the driver behind the F-111 procurement, Bruni found that the main factors for the Leopard and Aircraft Carrier Replacement Programme procurement decisions were bureaucratic- organisational in nature. Bruni argues that the decision to cancel the procurement involved ‘ingredients of replacement syndrome, inter-service rivalry and political interference’ and ‘helped assert the primacy of the RAAF in the employment of fixed- wing tactical airpower in Australia’. 226 The carrier replacement was victim to ‘RAAF manoeuvrings in seeking to elevate the Mirage replacement programme’ as a higher priority given the limited defence budget and high cost of both capital projects, as well as the ‘the long term friction between the RAN and RAAF over the control of naval aviation’. 227 The RAAF’s case was assisted by domestic politics as ‘many senior
======220 Bruni, Reasons for Choice , 175. 221 Ibid, 102. 222 Ibid, 124. 223 Ibid, 176. 224 Ibid, 152. 225 Ibid, 176. 226 Ibid, 192. 227 Ibid, 206.
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Labor figures argued strongly and continually against the purchase’ of a replacement carrier. 228
Joint Strike Fighter Procurement Geoffrey Barker is one of the few authors to examine the domestic and international politics of Australia’s contemporary military procurements, particularly with regard to the JSF. Barker argues that while ‘Australian governments like to boast that their processes for acquiring military equipment are rational and objective’ with decisions for military procurements being ‘prudent trade-offs between requirements and affordability, and based on hard-headed assessments of the nation’s strategic environment’, procurement decisions are actually ‘taken within a complex and shifting framework of economic, political and social pressures’. 229 Importantly, Barker recognises the ‘politics of Australia’s global alliance relationships and responsibilities [and] interservice competition for shares of the defence acquisition budget’. 230 Barker argues that for reasons of alliance solidarity and inter-operability, [Australia] joined other US allies in gambling on the acquisition of an unproved experimental aircraft of uncertain cost and performance, and with only vague post-2012 estimates of when it might start taking delivery of the planes. 231 Barker discusses Australia’s procurement of the JSF very briefly as an example of a ‘decision process does not even remotely resemble the processes put in place subsequently after the Kinnaird Review [but] rather the triumph of alliance politics over competitive process’. 232 For Barker, ‘What is significant is that only limited processes of comparing and evaluating other currently available combat aircraft were undertaken within Defence’ and that the ‘DMO, in its pre-Kinnaird mode, appeared not to have been involved’. 233 ======228 Bruni, Reasons for Choice , 206. 229 Geoffrey Barker, ‘The politics of defence acquisition’, in The Business of Defence: Sustaining Capability , Committee for Economic Development of Australia (Melbourne: Committee for Economic Development of Australia, 2006) 76. 230 Ibid, 77. 231 Ibid, 81. 232 Ibid. 233 Ibid.
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Barker’s article discusses the political and economic dynamics which influence Australia’s procurement decisions, with particular attention paid to the US alliance, and in the context of the ‘detailed and complex framework for decision-making and the for the management of acquisition projects’ following the implementation of the Kinnaird Review. 234 Barker suggests that Australian procurement has a ‘tendency to default to the US for technologically complex equipment judged strategically significant and necessary for alliance relations and maximum inter-operability’, but his point here is not to examine the politics of the relationship, but rather to ‘illustrate the limits to competitive process in military acquisitions’. 235
A brief examination of the international alliance politics at play in the Australia’s decision to procure the JSF is provided by Adam Lockyer’s examination of the importance of military interoperability for Australia’s defence policy. However, Australia’s acquisition of the JSF is a secondary issue for Lockyer as the main argument of his article is that ‘a more effective US-Australian alliance should attempt to shift the logic of interoperability from the operational to the politico-strategic level’. 236 Lockyer argues that although the 2002 decision to commit to the JSF was ‘surprising’, the Government was confident in its decision as it was the only fighter in the pipeline that could reasonably fulfil Australia’s need for a ‘fifth generation’ fighter’… the only choice if Australia wanted to remain technologically ahead of its immediate Asian neighbours [and] The F-35 fits neatly into Australia’s conception of operational interoperability. 237 Lockyer argues that the JSF will allow Australia ‘to leap ahead of its neighbours and regain its position as the regional leader in airpower, providing Canberra with a sense that it could be self-reliant in a direct confrontation with a regional player’ while allowing Australia ‘to contribute to a US-led coalition in the region or beyond’. 238
======234 Barker, ‘The politics of defence acquisition’, 80. 235 Ibid, 81. 236 Adam Lockyer, ‘The logic of interoperability: Australia’s acquisition of the F-35 Joint Strike Fighter’, International Journal 68:1 (Winter 2012-13) 72. 237 Ibid, 81-82. 238 Ibid, 82.
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Conclusion Generally, existing conceptual and analytic frameworks for understanding Australian defence procurements adopt a narrow or limited approach in examining a broad issue or range of procurements. Bruni’s multi-causal analytical framework provides a broader scope than single themed analyses, while targeting its analytical lens to domestic determinants. While combining the existing frameworks into a single multi- method analytical framework to examine Australia’s procurement of the JSF would address a significant gap in the literature, in would be inadequate to address Australia’s current defence environment and the new aspects of the development of the JSF and the JSF program.
As the JSF is Australia’s largest, and perhaps most controversial, procurement there is value in assessing Australia’s involvement in the project over the past twenty years, particularly given the paucity of procurement analyses. Similarly, given that there has not been a significant analysis of procurement since the late 1990s, there is value in evaluating the previously examined characteristics and determinants are still evident, or negated through procurement reforms, or have been replaced with new ones. However, the JSF, which represents a new type of international cooperative development and production requires a broader conceptual framework. Whereas previously conceptual frameworks focus on the political dynamics within national boundaries, the international scale of the JSF program requires the expansion of the bureaucratic-organisational model to encompass international actors. As the model does not treat the Australian Government or the ADF as a monolithic actor, but recognises different actors with different interests, this can be applied internationally to examine, for example, political interactions between different Australian and American actors. Whereas previous analyses tend to treat the US as single actor, a broader conceptual framework permits a more nuanced assessment of US-Australian politics in the context of the JSF Program. It is not clear from Kelton’s analysis of the Collins Class submarine if the political interactions between the US and Australia were limited to the Naval/submarine leadership of both nations, but there is an opportunity with the JSF Program to assess a broader scope of bureaucratic-organisational politics.
In addition, the internationally cooperative nature of the development and production of the JSF allows the Australian procurement process to be explicitly compared to
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other nations, which has not been done previously. Instead of a using a simplistic rationality as a baseline, a comparison of procurement decisions, processes and outcomes can be assessed against other nations. While some of the industrial aspects of the previous research is not relevant to the JSF, particularly self-reliance, the importance of international industrial contracts to the JSF Program allows an international comparison of Australia’s defence industry and policies. While Australian authors simply note that Australia is not involved in offset arrangements for JSF contracts, the fact that there are de facto offset arrangements in place for other nations facilitates an assessment of Australian defence industry policy. Although the literature on Australian defence industry and procurement primarily consists of economic analyses, there is also an opportunity with the JSF Program to examine the politics of defence industry through the application of a bureaucratic-organisational model.
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CHAPTER 3: DEVELOPMENT OF THE JOINT STRIKE FIGHTER
The F-35 Lightning II Joint Strike Fighter (JSF) is defined as a ‘multi-service, multi- national program consisting of a single-seat, single-engine aircraft built in three distinctly different variants intended to perform a wide array of missions to meet an advanced threat’. 239 While the F-35 Joint Strike Fighter embodied many of the transformative capabilities sought by the US Department of Defense (DoD), it was not a deliberate outcome of the US military’s transformation strategy with a new aircraft with new capabilities developed to address future needs, but rather the result of condensing of various, and sometimes disparate, capabilities and requirements into a single programmatic outcome. This chapter provides an outline of the development and features of the Lockheed Martin F-35 Lightning II strike fighter as well as the JSF Program more broadly. It will provide context and background information as a ‘benchmark’ for the analysis of Australia’s procurement. From the beginning of its development, the ‘key four foundational design pillars’ of the JSF have been lethality, survivability, affordability and supportability. 240 These four pillars have been embedded as features of the JSF Program, and serve as a rough guide to the range of issues examined in this chapter. For lethality and survivability this chapter begins with an examination of the transformational capabilities of the F-35 outlining the key features of the aircraft, and also provides a more detailed examination of the software issues and integrated training. In examining affordability and supportability, this chapter outlines the integrated logistic support element of the program, before outlining the development of the JSF Program beginning with the US technology development programs of the 1990s. Significant attention is given to examining problems of increasing costs and schedule delays as these have significant consequences for Australia.
======239 Director, Operational Test and Evaluation, United States Department of Defence, ‘F-35A Joint Strike Fighter Readiness for Training Operational Utility Evaluation’, Project on Government Oversight
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At the beginning, it is important to note that the JSF is much more than simply a family of strike aircraft, but represents a whole integrated system, the JSF Air System, which performs a range of functions. In international agreements between the US and partner nations, the JSF Air System is defined as ‘consist[ing] of two interrelated elements: the JSF Air Vehicle and Autonomic Logistics. 241 The JSF Air Vehicle includes the three variants of the JSF aircraft and the propulsion systems, as well as the on-board hardware, the ancillary mission equipment necessary to employ the JSF Air System, and the software necessary to perform assigned missions, autonomous operation and communication with off-board systems. 242 This definition is useful to highlight the different essential components of the JSF Air Vehicle, particularly the importance of software, as distinct from the hardware technologies. In addition to the Air Vehicle, the Autonomic Logistics is a critical element that is conceptually separate from the aircraft, but functionally integrated with the JSF Air System. The Autonomic Logistics Information System (ALIS) ‘integrates a broad range of capabilities including operations, maintenance, prognostics and health management, supply chain, customer support, training and technical data’, 243 and is used to comprehensively maintain and sustain the F-35 aircraft.
The capabilities of the JSF, particularly in the area of information and electronic warfare, can be seen to have addressed the needs of the transformation process the US Air Force (USAF) undertook in the late 1990s and early 2000s, representing a change from industrial to information age warfare. A brief outline of the core principles of the USAF transformation is provided, which allows a comparison to Royal Australian Air Force’s (RAAF) transformative plans, particularly Plan Jericho, which is discussed in Chapter 8. It is important to be able to evaluate the US articulation of strategic need, which the JSF addresses, in comparison to Australia’s articulation of strategic need, and the extent to which the JSF addresses Australia’s needs.
======241 United States Department of Defense, ‘Joint Strike Fighter Production, Sustainment, and Follow-on Development Memorandum of Understanding’, United States Department of State
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The survivability of the F-35 is dependent on its stealth characteristics, electronic warfare capabilities, and its ability to enable pilots to act faster through greater situational awareness. In many ways, lethality is the reverse side of the same coin, as the ability to survive hostile environments allows it to deliver weapons against critical targets. This chapter outlines the range of integrated mission systems that support these broad capabilities, including the sensor and targeting systems that contribute to sensor fusion, the advanced radar, and the communications/navigation system. The strengths and weaknesses of the systems, plus the transformational capabilities of them as an integrated system, are important in assessing the extent to which the JSF meets Australia’s strategic needs, discussed in Chapter 8.
As a highly complex weapons system designed to fight in the information age, the JSF is heavily dependent on software, and a brief examination of software issues is provided to help conceptually bridge the transformational capabilities and the development problems examined at the end of this chapter. The integrated training system of the JSF is also examined as it represents an element of the affordability and supportability pillars, but also because it has consequences for Australia. While the strategic drivers and political consequences of the need to improve interoperability are examined in Chapter 4, this chapter provides a brief technical overview of the capabilities that contribute to the concept of allied integration examined in that chapter. Similarly, the Autonomic Logistics system integrated in the JSF Program contributes to issues of allied integration and federated governance examined in Chapter 4, and the outline of the logistics system provides a technical basis to the subsequent political analysis. What is important to note is that the JSF Program was conceived as a US led allied coalition, of which much of the structure is embedded in the technical and material aspects of the program.
Despite the broad transformation of the USAF, and the rest of the US armed services, the JSF was not the product of a clearly defined set of requirements, but was the result of severe post-Cold War budget cuts which conflated several different Cold War era development programs across different services into a single program. The JSF emerged as a product ‘through a long chain of program mishaps, shifting strategies,
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and financial realities’ 244 in the new post-Cold War world. It originated from the Joint Advanced Strike Technology (JAST) Program of the mid-1990s, which was intended to streamline various technology development programs in preparation for future acquisition projects. 245 However, the JAST technology demonstration was transformed into the JSF acquisition program due to pressures to get a new airplane operational. 246 While the JAST Program is described in some detail, the JSF Program element is limited to outlines of the different phases of the program. Beyond the development phases, the JSF Program is not explicitly examined in detail, as most chapters in this thesis examine elements of the program. However, this chapter outlines the complexity of the JSF origins to demonstrate the high risk of the program in the early years, which will be assessed against Australia’s confidence in the program years before the aircraft first flew.
Although the JSF Program was originally hailed as a revolutionary program for procuring new technologically advanced systems at low costs, it has subsequently been described as ‘the poster child for how not to craft a program because of its unrealistic cost and requirements expectations, which set it up for more than a decade of missed milestones’. 247 This chapter provides an outline of the increasing costs and schedule delay issues with the program, the consequences of which will be addressed in greater detail in later chapters. Importantly, as the US Government Accountability Office (GAO) stated in 2012, until the US DoD can demonstrate that the program can perform against its cost projections, it will continue to be difficult for the United States and international partners to accurately set priorities, establish affordable procurement rates, retire aged aircraft, and establish supporting infrastructure. 248
======244 John A. Tirpak, ‘Strike Fighter’, Air Force Magazine (October 1996) 24. 245 Ibid. 246 Ibid. 247 Amy Butler, ‘When Lockheed Martin Won the JSF Award (2001)’, Aviation Week
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What becomes apparent in this analysis is a significant difference between the overly optimistic assessment of the Lockheed Martin and the JSF Program Office and the more cautious and realistic assessments of other US military and non-military organisations. There are clearly strong bureaucratic-organisational political dynamics between US actors, and the broad analytical framework advocated by this thesis will allow an assessment of how Australian actors interact with US political dynamics. As discussed in the next Chapter, Australia has a minor but integral role in JSF program governance, and the examination of contested assessments of costs provides a basis for examining the extent to which Australia used its position for Australia’s advantage. In particular, subsequent chapters will examine if Australia relied on the overly optimistic assessments of the Program Office and Lockheed Martin, or if alternate and perhaps more objective assessments were sought to inform Australia’s decision-making. Whether inadvertent or intentional, there was a significant degree of ignorance in certain key areas in the US management of the JSF program, and this thesis will examine the extent to which this ignorance, inadvertently or intentionally, was transferred into Australia’s management of its JSF procurement.
Transformational Capabilities Since the 1990s, the US military has been undergoing a ‘transformation’ in response to the changing technological environment, as well as the changing security and threat environment and post-Cold War defence spending reductions. One element of the USAF’s Transformation Strategy, as outlined in The US Air Force Transformation Flight Plan 2004, is to ‘develop transformational capabilities’ in areas including information superiority, air and space superiority, precision engagement, global attack, rapid global mobility, and agile combat support. 249 The USAF defines ‘transformation’ as A process by which the military achieves and maintains asymmetric advantage through changes in operational concepts, organizational structure, and/or technologies that significantly improve warfighting
======249 United States Air Force, The US Air Force Transformation Flight Plan 2004 (Washington DC: United States Air Force, 2003) vi-vii.
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capabilities or ability to meet the demands of a changing security environment. 250 The two ‘separate but related’ transformations experienced by the US military since the 1990s have been the ‘transformation from an industrial-age force to an information-age force’ and the ‘ongoing transformation … from a Cold War to a post- Cold War force’. 251
The US Department of Defense’s Quadrennial Defense Review (QDR) for 2001 identified a ‘capabilities based approach’ as one of the ‘interconnected set of strategic tenets’ underpinning US defence policy goals. 252 The QDR highlighted that one of its central objectives was to shift the basis of defence planning from a Cold War ‘threat- based’ model that had dominated thinking in the past to a ‘capabilities-based’ model for the future, and the requirement to develop and adopt new capabilities required for the transformation of US forces, capabilities, and institutions. 253 Two of the six critical operational goals identified in the QDR, which provides the focus for US DoD’s transformation efforts, is ‘Projecting and sustaining US forces in distant anti-access or area-denial environments’ and defeating anti-access and area-denial threats. 254
Supporters of Lockheed Martin’s F-22 Raptor and F-35 Lightning II, and the USAF’s transformation plan, argue that the F-22 and F-35 are addressing the need to modernise American tactical fighter aircraft while transforming air operations. 255 The combination of stealth and other capabilities will ‘enable radical capabilities and operational concepts’, and along with long-range bombers and standoff weapons, ‘stealthy high-performance aircraft offer the best potential for overcoming tomorrow’s anti-access threats’. 256 In outlining the requirements for the development of a new aircraft to face a new threat environment, the US DoD paid particular attention to the capability to penetrate and survive various kinds of strongly defended territories. According to the US Operational Requirements Document (ORD) for the JSF, its fully ======250 USAF, The US Air Force Transformation Flight Plan 2004, ii. 251 Ibid 252 United States Department of Defense, Quadrennial Defense Review Report (30 September 2001) 14. 253 Ibid, iv. 254 Ibid. 255 Christopher Bolkcom, ‘Tactical Aircraft Modernization: Issues for Congress’, Congressional Research Service (16 March 2006) 5. 256 Ibid.
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developed capabilities would allow a JSF equipped force ‘to attack targets day or night, in all weather, and in highly-defended areas of joint operations’. 257 Lockheed Martin considers the F-35 to be the singular solution to high threat environments, and have often stated that it ‘is able to operate inside highly contested airspace without any support assets’. 258 Eric Van Camp, Lockheed Martin’s domestic F-35 business development director stated By government contract specification, the airplane is required to be able to go into high threat anti-access environments, autonomously perform its mission and survive ... The results of flight tests indicate conclusively that the airplane will meet that contract specification. 259 The key capability for the F-35 for US is defeating a high threat anti-access/area denial environment, of which China, Russia and Iran are the most relevant threats, 260 with an inherently offensive posture.
Although the F-35 Lightning II embodies a range of transformational capabilities, it is important to note that the aircraft has three main variants, which are tailored to suit the specific needs of the different US services. As such, the F-35 is considered a ‘family’ of aircraft representing the F-35A, F-35B, and F-35C variants. The F-35A conventional takeoff and landing (CTOL) is the primary variant, and will be used by the USAF and partner air forces, including the RAAF. The F-35B is the short takeoff and vertical landing (STOVL) or jump-jet variant, which will be used by the US Marine Corps, the British Royal Navy and the Italian Navy. While it can operate from land bases, the Marines will operate them from their Landing Helicopter Docks (LHDs) and the Royal Navy from their Queen Elizabeth Class aircraft carriers. The F- 35C, designated a CV variant (a US Navy designation for fixed wing carrier aviation) or Catapult Assisted Take Off But Arrested Recovery (CATOBAR) variant, is the naval variant for the US Navy only, for use on their aircraft carriers. In addition to the
======257 DOT&E, ‘F-35A Joint Strike Fighter Readiness’, ii. 258 Dave Majumdar, ‘Stealth vs. Electronic Attack’, US Naval Institute
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main three variants, and despite original plan and public statements that there would not be nationally tailored variants, there are two sub-variants of the F-35A,: the Israeli F-35I and the variant with a drag chute for Norway, and probably Canada and Denmark as well, as discussed in Chapter 5.
While commonality was to be a key feature of the implementing a joint program meeting the different service needs, there are significant differences between the aircraft of the different services. While outwardly the variants are very similar, the major differences between the variants are their range and weapons load. All three F- 35 variants have two internal weapons bays, each of which can carry two air-to-air missiles, or one air-to-air missile and one air-to-surface missile or large bomb. It can also carry weapons or fuel tanks on pylons under its wings, but this greatly reduces its stealth characteristics. Only the F-35A carries a gun internally, and the F-35B and F- 35C use an external gun pod mounted on the centre-line hardpoint. The wings of the naval variant were increased in size to reduce recovery speed when landing on carriers, 261 as well as making control surfaces on the wings and tail larger, including larger edge flaps. 262 Its wings are 2.4m wider in wingspan with a 19.4m 2 larger wing area than the F-35A or F-35B variants. 263 The wingtips of the F-35C fold ‘to allow for more room on the carrier’s deck while deployed’, and a ‘more robust landing gear than the other variants, making it suitable for catapult launches and fly-in arrestments aboard naval aircraft carriers’. 264 The F-35B has thinner and lighter structural bulkheads than the other versions as a result of efforts to reduce its weight, and is stress rated to a maximum of 7g, while the F-35A is rated to 9g. 265 Also, the STOVL variant has a smaller internal payload and shorter range than the other two variants as
======261 Graham Warwick, ‘JSF special: Future Fighter’, Flight International
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Table 1: Lockheed Martin F-35 variant specifications
F-35A 266 F-35B 267 F-35C 268 Length 51.4 ft / 15.7 m 51.2 ft / 15.6 m 51.5 ft / 15.7 m Height 14.4 ft / 4.38 m 14.3 ft / 4.36 m 14.7 ft / 4.48 m Wingspan 35 ft / 10.7 m 35 ft / 10.7 m 43 ft / 13.1 m Wing area 460 sq ft / 42.7 sq m 460 sq ft / 42.7 sq m 668 sq ft / 62.1 sq m Horizontal tail 22.5 ft / 6.86 m 21.8 ft / 6.65 m 26.3 ft / 8.02 m span Weight empty 29,300 lb 32,300 lb 34,800 lb Internal fuel 18,200 lb 13,100 lb 19,200 lb capacity Weapons payload 18,000 lb / 8,160 kg 15,000 lb / 6,800 kg 18,000 lb / 8,160 kg
25 mm GAU-22/A cannon Two AIM-120C Two AIM-120C Two AIM-120C Standard internal air-to-air missiles air-to-air missiles air-to-air missiles weapons load Two 2,000-pound GBU-31 Two 1,000-pound GBU- Two 2,000-pound GBU-31 JDAM guided bombs 32 JDAM guided bombs JDAM guided bombs
Maximum weight 70,000 lb class 60,000 lb class 70,000 lb class Propulsion* F135-PW-100 F135-PW-600 F135-PW-100 (uninstalled thrust 40,000 lb Max. 38,000 lb Max. 40,000 lb Max. ratings) 25,000 lb Mil. 26,000 lb Mil. 25,000 lb Mil. 40,500 lb Vertical Speed (full Mach 1.6 Mach 1.6 Mach 1.6 internal weapons (~1,200 mph) (~1,200 mph) (~1,200 mph) load) Combat radius >590 nm / >450 nm / >600 nm / (internal fuel) 1,093 km 833 km 1,100 km Range >1,200 nm / >900 nm / >1,200 nm / (internal fuel) 2,200 km 1,667 km 2,200 km Max g-rating 9 7 7.5
Maximum Power (Max) = with afterburner; Military Power (Mil) = without afterburner
======266 Lockheed Martin, ‘F-35A Conventional Takeoff and Landing Variant’, Lockheed Martin
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the vertical lift and propulsion system takes up space and weight that is otherwise used for fuel and weapons. 269 The internal weapons bay is smaller, and while the F-35B will still be able to internally carry the same air-to-air missiles as the F-35A or F-35C, the capacity for air-to-surface missiles is reduced from 2,500lbs to 1,500lbs. A specification comparison table with additional information for the three variants is provided at Table 1.
According to Lockheed Martin, the F-35 Lightning II embodies many of the transformative capabilities pursued by the DoD, describing the aircraft as a 5th Generation fighter, combining advanced stealth with fighter speed and agility, fully fused sensor information, network-enabled operations and advanced sustainment. The supersonic, multirole F-35 represents a quantum leap in air dominance capability. 270 Beyond stealth, what makes the F-35 a unique aircraft is its integrated ‘mission systems’, which refers to the ‘avionics, integrated electronic sensors, displays and communications systems that collect and share data’. 271 These systems include sensor fusion, the active electronically scanned array radar, the distributed aperture system, the electro-optical targeting system, helmet mounted display systems, and the communications, navigation and identification system. Notwithstanding issues with some sensors, the F-35 contains many unique and high technology systems, but the critical transformational capability is the integration of these systems, enabling it to function as a Command, Control, Communications, Computers, Combat Systems, Intelligence, Surveillance, and Reconnaissance (C5ISR) aircraft 272 rather than simply a strike aircraft.
Stealth is not a new concept as it was a key feature of some aircraft over the past few decades, including Lockheed’s F-117 Nighthawk attack aircraft in the 1980s, Northrop Grumman’s B-2 Spirit strategic bomber in the 1990s, and Lockheed Martin’s F-22
======269 Lockheed Martin, ‘F-35C Carrier Operations’. 270 Lockheed Martin, ‘Multi-Mission Capability for Emerging Global Threats’, F-35
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Raptor air superiority fighter in the 2000s. The concept of stealth is a contested one, particularly in relation to the JSF, and is critically examined in Chapter 8, as is the concept of ‘fifth-generation’ aircraft. Nonetheless, stealth technology has increased significantly since the 1980s, and remains a key capability for surviving in high threat environments. Technical details regarding stealth technology are highly classified, and while the specifics of the F-35 stealth characteristics are not publicly known, the frontal radar cross (RCS) of the aircraft has been reported to be at least -30 decibels per square metre, which ‘is the equivalent to the same radar return from a sphere with a diameter of 3.6cm (0.001m 2) - the same size as a golf ball’. 273 While not rendering the F-35 invisible, stealth considerably reduces the range at which it can be detected by enemy sensors, giving it a ‘look first, shoot first, kill first’ capability. Additionally, new technologies for low observable coatings developed for the F-35 require less maintenance, reducing sustainment costs and airframe downtime. 274
The JSF will play a large part in changing conceptualisations of operational units, from individual aircraft, squadrons, or ‘strike packages’ executing a particular mission, to a ‘combat cloud’ concept which ‘looks at all the deployed aircraft as a whole, linked together by secure wireless networks’. 275 As well as sharing sensor information with other networked elements, the F-35 has the ability to identify targets for other elements in the combat cloud. According to US Air Combat Commander General Mike Hostage, the F-35 provides additional capabilities over what the F-22 Raptor contributes, arguing that ‘the advantage of the F-35 is the nature of the global fleet where Allied and American F-35s ... can talk with one another and set up the distributed operational system’. 276 A key element of the F-35’s networking capabilities is its Northrop Grumman communication, navigation and identification (CNI) suite, which provides functions such as ‘beyond-visual-range identification friend or foe, secure voice communications, caution and warning, intercom, and intraflight information sharing ======273 Abraham Gubler, ‘Weapons - Gauging the Lethality Edge of the F-35’, Australian Defence Magazine
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among multiple aircraft via a high-speed broadband data link’. 277 Unlike the current Link 16 data link system, the new Multifunction Advanced Datalink (MADL) allows the ‘stealthy’ sharing of data. 278
The F-35’s Northrop Grumman fourth-generation AN/APG-81 active electronically scanned array (AESA) X-band radar is the aircraft’s ‘most important and expensive sensor’, and will provide the aircraft with various air-to-ground and air-to-air radar modes, as well as high-gain electronic-support measures’. 279 As the APG-81 has an electronically scanned array rather than a mechanical one, it has no moving parts such as gimbals and motors, and little wiring to wear out, ensuring a long operational lifespan, estimated by Northrop Grumman to be around 8,000 hours. 280 The radar has a synthetic aperture radar (SAR) terrain mapping function for air-to-surface surveillance and targeting, which is comparable to the terrain mapping radar used in reconnaissance aircraft, unmanned air vehicles, and the E-8C Joint Surveillance Target Attack Radar System aircraft. 281 Additionally, an ‘inverse SAR mode’ enables the F-35 to detect and identify surface vessels at sea. 282 The APG-81 is also ‘capable of acting as a narrowband jammer’ that can be used against engagement radars, 283 and been shown to be capable of locating and jamming the radars of F-22s. 284 However, the F-35 does not have the power or range of jamming capabilities as a dedicated Electronic Attack (EA) aircraft, such as the EA-18G Growler, and its jamming is ‘mostly confined to the X-
======277 David Jensen, ‘F-35 Integrated Sensor Suite: Lethal Combination’, Avionics Today
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band’. 285 Sydney J. Freedberg argues that the JSF, as well as using kinetic weapons, will be capable of fighting cyber war, launching ‘viruses’ and ‘hacking’ enemy computers through radar and radio networks, 286 via its AESA radar. 287 Colin Clark argues that the JSF will be able to ‘spoof’ enemy radar systems, creating a multitude of false radar returns, and confusing the enemy by hiding the location of real aircraft. 288
While emissions from the AN/APG-81 radar can be detected, once a target has been identified by the radar, it can be turned off while other sensors allow targets to still be observed. Lockheed Martin’s AN/AAQ-40 Electro-Optical Targeting System (EOTS), which is located in the nose of the aircraft, is a high-resolution day/night infrared passive sensor which cannot be detected in the same way the active radar can. 289 However, the F-35’s EOTS is technologically a generation behind more advanced ‘third generation’ targeting externally mounted pods, such as the Lockheed Martin Sniper ATP-SE and Northrop Grumman LITENING-SE. 290 The F-35’s EOTS ‘does not have the range or high-resolution capability that would be found on the current targeting pods’ used by US aircraft in Iraq, Afghanistan and Syria, cannot downlink video feeds to troops on the ground, and lacks an ‘infrared pointer’ in designating ground targets. 291 An unnamed USAF official was reported to have stated that the F-35 will ‘be 10 years behind legacy fighters’ when it becomes operational, and will not have the ‘sensor capability, with respect to the CAS [close air support] mission set, that legacy multi-role fighters had by the mid-2000s’. 292 Joseph Della Vedova, spokesperson for the EOTS system program office, stated the decision not to include an advanced electro-optical system was a ‘deliberate and informed choice of the F-35
======285 Bill Sweetman, ‘Jamming Is Needed Against Agile Radar Threat’, Aviation Week
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partners more than a decade ago to minimize development risk’. 293 It is planned that future Block 4 upgrades of the F-35 will incorporate most of the improved attributes, including ‘higher definition video, longer-range target detection and identification, video data link and infrared marker and pointer.’ 294
The F-35 provides its pilot ‘unprecedented situational awareness’ due to its ability to communicate and process data obtained from a multitude of both onboard sensors and those of other platforms, 295 including other F-35s, or other aircraft and ships. The key to this ‘360 degree situational awareness’ is the Distributed Aperture System (DAS), which is ‘a remarkably sensitive and discriminating set of six sensors’ embedded around the F-35 airframe, allowing the unobstructed spherical collection of information. 296 Currently, the F-35 is the only platform with a DAS system. The Northrop Grumman AN/AAQ-37 DAS is a high resolution ‘omni-directional infrared sensor system that provides advanced spherical situational awareness capability, including missile and aircraft detection, track and warning capabilities’. 297 As well as detecting beyond visual range (BVR) missile launches during combat and ‘hostile ground fire detection’, 298 the F-35’s DAS has the ability to detect ballistic missiles at very long ranges 299 , reportedly at a range of up to 1,200 miles. 300
The JSF’s networking capabilities and data library, which would contain ‘thousands of possible signatures’, 301 contribute significantly to situation awareness by being able to identify remote threats and offer solutions. The data libraries, known as mission data files, serve as ‘database of known threats and friendly aircraft in specific regions’,
======293 John A. Tirpak, ‘EOTS Meets CAS Requirements’, Air Force Magazine
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including ‘commercial airliner information and specifics on Russian and Chinese fighter jets’. 302 The USAF is developing ‘12 different mission data files for 12 different geographic areas, with the first four expected to be ready by the time the F- 35A reaches planned initial operating capability in August 2016. 303
The F-35’s ‘fusion engine’ takes input from onboard sensors and fuses it with other input from off board sensors, then takes that information and balances it against the mission data. 304 After detecting something, the F-35 will attempt to identify it by combing through threat information to decide what the plane has detected, or suggest the pilot use their EOTS or AESA radar to gather more data, or if necessary, use ‘bigger computers on the ground [to] crunch the data from [other] sensors and make recommendations if any single plane hasn’t gathered enough information with enough fidelity’. 305 Information is shared among other aircraft, mobile platforms and ground systems until the threat has been identified, then ‘the plane’s fusion center will recommend targets, which weapons to use and which targets should be killed first’. 306 From this process, information from all of the JSF sensors and systems is ‘fused’ through the aircraft’s computer, providing the pilot with clear and integrated information, 307 rather than requiring the pilot to interpret information from a range of sources and sensors. Sensor fusion is expected to reduce pilot workload and improve battlespace awareness, including the clearer identification of targets and should not be targeted. 308
Software As an information age warfighting platform, software plays a greater and more critical role in the capabilities of the JSF than other aircraft. The magnitude of the task of developing lines of code, as well as the complexity of systems, has been the most significant challenge to the JSF Program. For USAF Major General Christopher
======302 Kris Osborn, ‘Air Force Develops Threat Data Base for F-35’, Defense Technology
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Bogdan, JSF Program Executive Officer (PEO), software has ‘always ... been the number-one technical issue on this program. And always will be’. 309 Software development has been caused delays with program milestones, with flow-on effects due the high levels of dependency between JSF software and hardware and capabilities. The US GAO stated in 2012 that Software defects, low productivity, and concurrent development of successive blocks have created inefficiencies, taking longer to fix defects and delaying the demonstration of critical capabilities. Delays in developing, integrating, and releasing software to the test program have cascading effects hampering flight tests, training, and test lab accreditation. 310
While the F-22 Raptor, the other ‘fifth-generation fighter’ with advanced avionics and sensor fusion, has around 1.7 million lines of code, 311 the lines of on board code for the F-35 aircraft has been variously stated to be at least 8.3 million, 312 or at most 9.5 million lines. 313 Whereas the entire JSF system was thought to require around 15 million lines of code in 2004, 314 the lines of code necessary for full JSF system capabilities grew out to over 24 million by 2012. 315 From the 2007 Critical Design Review to 2012, the total growth of software required grew 37 percent, but growth began stabilising after 2012. 316 While the growth in the software required for JSF is similar to other contemporary defence procurements, which have experienced from 30 to 100 percent growth in software code over time, ‘the sheer number of lines of code for the JSF makes the growth a notable cost and schedule challenge’. 317
======309 Sandra I. Erwin, ‘Why the Marine Corps Is Rushing to Deploy an Imperfect Combat Aircraft’, National Defense
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From the beginning of the JSF Program, Lockheed Martin’s software engineers have been working towards releasing the F-35 software over stages, with each software ‘Block’ providing additional capabilities and eventually full warfighting capabilities. 318 During the initial test flights of the JSF aircraft, Block 0.1 provided flight science capabilities for test aircraft, and Block 0.5 provided basic flight systems. 319 Block 0.1 was released about six months late and Block 0.5 was ‘almost two years late, due largely to integration problems’. 320 Block 1, divided into Block 1A and Block 1B, represented 78 percent of the total volume of software. 321 Block 1A software allowed for basic flying and approaches, which was used for the operational utility evaluation for the aircraft. 322 Formal pilot training began in early 2013 using Block 1B software, which includes ‘some data fusion in the cockpit avionics and security features’. 323
Block 2 would allow F-35s to carry some air-to-ground precision weapons for interdiction and close air-support missions, but would lack most of its potential air-to- air arsenal, including Raytheon AIM-9X Sidewinders and MBDA AIM-132 Advanced Short Range Air-to-Air Missiles. 324 Block 2A, consisting of ‘nearly 86 percent of the required code for full warfighting capability’, and includes ‘enhanced training including functionality for off-board fusion, initial data links, electronic attack and mission debrief’. 325 Block 2B, consisting of over 87 percent of the code for full warfighting capability, ‘provides initial warfighting capabilities, including but not limited to expanded data links, multi-ship fusion and initial live weapons’. 326 Block 2B allows the F-35 to provide basic close air support, and use the AIM-120 Advanced Medium Range Air to Air Missile, Joint Direct Attack Munition, and the GBU-12
======318 Lockheed Martin, ‘F-35 Software Development’. 319 GAO, DoD Actions Needed to Further Enhance Restructuring, 19. 320 Ibid. 321 Lockheed Martin, ‘F-35 Software Development’. 322 Amy Butler, ‘USAF Finally Begins F-35 Pilot Training’, Aviation Week
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laser-guided bomb. 327 While Block 2B was completed in February 2015, four months behind schedule, it still contained numerous glitches, but the US Marines declared initial operating capability (IOC) with Block 2B in 2015. 328
Block 3 would provide the F-35 with ‘a full-up weapon system capable of the aircraft's full mission profile, including carrying all external and internal weapons loads’. 329 However, Block 3i provides the same tactical capabilities as Block 2B, and the main difference between 2B and 3i is the implementation of new hardware, specifically the updated Integrated Core Processor. 330 Providing 89 percent of code required for full warfighting capability, the USAF will declare IOC with Block 3i 331 in 2016. Block 3F will provide 100 percent of the software required for full warfighting capability and the full range of weapons, as well as data link imagery and embedded training, 332 and will allow all services to achieve full operating capability (FOC). 333 Block 3F will allow the F-35 to use the AIM-9X and AIM-132 air-to-air missiles. 334 While Block 3F is planned to be completed in 2018, there is uncertainty as to whether it can be introduced by the target due to problems and delays with previous software blocks. 335
In 2014, the JSF Program began a process of developing a fourth software Block to ensure the F-35 ‘can counter threats and weapons expected to emerge in the mid 2020’s and beyond’. 336 Block 4 will be broken down into two separate increments: Block 4A is planned to be ready by 2021, and Block 4B which is expected to be ready for 2023. 337 Block 4 will include weapon systems developed by international partners who want them integrated in the F-35, including weapons developed by Britain and
======327 Kris Osborn, ‘Pentagon Develops F-35’s 4th Generation Software’, Defense Technology
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Turkey, as well as future US weapons. 338 Thomas Lawhead, operations lead for JSF integration office, acknowledged that when the JSF Program began, the ‘threats were mostly European centric’, such as Russian made SA-10s or SA-20s surface to air missiles (SAMs), but stated that ‘the future threats are … more Chinese-made and Asian-made threats’ and Block 4 will focus on these threats. 339
Training As previously discussed, the JSF represents a complete system incorporating warfighting and support elements, and this includes a comprehensive suite of training resources. Improving interoperability with allies through joint and improved quality of training was a strategic objective in the early development of the program. This section outlines the various training systems incorporated in the JSF, which contributes to the political analysis conducted in the next chapter. However, this section is also relevant to the broad approach adopted by the JSF program in developing new ways improving warfighting capabilities and reducing lifetime sustainment costs.
Lockheed Martin developed the F-35 Integrated Training System (ITS), which provides a comprehensive suite of training systems for all aspects of operating and sustaining the F-35, is characterised by the use of cost-saving technologies and interoperability. The ITS makes use of synthetic and advanced simulation systems as well as the platforms themselves. The system also includes operational and deployed training components allowing for on-demand training and mission rehearsal. 340 Lockheed Martin worked with partner nations in developing the ITS, to establish a ‘baseline for pilot and maintainer students prior to undertaking training for the F- 35’. 341 JoAnne Puglisi, Lockheed Martin’s Director of F-35 Training and Support, stated that ‘By tailoring devices and sharing resources across the training domain, we
======338 Osborn, ‘Pentagon Develops F-35’s 4th Generation Software’. 339 Ibid. 340 Australian Aviation, ‘Lockheed Martin ready for RAAF F-35 training’, Australian Aviation
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will provide even greater affordability for the services and our F-35 partner countries’. 342
The JSF program places a great focus on simulator training for pilots than with previous aircraft for a number of reasons. For US F-16 pilots, about 40 percent of training is conducted in simulators, but for F-35 pilots, simulator based training will be at least 60 percent, 343 and perhaps more than 70 percent, 344 of total training. A greater emphasis on simulator training before a pilot’s first flight in a real aircraft increases training safety as the JSF program lacks a two-seat version for training purposes; ‘when a student pilot steps into the cockpit of the F-35 for his first check-out flight, he is flying solo’. 345 For General Bogdan, ‘Simulated training with the F-35 is critical [as] it offers the military a more affordable way to train both pilots and maintainers while reducing lifecycle costs’. 346 However, disadvantages of simulated training systems include an increase in procurement and sustainment costs and an increase in operational budgets of F-35 units. 347
Like the decreasing component commonality, the commonality of the core training syllabus has decreased, but not the same extent as with components. In 2007, Puglisi, indicated that ‘80% of the training syllabus will be made up of core tasks common at all variants and all customers … [while] The remaining 20% will be unique to the service or the variant - but not necessarily both’. 348
======342 Lockheed Martin, Press Release, ‘Lockheed Martin Delivers First F-35 Weapons Load Training System to Eglin Air Force Base’, Lockheed Martin
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By 2012 however, according to Lockheed Martin’s F-35 International Training Program’s manager Eric Christner, about 70 per cent of the syllabus was common to those three US services and partner nations. 349 Of the remaining 30 per cent, 15 per cent is ‘minor differences in nomenclature – different services doing the same task but with different wording to describe them’, with the other 15 per cent are ‘due to the three variants of the aircraft’. 350
Lockheed Martin’s ‘pretty novel concept’ for simulators is their Deployable Mission Rehearsal Trainer (DMRT). 351 The DMRT consists of ‘two simulators in what is essentially a shipping container’, with a second container attached to provide heating, ventilation, and air conditioning and power for the system. 352 Two DMRTs can be linked, ‘giving four pilots a chance to train together’. 353 While the DMRT has a smaller visual display than the full mission simulator and only has a static cockpit, ‘it could go on an aircraft carrier or be forward deployed in an austere environment’ to ‘keep pilots current as well as provide high-fidelity mission planning’. 354
The main element in F-35 training is Lockheed Martin’s Full Mission Simulators (FMS), which is ‘the highest fidelity trainer in the F-35 pilot-training-device suite, accurately replicating all F-35 sensors and weapons deployment’. 355 The precise cost of a FMS is not clear from public information, but is in the range of US$15-20m. 356 357 Another ‘major technical innovation’ with the F-35 FMS is the additional
======349 Australian Aviation, ‘Lockheed Martin ready for RAAF F-35 training’. 350 Ibid. 351 Aaron Mehta, ‘Lockheed Develops Portable F-35 Trainer’, Defense News
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briefing and debriefing areas, where pilots can go through a flight visually, minute by minute, angle by angle, with multiple students and instructors … During a simulator lesson, the instructor can mark events for later reference during the debriefing … Everything the student is seeing, and what the instructor pilot is seeing at his console along with the audio feed, can be replayed later at whatever speed is needed. 358
A technical feature built into the F-35 in the early stage is Embedded Training (ET), which is a system of simulated training built into the architecture of the aircraft’s software, providing ‘synthetic training environments to support ‘anywhere/anytime’ interactive combat training while in-flight’. 359 The use of virtual adversaries reduces training costs, such as ‘savings on fuel, manpower and airframe life’, as well as improving the quality of training by enabling ‘more training content per flying hour’. 360 Another advantage of ET is that a relatively small volume of airspace is needed for training despite much of the future air-to-air engagements being likely to occur Beyond Visual Range (BVR) where ‘detection of the enemy, identification, weapon delivery, and electronic warfare all take place at relatively long distances’. 361 ET offers a higher quality of training, with more ‘realistic simulation of ground threats’ and the ‘flexible simulation of air threats [which] can be given any characteristics, … increasing the number of possible training scenarios’. 362 The ET on the F-35 consists of both a Virtual Training (VT) capability, which creates a simulated threat environment in any suitable airspace, and a Combat Training System capability that allows real F-35s to fly against each other using simulated weapons.
======United States Department of Defense, ‘Contacts CR-195-14’, United States Department of Defense
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The VT capability is implemented as a software model ‘provid[ing] the training capability for preplanned and reactive threat responses’ for BVR training missions. 363 For the pilot, VT is ‘an overlay of constructive simulation on the real world’, 364 and while in airborne, the pilot ‘can engage the computer in a training mission while experiencing all the physical forces of flight. 365 Pilots can ‘simulate core missions such as counterair, air strike/interdiction, and suppression of enemy air defences’ against ‘virtual targets with appropriate threat reactions and kill responses that are shared across participants’. 366 Coordination via onboard data links allows a flight of four F-35s to participate in the same training scenario, which can include ‘ up to 4 virtual threat aircraft, 10 virtual surface-to-air missile threats and associated virtual threat missiles, all of which can interact with and tactically engage the F-35’. 367 Mission planning data is loaded into the aircraft via a removable memory device, which also allows training and flight information to be transferred for debriefing. 368
As well as advanced pilot training, the JSF program includes a range of maintenance training systems, including an Aircraft Systems Maintenance Trainer, weapons load trainer, and an ejection seat maintenance trainer. 369 Lockheed Martin installed the first weapons load training device at the F-35 integrated pilot-and-maintenance training center at Eglin Air Force Base in October 2011. 370 The delivered system ‘allows maintenance students to hone their skills loading munitions, fuel tanks and missile systems onto the aircraft’ and ‘enable[s] training to take place without removing aircraft from the flight schedule’. 371
======363 Bills, Flachsbart, Kern and Olson, ‘F-35 Embedded Training’, 2. 364 Ibid, 1. 365 John Stanton, ‘F-22, Joint Strike Fighter Trainers Redefine ‘Point-and-Click’ Warfare’, National Defense
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Autonomic Logistics Information System (ALIS) As previously outlined, the JSF Air System consists of the JSF Air Vehicle and an integrated Autonomic Logistics system. JSF Program Manager Admiral Craig Steidle described autonomic logistics support as ‘a new paradigm’ representing the ‘spontaneous logistics response to an initial status stimulus’ from diagnostic systems on board the aircraft. 372 Steidle conceptualised the autonomic logistics process to be ‘analogous to the human nervous system, where basic functions respond without conscious thought’. 373 According to the Lockheed Martin, the F-35 is the ‘first tactical aviation system to have sustainment tools engineered in concert with the aircraft for efficiency and cost effectiveness’. 374 Additionally, during the early development, the JSF Autonomic Logistics Support Concept was developed to maximise combat sortie generation rates while reducing the logistic footprint necessary to maintain aircraft in the field. 375 It was intended to exploit ‘the reliability, maintainability, supportability, and deployability characteristics found in the air vehicle design to maximize support system commonality and interoperability’. 376
Autonomic Logistics (AL) is a comprehensive support system, defined in international JSF agreements as an ‘integrated, knowledge-based system’, encompassing a wide range of JSF support activities. 377 The logistics system designed as part of the broad JSF system package collects data from many sources and converts it into ‘actionable information, enabling pilots, maintainers and military leaders to make proactive decisions to keep jets flying’. 378 The JSF’s Autonomic Logistics Information System (ALIS) is ‘an integrated information system that connects training units, maintenance operations, mission planners, pilots, and the logistics system’. 379 ALIS also includes
======372 Craig E. Steidle, ‘The Joint Strike Fighter Program’, Johns Hopkins APL Technical Digest 18.1 (1997) 9. 373 Ibid. 374 Lockheed Martin, ‘Autonomic Logistics Information System’, Lockheed Martin
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software to build and track flying schedules, track maintenance actions and aircraft availability, monitor inspection requirements, and schedule and track parts delivery among other functions, 380 and operates on the IT networks of all participants and their contractors to facilitate information exchange. 381
While F-35s are in flight, they transmit Health Reporting Codes to the ALIS via data downlinks, enabling the ‘pre-positioning of parts and qualified maintainers’ to increase efficiency and decrease aircraft downtime once it has landed. 382 ALIS was intended to easily and instantly provide aircraft maintainers with detailed instructions and drawings when parts needed to be replaced. 383 With ALIS’s prognostic capability, which is ‘the ability to predict when a component will fail and will need to be replaced’, 384 parts requirements would be anticipated and requisitioned quickly across the global supply chain. 385 ALIS also includes the Training Management System (TMS), which is ‘intended to build and track training syllabi and schedules, and provide courseware and other training materials to the students’. 386 It is important to note that ALIS is a single system used by all operators of the F-35, with the central hub located in Lockheed Martin’s Fort Worth facility. Given the integrated nature of the ALIS, with the US maintaining effective control, there are considerable implications for sovereign capabilities, which is an issue discussed in subsequent chapters.
Like software onboard the JSF aircraft, ALIS software has been developed and released in a series of blocks with increased capabilities. The Director, Operational Test & Evaluation (DOT&E) FY2012 Annual Report indicated that ALIS was ‘immature and behind schedule, which has had an adverse impact on maintainability, ======380 DOT&E, ‘F-35A Joint Strike Fighter Readiness’, 1. 381 US DoD, ‘JSF PSFD MoU’. 382 Ibid. 383 Sandra I. Erwin, ‘F-35 Maintenance Software Comes Under Fire’, National Defense
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and delays delivery of aircraft’. 387 JSF Program leaders had realised that ALIS ‘was a hell of a lot more important and complex than they had originally foreseen’. 388 Bogdan stated that ALIS ‘is so crucial to operating [the JSF] that it is frightening a little bit, because if it doesn’t work, this airplane doesn’t work’. 389 By early 2014, Bogdan stated that they were ‘way behind’ and that the JSF program was ‘in catch-up mode with ALIS’. 390 Bogdan noted that while the JPO had made the mistake ‘treating [ALIS] like a piece of support equipment’, it was ‘an integral part of the weapon system’. 391 To rectify the problems in developing ALIS, the Program had ‘fundamentally’ changed the way ALIS was developed, and applied techniques used in developing the onboard JSF software. 392
Joint Advanced Strike Technology (JAST) Program While the F-35 Joint Strike Fighter embodied many of the transformative capabilities sought by the DoD, it was not a deliberate outcome of the US military’s transformation strategy with a new aircraft with new capabilities developed to address future needs. Instead, the tortuous origins of the F-35 can be considered a product of the transformative process changing how the Pentagon and Congress adapted to the post- Cold War environment of decreasing defence spending. In 1996, R. Noel Longuemare, Deputy Under Secretary of Defense for Acquisition and Technology stated that ‘We are trying to solve all our financial problems with this one airplane’, 393 the JSF.
======387 Office of the Director, Operational Test & Evaluation, US Department of Defence, FY2012 Annual Report, Office of the Secretary of Defense
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In the early 1990s, the US Air Force, Navy and Marine Corps were planning their next generation of strike aircraft 394 to replace their current aircraft for operations in the early 21 st century, and a number of programs were being conducted simultaneously by various services and agencies. The Air Force was ‘defining’ the Multi-Role Fighter (MRF) to replace its F-16s and A-10s and the Navy ‘was still looking for a successor to its A-6s through the notional A-X and later A/F-X efforts’. 395 Such is the nature of US inter-service politics and rivalry for funding, that the Navy suggested that ‘a derivative version of the A/F-X would have proved capable of replacing the Air Force’s F-111, F-15E and F-117, while the Air Force considered the MRF as ‘an ideal successor’ to the Navy’s and Marine Corps’ F/A-18. 396 At the same time, the Defence Advanced Research Project Agency (DARPA) was researching an Advanced Short Take-Off Vertical Landing (ASTOVL) aircraft capable of supersonic flight, and was analysing the need to reduce costs through inter-service commonality with the Common Affordable Lightweight Fighter (CALF) Project. 397
The Air Force’s MRF Program began in 1991 as ‘a relatively low-cost F-16 replacement’ being a single-seat/single-engine aircraft, with a unit flyaway cost in the range of $35 to $50 million’. 398 However, with the post-Cold War defence drawdown, the need to replace the F-16 became less critical, and the MRF Program ‘was effectively put on hold’ in August 1992, in large part due to the Air Force’s focus on the F-22 Raptor program, and the Air Force intended to continue to produce upgraded F-16s. 399 Meanwhile, the US Navy was coming to terms with the failure of its Advanced Tactical Aircraft (ATA) Program, fending off Air Force attempts to impose an Air Force fighter for its carriers, and progressing its own strike aircraft development program. As a result of Congressional intervention, the Navy was directed to evaluate a navalised version of the Air Force's Advanced Tactical Fighter (ATF), what is now the F/A-22, as a possible replacement for their F-14 Tomcats, with the Air Force to
======394 James Elliot, ‘JSF For Everybody?’, Military Technology 22:3 (March 1998) 20. 395 Ibid. 396 Ibid. 397 Ibid 20-21. 398 Joint Strike Fighter Program Office, ‘History Pre-JAST’, Joint Strike Fighter Program Office
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reciprocally ‘evaluate a derivative of the ATA as a replacement for their F-111s’. 400 The Naval ATF (NATF) Program office was established to conduct the evaluation in 1988, but the consideration of the NATF was dropped in early 1991. 401 By 1991, with the ATA and the NATF programs cancelled, the Navy’s new Advanced Attack (A-X) program was intended to develop an advanced, high-end, carrier-based multi-mission aircraft with day/night/all-weather capability, low observables, long range, two engines, two-crew, and advanced, integrated avionics and countermeasures. With the cancellation of the NATF program, increased air-to-air capabilities were added to the requirement of the program, which lead to a change in the name of the Program to Advanced Attack/Fighter (A/F-X). 402 From 1983, DARPA was examining the technologies available to design and manufacture a follow-on supersonic replacement for the AV-8 Harrier via the ASTOVL program, which would lead to US-UK collaboration. 403 Originally seen to only be relevant to the Marine Corps as it sought to replace the Harrier jump-jet, the ASTOVL program ‘became multi-service with the suggestion of multiple variants’ and the program was renamed as the CALF’, but also known as the Joint Attack Fighter (JAF). 404
The major obstacle for the various programs being run by the defence service was that the end of the Cold War resulted in reduced defence spending, and leading to the imperative for future development and procurement programmes for combat aircraft to be funded under severe cost ceilings [with] joint service inter-service endeavours … the only practicable way to achieve substantial savings without dramatic reductions as regards numbers and/or performance. 405 In 1993, with a new Democratic administration in the White House, and with significant changes in the US national security environment, the Office of the Secretary of Defense commissioned a Bottom-Up Review ‘to address the balance
======400 JSFPO, ‘History Pre-JAST’. 401 Ibid. 402 Ibid. 403 Ibid. 404 Ibid. 405 Elliot, ‘JSF For Everybody?’, 20-21.
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among budget priorities, national military strategy, and forces’. 406 The JAF/CALF, and the proposed Air Force and Navy Joint Stealth Strike Aircraft, represented ‘feeble- hearted’ attempts of joint programs, and Secretary of Defense Les Aspin’s Bottom-Up Review of defense policy and programs assessed maintaining both the Navy’s AF/X and Air Force’s MRF to be unaffordable. 407 In September 1993, Aspin announced his intention of canceling both programs and creating the Joint Advanced Strike Technology (JAST) Program to replace both. 408 Following the Congressional Defense Committees approval of a joint service plan, the JAST Program was established in January 1994. 409
The JAST Program was intended rationalise the various technological research programs being undertaken in the area of tactical air strike. The Charter for the JAST Program of August 1994 stated that the Program would facilitate evolution of fully developed and validated operational requirements, proven operational concepts and mature, demonstrated technologies to support successful development and production of next generation strike weapon systems for the USN, USMC, USAF and our allies. 410 While, like the subsequent JSF program, the JAST program was developed with the in intention of exporting weapon systems to allied nations, the program explicitly did not intend to develop a single aircraft. Instead, it was established to manage a wide range of aspects of future strike weapons systems. 411 According to the JAST Program Master Plan of May 1994, the program was a comprehensive advanced technology effort to preposition the building blocks for the next-generation of strike weapon systems.
======406 Defence Science Board, Office of the Under Secretary of Defense for Acquisition and Technology, Report of the Defense Science Board Task Force on Joint Advanced Strike Technology (JAST) Program, United States Department of Defence (September 1994) ES-1. 407 Elliot, ‘JSF For Everybody?’, 20-21. 407 Steidle, ‘The Joint Strike Fighter Program’, 16. 408 Christopher Bolkcom, ‘Joint Strike Fighter (JSF) Program: Background, Status, and Issues’, Congressional Research Service (11 January 2002) 2. 409 Steidle, ‘The Joint Strike Fighter Program’, 16. 410 Deputy Secretary of Defense, United States of America, ‘Charter for the Joint Advanced Strike Technology (JAST) Program’, United States Department of Defence (21 August 1994). 411 Deputy Secretary of Defense, ‘Charter for the Joint Advanced Strike Technology (JAST) Program’, Department of Defence (21 August 1994).
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Key Program objectives are to significantly reduce the cost of performing joint strike warfare, demonstrate the critical operational concepts, and identify and demonstrate innovative solutions/approaches to affordable joint strike warfare. 412 Although the JAST program was a broad effort to develop new defence technologies, it was also examining new ways of developing joint warfare technologies to reduce overall defence costs, and this element was to become an important feature in the JSF program’s development of innovative ways of developing and producing new aircraft. In 1995, DARPA’s ASTOVL Program was merged into the JAST Program with Congressional legislation, 413 which also drew the United Kingdom into an expanded role in the JAST Program. As the merging of programs made the previous UK-US ASTOVL MoU redundant, the UK signed a Letter of Intent (LoI) with the US in early April 1995. 414 The LoI established a ‘framework for cooperation’ on the JAST program, including common airframe and major subsystems development, 415 the ability to accommodate the participation of additional nations, and recognition that ‘both countries could benefit from each other's industrial expertise in this field, and so are encouraging … industrial teaming and reciprocal purchasing’. 416
As a product of the Bottom Up Review, the JSF Program was a central element of the US DoD’s ‘effort[s] to achieve an affordable long-term tactical aviation modernization plan’. 417 In a written submission to the House of Representatives National Security Committee in 1996, officials from the DoD stated that ‘The focus of the JSF Program is on affordability – reducing development, production and ownership cost’. 418 According to the DoD, the planned Joint Strike Fighter's ‘common family of aircraft’ approach is ‘a new way of doing business’ to satisfy the strike warfare requirements of
======412 Quoted in DSB, Report on JAST Program ’, 5. Emphasis in original. 413 Steidle, ‘The Joint Strike Fighter Program’, 17. 414 Douglas Barrie, ‘UK MoD signs JAST agreement with USA’, Flight International
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the Navy, Air Force and Marine Corps more affordably. 419 The common family of aircraft concept allowed ‘a high degree of commonality, while satisfying unique service needs’. 420 The DoD specifically separated the JSF Program from the problematic Air Force-Navy joint fighter development program, the Tactical Fighter Experimental (TFX) program, which led to the F-111 Aardvark, stating that the ‘JSF concept is nothing like the approach taken on the former F-111 program in the late 1960s’. 421 Relying on advances in the technology, design tools and manufacturing processes were to have significantly changed the manner in which aircraft were designed and built, and the JSF Program would use ‘these advances in technology to build three highly common aircraft variants on a common production line’. 422 Whereas the TFX program was characterised by inter-service rivalries undermining the project, the ‘truly joint structure of the JSF Program ensured balanced input from the three participating Services and a path to definition and achievement of affordable requirements’. 423 At this early stage, the DoD estimated that the ‘cost savings benefit of the tri-service JSF Program compared to separate Service standalone programs is significant—nearly $16 billion in development costs alone’. 424
The three US services involved in the JAST programme had fundamental but differing requirements that would need to be incorporated into the JAST aircraft. To replace the F-16 and A-10, the US Air Force required ‘a multi-role high sortie producer that is affordable in large numbers’. 425 To complement the F/A-18E/F Super Hornet, the Navy required a ‘first-day-survivable stand-alone long range strike capability’, 426 similar to that provided by the Air Force’s land-based F-117 Nighthawks. 427 To replace the F/A-18 Hornet, AV-8B Harrier with a STOVL aircraft with ‘better payload and survivability’, 428 the Marine Corps required ‘more capable short takeoff-vertical
======419 US Congress, Tactical Aircraft Programs, 128. Emphasis in original. 420 Ibid. 421 Ibid. 422 Ibid. 423 Ibid , 130. 424 Ibid. 425 DSB, Report on JAST Program , 6. 426 US Congress, Tactical Aircraft Programs , 113. 427 DSB, Report on JAST Program , 6. 428 Ibid, ES-3.
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landing aircraft for quick response to support the close battle’, 429 and light enough to operate from forward bases or amphibious ships’. 430 Even within services, the subsequent the multi-role JSF would replace multiple aircraft types which had specialised capabilities. As Rear Admiral Mike Manazir, US director of Navy Air Warfare, would later explain, ‘The F-35 is not an A or an E or an F; it is all of those. Earlier we had an F-14, an A-6 and an EA-6B and needed all three to do our job; now one airplane blends those capabilities’. 431 However, as with the USAF’s mix of F-15 air superiority fighters and F-16 multi-role fighters, the JSF was intended to be the low-cost low-end portion of a high-low-mix design for the US tactical air forces’, with the F-22 as the high-end. 432
Importantly, analyses of the capabilities of the JSF indicated that the aircraft would be much more capable, over a range of differing capabilities, than the legacy aircraft it replaces. A study conducted for the US Navy in 2001-02 assessed the JSF to be ‘approximately nine times more capable’ than the AV-8B Harrier, ‘about five times more capable’ than the F-14D Super Tomcat and F/A-18 A+/C/D Classic Hornet, ‘three times more capable’ than the Block I F/A-18 E/F Super Hornet, and ‘50 percent more capable’ than the Block II F/A-18E/F Super Hornet. 433 A capabilities study conducted by Lockheed Martin in 2010 found that compared to legacy aircraft, the F- 35 was six times more effective in air-to-air missions, eight times more effective in air- to-ground missions, and six times more effective in surveillance missions. 434
It is apparent that the F-35 was not the linear product of a clearly identified set of requirements, and was as much the product of bureaucratic/organisational politics as strategic need. The complexity of the origins of the aircraft is reflected in the
======429 DSB, Report on JAST Program , 6. 430 US Congress, Tactical Aircraft Programs, 113. 431 Robbin Laird and Ed Timperlake, ‘Expanding the Reach of the Carrier Strike Group’, Breaking Defense
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complexity of the JSF system as a whole and its development. Associated with the highly ambitious nature of the program is its high risk. The amalgamation of various technology development programs compounds the individual risks of those programs, in addition to compounding the risk of converting them into a single procurement program. The realisation of these risks are evident in the following section which examines cost and concurrency issues. The complexity and risks of the JSF program during its early years provides a basis for understanding the procurement approaches and risk assessments of partner nations, particularly Australia.
JSF Program Phases During the concept definition and design research (CDDR) phase, which began in 1994 and ended in 1996, the Program Office identified the fundamental objectives of the program for design characteristics, specified support and training concepts, and defined comprehensive plans for flight and ground demonstrations. 435 The identification of aircraft weapon system design characteristics and integrated weapon system concepts was intended to meet the requirement of the services contributing to a significant reduction in cost for joint warfare. 436 Similarly, the identification of support and training concepts was intended to ‘contribute to lower life-cycle cost, enhance supportability, promote commonality, and enhance deployability’. 437 It was during this period that the Program Office determined that a high degree of airframe and system commonality was possible and could lead to significant reductions in production and life-cycle costs. 438 In December 1994, aircraft weapons system CDDR contracts were separately awarded to four US defence aerospace corporations, Boeing, Lockheed Martin, McDonnell Douglas and Northrop Grumman, 439 but McDonnell Douglas and Northrop Grumman teamed together shortly after the contracts were awarded. The JAST office issued requests for proposals for JAST prototypes in March 1996. 440
======435 Stephen E. Myers, et al., ‘Evaluating Affordability Initiatives’, Johns Hopkins APL Technical Digest 21:3 (2000) 427. 436 Steidle, ‘The Joint Strike Fighter Program’, 17. 437 Ibid. 438 Myers, ‘Evaluating Affordability Initiatives’, 427. 439 Steidle, ‘The Joint Strike Fighter Program’, 16. 440 Bill Sweetman, Joint Strike Fighter: Boeing X-32 vs Lockheed Martin X-35 (Osecola, USA: MBI Publishing, 1999) 44.
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Shortly after this, the name of the program was changed from JAST to JSF, ‘reflecting the fact that it was backed by an operational requirement’. 441
The JSF Program’s Concept Demonstration Phase (CDP) began in November 1996 with the US DoD downselecting from three to two weapon system concepts, awarding contracts to Boeing and Lockheed Martin to demonstrate their concepts. 442 The main goal of the CDP was to ‘demonstrate, to a low level of technical risk, those critical technologies, processes and system characteristics necessary to produce an affordable family of strike aircraft that meets all participants’ needs’. 443 Boeing and Lockheed Martin were required to ‘conduct specific demonstrations that are critical to reducing risk for their concept and will feature flying concept demonstrators, concept unique ground demonstrations, and continued refinement of their preferred weapon system concept’. 444 Steidle stated that objectives of the CDP were to maintain a competitive environment with two different approaches and prototypes prior to entering the following engineering and manufacturing development (EMD) phase, provide two different STOVL approaches and two different aerodynamic configurations, as well as demonstrating the viability of the concept of a multi-service family of aircraft. 445 Another key objective was the maturation of technologies to provide ‘affordable and low-risk technology’ in the EMD phase. 446
The CDP phase ended in August 2001, and Lockheed Martin was selected by the US DoD on 26 October 2001 to develop and manufacture the JSF. 447 Lockheed Martin’s aircraft demonstrated technical advantages over its rival in some areas, and the Boeing prototype ‘was regarded as a high risk design’, 448 For example, Boeing’s aircraft
======441 Sweetman, Joint Strike Fighter, 44. 442 Defense Systems Management College, Acquisition Strategy Guide, Fourth Edition (Fort Belvoir, VA: Defense Systems Management College Press, 1999), B-6. 443 DSMC, Acquisition Strategy Guide, B-6. 444 Ibid. 445 Steidle, ‘The Joint Strike Fighter Program’, 17. 446 DSMC, Acquisition Strategy Guide, B-12. 447 Christopher Bolkcom, ‘Joint Strike Fighter (JSF) Program: Background, Status, and Issues’, Congressional Research Service (11 January 2002) 2. 448 Sweetman, Joint Strike Fighter, 44.
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‘struggled to match the performance of the lift-fan feature used by Lockheed Martin. 449 However, subjective biases by the USAF may have also been a contributing factor in the final decision. Aviation Week reported that The selection of Lockheed was hardly a surprise. General officers in the Air Force were not too shy about their distaste for Boeing’s design. One two-star famously declared the Boeing option just too ugly to be in the Air Force fleet. 450 At this stage, initial production of the JSF was expected to commence in 2005. 451 The delivery of aircraft to the service customers was also expected to begin in 2009 with the full production of aircraft expected to begin in 2010, the first Initial Operating Capability (IOC) also expected to be achieved by 2010. 452 However, these timeframes proved overly optimistic, and have been significantly delayed.
Following the CDP phase, the EMD phase commenced in October 2001, which was formally renamed the system design and develop (SDD) phase in February 2002. 453 Although the SDD phase was expected to be completed by 2008, 454 it has been extended until 2019. 455 The SDD phase focuses on the development of the F-35 variant aircraft with a test and evaluation program, and the establishment of establishment of F-35 manufacturing facilities and processes. 456 Lockheed Martin produced 22 test aircraft during the early stages of the SDD phase, of which 14 are used for flight- testing, seven used for non-airborne test activities, and one used to evaluate the F-35’s radar signature. 457 The production phase of the JSF Program began in November 2006
======449 Amy Butler, ‘When Lockheed Martin Won the JSF Award (2001)’, Aviation Week
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with the manufacture of batches of aircraft in low-rate initial production (LRIP) lots, 458 and Lockheed Martin expects full rate production to commence in 2019. 459 The production, sustainment and follow-on development (PSFD) phase establishes the acquisition, support, information access and upgrade arrangements for the complete JSF Air System over its service life, and this phase is expected to end in 2037.460
Costs and Concurrency Issues As previously discussed, the concept of low costs, and specifically affordability, was a key element of the JAST and JSF programs. Noel Longuemare, the Pentagon's principal deputy Under Secretary of Defense for Acquisition and Technology stated that the ‘way to develop JSF economically is to aggressively implement acquisition reform initiatives on the program’ which would result in ‘major reductions in costs’. 461 Longuemare argued that with a range of initiatives, including ‘specifying performance goals instead of contract specifications, a cost savings of at least 20 percent can be realized’. 462
One of key ‘best practices’ adopted by the JSF Program to contain costs was the concept of cost as an independent variable (CAIV), and the US DoD considered the JSF Program to be a ‘flagship program’ for implementing CAIV. 463 With CAIV, each aircraft variant had a capped cost, which served as a fixed independent variable in determining what requirements each service would include. 464 If a requirement resulted in the cost exceeding the cap, it would either have to be reduced, or the cost traded with another requirement to ensure the total cost remained under the cap. 465
======458 ANAO, F-35A Joint Strike Fighter Acquisition , 35. 459 Amy Butler, ‘Lockheed Looks to Push F-35 Production Rate’, Aviation Week
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In 1996, the JSF Program Office (JPO) argued ‘since DoD saves money when it buys weapons in bulk, ... a high level of commonality will keep JSF prices down’. 466 In 2001, it was planned that the JSF would share 80 percent commonality over the three variants, but by 2013 there was only 25 to 30 percent commonality among them. 467 DoD expected more than 60 percent commonality for the CTOL airframe with the other two variants in 2001, but had declined to ‘about 40 percent’ by December 2006, 468 and continued to decrease. For example, the electro-hydrostatic actuators on the power-by-wire flight controls are different sizes for each variant; they were reduced in size on the F-35B to reduce weight, and increased on the F-35C ‘to provide higher control rates for low-speed approaches’. 469 While the rate of commonality continued to drop as the aircraft was developed, Bobby Williams, Lockheed Martin’s air vehicle team lead, argued we maintain a high degree of commonality where it matters most – in the mission system. That is what is expensive to test, and what gets maintained and upgraded over the life of the aircraft, and it is nearly 100% common. 470
A fundamental cost saving measure adopted early in the JSF program was the use of sophisticated computer modelling to replace traditional design and testing. In 1998, Lockheed Martin launched its five year Virtual Product Development Initiative (VPDI) in an effort to ‘reduce substantially the cost and time required to develop and produce combat aircraft while improving the quality of the end product’. 471 The VPDI created a virtual development environment (VDE) for modelling and simulate ‘almost every aspect of a programme, from design, through fabrication and assembly, to in-service
======466 Cindy Williams, ‘Statement of Cindy Williams, Assistant Director, National Security Division, Congressional Budget Office on Modernizing Tactical Aircraft before the Subcommittee on Military Research and Development and the Subcommittee on Military Procurement Committee on National Security US House of Representatives’, Congressional Budget Office (27 June 1996) 9. 467 Sandra I. Erwin, ‘F-35 'Affordable' at $90 Million per Aircraft’, National Defense
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support’. 472 VPDI program manager Linda Poole stated that the VPDI would ‘enable the aircraft to be designed for affordability’ and allow Lockheed Martin to ‘eliminate unplanned changes, physical mockups and most testing’. 473 By the time JSF was to begin engineering and manufacturing development was in 2001, the VPDI was to have developed a suite of software tools to reduce cycle time and cost by 50 percent for development and manufacture and by 30 percent for maintenance. 474 However, by 2012, with significant delays and cost increases, the Pentagon publicly acknowledged the limitations of privileging computer design over physical testing. F-35 program manager Vice Admiral David Venlet admitted that the assumption that they ‘could design an airplane that would be near perfect the first time it flew’ was ‘foolishness’. 475 =
In order to save costs and get the aircraft into operational service sooner, a ‘fundamental idea’ in the JSF program was concurrency, whereby the production of aircraft would begin before testing and evaluation was complete. 476 It was planned that full production of 200 aircraft per year would be achieved by the time operational testing and evaluation was completed. 477 The concurrency risk is that addressing problems discovered during testing would need to be incorporated into production lines and aircraft already produced, leading to delays and addition costs. In 2009, ‘JSF leaders’ were arguing that ‘the concurrency risk was acceptable because improved modelling and simulation (M&S) would reduce the number of problems discovered in physical testing’, 478 but as previously discussed, design simulations were not adequate in identifying problems. In 2012, the GAO argued that ‘Most of the instability in the program has been and continues to be the result of highly concurrent development, testing, and production’. 479
======472 Warwick, ‘Virtual fighters’, 32. 473 Ibid. 474 Ibid. 475 Marcus Weisgerber, ‘Nominated DoD Anticipates Better Price on Next F-35 Batch’, Defense News
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The problems of concurrency became readily apparent in 2011, with the JSF Program incurring an estimated $373 million in additional costs to retrofit already-built aircraft to correct deficiencies discovered during testing. 480 Between June 2010 and December 2011, 725 requests to make engineering changes to the JSF were initiated. 481 The time between identifying the need to change the design of the aircraft and making the change in the production facilities took 18-24 months on average, and 148 of the 725 engineering changes were ready to be incorporated into production at the end of 2011. 482
Importantly, the risks of concurrency were not a complete surprise, and the GAO had been suggesting a cautious approach to production before technologies had matured since the beginning of the program, with a particular focus on concurrency issues since 2005. In May 2000, the GAO argued that the planned development schedule for the JSF should be extended to reduce technical risks, specifically that the Pentagon should postpone $20bn-worth of engineering and manufacturing development contracts, planned for March 2001, to allow several critical areas of technology to become more mature. 483 In selling their prototypes to the DoD, it is likely that the maturity of new technologies was overly optimistic, and the DoD may not have critically assessed the claims made by the competitors. Howard Rubel, a defence analyst with Goldman Sachs, said that the maturity issue shows there is a gap between reality and the JSF plan on paper. Statements made by Boeing and Lockheed Martin always concentrate on what that they want to show and hide what they're not willing to reveal. 484 An overly optimistic approach to technological risks, and perhaps an unwarranted faith in mechanisms put in place to reduce costs and risks, were also evident for decisions to
======480 GAO, Recent Decisions by DoD Add to Program Risks , 15. 481 Bill Sweetman, ‘JSF Gremlin Alert’, Aviation Week & Space Technology 173:45 (19 December 2011) 30. 482 Ibid. 483 The Engineer, ‘Battle for the skies of the future’, The Engineer
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enter subsequent program phases. A 2008 GAO report stated that the JSF Program began the SDD phase before requisite technologies were ready, started manufacturing test aircraft before designs were stable, and moved to production before flight tests have adequately demonstrated that the aircraft design meets performance and operational suitability requirements. 485
By the end of 2014, 60 percent of the development of the F-35 system had been completed, with development expected to be completed by 2017, 486 but concurrency costs had levelled out, from an estimated $1,750 million in May 2014 to an estimated $1,650 million in February 2014. 487 Nevertheless, a significant number of concurrency problems remained. For example, in December 2014 General Bogdan complained that the fasteners holding the panels of the airframe’s surface ‘kept breaking… [and] were falling into the airplane’, and while the parts have been redesigned, ‘it will take at least two years to replace all of them’. 488
While the burden of concurrency is primarily borne by the US, concurrency problems has lead to delivery delays of all participants, and some of the concurrency costs have been attributed to partner nations. In July 2014, the JPO announced its intent to ‘issue multiple contract orders … on a sole source basis to Lockheed Martin’ for ‘refit modifications to the JSF, including ‘the procurement and installation of retrofit modification kits for correction of aircraft deficiencies’. 489 The material and services for the issued contracts would be delivered by 30 September 2018. 490 One such contract, for example, was awarded in February 2015 for the ‘procurement and
======485 GAO, Recent Decisions by DoD Add to Program Risks , 17. 486 Butler and Norris, ‘Patching the F-35’s Data Fusion Gap’. 487 Office of the Under Secretary of Defense for Acquisition, Technology and Logistics, United States Department of Defense, ‘Third Report to Congress on F-35 Concurrency Costs’, Breaking Defense
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installation of vehicle management computer retrofit modification kits into designated aircraft that are critical to meeting F-35 Lightning II requirements’. 491 Of the total value of the contract of $16,492,000, international partners were obligated to contribute $8,246,000, 492 but it is not clear which partners were obligated, or the value of individual partner obligations.
In a similar way that Pentagon adopted an optimistic view of the utility of modelling and simulation in developing the F-35, the Pentagon and JSF Program Office maintained an overly optimistic view of the costing methodologies of the JSF despite alternate and more accurate costings. Speaking at a Senate Armed Services Committee hearing on the Joint Strike Fighter in March 2010, Ashton Carter, Under Secretary of Defense for Acquisition, Technology, and Logistics, admitted that ‘It's our job to tell the truth and not an optimistic story [but] That has not always been done in the course of this program.’ 493 The deliberate minimising of costs is often a feature of defence procurements, and can take the form of the ‘buying in’ syndrome. Indeed, Carter was explicitly asked by Congressional Committee Chair Carl Levin Was there a buy-in here? Is this a historic, traditional buy-in that someone bids low, gets a huge contract, and then we pay the price down the line? Is that what's going on here? 494 While Carter would not explicitly confirm that the JSF Program was a case of buying in, he did note ‘It's a pattern that would match’. 495 Just as the GAO had expressed critical assessments of concurrency in the JSF since the early days of the program, in opposition to the Pentagon and JSF Program Office, there is a long history of assessments by the GAO and other organisations that offer a less optimistic view of costs with the JSF Program.
During the 1990s the US grappled with the conflicting problems of the need to modernise its fleets of tactical aircraft, the increasing costs on technologically ======491 FBO, ‘Retrofit Modification Kits, Solicitation Number: N00019-14-G-0020-5500-02’. 492 United States Department of Defense, ‘Contacts CR-024-15’, United States Department of Defense
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advanced aircraft, and reduced defence budgets following the end of the Cold War. A characteristic of this period of political battles for budgets and procurements was the recurring differences between US DoD cost estimates, and the estimates of the Congressional Budget Office (CBO) and the General Accountability Office (GAO). The differences in cost estimates were played out over a number of years in Congressional hearings where committee members assessed the affordability of the Pentagon’s tactical aircraft modernisation programs.
Throughout the 1990s, the CBO stated that the DoD plans for aircraft modernisation were based on ‘optimistic assumptions about trends in costs’, including underestimating the costs of the JSF, which ‘may not be affordable and will probably need to be scaled back’. 496 In 1996, the JSF Program Office provided information to aerospace companies competing to produce the JSF, advising that the flyaway costs the US DoD would be willing to pay was $28 million for the Air Force Version, up to $35 million for the Navy version, and $38 million for the Marine Corps version, in 1994 dollars. 497 However, during a pubic panel discussion, Rear Admiral Craig Steidle, who replaced Mueller as the JSF programme manager claimed the aircraft would cost less, specifically that ‘the Air Force version of JSF would cost about $27 million, the Navy version would cost about $32 million and the Marine/Royal Navy version would cost about $30 million’. 498 However, the CBO stated that the ‘program office's goals for costs appear low given the performance goals’. 499 According to the CBO, the DoD’s cost goals assume that the department will be able to break away from historical relationships between cost and capability and aircraft weight [and] that it will get a number of improvements in performance, including stealth, with no cost penalty. 500
Although the DoD and the JSF Program Office stated that efficiencies in procurement process would keep costs low, the CBO stated ‘history offers little hope that such an
======496 Bolkcom, ‘Tactical Aircraft Modernization’, 6. 497 Williams, ‘Modernizing Tactical Aircraft’, 10. 498 Vago Muradian, ‘JSF Officials to Visit Belgium to Broaden European Participation’, Defense Daily 191:48 (6 June 1996) accessed via Factiva 16 July 2013. 499 Williams, ‘Modernizing Tactical Aircraft’, 30. 500 Muradian, ‘JSF Officials to Visit Belgium to Broaden European Participation’.
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endeavor might succeed’. 501 The CBO’s ‘more realistic’ estimate was that the procurement costs for the JSF would be ‘about 35 percent higher than current estimates’ at $197 billion, 502 or $219 billion including total procurement and development funding. 503 CBO estimated that Air Force version may cost about $63 million each, the Navy’s version $81 million, and the Marine Corps’ JSFs may cost about $68 million. 504
In June 2000, Michael O’Hanlon claimed ‘Most of us have been tricked into describing that plane as a $29 million a copy aircraft, making it seem competitive even with existing F-16s’, but that ‘Nothing could be further from the truth’. 505 According to O’Hanlon, the ‘$29 million figure appears to be expressed in 1994 dollars’ and ‘represent[s] flyaway costs rather than unit procurement costs’, 506 which is an important distinction. For O’Hanlon, Correcting for these two distortions in how the Pentagon describes the price of the plane, the unit procurement price is better estimated at $43 million for the Air Force version of the JSF—and at slightly more than $50 million for Marine Corps and Navy variants. 507 However, O’Hanlon argued that even the corrected Pentagon were low as they ‘ignore likely cost growth’, and cited the CBO figures as more likely costs. 508 By December 2006, the procurement cost of the JSF had increased, in base-lined 2002 dollars values, 10 percent from the previous year, and 13 percent since 2004. 509 Part of the cost variance was ‘due to optimistic assumptions at the beginning of the program’, such as the assumption that only one design iteration would need to be undertaken, the GAO argued, ‘whereas in reality it takes numerous design iterations before the final designs are determined’. 510 ======501 Muradian, ‘JSF Officials to Visit Belgium to Broaden European Participation’. 502 Ibid. 503 Williams, ‘Modernizing Tactical Aircraft’, 11. 504 Ibid. 505 Michael E. O'Hanlon, ‘Rethinking the Joint Strike Fighter’, The Brookings Institution
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In 2008, the GAO was highly critical of the development cost calculating mechanisms of the JSF Program Office, and critical of the DoD’s oversight in determining costs and cost increases, arguing that ‘the current JSF cost and schedule reported to Congress are not reliable for decision making’, and that the ‘acquisition cost estimate for the JSF program is not reliable because it is not sufficiently comprehensive, accurate, documented, or credible’. 511 Assessing the cost-estimating methodologies used by the JSF Program Office against best practices, the GAO determined that certain key costs were excluded, assumptions used were overly optimistic, documentation was inadequate, and no analysis had been done to state the confidence and certainty the program office had in its cost estimate. 512 The GAO predicted that the program costs for the JSF would increase and the development schedule would slip further, and stated a ‘major program restructure seems inevitable’. 513 The JPO had ‘not conducted a fully documented independent cost estimate since system development start in 2001’, and the GAO was critical of the DoD for not requiring one until the decision on full rate production planned for 2013, particularly given the changes in costs, schedule and procurement quantities. 514 Additionally, instead of using a range of possible values developed through an uncertainty analysis, the JPO used a single point cost estimate, which the ‘lead cost estimator for the program office acknowledged … is virtually certain to be wrong’. 515
As well as the GAO, other defence procurement assessment organisations found fault with the JSF Program Office’s management of the program, and considered ‘Lockheed Martin’s estimate ... too optimistic and that the program office will most likely require significantly more funding to complete the development program’. 516 The US DOD’s Cost Analysis Improvement Group (CAIG), the principal advisory body on matters concerning an acquisition program’s life-cycle cost, was similarly critical of the JSF Program Office’s assessment and monitoring of cost increases, and calculated escalating costs. The CAIG reported that ======511 GAO, Recent Decisions by DoD Add to Program Risks , 20. 512 Ibid. 513 Ibid, 18. 514 Ibid, 24. 515 Ibid, 47. 516 Ibid, 45.
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the assumptions the JSF program office used for weight growth, staffing head counts, commonality savings for similar parts, and outsourced labor rate savings were overly optimistic and not supported by historical data. 517 However, historical data would be of limited utility in calculating costs given the complexity of the JSF Program. As the GAO argued, the complexity of the program and its various objectives, including three variants in a joint program with international participation, three different engines under development, and an unprecedented volume and complexity of software, ‘may not merit assumptions that are even as optimistic as the historical data for those programs’. 518
According to the GAO, CAIG’s cost and schedule estimates ‘were prepared using different and more realistic assumptions and schedule projections than the program office estimate’. 519 For example, in its calculations and reporting, the JSF Program Office ‘had used a 3 percent factor for weight growth whereas the CAIG used a 6 percent factor more in line with historical data from other programs’, although given the complexity of the JSF, historical precedents may have still have been optimistic. 520 In addition, CAIG ‘predict[ed] significantly higher costs for JSF for the military services to purchase the aircraft. 521 Similarly, Naval Air Systems Command (NAVAIR), responsible for full life-cycle development and support for US Navy and Marine aircraft, ‘derived much higher cost estimates and a longer development period based on historical cost performance and removing what it considered to be artificial and unachievable schedule constraints’. 522
One of the significant contributing factors to the inaccuracy of the JSF Program Office’s cost estimates was its reliance on deficient Lockheed Martin earned value management (EVM) data, 523 which was used to monitor and quantify project performance. The Defense Contract Management Agency (DCMA), which reviews
======517 GAO, Recent Decisions by DoD Add to Program Risks , 21. 518 Ibid, 21-22. 519 Ibid, 23. 520 Ibid, 21. 521 Ibid, 46. 522 Ibid, 23. 523 Ibid, 22.
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contracts and industrial performance for DoD, 524 stated that the data used by the JSF Program Office was ‘deficient to the point where the government is not obtaining useful program performance data to manage risks’. 525 DCMA’s November 2007 report stated that their review found that the utility of the EVM system has declined to a level where it does not serve its intended purpose and the government is not obtaining useful program performance data to anticipate and mitigate program risks ... These weaknesses adversely impact the validity of the data used in internal and external decision-making processes. 526 Similar to the GAO, NAVAIR and CAIG, the DCMA ‘projected higher development costs for the aircraft contract based on adjusted cost and schedule performance to date’. 527 However, the GAO found that, despite GAO, NAVAIR, the CAIG and the DCMA predictions of ‘significantly higher costs to complete the JSF contract and the lack of realism in the contractor’s own estimate’, the JSF Program Office ‘continue[ed] to use the contractor’s estimate as its own’. 528
With Lockheed Martin’s ‘new paradigm for fighter aircraft support’, JSF sustainment was advertised as ‘a total life-cycle system’ resulting in greater reliability, affordability and enhanced readiness. 529 During the early CDP phase in 1996, Under Secretary of Defense for Acquisition and Technology Paul Kaminski stated that ‘Back end sustainment costs are … receiving up front attention in this process’. 530 However, 18 years later, General Bogdan was to state that the ‘influence’ of those looking to minimise maintenance and sustainment costs ‘is always far less than the guys who are
======524 GAO, Recent Decisions by DoD Add to Program Risks , 40. 525 Ibid, 22. 526 Defense Contract Management Agency, ‘Joint Strike Fighter – Lightning II Monthly Assessment Report’, United States Department of Defense
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worried about the performance of the aircraft’. 531 The designers, according to Bogdan, focussed more on ‘how fast and stealthy the plane would be, and less on how complicated and expensive it could turn out to be for maintainers’. 532 Instead of being cheaper to maintain than legacy aircraft, as initially claimed, the JSF has proved to be more expensive, leading to significant sustainment costs for operators such as Australia. By 2008, as the US DoD knowledge grew as the program progressed, it ‘doubled its projection of JSF life-cycle operating and support costs’ compared to the estimates of the previous year, and its expected cost per flight hour exceeded that of the F-16 legacy fighter it is intended to replace’.533 GAO stated that the previous estimated life-cycle costs ‘were early estimates based on very little data, whereas the new estimate is of higher fidelity, informed by more information as JSF development progresses and more knowledge is obtained’. 534
In May 2013, the USAF confirmed the estimated operating cost of the F-35A at ‘about $32,000 per flying hour’, although the number ‘may continue to adjust itself slightly’ once operational parameters and requirements are determined. 535 For other USAF aircraft, this compares with $22,514 per flying hour for the F-16C fighter, $17,716 for the A-10C attack aircraft, $41,921 for the F-15C and $68,362 for F-22A Raptor. 536 The JPO undertook efforts to address concerns of life-cycle affordability, but officials ‘noted that there are substantive differences between legacy and F-35 operating and funding assumptions which complicate direct cost comparisons’. 537
Conclusion The F-35 technical and material characteristics of the JSF system have a range of consequences for Australia that are not present in traditional procurements. In
======531 Cameron, ‘Pentagon Spreads Out F-35 Production’. 532 Ibid. 533 GAO, Recent Decisions by DoD Add to Program Risks, 4. 534 Ibid, 26. 535 Dave Majumdar, ‘USAF estimates F-35 will cost $32,000 per hour to operate’, Flight International
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particular, all JSF procuring nations will use the single Autonomic Logistics Information System for the global sustainment of their aircraft. Australia is locked into relying on the ALIS for the complete life cycle of the JSF, estimated to be around 40 years. In effect, Australia’s procurement of the JSF inherently includes a global but US-led logistics and sustainment system. What this exactly entails is not clear given the prognostic and health management system is not yet functional, but is likely to have significant consequences with regard to sovereign capability, dependency and vulnerability. While issues of sovereign capability will be examined in subsequent chapters, the issues examined will include the ability to use Australian industry to support Australian JSFs, the political effect of creating a federated coalition weapons system under US control, and operational sovereignty.
As demonstrated in the next chapter, the JSF partner nations adopted a cautious approach to the JSF program, unlike Australia, which can be considered prudent given the high risks of the program, especially in the early years. With cost as an independent variable a key feature of the program, it was not clear in the early stages what capabilities would be included and excluded. Chapter 8 will examine, to the extent of available information, which capabilities Australia considered critical in the design phase of the JSF program, and political dynamics of pushing for desired capabilities.
Given Australia’s role and staff positions in the JPO, the analysis on varying cost estimates raises questions regarding Australia’s knowledge and possible complicity in adopting a overly optimistic attitude and not always being completely truthful. With regard to Australia’s procurement, Chapter 7 will examine the extent to which Australia relied on the overly optimistic assessments of the Lockheed Martin and the JSF Program Office, or sought and used the more cautious and realistic assessments of other US military and non-military organisations. This assessment will examine how the different bureaucratic-organisational actors in Australia interact with the different bureaucratic-organisational actors in the US, and assess if there are problems with organisational links. In essence, the question as to whether the Australian military and civilian defence agencies were wilfully ignorant of the deficiencies in the US management of the JSF Program, as well wilfully ignorant of cost issues and program risks.
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CHAPTER 4: INTERNATIONAL POLITICS OF THE JOINT STRIKE FIGHTER
In this chapter, the proposed analytical framework is applied in examining the wide range of international actors that play a role in shaping procurements of the JSF. As was evident from the literature review chapter, traditional assessments have been almost exclusively focussed on domestic Australian determinants, with limited analytical depth on factors such as the US alliance and interoperability. However, the collaborative international nature of the JSF endeavour, particularly with regard to governance and production, requires a more detailed examination of the international politics of the program. As well as a range of US actors and agencies, the program involves industrial contractors and the governments and agencies of partner nations, all with varying interests and preferences. As Craig Penrice argues, the three factors considered when nations procure fighters are ‘performance, price and politics’, but ‘these days … it is politics that rules’. 538
Coproduction has been a feature of US weapons development for many decades, but the JSF Program represents a new approach of co-development in which the product is developed with allied nations in shared governance arrangements. Partner nations are provided a voice in JSF executive decision making bodies, and have representatives embedded in the JSF Program Office (JPO) which manages the development, production and sustainment of the JSF system. This chapter examines the governance arrangements of the JSF Program, including the major actors, decision-making bodies, and agreements between participants. In adapting Ball’s concept of formal and informal politics, the governance arrangements can be considered the formal politics of policy and decision making, but this chapter also examines the informal politics of hidden political activities which seek to influence decisions and differ from official political positions or policies. This chapter examines an example of informal politics in which the US actively sought to shape Norway’s 2008 selection of the JSF.
In examining US policies on the coproduction and export of the JSF, it is evident that it is more than the simple allocation of production to another nation, but serves the ======538 Jorn Madslien, ‘Eurofighter Typhoon squares up to F-35 challenge’, British Broadcasting Corporation
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particular interests of the US and its armed services and defence manufacturers. With reduced defence budgets following the end of the Cold War, US armed services and defence manufacturers rely on exports to ensure they gain capabilities and maintain profits. While they have competing interests domestically, the interests of the armed services and defence manufacturers can converge on the issue of exporting weapon systems.
As Adam Lockyer notes, ‘the F-35 is the first Australian defence purchase with the explicitly stated intention of improving interoperability with the US’. 539 Previous analyses offer a limited examination of interoperability as a factor in procurements, often limited to simply stating the interoperability with the US is a important element. However, the broader analytical framework of this thesis provides a deeper analysis of the interoperability as a determinant in JSF procurements in the context of US JSF policy. Although Lockyer argues that Australia’s procurement of the JSF promotes ‘operational interoperability’, but that Australia should be focussing on ‘politico- strategic interoperability’, 540 this thesis argues that a detailed examination of the international political aspects of the JSF Program demonstrate, that politico-strategic interoperability, i.e. compatible foreign policies, especially geo-politically and geo- strategically, is an inherent element built into the program.
In the late 1990s, as the JAST Program was being transformed into the JSF Program, the US began actively seeking allied nations to join in the co-development of the program. According to US DoD and the JPO, the JSF Program has expanded foreign relations politically as well as militarily, as well as decreased JSF program costs from partner contributions, … increased access to the best technologies of foreign partners, and …improved mission capabilities through interoperability with allied systems. 541
======539 Adam Lockyer, ‘The logic of interoperability: Australia’s acquisition of the F-35 Joint Strike Fighter’, International Journal 68:1 (Winter 2012-13) 72. 540 Ibid. 541 United States Government Accountability Office, Joint Strike Fighter: Management of the Technology Transfer Process (Washington DC: Government Accountability Office, 2006) 5.
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JSF briefings, which were ‘formal sales pitches … to bolster international cooperation’,542 were provided to Belgium, Germany, France, Spain, Italy, Norway, Israel, Denmark, Sweden, Greece, the Netherlands, Canada and Australia in 1995 and 1996.543,544
The complex relationships between US actors, industrial contractors and international partners can be seen in Figure 1. The structure of the international JSF Program was described by the US General Accounting Office (GAO) as one ‘based on a complex set of relationships involving both government and industry from the United States and eight other countries’, with the international participation ‘add[ing] complexity to an already challenging acquisition process’.545 Frank Kendall, US Undersecretary of Defense for Acquisition, Technology and Logistics, described the combined efforts
Figure 1: JSF Program Relationships546
======542 Vago Muradian, ‘Canada Considers Joining JSF Effort as an Observer’, Defense Daily 192:57 (19 September 1996) accessed via Factiva 23 August 2013. 543 Aerospace Daily, ‘International JSF’, Aerospace Daily 176:15 (23 October 1995) accessed via Factiva 23 August 2013. 544 Muradian, ‘Canada Considers Joining JSF Effort as an Observer’. 545 United States Government Accountability Office, Joint Strike Fighter: Cooperative Program Needs Greater Oversight to Ensure Goals Are Met (Washington DC: Government Accountability Office, 2003) 1. 546 Ibid, 7.
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required ‘to accomplish something as significant as the F-35’: In this case it takes a community of nations, it takes a community of companies, it takes a community of militaries and departments within the US and around the world, and all of our partners. It takes a community of industry to come together.547
As well as continuing coproduction, the JSF has introduced co-development as an inherent feature of Western weapons production. In the early 2000s, the JSF Program was considered a ‘new model for cooperative development and production between DOD and US allies’.548 James R. Holmes argues that In a sense ... the F-35 program is an alliance among dissimilar industries, governments, and armed forces. Alliance politics, national strategic cultures, and bureaucratic culture help explain the program’s past while suggesting what its future may hold.549 Furthermore, Holmes argues that ‘the Lightning II consortium is an end in itself’, as it establishes US-lead international cooperative arrangement in which allies work towards a common goal, and establishes a key foundation for expanding alliance relationships.550 Holmes suggests that, as the leader in the JSF alliance, the US does not ‘ride roughshod over junior partners’, but rather engages in compromise with partners.551
Co-production Co-production, ‘the foreign manufacture of US defense equipment’,552 emerged as ‘a tool of US foreign policy in the 1950s’, as an ‘effective mechanism to help rebuild the
======547 Cheryl Pellerin, ‘Kendall: F-35 Rollout Marks US-Australia Partnership Milestone’, US Department of Defense
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defense industries of the European NATO countries, thus enhancing their defense preparedness and self-sufficiency’.553 The emphasis of the policy objectives of coproduction changed of the following decades, from enhancing allied military capabilities (1960s) to promoting security assistance sales (early 1970s and 1980s) to fostering standardization and interoperability (late 1970s) to reducing alliance- wide duplicative research and development (R&D) costs (1980s).554 Although empirical data demonstrated the issue was minimal, the US Congress began to express some concern ‘about possible adverse impacts of coproduction on the US defense industrial base, viewing coproduction as a form of counter-trade or ‘offset’’, taking the view that coproduction had ‘become a marketing tool for arms sales rather than a form of armaments cooperation’.555 Nonetheless, in March 1997, the Secretary of Defense instructed the DoD to ‘engage allies in discussions as early as possible to determine the parameters of potential collaboration to meet coalition needs and ensure interoperability between allied systems’.556 In the mid-2000s, the US DoD stated that the core objectives of armaments cooperation are to increase military effectiveness through standardization and interoperability and to reduce weapons acquisition costs by avoiding duplication of development efforts with US allies.557 Co-production ‘has become a popular offset requested by foreign recipients’, and despite the costs and risks for the US politicly and strategically, has been ‘increasingly accommodated by the armed services as a necessary evil for the US forces to afford their own force modernization’.558
======Leavenworth, United States of America
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The end of the Cold War in the early 1990s saw a decline in defense procurements and ‘the increasing globalization of defense technology’, which has ‘altered the traditional frame of reference that has guided US policy in the past’.559 In this environment of reducing defence budgets, the ‘tight market for defense firms complicates traditional relationships between the US government and the foreign buyer’.560 In the post-Cold War acquisition environment, domestic demand has often not been adequate to meet the production costs for US defence companies, and US modernisation has become more dependent on international exports. It has become common for defense producers to secure the help of the US government (i.e., armed services) to assist in efforts to acquire scare foreign arms orders [and] a loss to a foreign competitor may mean that the US firm will choose not to produce the defense article at all, making the article unavailable to the [US] armed services.561 As Isaiah Wilson notes, Firms need the US government, and more specifically, the armed services pushing on their side to seal arms deals. Such negotiations often place the US government in conflict with the foreign country on matters of price, cost, and access to proprietary information.562
An example the changes to global defence procurement environment can be demonstrated with a brief examination of the US Army acquisition of the Raytheon Lockheed Martin FGM-148 Javelin anti-tank missile. The Javelin is a man-portable guided missile and entered service in the US Army in the mid-1990s.563 When the US Army requested funding and procurement authorisation from the House Committee on International Affairs and the Senate Armed Services Committees, it was only allocated resources for approximately 13,000 Javelin systems, which was insufficient to meet force structure needs.564 In addition, a 13,000-missile production run ‘was insufficient
======559 Nauta, ‘Armaments Coproduction at a Crossroads’, iii. 560 Wilson, ‘Providing for the Common Defense’, 19. 561 Ibid, 18. 562 Ibid, 19. 563 Ibid, 55. 564 Ibid.
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for Raytheon-Lockheed Martin to accept a long-term production contract for the Army at an acceptable price’.565
The solution to both of these problems was foreign sales as a larger production would decrease individual unit costs, allowing the US Army to purchase more systems with the same budget, and the Foreign Military Sales (FMS) administrative fee would defray some of the overall program costs.566 An additional incentive was established, whereby the US Army would receive one Javelin system free of charge for every 16 systems sold internationally.567 Wilson argues that the ‘US Army’s role as ‘pointman’ in the hunt for foreign buyers was significant in garnering arrangements with the Netherlands, and later Australia, Finland, and New Zealand’.568 In December 2002, Australian Defence Minister Robert Hill announced the Javelin missile system was ‘selected as the Australian Army’s anti-armour and bunker-busting weapons of choice’ at a total cost of around $180m.569
Interoperability and Alliances The US was able to forge a wide international coalition during the 1990/91 Gulf War politically, but operationally the allied air forces were only able to fulfil a small number of roles due to shortfalls in capabilities, interoperability and training.570 As all allied aircraft lacked stealth, none could perform deep strike missions, and none could use precision-guided munitions, conduct suppression of enemy air defenses missions, and ‘only a few could perform adequate offensive counter air missions’.571 Operation Allied Force, the NATO air war over Kosovo in 1999, further highlighted ‘the growing
======565 Wilson, ‘Providing for the Common Defense’, 55 566 Ibid. 567 Ibid, 74. 568 Ibid. 569 Department of Defence, Australia, Media Release, ‘Javelin selected as new shoulder fired weapon for Australian Army’, Department of Defence
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gap between the military capabilities of the United States and Europe’.572 Due in large part to the limitations in electronic capabilities of the NATO allies, including identification friend or foe (IFF), off-board target designation and communications, US aircraft conducted around 80% of all strike sorties.573 Germany’s General Klaus Naumann, NATO’s Military Committee Chairman, expressed ‘concern that the growing technology gap between the United States and its allies could eventually lead to their inability to fight together or even communicate in the same battlespace’.574 With the ‘increasing American expectations of their partners and allies doing more in the way of burden sharing’,575 the US has interests in the ability of its allies to field state-of-the-art weapons systems, which coincides with the interests of allies in improving their military capabilities. This can be achieved effectively and efficiently by developing weapons systems from the beginning to incorporate an expectation of exports to allied nations. Indeed, the Introduction to the 2007 JSF Production, Sustainment, and Follow-On Development (PSFD) Memorandum of Understanding (MoU) between all international partners ‘Recogniz[es] the benefits to be obtained from international cooperation regarding standardization, rationalization, and interoperability of military equipment’.576
Improving interoperability, and indeed integration, with allies and coalition partners has been one of the key strategic objectives of USAF planning since the early 2000s. One of the strategic tenets underpinning US defense policy goals in the 2001 Quadrennial Defense Review was ‘Strengthening Alliances and Partnerships’ with US defense strategy ‘premised on efforts to strengthen America's alliances and partnerships and to develop new forms of security cooperation’.577 Similarly, one element of the USAF’s Transformation Strategy is to ‘Work with other Services, Joint
======572 John E. Peters, et al., European Contributions to Operation Allied Force: Implications for Transatlantic Cooperation (Santa Monica, CA: Rand, 2001) xiv. 573 Benjamin S. Lambeth, NATO's Air War for Kosovo: A Strategic and Operational Assessment (Santa Monica, CA: Rand, 2001) 168. 574 Ibid. 575 Andrew Davies, ‘US–Australia military interoperability II’, The Strategist (Australian Strategic Policy Institute)
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Staff, other Department of Defense Agencies, and allies/coalition partners to enhance joint and coalition warfighting’.578 The US Air Force Transformation Flight Plan 2004 notes that the USAF ‘has sort opportunities to help transform our allies’ as the USAF’s transformation risks leaving behind the air forces of key allies and potential coalition partners … [which] increases the difficulty of conducting future coalition air operations, as it may undermine interoperability and integration.579 One example the Flight Plan provides of ‘Helping US allies and potential coalition partners to transform’ is Italy’s role as a JSF Level II partner, which ‘support[s] the US Air Force’s Air and Space Superiority and Global Strike transformational capabilities’.580 Similarly, one of the strategic planning objectives in the USAF’s Strategic Planning Directive for Fiscal Years 2006-2023 is to ‘Increase interoperability within the Total Air Force, with other services, with allies, and with coalition partners’.581 Noel Longuemare, the Pentagon's principal deputy Under Secretary of Defence for Acquisition and Technology, stated that international cooperation with the JSF ‘has the obvious benefit of greatly improving the interoperability’.582
Explicitly, the benefit of close interoperability for coalition operations has been a key lever in encouraging allied nations to procure the JSF. In mid-2007, with commitment of some partner nations uncertain as they examined other aircraft options, Lockheed Martin’s Vice President Tom Burbage said Most of these countries have to look at whatever [aircraft] they are going to buy from two different perspectives … Do I want to operate outside my own national boundaries as part of a bigger force and, if I do, what is the right [aircraft] for that?583
======578 United States Air Force, The US Air Force Transformation Flight Plan 2004 (Washington DC: United States Air Force, 2003) ii. Emphasis in original. 579 Ibid, 18. 580 Ibid. 581 United States Air Force, The United States Air Force Strategic Planning Directive for Fiscal Years 2006-2023 (Washington DC: United States Air Force, 2003) ii. 582 Aerospace Daily, ‘JSF program will be briefed to European F-16 countries’, Aerospace Daily 178:49 (7 June 1996) accessed via Factiva 23 August 2013. 583 Caitlin Harrington, ‘Paris Air Show: USAF braces itself for impact of potential JSF 'drop outs'’, Jane's Defence Weekly (21 June 2007) accessed via ProQuest 27 December 2013.
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Burbage and the JSF Program Executive Officer (PEO) Brigadier General Charles Davis ‘stated that if Norway and other countries want to be interoperable with other countries in future coalition operations, then the JSF would make sense’.584
Since the inception of the JSF Program, it was conceived as a partnership between allied nations. In 1996, Under Secretary of Defense for Acquisition and Technology Paul Kaminski, highlighted that the JSF was ‘more than a joint program’ between the three US services, but was an ‘allied program’.585 However, in the decades since, it has become clearer that the type of interoperability and alliance conceptualised by the US is strategic integration. Speaking at a Brookings Institution forum in January 2009, Davis, stated that There is something very unique that Joint Strike Fighter offers that other programs I have seen do not ... The F-35 program represents the first time in military procurement history that the United States has partnered with another nation to build an aircraft from the ground up ... This partnership ... brings the concept of coalition integration to a whole new level. In addition to funding and developing the F-35 together, the partners plan to use a single system to sustain it -- sharing spares and repair capabilities to reduce costs.586
While improving national capabilities has been a strong theme in statements regarding the utility of the aircraft, the JSF Program has also often been described as a tool or catalyst for strengthening the strategic relationship between the US and partner nations. Lockheed Martin stated that Italy’s role in the program was ‘reinforcing strong security ties with the United States’.587 Turkish military and diplomatic sources were reported to have said that the US acceptance of Turkey into the JSF Program in 1999- 2000 ‘for the first time showed the real-life reflection of the Turkish-US strategic ======584 Harrington, ‘USAF braces itself for impact of potential JSF 'drop outs'’. 585 United States Department of Defense, Transcript, ‘DoD News Briefing’, United States Department of Defense
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partnership initiated by Washington during a NATO summit’ in April 1999.588 One senior Turkish diplomatic source was reported to have ‘stressed’ that ‘Turkey's involvement in the development of the JSF has turned the rhetoric of the Turkish-US strategic partnership to a concrete level’.589
Similarly for Australia, high-level officials have repeatedly stated that Australia’s participation in the JSF Program and procurement of the aircraft has strengthened the bilateral strategic relationship. In meetings with Hill and representatives from Lockheed Martin and the JPO, US Ambassador to Australia Tom Schieffer ‘highlighted the history of cooperative security between the United States and Australia over the last Century’, and ‘emphasized that the relationship has entered a new era of partnership, with the JSF program cementing that historic bond and enhancing its effectiveness’.590 During the factory rollout ceremony for Australia’s first tranche of two F-35As, Kendall stated that for the US and Australia, the JSF Program represents ‘an integral component of our ongoing joint commitment to stability and peace in the Asia-Pacific’.591 The USAF declared that ‘The Australian partnership with the US has grown stronger with the delivery of the F-35s’.592
JSF Program Governance At a fundamental level, governance of the JSF Program is shaped by US law and Congressional approval, firmly rooting the program in domestic US politics. The US DoD is authorised to enter into cooperative programs with allies under the Arms Export Control Act (AECA), and the DoD’s Arms Transfer Policy Review Group ‘approved the JSF international plan’, and established guidelines for the JSF for negotiations ‘based on the AECA requirement that participants contribute an equitable ======588 Lale Sariibrahimoglu, ‘Turkish involvement in JSF reflects first concrete step in Turkish-US strategic partnership’, Hürriyet Daily News
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share of the costs and receive an equitable share of the results of a project’.593 Activities conducted in the program, including those of partner nations, are subject to US National Disclosure Policy, and the authorisation process for the JSF ‘involves three committees, five major processes, and 23 agencies, as well as numerous laws, executive orders, policies and regulations’.594 The sharing of US technology is an export matter, and the formal export control process can ‘involve the Department of State, DoD, Department of Energy, US Military Joint Staff, the military services, National Security Council and the National Economic Council’.595 An example of US politics overriding international obligations is the November 2014 delay in Congress passing a Defense Spending Bill, which included funding for new JSF work. The delay, according to General Bogdan, resulted in the JPO, ‘put[ing] on ice new work on many of the unique weapons that our partners want’.596
The main executive body overseeing the JSF Program are the multi-national executive bodies established by the SDD and PSFD MoUs. The SDD MoU established the JSF Executive Committee (EC), which was composed of one US representative who was the JSF Program Director, and one representative from each of the partner nations.597 The EC met every 6 months, and each partner took turns in hosting EC meetings in their countries, with the host representative chairing the committee for that meeting.598 The EC provided ‘executive level oversight’ for the JSF Program, and its responsibilities included ‘reviewing progress toward program objectives, ensuring compliance with MoU financial provisions, and resolving program-related issues identified by the JSF international director’.599 Decisions of the EC on the matters
======593 GAO, Cooperative Program Needs Greater Oversight, 4. 594 Wilkerson, ‘The JSF as a Model Defense Acquisition Program’, 58. 595 Ibid. 596 John Bennett and Aaron Mehta, ‘Work on 'Unique Weapons' for F-35 Partners, EW Tools on Hold Until Congress Acts’, Defense News
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specified in the Engineering and Manufacturing Development (EMD) MoU were to be made unanimously.600 The last EC meeting was held in Norway in May 2006.601
The 2007 JSF PSFD MoU specified the establishment the JSF Executive Steering Board (JESB) to ‘exercise executive level guidance and oversight for the Project’ and to ‘provide a forum for discussions and consultations’.602 Effectively, the JESB replaced the EC as the PSFD MoU superseded the SDD MoU. According to the Norwegian MoD, the JESB, like the previous EC, ‘represents the highest decision making body within the F-35 Program’, and its role is to serve as a board of directors for the program that follows up on its progress and determines its future development. The PEO … as well as various subgroups and advisory boards within the program prepare and propose several reports and proposals for presentation and deliberation at the JESB. Based on the decisions and input from the JESB, the PEO and the JPO manage the daily operations of the program, as well as the development and production of the F-35 on behalf of the partner nations.603 The US maintains permanent chairpersonship of the JESB, alternating between the Service Acquisition Executives of the Departments of the Air Force and the Navy, and the JSF PEO serves as the JESB's Executive Secretary.604 The JESB is co-chaired by an official from one of the non-US partners, and it also includes designated representatives from all partner nations.605 Decisions by the JESB are made by consensus, which includes all national representatives where matters concern all partner nations, or between the US and specific representatives where the issue is only related to some partner nations.606
======600 ‘JSF Engineering and Manufacturing Development MoU’, 14-16. 601 Lockheed Martin, ‘F-35 International Integration: Q&A with Tom Burbage’, F-35
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The JESB met for the first time April 2007, where it ‘approved the final software configuration’ for the JSF,607 and meets semi-annually, although additional meeting may be held if needed.608 Under JESB oversight, the PEO is responsible for the management of the Autonomic Logistics Global Sustainment (ALGS), as well as ‘coordination among production, sustainment and follow-on development activities’.609 The ALGS is the ‘worldwide cooperative sustainment system for the JSF Air System consisting of a predominantly shared common logistics enterprise’,610 which is essentially a single US-led system responsible for the complete range of sustainment activities for the global JSF fleet.
Australia’s representative on the JESB is the person holding the position of Director General New Air Combat Capability, which has been a senior member of the RAAF or Defence Materiel Organisation (DMO) chief.611 As discussed in Chapter 2, a major tension in Australian defence procurement, and a major factor in procurement reforms, has been balancing the competing interests of civilian and military organisations. While the differing interests of US civilian and military organisations compete in various political arenas, such as the disagreements between the GAO and JPO discussed in Chapter 3, having a RAAF officer represent Australia in the JESB may limit the extent to which civilian or non-air force interests may influence Australia’s input into JSF executive decision making. Recognising the inherent biases in military and civilian defence policy positions, the direct USAF to RAAF link in the JESB may circumvent the inter-service and military-civilian consensuses of traditional Australian based procurement decision-making.
The JPO is responsible for managing the wide range of activities in developing, manufacturing and sustaining the JSF system, with the specific program management function of ‘balancing the requirements for JSF performance against its established
======607 Craig Hoyle, ‘JSF recovers from in-flight power loss’, Flight International
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cost and schedule targets’.612 The JPO is responsible for ‘ensuring that program objectives are met for all participants’,613 including US and partner nations, and has been ‘tasked with integrating partner government and industry participants into the program’.614 As can be seen in Figure 2, the JPO consists of a number of sub- groups, working groups and advisory bodies with different responsibilities. The chief executive of the JPO, the PEO, has been a senior m military position, rotating between the US Air Force, Navy and Marines.615
Figure 2: JSF Program Management Structure616
Lockheed Martin interacts with the with the Program Office in developing contracts for the program phases, as well as interacting with integrated product teams and work groups in developing the JSF system.617 Lockheed Martin also deals with national deputies within the JPO, and directly with the governments of partner nations on industrial participation issues.618 As the prime contractor in the JSF Program, ======612 GAO, Cooperative Program Needs Greater Oversight, 12. 613 Ibid, 3. 614 Ibid, 12. 615 Craig Witlock, ‘Defense secretary Gates fires general in charge of Joint Strike Fighter program’, The Washington Post
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Lockheed Martin is responsible for managing industrial participation, especially return-on-investment expectations, as well as providing ‘opportunities for qualified bidders to compete for JSF contracts, and visibility into the subcontracting process’.619 However, according to the GAO, if Lockheed Martin’s efforts to meet partner return- on-investment expectations conflict with program cost, schedule, and performance goals, the ‘program office will ultimately have to make decisions to balance expectations and program execution’.620
The JPO and Lockheed Martin both have ‘a great deal of responsibility for providing a level playing field for JSF competitions, including opportunities for partner industries to bid on subcontracts and visibility into the subcontracting process’.621 Both the JPO and Lockheed Martin have assisted industry in partner nations in overcoming technology issues for industrial participation by ‘adding resources to help prepare license applications [and] exploring ways to streamline the export authorization process’.622
The differences between the interests of the Pentagon and Lockheed Martin, which led to a high degree of animosity between the two, became evident as they negotiated early production lot costs, and the Pentagon attempted to impose financial liabilities on Lockheed Martin for additional concurrency costs. By 2012, the JPO and the Pentagon began to take a harder line with Lockheed Martin, but the JPO was also critical of the Pentagon. Major General Christopher Bogdan adopted more publicly critical position as JSF PEO compared to his predecessors, stating that don’t expect me to be a cheerleader for the F-35 program. That’s not my job. My job is to execute this program. If I start becoming an advocate or a zealot for this program, I lose my credibility.623 According to Forecast International aerospace analyst Raymond Jaworowski, Bogdan’s public criticism was designed to push Lockheed Martin and Pratt & Whitney
======619 GAO, Cooperative Program Needs Greater Oversight, 20. 620Ibid, 21. 621 Ibid, 3. 622 Ibid, 2. 623 Australian Aviation, ‘F-35 chief Bogdan to execute, not cheerlead’, Australian Aviation
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into changing their behaviour, and was ‘a way to put pressure on the contractors in hopes of getting increased contract performance or better prices in negotiations’.624
In 2012, Bogdan stated that the relationship between the Pentagon and Lockheed Martin was the ‘worst I've ever seen in many years of working on complex acquisition programs’, and that ‘those tensions posed a bigger threat’ to the JSF Program than the ongoing software, helmet and ALIS problems.625 Vice Admiral David Venlet, who preceded Bogdan as JSF PEO, refused to provide the funds until Lockheed agreed to a concurrency clause, in which Lockheed would have pay a ‘share the cost of potential aircraft retrofits that would be required if deficiencies were found in the aircraft’ during development over the next few years.626 At the time of the negotiations, Lockheed Martin was ‘exceeding target cost on earlier production lots by at least 15% and software delivery was lagging behind’.627 Bogdan was specifically critical of the Pentagon and Lockheed Martin for the impasse and nine month delay in contract negotiations for the fifth low rate initial production (LRIP) lot of 32 F-35 variants,628 stating ‘It should not take 10, 11 or 12 months to negotiate a contract with someone we’ve been doing business with for 11 years’.629 He said that ‘the Pentagon also needed to stop making changes to the program’ describing them as ‘destabilizing’ what was already a complex program.630 With Pentagon officials having ‘promised Congress to get tougher in negotiations’ with Lockheed Martin, part of the delay for LRIP 5 was due to the use of ‘should cost’ analysis, which involves ‘a detailed review of prior F-35 contract data, historical cost data and reasonable extrapolations of what the next aircraft cost should be’.631 The ‘should cost’ approach involves assessments of
======624 David Lerman and Brendan McGarry, ‘Pentagon Escalates Rhetoric Against Lockheed Over F-35’, Bloomberg
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cost reductions which could be made in particular areas, and ‘efficiencies that should come over time with the program, such as improved supply chain management’.632
According to Aviation Week and Space Technology, ‘Multiple current and former senior Air Force and Pentagon officials’ said that Lockheed have continued the approach used in negotiations for the F-22 Raptor with the F-35, including delaying progress for advantage.633 An official stated that Lockheed Martin would intentionally stall the Air Force procurement staff in F-22 negotiations in order to protract talks dangerously close to the end of the fiscal year, when Pentagon comptrollers would reclaim unused funding from a program. This would force service officials to quickly conclude deals that were less beneficial to the taxpayer.634
International Partner Program Participation The governance arrangements for the international partners in the JSF program was established through a framework MoU for the SDD and PSFD phases, as well as individual supplemental MoUs, between each of the partner country’s defense department or ministry and the US DoD on behalf of the US government.635 One supplemental MoU dealt with the Initial Operational Test and Evaluation of the JSF, of which Australia is a participant. The PSFD arrangements have very long-term consequences, measured in decades, for the entire life cycle of the JSF.
The MoUs ‘identify the roles, responsibilities, and expected benefits for all participants’, and were negotiated for each phase of the procurement process.636 Additionally, supporting documents provide details in specific areas, such as the financial management procedures document, the program position description document for non-US personnel in the JPO, and exchanges of letters which ‘emphasize ======632 Sarah Chacko, ‘Pentagon Tests New Way of Estimating Program Costs’, Defense News
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issues of importance to the United States and JSF partners but are not specifically mentioned or described in the MoU agreements’.637 While not an impartial actor, the US DoD acts ‘as a ‘court of appeals’ to address partner concerns, including industrial participation issues’ in the implementation of the MoUs.638
In exchange for signing on as a JSF partner via MoUs and contributing a defined capital sum towards the program, international partners receive a range of benefits. Specifically, the governments of international JSF partners expected to ‘benefit through defined influence over aircraft requirements and improved industrial relationships with US aerospace companies through access to JSF contractors and subcontracting competitions’.639 As Penrice argues, ‘when governments choose to pour money into a jet programme, they want industrial expertise and they want manufacturing jobs in return’.640 Indeed, the introduction to the 2007 JSF PSFD MoU between all international partners ‘Recogniz[es] that industrial participation will be an important parameter in the Participants' various national decision-making processes’.641 Lockheed Martin’s management of partner industrial expectations is a critical role as JSF partner nations identified ‘industrial return as vital to their participation in the program’.642 This is because, as international JSF partners told the GAO, if their expected returns for investments were not met, the JSF Program ‘could lose political support domestically’.643 In 2003 and 2004, Lockheed Martin had been ‘quietly pushing its main airframe suppliers Northrop Grumman and BAE Systems and its own divisions for nearly a year to direct small deals to unsatisfied partners’.644
Traditionally, nations acquire industrial benefits in weapons systems procurements through offset arrangements where their financial contributions are linked to defined industrial outcomes. With the JSF Program however, partnership and financial
======637GAO, Cooperative Program Needs Greater Oversight, 8. 638 Ibid. 639 Ibid, 1-2. 640 Madslien, ‘Eurofighter Typhoon squares up to F-35 challenge’. 641 ‘JSF Production, Sustainment, and Follow-on Development MoU’, 5. 642 GAO, Cooperative Program Needs Greater Oversight, 3. 643 Ibid. 644 Craig Hoyle, ‘F-35 contractors offer workshare deals’, Flight International
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contributions only provides an opportunity to bid for industrial contracts and does not guarantee a work-share, and the industries of international partners need to win contracts through international competition.645 Winning industrial contracts require nations to continue participation in the JSF program. In mid-2007, with doubts that Norway, Denmark and Turkey would continue participation in the JSF Program, Burbage stated The decision by any country to leave the JSF partnership would also affect foreign industry participation in the US-led programme … JSF work would have to be moved out of any countries that dropped out.646 However, this is not clearly the case, and Canada’s potential withdrawal from the program will test the issue.
Formal participation as a partner in SDD phase of the JSF Program allowed representative from partner nations to participate in ‘senior-level management meetings’, providing ‘opportunities for partner representatives to gain insight into and, in some cases, influence over the progress of the JSF program’.647 These meetings included the chief executive officer meetings chaired by the US Under Secretary for Acquisition, Technology, and Logistics; system acquisition executive meetings; the senior warfighters group; and the US DoD’s configuration steering board.648
One of the major benefits for partners in the JSF Program is having their personnel, who act as national representatives, ‘physically located within the program office with access to program information and contractor data’.649 As can be seen in Figure 3 (below), the personnel of partner nations assigned to the JPO, known Cooperative Project Personnel (CPP), are distributed in a wide range of functional sub-groups. For example, CPP of partner nations were ‘assigned to participate in ALGS planning and implementation efforts’.650 In the JPO, ‘national deputies’ act as representatives of their nations, and are ‘the principal interface’ between the JPO and the departments or
======645 GAO, Cooperative Program Needs Greater Oversight, 3. 646 Harrington, ‘USAF braces itself for impact of potential JSF 'drop outs’'. 647 GAO, Cooperative Program Needs Greater Oversight, 3. 648 Ibid, 8. 649 Ibid, 2. 650 Ibid, 18.
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ministries of the partner nations.651 The key responsibility of national deputies is to ensure proper execution of the MoU and ‘provide support and guidance on all country- specific program execution and integration issues’.652 As well as providing information to their respective national governments, they can act as advocates for their nation’s industries. National deputies also provide a functional role in the JPO as members of integrated product teams, which are ‘multidisciplinary teams that represent a variety of areas, including systems engineering, logistics, and command, control, communications, computers, and intelligence’.653
Figure 3: JSF PSFD MoU Organisation Chart with CPP Manning654
In the SDD phase, all Level 3 partners were all permitted one JPO staff member as a national deputy, and a participant on the command, control, communications, computers, and intelligence integrated product team.655 In the case of Norway, which contributed 10 people to the PSFD phase of the program as of 2014, eight people provide technical expertise, while the remaining two ‘represent Norway and promote ======651 GAO, Cooperative Program Needs Greater Oversight, 8. 652 Ibid, 8-9. 653 Ibid, 9. 654 ‘JSF Production, Sustainment, and Follow-on Development MoU’, 93. 655 Ibid, 32.
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Norwegian interests’.656 In January 2014, Norway’s Minister of Defence Ine Eriksen Søreide said of the Norwegian representatives in the JPO: You have an important role to play in keeping ‘a finger on the pulse’ of the programme for those of us at home in Norway, and providing insight we would not have had if we were sitting outside. This is crucial when making investments so large and so essential as a new fighter aircraft capacity.657
Under the international collaboration provisions of the SDD phase, nations could become partners in the Program at one of three participation levels, bases on the value of financial contributions.658 In 2002, when partner nations signed on the JSF’s SDD phase, the international contributions to represented almost 15% of the SDD costs.659 The UK was the only Level 1 full collaborative partner, and its $2.056 billion contribution to the SDD phase provided it with 10 personnel positions in the JPO including senior positions on integrated product teams, participation in cost versus performance trade-off and requirement setting processes. 660 This allowed British needs to be included in the JSF operational requirements document, and involvement in final source selection process for the SDD phase.661 The UK’s contribution equated to approximately 6.2 % of SDD costs, but the US had expected a 10% contribution.662 The reduced contribution was approved as the US was able to ‘negotiate concessions concerning rights for the disposal of project equipment and third-party transfer and sales’.663
======656 Ministry of Defence, Norway, Press Release, ‘The F-35 combat aircraft: Important to ‘keep up the good progress’’, Regjeringen [Government of Norway]
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As the UK was the first partner to sign, the contributions for the other partner nations were also revised. 664 Level 2 partners Italy and the Netherlands were expected to contribute approximately $1.25 billion each, or around 5% of total of total SDD costs, but actually contributed $1,028 million and $800 million respectively. 665 While Level 3 partners, Turkey, Canada, Denmark, Norway and Australia were expected to contribution between 1 and 2%, equal to $250-500 million, actual contributions ranged between $100 million and $175million, or between 0.3 and 0.5% of total SDD costs. 666 Contributions could be financial or non-financial; while Turkey’s contribution was all cash, $15 million of Denmark’s contribution ‘represented the use of an F-16 aircraft and related support equipment for future JSF flight tests’ and the use of NATO assets ‘for a JSF interoperability study’. 667 By 2007, the international JSF partners contributed $4.5bn to help defray the costs of the PSFD phase. 668 Unlike the SDD phase, the PSFD phase does not differentiate between levels of participation. 669 The negotiations for the PSFD phase included the ‘costs the partners [would] share, including the bills for running the program office, production tooling and aircraft sustainment’. 670
However, as can be seen in Table 2 (below), the contributions made by Level 3 partners for the SDD phase was not proportional to the expected procurement quantities, despite them all receiving the same benefits. With the exception of Australia, the countries that joined the JSF Program’s Concept Demonstration Phase (CDP) in 1996 also signed onto the SDD and PSFD phases in 2002 and 2007 respectively. Although it is beyond the ability of this thesis to examine the details of negotiations, the variance in contributions invites an examination of how different nations were able to negotiate different values and types of contributions.
======664 GAO, Cooperative Program Needs Greater Oversight , 10. 665 Ibid, 31. 666 Ibid, 10. 667 Ibid. 668 Ibid. 669 Christopher Bolkcom, ‘Joint Strike Fighter (JSF) Program: Background, Status, and Issues’, Congressional Research Service (12 December 2009) 12. 670 Inside the Navy, ‘JSF Program Negotiating for Production-Sustainment Agreement’, Inside the Navy 17:37 (13 September 2004) accessed via Factiva 3 December 2014.
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Table 2: JSF Partner Financial Contributions, SDD Phase as at 2003671
In 2006, Brookings Institution analyst Michael O’Hanlon questioned the cost sharing benefits for the US of multi-national defense programs such as the JSF Program, arguing that ‘such arrangements limit US decision-making flexibility and offer little in return’.672 According to O’Hanlon, conduct[ing] big defense procurement programs in conjunction with allies … [is] a huge impediment to the American strategic debate … [as] the entanglements with other countries makes it harder to change the program … we can't even debate this [program], because it's seen as undercutting NATO if we do.673 O’Hanlon argued that while the JSF program is technically a joint program between the US Air Force and Navy, and the British Royal Air Force and Royal Navy, the investment of allied nations as program partners has the effect of giving the partner nations ‘a voice in running the program, thus limiting the ability of US defense planners to run the program in a way that best suits American priorities and interests’.674 For O’Hanlon, the involvement of alliance partners in the program ‘inhibits rational debate within the United States about the merits of the program’, and limits the ability of the US to critically examine defence programs, and change them if
======671 GAO, Cooperative Program Needs Greater Oversight, 10. 672 Richard Mullen, ‘Some Question Logic of Multinational Defense Programs’, World Politics Review
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necessary. 675 O’Hanlon argues that while ‘It's so hard to cancel weapons in general’, the involvement of allies is ‘making it even harder’; The armed services tend to defend their acquisition programs, as do the companies that produce the weapons; then add the weight of foreign countries as partners, and programs become virtually unassailable. 676
However, Loren Thompson, defense analyst at the Lexington Institute, minimised the ability of partner nations to affect decision-making, arguing that Although [JSF] is in principle a multinational program, all the key decisions in the near term will be shaped by the ... US military services who plan to buy it … [and] the allies complain that their views are not taken adequately into account. 677 For Thompson, ‘the allies become a rather secondary concern’ as the Pentagon ‘is footing 90 per cent of the bill for JSF’. 678 However, as Thompson notes, the issue of technology transfer between the US and JSF partners and allies has been an ongoing issue of disagreement since the mid-2000s, and this issue is discussed in detail in Chapter 5. Thompson articulated some of the concerns within the Pentagon on the shared decision making between US services, as well as international partners: there's a great deal of dissatisfaction within the Pentagon with [having] too many players with a veto. Having multiple armed services with veto power over a program is bad enough … much less [having] a slew of others [from abroad]. 679
Industry Policies Richard Aboulafia, vice president at aerospace consultancy Teal Group, argued the JSF is ‘as much an industrial policy as a fighter’, 680 and industrial issues have been a ======675 Mullen, ‘Some Question Logic of Multinational Defense Programs’. 676 Ibid. 677 Ibid. 678 Ibid. 679 Ibid. 680 Doug Cameron, ‘Pentagon Spreads out F-35 Production’, The Wall Street Journal
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central feature of the international political dynamics of the program. As of 2014, about 30 percent of F-35 components were made outside the US by JSF partner nations, 681 with British industry building around 15 percent of every F-35 produced. 682 The eight international partners have three categories of industrial options for industrial participation in the PSFD phase. Firstly, they have an opportunity for further supply of the hardware or software that their industries have already contributed to the development program with reductions in price where appropriate to reflect the larger quantities involved in production. 683 The second option is the ‘opportunity to bid competitively as a second production source on a variety of new items’, and the third option is the ‘strategic sourcing’ of some items that match the capabilities of the partners’ industries. 684
Tensions between international partner nations and Lockheed and the Pentagon have been a frequent characteristic of the JSF Program, but conflicts of national interests can be seen as representing a conflict between different procurement models. 685 The official position of the US, and the oft-stated position of Lockheed Martin, is that industrial contracts would only be awarded on a best-value basis without the use of traditional offset arrangements. However, i n an effort to ensure continuing international support for the JSF Program, Lockheed Martin ‘resorted to an increasing use of ‘strategic best-value sourcing methodology’, which allows for ‘a certain number of contracts to be placed in partner countries where contract awards have not met national expectations’. 686
======681 Sandra I. Erwin, ‘F-35 Program Manager: More Buyers Needed to Help Lower Production Costs’, National Defense
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In 2003-04, shortly after the beginning of the SDD phase, most of the international partners began expressing dissatisfaction at the quantity and quality of work their national industries had been awarded. Denmark, the Netherlands, Norway and Turkey ‘threatened to reduce their participation in the program, or to purchase European fighters instead’. 687 In late 2003, the Netherlands Industrial Fighter Aircraft Replacement Platform (NIFARP) organisation wrote a confidential letter to Karien van Gennip, Dutch State Secretary for Economic Affairs, to express ‘concern about its prospects for JSF series production business’. 688 NIFARP chairman Kier Vis complained that ‘so far, only a small part of the JSF-related contracts awarded to the Netherlands truly offered the possibility of substantial production turnover’.689 Obstacles to Dutch industrial participation had been so great that by early 2004, Thales Nederland, the largest Dutch contractor, ‘stopped nearly all efforts to position itself for JSF business’. 690 In 2004, UK and Italian defence industry executives told Jane’s Defense Weekly that ‘they have become frustrated with what they are beginning to feel is a disingenuous request by the US government to compete for JSF work’. 691 It was reported in April 2004 that ‘Italian officials are so piqued at the current situation that Lockheed Martin JSF representatives have been barred from visiting some air force offices’. 692
While there were structural reasons underlying the limited amount of work awarded to JSF partner nations in this period, there were also domestic political factors at play. Stephen Bryen, president of the US office of Italy’s Finmeccanica defence company, stated that US companies had a competitive edge in winning JSF contracts as they were ‘less likely to have to include the cost of building new facilities, ordering new equipment or developing new technology, giving them a price advantage in bidding for work’. 693 Additionally, the industries of smaller nations ‘face disadvantages in terms of
======687 Jeremiah Gertler, ‘F-35 Joint Strike Fighter (JSF) Program’, Congressional Research Service (16 February 2012) 25. 688 Joris Janssen Lok, ‘Frustration Mounts Among JSF Partners’, Jane’s Defence Weekly (24 March 2004) accessed via ProQuest 27 December 2013. 689 Ibid. 690 Ibid. 691 Ibid. 692 Barrie and Wall, ‘Industrial expectation and competitive procurement clash’, 33. 693 Renae Merle, ‘Norway Threatens to Revoke Support for Strike Fighter’, Washington Post (16 April 2004) accessed via Factiva 11 January 2014.
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economies of scale and the ability to invest in infrastructure for JSF production’. 694 However, Vago Muradian, editor of Defense News , described a JSF environment where ‘partners have postured to garner as much work as possible on the program’. 695 As discussed previously, officials from partner nations have stated that a significant amount of domestic industrial output is needed to ensure their continued participation in the JSF Program. Aboulafia stated that in expressing dissatisfaction, lower level JSF international partners ‘were probably trying to leverage the threat of leaving the program as a way to actually secure more contracts for their industrial base’. 696
The politics of international industrialisation shares features with the concept of ‘pork- barrelling’ in the US. As Harvey M. Sapolsky and Eugene Gholz argued, ‘the politics that count the most in weapon purchases are often influential politicians' desires to support hometown jobs and local companies' profits – ‘pork,’ in the vernacular.’ 697 It has been argued that the ‘lure of employment has helped the F-35 retain support among US lawmakers and overseas customers’ despite continuous problems in the development of the aircraft. 698 In the US, defence contractors often spread work throughout the country as the creation of jobs disincentives politicians from cancelling programs. Similarly, distributing industrial work among partner nations creates incentives to remain in and actively promote the program. For the partner nations manufacturing components for the JSF, greater global procurement numbers results in a greater market and greater returns. It was for this reason that some Norwegian officials and military sources considered the Gripen to be ‘an outside contender’ for their fighter competition. 699 The limited sales of the Gripen would result in fewer industrial opportunities compared to the JSF, and that Norway was ‘insistent that it wants to be part of a large international user group to support the aircraft in service’. 700 ======694 Barrie and Wall, ‘Industrial expectation and competitive procurement clash’, 33. 695 Hudson Institute, Conference Transcript, ‘Defense Coalitions and the Global Character of the New Defense Industry’, Hudson Institute
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While industrial workshare serves a domestic political tool for governments to promote support for JSF procurement programs, and for governments to promote themselves as job creators, it is also a tool that can be used against governments in the procurement process. Lockheed Martin has explicitly used the potential for a reduced industrial workshare as a disincentive for governments who may look to reduce the numbers of F-35s they procure. Italian Defence Minister Giampaolo Di Paola announced in June 2012 that, due to budgetary pressures, Italy would cut its acquisition of F-35s by approximately 30 percent, from the 131 it planned on purchasing in 2002, to 90. 701 In July 2013, according to Debra Palmer, Lockheed Martin’s vice president and general manager for the Final Assembly and Check Out facility in Italy, ‘Alenia had been scheduled to produce 1,215 wings, but is now committed to a minimum of 835 after the reduction of Italy’s order of JSFs’. 702 The reduction in the number of wings to be produced by the Italian company is approximately 30 percent, suggesting a proportional response from Lockheed Martin. While F-35 work was expected to sustain 10,000, the Italian government revised the estimate to 6,000 jobs following the reduced procurement. 703
In the case of Australia, the promotion of the benefits of industrial participation in the JSF Program also has consequences for Australia’s ability to change its procurement plans. Andrew Davies argued that, with ‘the acquiescence of the US Government’, Lockheed Martin has used contracts to attempt to ‘tie’ partner governments to acquisition of the F-35 ... In effect, what could be an arms-length commercial relationship is instead being used to constrain the Australian Government’s decision making on an important defence capability. 704
======701 Reuters, ‘Italy cuts F-35 fighter orders by 30 percent’. 702 Tom Kingston, ‘Amid Local Opposition, Italy Begins F-35 Assembly’, Defense News
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Additionally, linking industrial work to Australia’s acquisition, Lockheed Martin has been ‘effectively adding a steep local political price to any decision to pursue an alternative, and recruiting the Australian industry lobby to the cause of the F-35’. 705
Informal Politics The international politics of the JSF often takes place beyond the formal governance arrangements of the Program, which can be categorised as informal politics. In August 2000, European industry officials, particularly Eurofighter representatives, criticised US activities in promoting the JSF to European countries. Cesare Gianni, a vice president of Eurofighter International, ‘accused the US government and US contractors of pressuring nations to withhold decisions on fighter purchases until the JSF becomes available’. 706 In Norway, Gianni claimed, ‘a contract award for several dozen aircraft was suspended … because the US government requested that Norway consider purchasing the JSF’. 707 While the Netherlands was considering whether to remain in the JSF partnership, Gianni claimed that ‘major political and industrial pressure is being applied for it to stay with JSF’. 708 To counter the pressure from the US, Gianni argued that ‘Strong European governmental support is required to generate an attractive military, industrial and political alternative’. 709
While Gianni’s claims should be treated with some scepticism because of his vested interests in Eurofighter’s success, the claims were not denied by US aircraft industry officials, but in fact confirmed. John Douglass, president of the Aerospace Industries Association in Washington DC, said there is ‘nothing sinister’ about ‘US government pressure for JSF sales’ because it's part of the way business is done in the arms market. All governments do the best that they can to support the industry from their countries, and of course, if they are selling their equipment in ======705 Davies, ‘US–Australia military interoperability’. 706 Sandra I. Erwin, ‘US 'Paper Aircraft' Spawning Trade Wars’, National Defense
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the international market and somebody buys it, it makes it cheaper for them to buy it for their own country. 710 While it is true that national governments have vested interests in the promotion their domestic defence, the political pressure that the US can apply by far exceeds that of other nations in Europe by virtue of its political, economic and military predominance. While US political pressure can be significant, but it is not overwhelming and nations have a capacity to promote their own national interests with their limited capacity.
Although lobbying and pressuring by national governments is a common feature of the international arms trade, the details of these actions are normally hidden from public view. However, in the case of the JSF, a series of diplomatic cables published by Wikileaks in 2010 provide a rare glimpse into comprehensive resources and mechanisms used by the US to shape aircraft acquisition decisions by other nations. The cables sent by US Ambassadors Bevan Whitney in Oslo and Michael Wood in Stockholm to Washington reveal the high level of political interference conducted by the US in the Norwegian fighter competition and the extent to which it is willing to manipulate its allies in security matters.
In July 2007, the US Embassy in Oslo began to express concerns over that regional politics and problems with other Lockheed Martin weapon sales was damaging the likelihood of Norway choosing the JSF. The Norwegian Labor Party, the largest member in the coalition government, were ‘in favor of furthering Nordic Cooperation and prefer[ed] to buy from Sweden’, 711 while the Progress Party, the largest opposition party, appeared ‘to prefer the Gripen out of Scandinavian solidarity’. 712 Norway’s Socialist Left Party which was a part of the coalition government, ‘regularly questioned’ the procurement of the JSF, ‘promoted the continued competition of the Gripen and Eurofighter’, 713 and was ‘strongly against purchasing aircraft from the
======710 Penney, ‘Fighting for - a foothold’. 711 Wikileaks, ‘08OSLO522_a, Proposed Norway Fighter Purchase: High-Level Advocacy Needed Now’, Wikileaks
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US’. 714 In addition to a pro-European and specifically a pro-Swede attitude favouring the Saab Gripen over the American JSF, the Embassy thought that problems with Norway’s procurement of the Raytheon-Lockheed Martin Javelin missile system and the Navantia-Lockheed Martin Nansen-class frigates could damage the US reputation as a ‘a reliable supplier of the best weapons systems’, with consequences for the JSF decision. 715 The issue for the embassy was that the two issues may have be conflated with the JSF procurement as they were all US and Lockheed Martin related procurements. While the Nansen-class frigate delay was the result of Spanish bureaucratic problems, the Embassy considered the delay may be ‘perceived as US intransigence on technology transfer’, from which ‘the prospects for JSF could certainly be jeopardized’. 716
Norway had signed a Letter of Offer and Acceptance for a $65 million procurement of the Javelin anti-tank missile, which were to be delivered in August 2006, but Norway was not willing to accept the missiles ‘due to potential manufacturing corrosion in the missile guidance section’. 717 Raytheon-Lockheed Martin and the US Army insisted the Norwegians accept an ‘extended manufacturer's warranty that the missiles will function properly or be replaced’, but Norwegian officials ‘strenuously objected to this situation’, demanding the replacement of potentially corroded components before accepting the missiles. 718 Norway argued that the offered warranty offered is ‘predicated on conclusive proof that any failure of the missile is directly attributable to the identified corrosion problem’. 719 This would ‘require a misfired missile to be transported to the US for inspection and analysis’, but this would be ‘impossible’ due to safety regulations regarding the handling of misfired weapons. 720 Additionally, the US embassy noted that the Javelin
======714 Wikileaks, ‘High-Level Advocacy Needed Now’. 715 Wikileaks, ‘Negative Impact of US Weapons System’. 716 Ibid. 717 Ibid. 718 Ibid. 719 Ibid. 720 Ibid.
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was selected by a narrow margin over several competitors and had Norway been aware of the problems they would encounter in this purchase, they most likely would have chosen a different system. 721 As the Oslo embassy considered that these issues harmed the chances of Norway procuring the JSF, it recommended that Washington seek a resolution that accounted for the broader strategic issues. 722
The likelihood of a Norwegian decision in favour of the Gripen grew the following month with Norwegian and Swedish officials expressing the desire to deepen their defence cooperation. In August 2007, Chief of Sweden's armed forces Supreme Commander Håkan Syrén and the Norwegian Chief of Defence General Sverre Diesen declared ‘the globalization of security challenges combined with the increased cost of technology made it necessary to cooperate to achieve financial and operative balance’. 723 Specifically, they concluded ‘purchasing submarines, tanks and other equipment’ would be an area for cooperation. 724 For the submission of the Swedish bid in Norway’s fighter competition, Tolgfors placed significant emphasis on Sweden- Norway bilateral defence relationship, stating That Sweden can offer the Gripen as an alternative for Norway confirms the strong connections and good relations we have between our two countries … Nordic defence cooperation is developing more and more, and is a central area of development for defence policy. If Norway chooses the Gripen it would have great significance for defence policy. 725
By July 2008, US concerns that the JSF would not be selected had increased, resulting in an escalation of political interventions, including the undermining of the Swedish alternative. On 9 July 2008, US Ambassador Wood in Stockholm recommended that the US ‘postpone a response to the Swedish request for release of AESA radar for Swedish Gripens until after Norway's selection of its next fighter jet’. 726 The Swedish ======721 Wikileaks, ‘Negative Impact of US Weapons System’. 722 Ibid. 723 The Local, ‘Sweden should deepen defence ties with Norway’, The Local
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government had requested US export licenses for Raytheon's Advanced Electronically Scanned Array (AESA) radar to be used on the Saab Gripen fighter, and Swedish officials and Saab wanted the AESA radar ‘in time to make the Gripen more competitive’. 727 The Stockholm Embassy noted competing interests, drawing attention to how ‘Sweden works closely with the US and NATO on security and makes important contributions through military deployments’, and that AESA equipped Gripens ‘would enhance NATO interoperability’. 728 Also, with 50 percent of the Gripen being US sourced technology, ‘AESA would increase US content and enhance sales prospects’, and Gripen sales would be ‘good for US industry’. 729 Nevertheless, the Embassy recommended delaying the release of the AESA radar because of the ‘potential impact … on the Norway competition’, and the Danish competition to follow. 730
In September 2008, the Oslo Embassy requested ‘High-level Washington advocacy’ to counter the adverse public opinion on the JSF during a ‘critical phase’ of Norway’s procurement process. 731 Earlier in the year, the public debate on the JSF procurement was considered to be ‘largely balanced’ because of ‘extensive efforts by the Embassy and Lockheed Martin’. 732 However, the US position was later eroded following a ‘seemingly well-orchestrated public campaign’ against the F-35's abilities and attacks on US interventionist foreign policy, which, according to the Embassy, ‘an F-35 purchase by implication supports’. 733
Ambassador Whitney stated that US ‘contacts’ in the Norwegian MoD ‘have reassured us that the MoD will recommend the F-35’. 734 However, Whitney also stated that ‘Very senior contacts, including the President of the Parliament’ believed that the
======727 Wikileaks, ‘Proposed Response to Swedish Request’. 728 Ibid. 729 Ibid. 730 Ibid. 731 Wikileaks, ‘08OSLO522_a, Proposed Norway Fighter Purchase: High-Level Advocacy Needed Now’, Wikileaks
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Norwegian government was ‘likely to choose the Gripen, based largely on political reasons’, but also that it may also defer the decision for a future government. 735 While the MoD was conducting a technical study of the options, including the ‘capabilities of the aircraft, price, and the industrial participation plan’, the recommendations of the study would not be made public. 736 The Embassy noted that the study’s recommendations could be ignored, and the decision would be made by ‘a few political leaders’ in the Norwegian Government. 737 In particular, the embassy identified Deputy Defense Minister Espen Barth Eide as the key decision maker, describing him as the ‘Power Behind the Throne’. 738 Whitney described Eide as ‘difficult to characterize’, and ‘a skilled and subtle interagency player who is largely pro-US but should not be trusted to reliably uphold US interests’. 739 Whitney stated that ‘Senior Norwegian officials, with strong pro-US instincts, have also told the Embassy in private that Barth Eide is not to be relied upon to promote US priorities’. 740 While Eide had ‘been helpful’ on a number of issues important to the US, but ‘hedged his bets’ on Norway’s fighter procurement. 741 For Whitney, ‘One key test of Barth Eide's inclinations’ with regard to promoting US priorities, would be the MoD recommendations on the replacement fighters. 742
The importance the US embassy placed on Norway choosing the JSF indicates the range of international political factors that shape procurement decisions beyond simply strategic need. The Oslo Embassy noted the importance of ‘NATO's northern flank, secured by the superior capabilities of F-35s in Norway’, as well as the importance of ‘high levels of interoperability in NATO’. 743 As Norway was poised to become the first European partner to make a choice on the aircraft, the embassy considered the
======735 Wikileaks, ‘High-Level Advocacy Needed Now’. 736 Ibid. 737 Ibid. 738 Wikileaks, ‘08OSLO406_a, Norway's Deputy Minister of Defense, Espen Barth Eide, Power In Norway's MoD and Rising Star in the Labor Party’, Wikileaks
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Norwegian decision would ‘disproportionally affect other partners' choices’, particularly the Danish and Dutch decisions. 744
For the US, the bilateral strategic relationship was of ‘primary importance’, 745 and the JSF would ‘naturally support … close US-Norwegian military ties’. 746 Whitney indicated that the Norwegian decision would impact our very strong military ties (particularly in the Norwegian Air Force which trains all its pilots in the US) … and would reduce contact between our leaders both militarily and politically. 747 Similarly, Norwegian commentators stated that ‘any choice other than the JSF would jeopardize the historic alliance between the United States and Norway’. 748 A Norwegian decision to procure the Gripen instead of the JSF would, according to the Ambassador, ‘significantly alter the forty-year close relationship between our Air Forces and weaken one of the strongest pillars of our bilateral relationship’. 749 Importantly, the close relationship between the US and Norwegian air forces was a fundamental element of the Norwegian military’s preference for the JSF. In discussing Norway’s procurement of an aircraft to replace their fleet of F-16s in 2006, Barth Eide had said If you ask our air force, you know exactly which answer you'll get: they want the JSF. Given their long history of buying US aircraft and of training and operating closely alongside the US Air Force, that is perfectly understandable. 750 However, Barth Eide created doubt as to Norway’s support for procuring the JSF, adding that the replacement fighter program was ‘of such magnitude that the decision really should not be left to the generals alone’. 751 The US Embassy had carefully crafted the US position, which ‘needed to avoid any appearance of undue pressuring’, ======744 Wikileaks, ‘Turning the Tide with Norway on JSF’. 745 Wikileaks, ‘High-Level Advocacy Needed Now’. 746 Wikileaks, ‘Turning the Tide with Norway on JSF’. 747 Wikileaks, ‘High-Level Advocacy Needed Now’. 748 AFP, ‘Saab submits Gripen offer to Norway’. 749 Wikileaks, ‘High-Level Advocacy Needed Now’. 750 Joris Janssen Lok, ‘Norway steps up pressure for JSF industrial share’, Jane’s Defence Weekly 43:9 (1 March 2006) 4. 751 Lok, ‘Norway steps up pressure for JSF industrial share’.
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and adopted the public message that ‘choosing the JSF will maximize the [bilateral] relationship’, but also adopting a ‘much more forceful’ approach in ‘private’. 752
In response the embassy’s request for an immediate, ‘dedicated’ and whole of government response to ensure Norway’s selection of the JSF, the US Deputy Secretary of Defense Gordon England, Department of State Assistant Secretary Mark Kimmitt, and United States Air Forces in Europe Commander General Brady, made visits to Oslo or held meetings with Norwegian officials. 753 The Oslo Embassy was responsible for managing a strong, coordinated USG [United States Government] message which publicly professed the unequalled capabilities of the aircraft and the value we place on the relationship, and privately pressed for the selection of the F-35. 754 The Embassy requested that ‘senior-level advocacy for the F-35 [stress] the advanced fifth generation capabilities’ of the aircraft. 755 A primary role of the broad US government effort, which included ‘Reach[ing] out to other USG agencies and experts’, 756 was to discreetly demonstrate USG focus on the issue and our commitment to the relationship, while being cautious not to over-assert our position and thereby potentially affront Norwegian sensitivities on their selection prerogatives. 757 As well as high-level advocacy, the Oslo effort involved ‘the whole country team’ of the Embassy, including the Ambassador, Deputy Chief of Mission, the Office of Defense Cooperation, the Defense Attaché Office, the Foreign Commercial Service, the Political/Economic Section, and Public Affairs offices. 758 The embassy also worked with Lockheed Martin in determining the sales approach and developing a
======752 Wikileaks, ‘08OSLO670_a, Lesson Learned from Norwegian Decision to Buy JSF’, Wikileaks
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press strategy. 759 The embassy actively discussed the benefits and capabilities of the JSF in public forums, and was ‘consistently a part of [their] informal discussions’ with the Norwegian Ministries of Foreign Affairs and Defence, and ‘influential think tanks’. 760
On 20 November 2008, the Norwegian Government announced that the JSF had been selected, and Ambassador Whitney stated ‘A concerted effort by Lockheed Martin, Embassy Oslo, EUCOM [United States European Command], and the Departments of State and Defense played a key role in this decision’. 761 Specifically, the Oslo Embassy believed that ‘strong and consistent engagement by senior defense and state officials played a key role in persistently lobbying without overplaying our hand’, with senior officials expressing America’s ‘interest in the process without appearing to bully or attempt to force a decision’. 762 Whitney noted that the ‘more balanced’ media reporting of the JSF was ‘a result of the strong USG push’. 763 In a meeting with US embassy officials following Norway’s announcement, Barth Eide stated that ‘we were now on the same side’, and said it ‘would be very helpful’ if the US government would ‘publicly stress the strength of the F-35 and the viability of the JSF program, … confirm there was no USG political pressure to buy the plane [and] note the low price of the F-35’. 764
In terms of the US-Norwegian bilateral relationship, Norway’s participation in the JSF Program continues to be seen as an important element in improving Norway’s alliance with the US. In a visit to Washington DC in January 2014, Norway’s Minister of Defence Ine Eriksen Søreide stated that ‘The United States is our most important ally’, and expressed the need not to take the security and defence relationship for granted and the desire to further develop cooperation with the US. 765 During a meet between ======759 Wikileaks, ‘Lesson Learned from Norwegian Decision to Buy JSF’. 760 Ibid. 761 Wikileaks, ‘08OSLO629_a, Norway Chooses the F-35’, Wikileaks
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Eriksen Søreide and US Secretary of Defense Chuck Hagel, both ‘agreed that the transatlantic partnership is more important than ever’, and discussed a range of cooperative efforts, including ‘pre-positioned US equipment storage in Norway and exercises and training in both countries’. 766 Eriksen Søreide stated that Norwegian representatives in the JPO ‘are at the heart of a programme that will help set the tone for Norwegian-American cooperation well into the future’. 767
While this account of US efforts to persuade Norway to choose the JSF should not be taken as a complete account as it only represents one side of the political dynamics, it does serve as a case study for demonstrating the multi-dimensional international politics of JSF procurement. It highlights a range of international factors which contributed to Norway’s decision, which would not be evident from traditional procurement analyses. While the other diplomatic cables were only distributed to Washington and European military command organisations, the ‘Lessons Learned’ cable, which was explicitly a policy guidance document, was distributed to embassies in all JSF partner nations. It should not be assumed that the US actions were replicated for other nations, but it can be assumed that US interests would be relevant to other nations, and that these external factors influence procurement decisions when realised, but also shape the international environment when only potential. An awareness of the strength of US interests and potential efforts would influence decision making without the actual political interventions taking place.
The US interest was not in allied interoperability per se, but increased interoperability derived from allies operating the same aircraft as the US, and suggests the desire for integration. It is also evident from the US cables that while the JSF procurement increases military interoperability, it is also linked to political alignment. Barth Eide’s perceived political support of US interventions and Norwegian cooperation was considered by the US Ambassador as an important factor in the Norwegian decision, and the decision, to some degree, can be considered a product of Barth Eide’s support of US international policies. As outlined earlier, the JSF was designed to address the increasingly cooperative nature of US-led international interventions and the need for ======766 Ministry of Defence, Norway, Press Release, ‘Norway seen as ‘solutions-oriented ally’, Regjeringen [Government of Norway]
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increasing interoperability. Domestically, the parties which opposed the procurement of the JSF either explicitly opposed US interventionist policy or favoured Scandinavian solidarity. As will be discussed in Chapter 8, improved interoperability with the US has been a strategic goal of Australia, and a recurrent theme in its procurement process.
The Norwegian case also demonstrates a blurring between the delineations between the interests of domestic and international actors. The ability of Norway to undertake sovereign decision making, and adopt a strong negotiating position, was undermined by US ‘contacts’ and ‘allies’ in the Norwegian government and military providing back channel information. It was also the case, once the decision was publicly announced, that Barthe Eide requested US assistance in ensuring the public information supported the decision and minimised problems, presumably to subdue opposition from the groups opposed to the decision. It is also possible, however, that the partisanship of Norwegian domestic politics in the context of the JSF was advantageous to Norway in negotiations with Lockheed Martin. As will be discussed in Chapter 6, Norway maintained a lack of commitment to the JSF before and after the 2008 selection decision, enabling it to garner economic and strategic benefits, and Norway’s domestic partisanship would have contributed to the uncertainty.
Additionally, the tensions between differing US agencies discussed in Chapter 3, including different military agencies, is completely absent from the uncritical approach taken by the US Embassy. The political dynamics of US weapons procurement is transformed as the political environment shifts from the domestic to the international. While US agencies and officials were debating risks and costs during the problematic development of the JSF, often in conflict with Lockheed Martin, the US Embassy, military and Lockheed Martin were unified in their positive view of the JSF and their marketing approach to Norway. While formally, the interests of Lockheed Martin and the Pentagon are divergent, they informally converged on the issue of selling the JSF to Norway. A reliance on information and assurances through standard military or diplomatic channels would not provide the critical assessments which could be obtained through other channels and from other agencies, such as the GAO. In Australia’s case, there is a question as to the extent to which Australia’s close
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diplomatic and military relationships and their formal channels of interaction limited access to more critical information.
While Australia’s 2002 selection of the JSF negated the need to conduct a coercive campaign as was undertaken in Norway, suggesting a lack of rigour in Australia’s selection process, but latent and realised political influences may still have been at play before and after the decision. It is evident from the Norwegian case that it can be difficult to determine the extent of US coercion given the explicit disingenuousness of the American efforts, and indeed, it is beyond the ability of this thesis to examine details of US political efforts with regard to Australia’s procurement. While the type of public messaging undertaken in Norway can be compared to Australia, it would be difficult to determine the extent to which forceful positions were taken with Australian officials in private.
Conclusion Applying the proposed analytical framework to the international aspects of the JSF Program demonstrates a range of actors in the US which engage with actors in other nations in different ways. Whereas traditional analyses have treated the international aspects simplistically in terms of the US alliance and/or interoperability, this chapter has shown that US actors and agencies have different interests and exercise influence differently in relation to allies such as Australia. Much of the international politics of the JSF is a result of the international co-development and coproduction, and the JSF Program was designed to increase the strength of political, military and industrial relationships between the US and its allies. The international politics of the JSF have significant long-term consequences, and it is essential to be able to identify and investigate them to be able to comprehensively understand Australia’s procurement.
While co-development and coproduction offer advantages for JSF partner nations, it is a US policy intended to provide the US with particular benefits. For example, the integration of allied air forces in potential collation operations with the US provides the US with leading-edge capabilities while allowing it to reap benefits from deferring its procurements.
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Table 3: Estimated JSF Procurement Quantities, as of November 2009 768 Year US UK Turkey Italy Australia Canada Norway Denmark 2022 130 4 8 10 0 0 0 0 2023 115 14 4 10 0 0 0 0 2024 105 14 0 0 0 0 0 0 2025 103 14 0 0 0 0 0 0 2026 80 14 0 0 0 0 0 0 2027 80 13 0 0 0 0 0 0 2028-34 509 0 0 0 0 0 0 0 Total 1122 73 12 20 0 0 0 0 % of total 45.93% 52.90% 12.00% 15.27%* 0% 0% 0% 0% procurement * 22.22% following Italy’s decision to reduce their order to 90 aircraft in 2012.
For the US and the UK, procurement from 2022, which is approximately half of the production run timeframe, represents around half of their total procurements, with lower relative quantities for Turkey and Italy, and no procurements for the other four partner nations, as can be seen in Table 3. The political and strategic integration created by the JSF allows the US to rely on the aircraft of allied nations to fill out its force structure for operations. Indeed, the relatively limited numbers of JSF aircraft available to the US during early production creates an incentive to use allied aircraft, particularly when their crews have training with the US or to US standards, to achieve a critical mass of aircraft which operations may require. Also, as unit costs decrease as more aircraft are produced, the US, as well as the UK, economically benefit from half their total fleet in the last half of the production run, as well as saving in sustainment costs.
It is important, though, to note that Australia is not a passive participant in JSF governance, and a fundamental question regarding Australia’s procurement is the extent to which it is able and will to its particular national interests which they differ from those of the US and other JSF partners. However, this task is difficult as the inner workings of the JESB and JPO, and indeed Australia’s own program office, is opaque and not open to public scrutiny. With the broad analytical framework advocated in this thesis having identified key issues, subsequent scholars may be able to conduct such an analysis. Nevertheless, using what information is publicly available, Chapter 8 will conduct an analysis of the extent to which JSF partner nations
======768 ‘JSF Production, Sustainment, and Follow-on Development MoU’, 88.
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have been willing and able to advocate for their own interests in terms of capabilities and other characteristics of the JSF.
The section which examined the tensions between the JPO, Pentagon and Lockheed Martin on the costs for production lots demonstrates the complexity of procurement politics from a US perspective, but also raises issues for Australia’s procurement, which can be identified but not answered in this thesis. As Australia has a role in JSF governance in the JESB and JPO, it would be useful to know Australia’s position in the affair and the extent to which information was shared with Australia, notwithstanding the fact that there is no public information on the issue. It may be the case that Australia was able to ‘free-ride’ in the negotiations, being able to reap the rewards of lower unit costs while still being able to maintain good relations with Lockheed Martin. Alternatively, Australia may have been able to learn lessons from the US in negotiating strongly with Lockheed Martin. Either case would be important as Lockheed Martin gaining a larger market share of defence contracts in Australia. Additionally, the section highlighted the limitations of Australia being able to negotiate prices for its purchases as the negotiations were conducted solely by the Pentagon. Again, Australia could benefit by ‘free-riding’ on the Pentagon’s experience and leverage in driving down costs. However, as the Pentagon kept its ‘should costs’ a secret from Lockheed Martin, it is not clear that Australia would have been provided with this analysis, which would be useful in being able to more accurately determine procurement costs than the JPO’s methodologies.
Building on the political foundations of this chapter, with respect to industrial and informal politics, Chapter 6 will conduct an assessment of the procurement approaches of other nations which are approximately Australia’s peer. Particular attention will be given to Norway’s procurement approach as it demonstrates the two-way nature of JSF international politics; this chapter demonstrated US efforts in pushing Norway to select the JSF, but Chapter 6 will demonstrate the extent to which Norway pushes back in efforts to ensure its own interests are met. This is conducted to demonstrate the utility of this thesis’ analytical framework, and to provide a benchmark for assessing Australia’s procurement.
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CHAPTER 5: INTERNATIONAL GOVERNANCE AND NATIONAL CAPABILITIES
The previous chapter outlined the complexity of the international governance arrangements for the JSF Program, both in terms of formal and informal politics, but did not provide an assessment of the extent to which actors within those arrangements exercised their power. This chapter will examine the attempts of partner nations to include variations to their JSF aircraft for the purposes of national needs, and the extent to which partner nations exert influence in high-level JSF Program decision- making. This chapter also examines the nature of the JSF partnership, in terms of equity and willingness to compromise, which is important in assessing whether countries view themselves as genuine partners or simply procurers. Using the proposed analytical framework, this chapter will examine the politics of tailoring nationally specific capabilities for the JSF, allowing the actions and policies of Australia to be assessed against other nations who faced similar issues.
The JSF is designed to meet the needs of US and British armed services, and specific capabilities required by JSF partner nations require self-funding and are subject to approval by the JSF executive. In the case of the Norway-led drag chute variant, Norway was able to develop a JSF variant different to the standard F-35A of the USAF in order to meet its specific national requirements. However, the JSF executive overrode Canada’s desire to give the JSF critical satellite communications capability during the early years of its procurement. This analysis will facilitate an evaluation of Australia’s pursuit of specific national requirements, which will be undertaken in Chapter 8.
The 2006, US Congressional hearings into the planned cancelation of the JSF’s second engine provided an insight into the extent to which JSF partner nations were willing to exercise their power vested in JSF governance arrangements on significant program matters affecting cost, capabilities and development schedules. It will be shown that, with the exception of the UK, the JSF partner nations abrogated responsibility, at least in the Congressional forum, deferring judgment to the Pentagon. It is also evident that while abandoning the alternate engine was significant program matter, the Pentagon had not consulted with its international partners before determining the policy.
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While sharing technology between partners has been a key element in the internationally collaborative program, transferring advanced and critical technologies from the US to partner nations has been a recurrent source of tension between the US and partner nations. The US intended to maintain a military edge technologically limited sharing advance technologies, but a part of the problem has also been the reluctance to share US technologies for benefit the domestic industries of JSF procurers, which would undermine the US technological advantage industrially. The procurement approaches of JSF partner nations to gain technological advantages for their indigenous industries is discussed in Chapter 6. Nevertheless, this chapter provides a specific focus on access to JSF source code as a key issue for national capabilities. With previous experiences of restricted access to source code limiting national capabilities, Australia, the UK and Turkey adopted strong public positions in negotiations. Despite the recognised importance of source code, Australia’s position was more optimistic and less demanding in nature than the British, and the US appeared to be more accommodating to the UK’s requirements.
US Congress Although outside of the formal governance arrangements of the JSF Program, and despite the JSF Executive Steering Board (JESB) being the highest decision making authority, US Congress had a significant role in denying access of technologies to international partners. Richard Krueger’s analysis indicates that with the JSF Program as a driver, US government policy on transferring technology has changed since the Cold War. As a program intended to ‘reform’ defence acquisition, the JSF Program has served as a catalyst to reforming the US approach to international technology transfers. 769 Krueger finds that the senior DoD officials, including senior US Navy and Air Force officials, were the primary actor in technology transfer processes, who ‘were determined to have developed and executed technology transfer policies in order to value-maximize the technology transfer plan for the JSF program’. 770 While the State Department was a key player in processing JSF export licenses, State Department ======769 Richard D. Krueger, Technology Transfer and US National Security Policy: The Joint Strike Fighter, Doctoral thesis, George Mason University, Fairfax, Virginia, United States of America
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officials ‘generally deferred to the Department of Defense to establish the scope and content of JSF militarily critical technologies’. 771 However, Krueger also argued that the US Congress remained ‘a key factor in any technology transfer policy’, and as political considerations were paramount, its decisions had ‘significantly more political content as opposed to national security or critical technology policy content’. 772
While licensing issues related to technological intellectual property is often cited as the main limiting factor in technology transfers, Lockheed Martin’s Tom Burbage stated that for sensitive areas such as low-observable technology and software source code, it ‘has got to be sorted out at the top political level’, with access for all JSF partners to be determined by the US Departments of Defense and State. 773 However, following September 11, Congress increasingly became an obstacle with ‘Republican hawks … remain[ing] opposed to the idea of sharing military technology at a time of international insecurity’. 774 In May 2003, Congress blocked an export waiver for the UK, although the subject of the waiver, according to a British Ministry of Defence (MoD) official, was for ‘unclassified and bland areas of technology’. 775 A report by Congress’s International Relations Committee argued that the ‘Department of State was in serious danger of compromising US security’ in inappropriately making promises to allies regarding transferring technology. 776 As Max Blenkin notes, transferring technology ‘even to close allies, can be halted by just a few powerful US congressmen’. 777 Despite the ongoing problems in developing the JSF, in June 2006, Australian Defence Minister Brendan Nelson stated that ‘the biggest risk … to the
======771 Krueger, Technology Transfer and US National Security Policy, 305. 772 Ibid, 304-305 773 Douglas Barrie and Andy Nativi, ‘Jockeying for Position: Potential European Joint Strike Fighter production partners maneuver to secure workshare involvement’, Aviation Week & Space Technology 158:26 (30 June 2003) accessed via Factiva 11 January 2014, 62. 774 Dan Roberts and Peter Spiegel, ‘The UK's 'national champion' is desperate to find a US partner to keep pace in a global technology race’, Financial Times (15 July 2003) accessed via ProQuest 11 January 2014, 17. 775 Ibid. 776 Tim Robinson, ‘A question of trust’, Aerospace International (3 August 2004) accessed via Factiva 8 February 2014. 777 Max Blenkin, ‘Australia seeks new air fighter secrets’, Australian Associated Press (15 Mar 2006) accessed via Factiva 12 February 2014.
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scheduling of the JSF actually relates to decisions that will be made in the US Congress and Senate. 778
Cancelling the F136 Alternate Engine It was planned that the JSF Program would include two different engines to promote competition with the aim of decreasing overall costs, improving performance, increasing international cooperation through additional industrial participation, and to offset the risks of an engine fault grounding the entire JSF fleet. 779 The primary F135 engine was under development by the US company Pratt & Whitney, while the alternate F-136 engine was being developed by a collaboration between America’s General Electric and Britain’s Rolls Royce companies. From January 2006, the Pentagon attempted to terminate the alternate engine by cancelling funding, but was blocked by Congress until May 2011 when it was finally defunded. 780 Ultimately, there may have been value in creating competition, with General Bogdan expressing his frustrations in 2014 at ‘not having enough leverage with Pratt because the company is the sole manufacturer’. 781 Bogdan said in a sole source environment, ‘it is difficult to find the right levers and motivation to drive cost out of a program ... One of the most effective ways to do that is through competition. 782 It should also be noted that the entire JSF fleet was grounded in July 2014 following a catastrophic engine fire. 783
In March 2006, international JSF partners were asked to present testimony to the Senate Committee on Armed Services on the proposal to terminate the F136 alternate engine. Specifically, they were to provide their ‘assessment of the desirability of developing an alternate engine’ and the extent to which their respective governments
======778 Department of Defence, Australia, Transcript, ‘Address to the American Enterprise Institute’, Department of Defence
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were consulted regarding the Pentagon proposal. 784 Committee Chair John Warner indicated that JSF partner nations were invited to the hearings because they ‘have not only a stake, but a voice in the successful management of this program’. 785 Pratt & Whitney’s written submission to the Committee stated ‘The UK is the partner expressing serious concern with termination of the alternate engine’ and ‘All other partner countries stress schedule, price and capability more important that second engine source. 786
Speaking for Italy, Lieutenant General Giuseppe Bernardis, Department Chief for Armament Programs, abrogated any responsibility, declaring ‘Italy thinks that this should be a US decision only, and the Italian Ministry of Defence will adhere to it’, and that its primary concern was in areas of cost and schedules. 787 The Netherlands, Denmark, Norway and Turkey did not send representatives to the hearings, but submitted written statements. Cees van der Knapp, Dutch Deputy Secretary of Defense, wrote that while the Netherlands expected the program would include two engines, and were in favour of two engines to maintain competition to reduce costs, the Netherlands acknowledged risks to capabilities, schedules and costs, and ‘trusts the US government to make the right decision in this matter’. 788 Denmark declared it position to be ‘neutral’ on the alternate engine issue as it had only contributed funds to the development of the F135, and as it ‘never expressed an interest’ in the F136 engine, it ‘would not expect to be consulted’. 789 Norway’s ambassador noted that their Ministry of Defense was of the opinion that ‘the US Department of Defense, as the largest contributor, customer and overall responsible for this large program, should weigh heavily in this matter’. 790 Turkey’s Kirazlıdere Mevkii suggested that the alternate engine had a positive effect on affordability via competition, but acknowledged as the alternate engine was originally a US decision, the ‘termination of the alternative engine
======784 United States Congress, Senate, Committee on Armed Services, Joint Strike Fighter F136 Alternate Engine Program: Hearing Before the Committee on Armed Services, 109th Congress, 2nd Session (14 March 2006) 814. 785 Ibid , 784. 786 Ibid , 807. 787 Ibid , 813. 788 Ibid , 832. 789 Ibid. 790 Ibid , 828.
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shall also be on United State’s [sic] own decision’. 791 The British representative, Lord Drayson, stated that the UK Ministry of Defence (MoD) had not seen the business case for terminating the F-136 program, and to the best of their knowledge, neither had any party outside of the US DoD. 792
In contrast to the other European JSF partners, Lord Paul Drayson, Britain’s Minister for Defence Procurement, made strong arguments in favour of continuing the development of the F-136 engine. Drayson stated that the F136 engine was ‘a strategically important collaboration between our two defense Sectors’, and that cancelling it ‘would not only be a blow to such cooperation, but could also damage the commercial and military robustness of the JSF program’. 793 He declared that as a Level 1 partner, Britain ‘expect[ed] to be properly consulted on decisions of this magnitude’, but was not consulted, and sought to understand why the Bush administration wanted to cancel the F136 engine program. 794 Britain’s main argument for continuing the development of the F136 engine was their belief that having a two engine approach will drive improved value for money for all parties and it will provide a competitive element through this process, which will drive down the acquisition costs and the through-life costs. 795 The point was also made that the Britain’s ‘commitment of $2 billion to the SDD phase of the program was on the basis of there being a two engine approach’, 796 particularly with Rolls Royce partnering in F136 development and production.
Rear Admiral Raydon Gates, Head of the Australian Defence Staff in Washington, stated that while Australia recognised the benefits of competition and choice, it should not be ‘at the expense of overall program cost, schedule, and capability targets’. 797 Gates indicated that in 2003, the JSF Program Executive Officer (PEO) ‘requested our input as to the desirability of a second JSF engine in the context of the United States
======791 US Congress, Joint Strike Fighter F136 Alternate Engine Program Hearing, 829-30. 792 Ibid , 800. 793 Ibid, 789. 794 Ibid. 795 Ibid , 803. 796 Ibid. 797 Ibid, 816.
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JSF budget deliberations of that time’, but that Australia had not been consulted regarding proposals to cease funding the alternate engine program. 798 Additionally, Air Commodore John Harvey, Director General of New Air Combat Capability stated that ‘we respect the right for the project manager to make the decisions required’ to ensure cost, schedule, and capability targets were met. 799
Drag Chute Variant The drag chute modified F-35A demonstrated the ability of international JSF partners to work within the formal JSF governance architecture to bring about a modification to the standard aircraft to suit their local environments. A drag chute, also known as a drogue parachute, is a parachute deployed from the rear of aircraft to slow them down when landing, and are ‘used for fighters that operate from shorter runways or from short, wet or icy runways in extremely cold climates’. 800 Currently, the F-16s of Norway and the Netherlands use drag chutes while Canada’s CF-18s use arresting hooks to slow them down. 801 The drag chute system consists of a ‘removable, or missionised pod’, identifiable as ‘a small, aerodynamically clean bump on the upper surface between the two vertical tails’. 802 Norway worked closely with Lockheed Martin on the drag chute system, and was ‘involved directly’ with Lockheed’s engineers ‘at a very detailed level’. 803 In addition, the JPO played a critical role in facilitating this capability as it required a relatively significant modification to aircraft design, production, and software. Jeff Mohr, the chief project engineer for the drag chute program, stated that Designing the drag chute system [was] truly a collaborative effort. Not just between Norway and Lockheed Martin but also with the F-35 JPO. Our success to date with such an aggressive schedule would only be
======798 US Congress, Joint Strike Fighter F136 Alternate Engine Program Hearing, 816. 799 Ibid , 823. 800 Eric Hehs, ‘F-35 Lightning Drag Chute’, Code One [Lockheed Martin]
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possible with the trust and collaborative relationship among all three entities. 804
While commonality and standardisation was to be a fundamental feature of the JSF Program, the drag chute variant of the F-35A ‘represents the first modification to the F-35 design’ to come after the SDD phase. 805 The drag chute modification was developed from a Lockheed Martin study funded by Norway, Canada, and the Netherlands in 2010. 806 Norway is covering the costs to develop and test the system, paying as much as US$246.6 million, but would also receive a royalty on any drag chute modified F-35s sold to other nations, of which Canada, Denmark and the Netherlands are ‘leading candidates’. 807 The drag chute system was incorporated very late into the development of the JSF as Lockheed Martin, the JPO and Norway began development in 2012. 808 Although Norway received its first F-35s in 2015 as part of low-rate initial production (LRIP) lots 7 and 8, they will not have the drag chutes even though the necessary hardware modifications were completed on planes in LRIP 7 and 8. 809 The reason is that the software for the system will be part of Block 3F, 810 which is still under development. Testing of the drag chute will not commence until at least 2017. 811
Modifying the JSF to accommodate a drag chute capability was not a simple exercise, resulting in changes throughout the program. Structural modifications to the airframe involved adding a load fitting onto an upper fuselage bulkhead near the aft portion of the wing and redesigning the skins in the wing and aft fuselage. 812 This structural change required changes to the manufacturing tools used to manufacture the wing
======804 Hehs, ‘F-35 Lightning Drag Chute’. 805 Ibid. 806 Ibid. 807 Tony Osborne, ‘Norway Paves the Way for F-35 Acquisition’, Aviation Week
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carry-through and aft fuselage structures for the production lines in the US, and for the aft fuselages that are produced in the UK. 813 The addition of the drag chute also requires a cockpit modification and additional software .814 It is not clear if any of the modifications to the aircraft or production facilities would result in additional costs for other JSF customers.
Canada’s Satellite Communications While Canada benefited from the success of the drag chute modification it had less success with the JSF’s satellite communications (SATCOM) issue. Lockheed Martin reportedly provided a briefing to Canada’s top air force commander in 2010 outlining the early limitations of communications for the F-35 operating in Canada’s arctic north. 815 In the high Arctic, military aircraft ‘rely almost exclusively on satellite communications, where a pilot's signal is beamed into space and bounced back to a ground station’. 816 While the F-35 will have eventually have SATCOM, the software will not be available until at least 2019 as a part of Block 4 software developed. 817 The Canadian Department of National Defence (DND) stated that Although originally intended to be included in earlier versions of the F-35, a conscious decision was made within the JSF Partnership to delay upgrading the F-35 with SATCOM until later in the program. The aim of this deferment was to await emerging satellite constellation/capability developments and the maturing of associated enabling technologies, and to thereby avoid the investment of funds into waning technologies/capabilities. 818 The DND indicated it was not concerned about the delay in communication capability as the SATCOM upgrades were scheduled to in place for the Initial Operational
======813 Parsons, ‘Norway set to receive first drag-chute equipped F-35’. 814 Ibid. 815 The Canadian Press, ‘F-35s face communication problems in Arctic’, CBC News
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Capacity (IOC) for Canada’s F-35s. 819 Nevertheless, it appears that Canada’s need for SATCOM in the short term was overridden by a JSF executive decision in an effort to reduce costs.
However, SATCOM in Block 4 is not guaranteed because research is still underway, and SATCOM upgrades will compete with other software upgrades, such as those integrating the weapons of program partners. 820 On the issue of SATCOM, a Lockheed official stated That hasn't all been nailed down yet … As you can imagine there are a lot of science projects going on, exploring what is the best … capability, what satellites will be available. 821 Canadian Defence spokesperson Evan Koronewski stated that Canada was ‘working closely with the other partner nations to ensure Canadian operational requirements for communications in the Arctic are met.’ 822 Canadian air force planners recognised the problem in 2009 and were ‘considering a back-up’. 823 An option being examined is using an external communications pod on the F-35, similar to those carried by the CF-18s which were purchased as part of the $2.6 billion fleet upgrade that began in 2000. 824 However, the external pod would compromise the stealth characteristics of the F-35. Canada has been looking at involving other partner nations in the development of the communications pod to defray costs. 825 It would seem that as a result of a lack of support by JSF executive actors, Canada either faces a short-term critical capability gap, or will individually have to pay to address the gap.
Source Code One of the main ongoing sources of international tensions in the JSF Program has been the reluctance of the US to grant access to the software source codes of the JSF to its international partners. In essence, source code is the computer instructions written by
======819 The Canadian Press, ‘F-35s face communication problems in Arctic’. 820 Ibid. 821 Ibid. 822 Ibid. 823 Ibid. 824 Ibid. 825 Ibid.
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humans, which is converted into low-level machine-readable code. In contrast to US policy with the JSF, its European competitors have offered access to the source code for their aircraft, making them more attractive alternatives. In marketing their aircraft to India, senior officials with the Eurofighter consortium ‘promised an open door technology transfer’, stating ‘The technology transfer is very attractive’ and ‘There is very strong will to transfer all possible technology’. 826 In 2009, Andy Latham of BAE System and vice president in charge of Typhoon exports offered Japan a ‘no black box approach’ regarding military technology transfer for the aircraft, allowing ‘integration with Japanese equipment’. 827 Similarly, Dassualt planned to ‘share source code and other data as needed’ with Singapore as it looked at new fighter replacements in 2004. 828 In 2007, Saab offered Thailand ‘a special full package’ including the source code for its Gripen. 829
In 2005, JSF deputy PEO General Charles Davis acknowledged that some JSF partners ‘requested information on basic source code and algorithms the program considers off limits’. 830 While the US would provide JSF customers with technology and information to fly the JSF, Davis stated that the ‘US government does not regard the source code as something the partners are required to have’. 831 The reasons JSF partner nations requested access to source codes varied from ‘look[ing] into the possibility of changing some of it to [meet] certain preferences’,832 to ensuring sovereign capability. As Singapore examined options for replacing its F-16s, it was reported to have more concerned with gaining ‘access to technical data to ensure it can maintain the aircraft on its own and update them later rather than pushing for a production share’. 833 Italy, however, adopted the reverse position, with defense procurement chief General Gianni ======826 Sandeep Dikshit, ‘Typhoon outdid Rafale in Libya, claims four-nation consortium’, The Hindu
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Botondi indicating that Italy was ‘more focused on work share for local industry than technology transfer’. 834 Commodore Simon Henley, the UK’s Defence Procurement Agency's program leader, stated that ‘Britain needs to have the technologies under sovereign control for operational reasons’. 835 For the British, not having access to the JSF’s source codes would leave them without the ‘autonomy to adapt the aircraft for operational requirements or perform important upgrades’, such as new missiles and radars, creating a dependency on the US for reprogramming. 836 However, Tom Burbage stated that ‘operational sovereignty is assured even without the UK having full access to the source code’, and that the UK ‘will get everything it needs for the JSF … including software upgrades. 837
For Australia, the importance of source code was often expressed in terms of maintaining the JSF, rather than operational sovereignty. In 2006, Defence Minister Brendan Nelson acknowledged that Australia had ‘significant issues to address in terms of access to data and key technology for the maintenance of the JSF through its life’. 838 More specifically, a 2006 Parliamentary Library Research Note identified the importance of JSF source code, stating that without complete access to [the] source code, Australia will be unable to modify or even maintain the aircraft independently … [and] be put in the invidious position of having no option but to pay whatever Lockheed Martin asks during future contract negotiations for the ongoing maintenance of Australia’s strike fighters. 839
As Lockheed Martin notes, the JSF program involves an ‘unprecedented technology transfer’ between companies of different nations, but the transfer is not completely equal or complete. Sandra Erwin stated that the Pentagon had ‘signed carefully negotiated technology transfer agreements with F-35 partners, each based on the ======834 Vago Muradian, ‘US Offers UK JSF Stealth, Key Codes But London Could Walk Away From Production Phase’, Defense News (11 December 2006) accessed via ProQuest 11 January 2014. 835 Andrew Chuter, ‘Britain's Plan B? UK Procurement Minister Urges Choosing JSF Backup, Just in Case’, Defense News (5 December 2005) accessed via ProQuest 11 January 2014, 4. 836 Roberts and Spiegel, ‘The UK's 'national champion' is desperate to find a US partner’, 17. 837 Adam Durchslag, ‘Lockheed flies in to defend JSF’, Sunday Business (14 May 2006) accessed via ProQuest 11 January 2014. 838 Department of Defence, Australia, ‘Address to the American Enterprise Institute’. 839 Alex Tewes, ‘The F-35 (Joint Strike Fighter) Project: progress and issues for Australia’, Research Note No. 32 (9 June 2006) Australian Parliamentary Library.
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country's political and economic ties to the United States’. 840 Despite lobbying form allies, there are differences in the provision of technical information to JSF program partners, and there has been a US policy in place to restrict highly classified information on the F-35 from partner nations and other users. In 2014, General Bogdan stated that ‘There are certain things we will not let any of our partners or FMS [foreign military sales] customers have’. 841 While all of the partner nations will likely be involved in supporting regional maintenance, repair, and overhaul facilities the work share is not evenly divided. In Europe for example, Italy will conduct heavy maintenance on F-35 airframes, while Turkey will conduct heavy maintenance on the F135 engine. 842 The separation of work allows the US to compartmentalise the information it provides, but there is no publicly available evidence as to what extent this is done. What is clear, however, is that there is a threshold where the US will not provide information to those who procure the JSF. Bogdan stated that the US is not going to stop partners or FMS customers from doing their own sovereign, national level work on their airplanes … But only up to the level to which the United States would let them do that work. 843
In August 2002, USAF Colonel Dwyer Dennis, deputy director of the International Directorate of the JSF System Program Office, stated that the ‘overall concept’ for the JSF program included ‘pressing for maximum commonality between the US version and our international partners’. 844 However, the desire for maximum commonality was in conflict with US national disclosure policies. 845 Earlier in 2002, the US had started an 18-month study to evaluate the limitations on commonality, and by extension national variants, and sharing sensitive information with allies. Israel had formally requested to include its own electronic-warfare (EW) suite on its JSFs, if it decided to
======840 Sandra I. Erwin, ‘F-35 Program Weighs Security Concerns as It Creates Global Supplier Base’, National Defense
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procure them, but the decision was deferred pending the outcome of the study. 846 Israel did achieve some success in integrating its own EW equipment into its JSFs, will be discussed in Chapter 6.
An obstacle to tailoring JSF capabilities is the complexity and tightly integrated nature of its electronic systems compared to the ‘federated’ systems of older aircraft such as the F-16. 847 As opposed to divisible systems, the JSF is ‘one of the first aircraft with a centralised computer architecture controlling all operations’. 848 Whereas an F-16 operator could retain the aircraft’s radar but swap out a different radar-warning receiver or electronic-countermeasures system, such an effort would be much more difficult with the integrated nature of the JSF’s electronic systems. 849 Additionally, the quantity and complexity of the JSF’s software presents a daunting maintenance task, with one unnamed official in the British MoD arguing that ‘supporting the source codes could be too expensive for the UK’. 850 However, as Peter Roberts argues, while Australia would not be able to afford the investments required to fully support all JSF systems with millions of lines of code, it could be possible for the Australia to have access to systems allowing Australia to tailor critically important capabilities. 851
Significantly, JSF source code access was an issue in which Turkey has been willing to pressure the US through delaying or limiting its JSF orders. 852 In March 2011, Turkey announced it was placing it order of 100 JSF aircraft on hold over the refusal of the US to provide ‘adequate access to the aircraft’s source codes’, 853 as well as dissatisfaction over Turkey’s work-share. 854 Additionally, the 2012 reduction of Turkey’s initial order from six to two aircraft was, in large part, a deliberate action to ‘make a
======846 Rivers, ‘JSF Going Global, but will its EW suite?’, 26. 847 Ibid. 848 Peter Roberts, ‘Codes are key to latest US technology’, The Australian Financial Review (1 March 2004) accessed via Factiva 11 January 2014, 32. 849 Rivers, ‘JSF Going Global, but will its EW suite?’, 26. 850 Roberts and Spiegel, ‘The UK's 'national champion' is desperate to find a US partner’, 17. 851 Roberts, ‘Codes are key to latest US technology’. 852 Serhat Güvenç and Lerna K. Yanık, ‘Turkey’s involvement in the F-35 program: One step forward, two steps backward?’, International Journal 68:1 (Winter 2012-13) 127. 853 Burak Bekdil, ‘Turkey Says Cost, Problems Prompted JSF Purchase Delay’, Defense News
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statement [about] Turkey’s lack of progress in pursuing access to source codes’. 855 The postponement of Turkey’s order for its first two aircraft announced in January 2013 was based on ‘technological concerns’, as well as rising costs. 856 Following the announcement, a senior official with Turkey’s procurement agency, the Savunma Sanayi Mustesarligi (SSM), stated ‘We have not inched forward for the solution of this problem … We don’t know what else we could do to tell our [American] counterparts that access to source codes is essential for us’. 857 Ankara stated that negotiations for access to the codes, ‘including codes that can be used to control the aircraft remotely, had not yielded satisfactory results, and under these conditions, Turkey could not accept the aircraft’. 858
Australian and Turkish Technology Transfer Contexts Turkey has long faced problems of limited technology transfers, even as a NATO ally, and since the closer ‘strategic partnership’ between the two nations following 9/11. 859 Speaking at the 21st Annual Conference on US-Turkish Relations in Washington in March 2002, Major General Aktug Atay, Turkish Chief of Staff, pointedly stated that ‘The real meaning of a strategic partnership between the two countries should be exposed to other nations and Allies through solid actions’. 860 Atay said that restricted technology transfers had ‘always been the most time-consuming issue, sometimes creating longstanding unresolved discussions and sometime deadlocking projects’, and also limited self-sufficiency in terms of core maintenance and upgrade capabilities. 861 With Turkey to sign on the SDD phase by July of that year, Atay declared that Turkish participation in the JSF Program ‘provides the best opportunity to reveal solid
======855 Güvenç and Yanık, ‘Turkey’s involvement in the F-35 program’, 127. 856 Bekdil, ‘Turkey Says Cost, Problems Prompted JSF Purchase Delay’. 857 Burak Bekdil, ‘Lockheed dispute clouds Turkey’s F-35 commitment’, Hürriyet Daily News
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outcomes of our strategic partnership’, and that Turkey ‘expect[s] to receive no more tight and irrational limitations in this project.’ 862
For Turkey, unrestricted access to the JSF source codes was a significant and unresolved issue, and was the ‘main theme of debate in parliament’ in 2008 following Turkey’s signing of the 2007 PSFD MoU. 863 Opposition parliamentarians argued that without access to source codes, Turkey’s JSFs would possess limited electronic targeting capabilities for some missions, such as Identification Friend or Foe (IFF) equipment. 864 Şükrü Elekda ğ, a deputy from the opposition Republican People’s Party, noted that ‘several times the US refused to give or make changes to codes on Turkish F-16s’, 865 which had significant consequences for Turkey’s strategic capabilities since the 1980s, and which would continue to be the case with the JSF.
The F-16 fighters Turkey acquired from the US ‘came with pre-installed IFF software that automatically identifies Israeli fighters and warships as friends, disabling Turkish F-16s from targeting Israeli planes or ships’. 866 Without access to source codes, Turkey was unable to modify the IFF equipment, while Israel was ‘given a different version of the software allowing Israeli authorities to make modifications’, and was ‘authorized to view the version given to Turkey’. 867 However, the US agreed in principle to allow Turkey access to F-16 source codes in August 2011 followed by Congressional approval shortly thereafter. 868 A US source was reported to have stated that the information was provided ‘because Turkey has pursued a very persistent policy on the matter’. 869 The US source also said that
======862 Jonson, ‘Turkish Air Force General calls for removal of trade restrictions’. 863 Güvenç and Yanık, ‘Turkey’s involvement in the F-35 program’, 125-127. 864 Ibid, 125. 865 Ibid. 866 Today’s Zaman, ‘Report: Israel no longer ‘friend’ for Turkey’s F-16s, warships’, Today’s Zaman
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By agreeing to transfer information on F-16 weapon systems so that Turkey could automatically integrate them with national software source codes, the US sought to ease tensions with its NATO ally. 870 Turkey's Military Electronics Industry developed a new IFF system, which was integrated in Turkey’s F-16s by October 2011, allowing ‘Turkish military commanders to identify friends and foes on the basis of national considerations’. 871
Turkey and Australia both encountered technology transfer issues in acquiring US sourced Boeing 737 airborne early warning & control (AEW&C) aircraft and related systems, although with differing outcomes. In 1998-98, Australia and Turkey ‘liaised closely during their evaluations’ 872 on options as they were both ‘engaged in parallel evaluations of competing AEW&C systems’. 873 Australia and Turkey both ‘sought maximum source code access’ for the electronic systems, but ‘met with mixed results’. 874 Turkey has certainly been more publicly vocal in pushing for access to restricted technology related to their AEW&C systems, but this may be partly due to the way in which Australia gained access to restricted information.
As Blenkin notes, Boeing’s controversial technology transfer in tendering for Australia’s Wedgetail project highlights the extreme caution of the US at selling technology, particularly computer source codes, which might diminish its technological advantage [which] applies even to close allies such as Australia. In 1998-99, Boeing ‘gave itself an edge’ in Australia’s Wedgetail competition by ‘offering to provide the data and know-how that could make the Australian system equal to the US AWACS system - technology that by law cannot be exported’. 875
======870 Kemal, ‘Turkey to rewrite software source codes of 204 F-16 fighters’. 871 Today’s Zaman, ‘Report: Israel no longer ‘friend’ for Turkey’s F-16s, warships’. 872 Flight International, ‘Turkey nears airborne warning decision’, Flight International
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Specifically, the information was ‘low-observable/counter-low-observable radar signature and verification cross reference indexing data’, 876 possibly relating the ‘ability of the Northrop-Grumman MESA [multi-role electronically scanned array] radar to detect stealth aircraft such as the US Air Force's F-117 and B-2’. 877 As Australia apparently gained information the US did not want to share, the US Department of Defence investigated, and subsequently fined Boeing $3.8m for ‘shar[ing] military technology it was barred from exporting to another country’. 878 However, Air Marshall McCormack stated that We have assurances from the United States Government that we will have the releases that we require for the operation of this aircraft [and] there will be no detriment to availability [to us] of the equipment or the systems. 879
While the technology access created no problems for Australia’s Wedgetail project, issues did emerge for the AIR 5333 Vigilare project. Vigilare is a ground-based air defence command and control system which will ‘provide the ADF with the capability to support national surveillance and the air defence of Australia from upgraded Regional Operations Centres’. 880 McCormack stated the RAAF was seeking ‘as much commonality as possible’ between Wedgetail and Vigilare. 881 While Boeing Australia was selected in 1998 to provide the system, negotiations were suspended in late 1999 ‘after failing to secure US State Department approvals for release of source code and processing algorithms’. 882 Boeing had planned on using the ‘processors and displays from the Wedgetail AEW&C aircraft to provide a common human-machine interface’,
======876 Peter Cole-Adams, ‘Boeing Investigated Over Stealth Aircraft Secrets’, Sydney Morning Herald (10 August 1999) 4. 877 Max Blenkin, ‘Defence says Boeing row won't affect Wedgetail deal’, Australian Associated Press (10 August 1999) accessed via Factiva 21 February 2014. 878 Anderson, ‘Boeing's fines soar to 100 million in three year period’. 879 Cole-Adams, ‘Boeing Investigated Over Stealth Aircraft Secrets’, 4. 880 Australian Defence Magazine, ‘Vigilare contract signed - at last!’, Australian Defence Magazine
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but this approach was abandoned ‘because of delays in the US defence export licensing regime’.883
Although Turkey has selected Boeing’s AEW&C platform and began negotiations in November 2000,884 the acquisition process had stalled as negotiations regarding technology transfers continued to drag on till June 2002885 ‘because [of] restrictions imposed by the US government on Turkey’.886 One of the main issues for Turkey was the undermining of self-sufficiency in terms of maintenance and upgrading, and hence strategic sovereignty and autonomy. Atay stated that the technology restrictions ‘create absolute dependency [on] US companies, even for the resolution of very small-scale problems that should normally be taken care of by Turkey’.887
Australia also faced similar problems as Turkey with access to source code for aircraft, including for the two aircraft the JSF replaces. The RAAF reportedly ‘[felt] badly burnt by the US refusal to part with intellectual property rights that would have made its fleet of F-111s and Hornets easier and cheaper to maintain and upgrade’, with a significant amount of work undertaken by US companies at the expense of Australian industry.888 In 1999, Federal Member of Parliament Allan Morris stated ‘we bought the [F-111s] but not the software, and it took us 30 years to get the software’.889 Australia began to develop software to reprogram the F-111’s old radar warning receiver (RWR) for contemporary threats because ‘the extant system only had Soviet-era data that was no longer relevant to the Australian region’.890 Without access to codes, Australia was
======883 Julian Kerr, ‘C4I: Vigilaire - building the RAP’, Australian Defence Magazine
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reliant on the US to provide software updates, with ‘delays of up to 12 months experienced in upgrading the receiver when a new type of radar [was] introduced into service in the region’. 891
Former Defence Minister Kim Beazley revealed a similar situation regarding Australia’s F/A-18 Hornets in his valedictory speech to Parliament in September 2007. 892 Beazley stated that the radar of our Hornet [fighters] could not identify most of the aircraft in this region as hostile - in other words, our front-line fighter could not shoot down people who would be the enemies in this region. 893 The issue relates, at least in part, to the ability of the Hornet's original Hughes APG-65 radar to classify detected aircraft and the ‘US refusal to release computer source codes to allow Australia to configure Hornet RWRs to detect radars commonly used in this region’. 894 The problem arose because the codes provided in the US sourced F/A-18 aircraft ‘related to Warsaw Pact aircraft, rather than ones in Australia’s region’. 895 Ross Babbage stated that the Hornets were geared primarily to look at Russian aircraft in Europe and the North Pacific … But they were not geared to the mix of aircraft, particularly western aircraft, being operated by some south-east Asian countries. The full capacity of the radar was not available until that was overcome. 896
Beazley described how, for five years, he unsuccessfully fought senior US officials, including Secretaries of Defense Caspar Weinberger and Dick Cheney, and Deputy Assistant Secretary of Defense Paul Wolfowitz. 897 He said ‘The Americans kept saying
======891 Peter Roberts, ‘Codes are key to latest US technology’, The Australian Financial Review (1 March 2004) accessed via Factiva 11 January 2014, 32. 892 Samantha Maiden, ‘Bomber Beazley goes out blazing’, The Australian
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they’d provide the codes, but never did’. 898 The problem was solved, Beazley stated, because Australia spied on them and we extracted the codes ourselves—and we got another radar that can actually identify them [and] was capable of doing the shoot-down and the rest of what we wanted. 899 Beazley said the Americans ‘knew what the Australians were doing and were intrigued by the progress’ Australia made in ‘crack[ing] the codes so we could enhance them’. 900 While an anonymous ‘very senior former defence official’ acknowledged that ‘access to US source codes, so that US-supplied equipment could be modified to Australian needs, had been a sore in the relationship for many decades’, the official also suggested that Beazley ‘might be embroidering [the story] slightly’. 901 As Beazley’s account lacks technical details, it is difficult to confirm as Australia had access to the operating systems of some radar systems. In any case, the point of Beazley’s story in his valedictory speech was the importance of recognising that while the Americans ‘are our most important ally … they are a bunch of people you have got to have a fight with every now and then to get what you need out of them’. 902
British Efforts for JSF Source Code Access Like Australia and Turkey, the UK was sensitive to the importance of source code for operational capabilities and sovereignty following the problems with their Chinook helicopter procurement, which stemmed from a failure to acquire source code. 903 In 1995, the British MoD procured eight Chinook Mk3 helicopter from Boeing, which were delivered in 2001. 904 However, they were not flown ‘because the Department refused to grant the helicopters an airworthiness certificate’. 905 To meet airworthiness standards, ‘analysis and testing of the software source code for the Mk3 cockpit was ======898 Blenkin, ‘Beazley tells how secret US radar codes cracked’. 899 Beazley, Second Reading speech [valedictory speech]. 900 Blenkin, ‘Beazley tells how secret US radar codes cracked’. 901 Blenkin, Beazley spy claim against US hard to confirm’. 902 Beazley, Second Reading speech [valedictory speech]. 903 House of Commons Public Accounts Committee, Ministry of Defence: Chinook Mk3, Eighth Report of Session 2008–09: Report, together with formal minutes, oral and written evidence (London: The Stationery Office, 2009) 7. 904 National Audit Office, Ministry of Defence: Chinook Mk3 Helicopters (London: The Stationery Office, 2008) 7. 905 Ibid , 8.
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required to reduce the possibility of unforeseen system and safety problems during flight’. 906 Boeing had ‘resisted the Department’s requests for access to the source code’ to protect their intellectual property rights, and was not in breach of its contractual obligations in doing so. 907 The MoD ‘had no leverage with which to negotiate with Boeing’ to gain access 908 as the contract ‘did not mandate access’ for the source code. 909 The Public Accounts Committee would later state that ‘Given that software is key to the operation of most modern defence equipment, this is irresponsible’. 910
While defence analyst Loren Thompson argued that ‘the allies become a rather secondary concern’ for decision making in the JSF Program, the United States did pay attention when key ally Britain complained about having inadequate access to JSF technology. 911 Thompson stated that ‘When the British shot their cannon across the bow of the Bush administration on the matter of sharing the JSF technology, the Bush administration sat up and took notice and was responsive’. 912 However, despite Britain’s strong relationship with the US following Iraq War, Britain’s unique position as a JSF Level 1 partner with its £2 billion contribution, and with British industry expected to produce up to 15 percent of total JSF industrial workshare, it was unable to gain the access to the technologies it desired.
British industry began publicly expressing concerns over technology transfer in mid- 2003 as international partners faced difficulties in gaining JSF production workshares, and advocated for the British Government to push the US for greater access. 913 While BAE Systems was a key partner in the JSF Program, its senior executives were publicly expressing concerns, with chairman Sir Richard Evans ‘voicing worries over the impact of not being able to secure adequate access to key technologies’. 914 BAE executives and some analysts believed that US goodwill towards the UK, which ======906 NAO, Ministry of Defence: Chinook Mk3 Helicopters, 8. 907 Ibid. 908 Ibid. 909 PAC, Ministry of Defence: Chinook Mk3 , 7. 910 Ibid, 5. 911 Richard Mullen, ‘Some Question Logic of Multinational Defense Programs’, World Politics Review
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developed from British support of the invasion of Iraq, presented an opportunity for British industry to gain better access to US industry, contracts, and technology. Alex Nicoll, assistant director of the International Institute for Strategic Studies in London stated that ‘We are at a peculiar juncture in history with the US and UK relationship so strong because of Iraq’, and that ‘There will never be a better moment to press home’ a freer sharing of technologies. 915 BAE Systems chief executive Mike Turner said that ‘Rightfully, because we are a good friend and loyal friend of the US, we should ask for that technology when we buy the kit’. 916 However, BAE System’s ‘campaigning for greater access to US technology’, particularly regarding JSF source codes, ‘angered many in the US administration’, as well as angering officials in the Pentagon, the Department of State, and US industrial partners such as Lockheed Martin. 917
While technology transfer had been an ongoing issue, tensions between the British and American government began escalating in 2003. In a meeting with President Bush, British Prime Minister Blair asked that the BAE System’s requests for access to source codes be fast-tracked. 918 By mid-2004, defence procurement minister Lord Bach had ‘visited the Pentagon to voice his displeasure at the slow pace of technology transfer’. 919 British Defence Secretary Geoff Hoon publicly confirmed he had written to Donald Rumsfeld to press the British case for technology transfer, reminding him of the technology cooperation agreement between the UK and the US signed two years previously. 920 Hoon’s ‘strongly worded letter’ reportedly ‘threatened restrictions on US firms’ access to the normally wide open UK defense market’. 921 In 2005, Britain’s new defence procurement minister, Lord Drayson, stated that ‘there has to be a Plan B’, an alternative to the JSF, in order to strengthen the UK’s position in negotiations with the US over technology transfer. 922 In contrast to the Australian position, Drayson stated that ======915 Roberts and Spiegel, ‘The UK's 'national champion' is desperate to find a US partner’, 17. 916 Ibid. 917 Ibid. 918 Glain and Kerber, ‘Report Challenges Fighter Program’, C1. 919 Dominic O'Connell, ‘Britain fights for larger stake in JSF’, Sunday Times (25 July 2004) accessed via ProQuest 11 January 2014, 9. 920 O'Connell, ‘Britain fights for larger stake in JSF’. 921 Tim Robinson, ‘A question of trust’, Aerospace International (3 August 2004) accessed via Factiva 8 February 2014. 922 Andrew Chuter, ‘Britain's Plan B? UK Procurement Minister Urges Choosing JSF Backup, Just in Case’, Defense News (5 December 2005) accessed via ProQuest 11 January 2014, 4.
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one of the things [the US] really respect are people who have worked out what their alternative is to a negotiated agreement. ... It's very important for us not to travel in hope on things. Be businesslike, realistic and ensure we have thought through our plan B. 923 There is, however, some doubt as to what level of access the UK was negotiating for. In 2006, shadow defence minister Gerald Howarth said that ‘Britain wanted firm commitments that it would get source code’ to enable autonomous operations, but JPO spokesperson Kathy Crawford stated that Howarth's comment ‘does not line up with the feedback that we're receiving from meetings taking place between high-level US and UK government officials.’ 924
The UK leveraged negotiations on the PSFD MoU in an effort for access, particularly with Drayson using his appearance at a Congressional hearing in March 2006 to stridently argue for British interests. Citing the 2000 intervention in the Sierra Leone civil war as an example where Britain operated independently of the US, Drayson argued that Britain ‘need[ed] to be able to reconfigure the JSF weapon system to meet UK specific operational threats and scenarios’. 925 The British position, in the lead up to the PSFD agreement was made very clear, with Drayson stating If we do not have the information and technology needed to make that decision, then I shall not be able to sign the MoU ... without the technology transfer to give us the confidence to deliver an aircraft fit to fight on our terms, we will not be able to buy these aircraft. 926 Pointedly, he stated that Britain was ‘not asking for anything new’, but wanted the obligations consistent with the principles of JSF agreements to be met. 927
While Drayson acknowledged the need to maintain a high degree of commonality for the purpose of interoperability, he also argued that ‘there will be differences in configuration driven by the capability needs of the UK user to meet emerging
======923 Chuter, ‘UK Procurement Minister Urges Choosing JSF Backup’. 924 Jim Wolf, ‘Summit-Britain may quit F-35 fighter-shadow minister’, Reuters (6 December 2006) accessed via Factiva 12 February 2014. 925 US Congress, Joint Strike Fighter F136 Alternate Engine Program Hearing, 791. 926 Ibid , 792. 927 Ibid , 790-791.
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threats’. 928 Adding to Drayson’s arguments, Chief of the Air Staff Sir Jock Stirrup also made the point that while the JSF facilitated interoperability internationally, Britain would need to integrate it into its armed services, with its own unique characteristics. 929 As Britain’s future needs were not clearly known, they were not built into the current JSF system, and Britain would be at a strategic disadvantage if it could not ‘adapt and modify JSF to meet the unforeseen demands of an uncertain future’. 930
Other JSF partner nations adopted different positions at the Congressional hearing, demonstrating the importance of operations sovereignty, but different level of importance to source code access. A spokesperson for the Dutch MoD stated that the Netherlands aimed to sign onto the PSFD MoU, but that ‘technology transfer remains an issue of concern’, and that they ‘support the UK in its stand’. 931 Cees van der Knaap, the Dutch deputy minister responsible for procurement, called on the US Congress not to change the conditions of the JSF Program, and in an effort of reconciliation, said that ‘What we need right now is calm in the program’. 932 As previously discussed, Turkey adopted a strong positions and a willingness for tough negotiations. Italy declared the importance of access to technologies, but did not push for complete access. A senior Italian defense official stated that ‘We must be able to preserve sovereignty over the weapon systems and have the ability to use it independently’, but that ‘we are not looking for the source codes of the weapon system [and] Total technology transfer is not necessary’. 933
Following Drayson’s ultimatum in Congress, the Bush administration considered options to provide the UK access, with a senior Pentagon official stating that the US was ‘disposed to really working out this issue’. 934 In May 2006, President Bush and Prime Minister Blair issued a statement declaring
======928 US Congress, Joint Strike Fighter F136 Alternate Engine Program Hearing, 791. 929 Ibid, 795. 930 Ibid. 931 Defense News, ‘With JSF Accord in Hand, UK, US Wrestle Over Details’, Defense News (5 June 2006) accessed via ProQuest 11 January 2014. 932 Ibid. 933 Ibid. 934 Demetri Sevastopulo and James Boxell, ‘US seeks to end dispute with UK on fighter jets’, Financial Times
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Both governments agree that the UK will have the ability to successfully operate, upgrade, employ and maintain the Joint Strike Fighter such that the UK retains operational sovereignty over the aircraft. 935 However, a former senior US official, who was reportedly heavily involved in the JSF Program, said British lobbying was ‘shameful’ considering British opposition to US equipment in the Eurofighter, and said ‘If the Brits force the issue on source code we will have a mess with friends and allies like the Israelis, Singaporeans, Australians and a lot of others.’ 936
By July 2006, the issue of access to technologies, including source code and stealth, appeared to have been resolved following the US and UK signing a ‘an agreement setting forth a statement of principles for Britain to achieve operational sovereignty of any Joint Strike Fighter aircraft it may acquire’. 937 JSF Program director Rear Admiral Steven Enewold stated that ‘We do not see any big deal on technology transfer any more … We have gone to each country and asked them what they want and need for operation and support’. 938 Alfred Volkman, the director of the Pentagon's international cooperative programs, stated that they had ‘gone far, far out of our way … to make sure that the Brits have what they characterize as operational sovereignty’. 939 While Volkman said that they would be providing the British MoD ‘unprecedented access to information about Low Observable-Counter Low Observable technology and most of the plane's source codes’, it was on the condition that the information was not passed on to British industry. 940 It was expected the ‘protocols and particulars of transferring sensitive technologies essential for Britain's operational sovereignty of the aircraft’ would be detailed in a series of classified annexes to the PSFD MoU. 941 ======935 Inside the Pentagon, ‘US-UK Negotiations on Joint Strike Fighter Tech Transfer Stall’, Inside the Pentagon 22:24 (15 June 2006) accessed via Factiva 12 January 2014. 936 Sevastopulo and Boxell, ‘US seeks to end dispute with UK on fighter jets’. 937 Inside the Pentagon, ‘US, UK Resolve Joint Strike Fighter Technology Transfer Dispute’, Inside the Pentagon 22:31 (3 August 2006) accessed via Factiva 12 January 2014. 938 Graham Warwick, ‘Farnborough: F-35 JSF international production closer as technology transfer concerns recede’, Flight International
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Despite the confidence of international partners following PSFD MoU negotiations, three years later the position of the JPO was that the US would not share JSF source code. In November 2009, Jon Schreiber, JPO Director of International Programs, stated that ‘No other country is getting the so-called source code … That includes everybody. 942 Acknowledging partner dissatisfaction with the policy, Schreiber said that ‘Nobody’s happy with it completely, but everybody’s satisfied and understands’. 943 In contrast to the assertions that JSF partners understood the US position on withholding access, British defence chiefs were reportedly ‘furious’ after the policy became publicly known. 944
As an alternative to operational sovereignty, the US is establishing reprogramming facilities which would ‘further develop F-35-related software and distribute upgrades’. 945 Schreiber indicated that ‘Software changes will be integrated there and new operational flight programs will be disseminated out to everybody who’s flying the jet’. 946 The facilities will update mission data files, discussed in Chapter 3, 947 which is a sensitive technology as they ‘are essential to the aircraft's stealth characteristics’, containing ‘a highly detailed model of the aircraft's radar cross-section against all known threats and at all aspect angles’. 948
Half of the staff in the facilities will be American, and it is ‘not clear who, ultimately, would control the use of the foreign funded laboratories, which will depend on host US bases for power, communications and access’. 949 The JPO is limited in its capacity to provide access to this technology as the ultimate US authority is the Observables/ Counter Low Observables Executive Committee. Bill Sweetman suggests that ‘the ======942 Jim Wolf, ‘US to withhold F-35 fighter software code’, Reuters (24 November 2009) accessed 4 December 2013. 943 Ibid. 944 David Gardner, ‘UK anger as America refuses to share secrets of new radar-evading Lockheed F35 fighter jet... that Britain helped pay for’, Daily Mail
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initial US position was that foreign nationals would not be involved with reprogramming at all’ as Bogdan stated that the laboratories ‘would allow the operators more access to the system than they would otherwise have enjoyed’. 950
Two software update laboratories are being built in the US to support the needs of JSF allies; one at USAF Elgin in Florida will be a British and Australian facility, and also support Norway and Italy, while the other at Naval Air Station Point Mugu in California will support Japan and Israel. 951 It is not clear how software upgrading for Turkey and other JSF nations will be conducted. In 2012, based on access to ADF information, the Australian National Audit Office stated Australia would be involved in a Commonwealth reprogramming laboratory, shared with the UK and Canada, estimated to cost US$500m, with acquisition and partner costs to be split equally among the Commonwealth partners. 952 However, in April 2015, Lockheed Martin was awarded a US$150m contract to ‘provide an integrated reprogramming capability to build, test, modify, and field F-35 Lightning II mission data files for Australia and the United Kingdom’ in Fort Worth, Texas. 953 Australia is contributing 55 percent of funds for this project (US$89m) with the UK providing the other 45 percent. 954
Australia and JSF Source Codes In the early 2000s, access to source code was considered a critical element in improving Australia’s defense self-reliance. In September 2001, an unnamed defense science attaché at the Australian embassy in Washington indicated that ‘Australia intends to achieve significantly increased self-reliance in its ability to support systems and adapt them to unique national requirements’. 955 Additionally, the attaché stated
======950 Sweetman, ‘F35 Customers Funding US Based Software Update Labs’. 951 Ibid. 952 Australian National Audit Office, Management of Australia's Air Combat Capability: F-35A Joint Strike Fighter Acquisition (Canberra: Australian National Audit Office, 2012) 77, 177. 953 United States Department of Defense, ‘Contacts CR-066-15’, United States Department of Defense
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that ‘it will be increasingly unlikely that Australia will procure systems in the future without full release of all relevant background [internet protocol] and source code’. 956
Unlike the UK, Australia seemed to have adopted a passive optimism while analysts and commentators noted the importance of access and the previous difficulties in gaining access. Although Lockheed Martin would not comment on access to software source codes in 2002, 957 it was reported that Lockheed Martin had ‘repeatedly assured Australia of full access to this technology’. 958 Defence Minister Robert Hill acknowledged previous problems with accessing US technology, but stated that ‘We have some reason to be more optimistic than what might have been the case in the past’. 959 As well as Hill, the RAAF were ‘confident that the US [had] a more cooperative approach to sharing technology’ with the JSF. 960 Hill’s confidence was based on ‘recent episodes of interoperability with US forces’, such as in the Persian Gulf, and US assistance in solving problems with Australia’s Collins Class submarines. 961 The Australian and US Departments of Defence signed the ‘Statement of Principles for Enhanced Cooperation in Matters of Defense Equipment and Industry’ in July 2000 as an effort to ‘greatly simplify the transfer of defence equipment and technology’ between Australia and the US. 962 Although generalised and heavily caveated, the ‘Statement of Principles’ did express a confirmation of the Australian and US ‘desire to maximize the flow of technologies and technical information between themselves’. 963 However, as Lincoln Wright notes, the selection
======956 Defense Daily, ‘Defense Watch’. 957 Lincoln Wright, ‘We need radar code for fighter – expert’, The Canberra Times (29 June 2002) accessed via ProQuest 12 February 2014, 5. 958 Max Blenkin, ‘Australia seeks new air fighter secrets’, Australian Associated Press (15 March 2006) accessed via Factiva 12 February 2014. 959 Lincoln Wright, ‘Hill optimistic about jet codes’, The Canberra Times (3 July 2002) accessed via ProQuest 12 February 2014, 3. 960 Ibid. 961 Lincoln Wright, ‘No codes for the fighter? No deal’, The Canberra Times (4 July 2002) accessed via ProQuest 12 February 2014, 10. 962 Department of Defence, Australia, ‘Meeting with US Secretary of Defense’, Department of Defence (17 July 2000)
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of the JSF and exclusion of the European options eliminated a potential lever for Australia to gain access to the JSF’s source codes.964
Aldo Borgu, defence analyst with the Australian Strategic Policy Institute (ASPI) stated that the ‘plane's software source codes were crucial to making the F-35 deal worth while’, but was doubtful that access would be provided given Australia’s previous experiences. 965 For Borgu, the issue was that the JSF's software would be configured for US strategy and weapons, while Australia would potentially face adversaries armed with US equipment. 966 He also stated that while it was ‘possible for Australia to hack into the source codes of some jets’, as was the case with Australia’s Hornets, but ‘reverse engineering was a costly process’, and it was not certain that it could be done with the JSF. 967
As mentioned previously, in July-August 2002, the US was midway through a study assessing the extent to which technology would be shared with allies. As Brendan Rivers noted, until the study would be completed and export policy determined, ‘international partners won't know what they might be getting’. 968 A key issue was that decisions made in the early 2000s may be subject to changing national disclosure and export policies and technologies as partners would not be receiving their aircraft for another decade. 969 At this early stage, Australia had committed to the JSF without a clear understanding of the extent to which the US would share technology, but was apparently confident that it would do so.
Australia adopted a similar position to the UK during PSFD negotiations, indicating that access to critical systems was a precondition for joining the PSFD phase. An official in Australia’s New Air Combat Capability (NACC) project office stated that Australia's fundamental requirement before committing to the next phase will be obtaining assurances from the US that we will have access to the necessary information and technology required to ======964 Wright, ‘Hill optimistic about jet codes’. 965 Wright, ‘We need radar code for fighter’. 966 Ibid. 967 Ibid. 968 Rivers, ‘JSF Going Global, but will its EW suite?’, 26. 969 Ibid.
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operate and support the JSF aircraft and associated systems for the 30-plus-year life of the JSF. 970 What should be noted, particularly given the inadequacy of previous US claims, is that ‘assurances’, rather than guarantees, were required. The NACC official stated that negotiations with the US Government and Lockheed Martin were ‘progressing well’, and that the ‘Government remains confident the technology transfer issue will be resolved in time to sign the MoU’. 971 Defence Minister Nelson has said he ‘hope[d] to resolve the issue when he [met] with Defence Secretary Donald Rumsfeld’ later in the year. 972 In a joint press conference with Nelson in June 2006, Rumsfeld stated that he had discussed the matter with Nelson, and that it was his ‘understanding is that most of the issues either have been worked out or are being worked out quite successfully’. 973 Nelson stated that ‘we are confident that all of our requirements will be met on the JSF, the technology and data transfer [sic]’. 974
However, prior the meeting with Rumsfeld, Nelson repeatedly made ‘contradictory statements’ 975 indicating that Australia was firm in its plan to procure the JSF, but required access to the source codes before continuing participation in the PSFD phase. For example, Nelson stated the Government has no intention of walking away from it, but I can assure you that if we don't get the guarantees that I'm confident we will get, but if we don't get them on technology and data access and also Australian industry participation, then we most certainly would be inclined to look for an alternative. 976 Nelson was of the opinion that the US ‘laws and regulations and processes that govern the sharing of technology and information’ were a product of the technological and ======970 Defense News, ‘With JSF Accord in Hand, UK, US Wrestle Over Details’. 971 Ibid. 972 Ibid. 973 Department of Defence, Australia, ‘Transcript of Joint Press Conference with US Secretary of Defense, Donald Rumsfeld, the Pentagon, Washington, DC’. Department of Defence
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trade contexts of the Cold War, and the ‘war on terror’ was a new context in which the legal restrictions would be opened to allies. 977 However, Nelson considered the close relationship between the two allies would be sufficient to overcome obstacles to access to technology, particularly with the expressed political support of Rumsfeld and Vice- President Cheney. Nelson stated the he was certainly confident that we will be able to resolve the technology and data access issues in relation to the Joint Strike Fighter. Australia is a key ally of the United States … It’s very important to the United States, of course, that Australia have very effective and state-of-the- art air combat capability in our part of the world.978
Although not as forceful as Drayson’s arguments, Australia had taken a strong position against US restrictions to accessing technology during the March 2006 Congressional hearing. Echoing Britain’s position during PSFD phase negotiations, Gates stated ‘Guaranteed access to necessary JSF data and technology to allow Australia to operate and support the JSF will be required before we join the next phase of the project’. 979 Echoing Nelson’s attribution of the restrictions on access, Gates thought that ‘there needed to be difficult legislative change in the US to overcome the technology transfer issue’, but that the issue was ‘critical to us’. 980
The day after it publicly emerged that the US intended to withhold access to the JSF’s source codes, Australia’s National Security Committee (NSC) of Cabinet made the decision to purchase a batch of 14 JSF aircraft. Defence Minister John Faulkner would not comment on the British threat to procure an alternative aircraft if it did not receive access to technologies, stating that ‘The Australian Government has never sought full access to source codes so as to ensure that we stay common with the core JSF program’. 981 Unlike Turkey and the UK, Australia remained publicly silent on the
======977 Department of Defence, ‘Address to the American Enterprise Institute’. 978 Department of Defence, Australia, Transcript, ‘Doorstop interview, Washington, DC’, Department of Defence
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issue of source code following the JPO’s public confirmation of denying access. The timing of Australia’s decision to procure its first tranche of JSF seems to indicate that access to source code was not a key issue in the NSC decision, and demonstrates the lack of willingness to use procurement to lever advantages such as increased access to technology. These issues will be examined in further detail in Chapter 7, including the extent to which Australia examined modifications to the JSF to meet national requirements.
Conclusion While the JSF executive has been willing to accommodate modifications to the JSF to meet critical and ongoing national requirements, as with the drag chute variant, it has resisted other attempts. This has particularly been the case with sensitive technologies such as the JSF’s source code. With similar experiences where the consequences of not having access reduced critical national capabilities, and eroded national autonomy, the UK, Turkey and Australia actively lobbied for access to varying degrees. This issue demonstrated the limited capacity of JSF international partners to determine key program policies on critical issues. What this chapter also makes evident is a reluctance of partner nations other than Britain to exercise decision making powers on important program issues, instead deferring authority to the Pentagon.
Australia’s experience with the JSF source code reflects that of the F/A-18 in that it was not provided despite assurances from high level government officials that it would be shared. It seems clear that Beazley’s advice, that while the US was a close ally, it had to be fought with occasionally to get what Australia wanted, was not followed with the JSF. Defence Ministers Hill and Nelson likely weakened Australia’s bargaining position in expressing confidence in the US to share technology so as not to undermine the bilateral relationship. Importantly, the basis on which the need for access to JSF source code was made differed between Australian the UK. The British repeatedly and clearly stated that it was needed to ensure operational sovereignty, and strategic autonomy in a broader sense. Australia’s position was primarily based on the capacity for sovereignty for maintenance, which may have been an effort to ensure a role for Australia’s domestic defence industry in the decades in which it operates the JSF. It may also be the case that the Australian Government did not wish to undermine
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domestic support for the JSF by suggesting that not having access to its source code would reduce Australia’s strategic capabilities.
Like the British, Australian technology cooperation agreements sign with the US were of little value on matters of critical importance. The source code issue for the JSF highlights the limits of US cooperation, even in an environment of significant political goodwill and military cooperation, and in an explicitly cooperative defence program. For Australia and JSF source code access, faith in American government officials and agreed principles were misplaced. However, Britain’s more activist position did not gain them the access they wanted, and it may be the case that Australia limited the damage to the bilateral relationship for an issue the US was fundamentally not willing to shift on. Turkey’s success, though, in gaining access to their F-16 source code does demonstrate the utility of forceful, continued and public lobbying. The outcomes of nations lobbying for advantages, in terms of industrial and strategic gains, as a part of their JSF procurement approaches is examined in detail in the next chapter.
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CHAPTER 6: INTERNATIONAL JSF PROCUREMENT APPROACHES
An examination of the procurement approaches adopted by the partner and non-partner nations would allow Australia’s procurement to be comparatively evaluated. It has previously been difficult to compare Australia’s military procurements with those of its peers as different nations procure different weapons systems, in different political and economic contexts, and procurements occur at different times due differences in the weapon systems life cycles. However, the JSF Program offers a synchronous set of international procurements, albeit with some significantly different characteristics. This chapter will apply the proposed conceptual and analytical frameworks, using the general bureaucratic-organisational model, to international JSF procuring nations.
This chapter will establish comparators for assessing Australia’s political interactions with actors in the context of political, economic and strategic interests by examining the procurement processes, decisions and political actions of other countries involved in the JSF Program. For comparator purposes, Norway and Turkey are Level 3 partners in the JSF Program, like Australia. Israel, as a Security Cooperative Participant and not a partner in the program, should not receive the benefits only available to partner nations, and an analysis of Israel’s procurement approach will be used to test Australia’s assumptions underlying its decision to join the SDD phase. Although Chapter 3 provided an examination of international political interactions which affect national procurements, it did not focus on the specifics of the various national approaches. In examining the procurement approaches used by various nations, the analysis of this chapter will focus on the methods and successes of political bargaining between the different allied nations and US actors, particularly Lockheed Martin, with regard to achieving economic, industrial and strategic benefits.
The purpose of this chapter is to identify key themes and commonalties which can be compared and contrasted with Australia’s procurement processes. Conceptually, this focus on national approaches provides a deeper analysis than one limited to syndromes or specific characteristics. The approaches used by the different nations and the outcomes they achieved provide a way of evaluating their national defence procurement policies, which in turn, can be compared to Australia’s policies,
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evaluating Australia’s procurement policies above the level of sub-national organisational or bureaucratic politics. Ontologically, the level of analysis changes from the national to international. One key theme which will be examined is how other nations conceptualise their procurements, either as a simple transaction to procure a solution for meeting strategic need, or considering the procurement itself as a political lever for long and short term economic and strategic benefits.
It will become apparent in the analysis to follow that ‘offsets’, also known as reciprocal or counter trade, have been a significant factor in the procurement decisions of the countries examined in this chapter. Other nations procuring the JSF that explicitly use offsets include Denmark, Canada, Japan and South Korea. In the context of defense equipment, offsets ‘typically require overseas ... suppliers to directly or indirectly invest cash and technology in the economic and social development of the nation buying the arms’. 982 While the value of offsets differs from country to country, depending on levels set by government policy or the specific context of agreements, defence offsets ‘usually run between 50 and 100 percent of the contract price although sometimes they can be more than the value of the equipment or service contract itself’. 983 Lockheed Martin is heavily involved in the provision of offsets internationally, with its ‘obligations totaling just over $13 billion’ at the end of 2014. 984
Norway As Vago Muradian notes, JSF political ‘manoeuvrings have been largely optical’, that is public posturing regarding industrial work shares without significant substance, but ‘there have been a few genuine scares’, 985 of which Norway is the most prominent example. Assessing the precise level of Norway’s commitment to the acquiring the
======982 Andrew Chuter, ‘Lockheed Strikes S. Korean F-35 Offset Deal’, Defense News
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JSF for its own air force is a difficult exercise considering the differing public and private positions of Government decision makers over the many years of Norway’s involvement in the JSF Program. Robert Wall’s statement that ‘Norway would go ahead with buying the F-35 Joint Strike Fighter has long been more or less a given as long as the US showed its willingness to make the aircraft a home for Kongsberg's stealthy Joint Strike Missile’ 986 summaries the general opinion of Norway’s policy, but minimises Norway’s political manoeuvrings.
A key aspect for Norway’s participation in the JSF Program has been industrial participation for domestic manufacturing and the benefits of increasing the technological skills of its industry. In the acceptance ceremony for the competition bids in 2008, Norwegian Minister of Defence Anne-Grete Strøm-Erichsen made it clear that the ‘Government put great emphasis on the importance of ensuring a high level of industrial participation for the Norwegian defence and security related industry’. 987 Strøm-Erichsen said the long period of procurement and sustainment will bind such a large proportion of our investment budget that without sound industrial participation, Norwegian defence and security industry will have few opportunities in their interaction with us and, together, for positioning itself on the global market. 988 During Norway’s involvement in the JSF, it demonstrated the willingness and ability to lever it participation to promote Norwegian economic and strategic interests. While different Norwegian officials, including different Defence Ministers, have used different styles in conveying their demands to the US and Lockheed Martin, there has been a consistent message representing a clear government policy to use their procurement of the JSF to ensure maximum reciprocal returns.
======986 Robert Wall, ‘JSF – Norway Signs Up’, Aviation Week
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Norway signed on to be a System Development and Demonstration (SDD) phase program partner on 20 June 2002 for US$125 million.989 The Defence Minister’s announcement simultaneously demonstrated a strong indication that Norway would acquire the JSF to meet its future requirements, but at the same time created uncertainty by delaying a final decision in order to examine other options. On the one hand, the Norwegian Government ‘consider[ed] that the Joint Strike Fighter is the alternative that looks most likely to be able to satisfy our future operational requirements in a cost-effective manner’ based on a ‘comprehensive assessment’. 990 On the other hand, the Government stated the decision to sign on the SDD phase of the JSF program ‘does not imply a choice of a successor to replace the existing F-16 aircraft, and the Government is therefore ensuring that Norway can continue to follow closely the development of alternative candidates, including Eurofighter and Rafale’. 991 Norway’s non-committal position was reinforced by Leif Lindback, Norway’s National Armaments Director, during the Pentagon press conference following the SDD signing ceremony. Lindback expressed the ‘intention to review the JSF for possible procurement at a later date’, and stated that ‘No decision has been made yet as to procurement’. 992 Lindback also ‘stress[ed] that Norway remains very anxious to see substantial involvement of its own industry in the JSF program’, and noted Norway's skills in areas of propulsion and in avionics. 993
Pointedly, the government announcement highlighted the importance of industrial participation for Norway, and contained a condition of Norway’s involvement, which could be seen as a threat, or at least a strong bargaining position. The announcement stated that the agreement with the US contains clauses which give Norway special rights to terminate the agreement if Norwegian industry is not afforded satisfactory
======989 Joint Strike Fighter Program Office, ‘International Participation’, Joint Strike Fighter Program Office
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opportunities to participate. If it proves impossible to arrive at arrangements for industrial collaboration with a satisfactory content, the Government will assess how far Norwegian participation in the programme should continue. 994 As with the JSF, industrial participation has been an important feature of the marketing of other aircraft, particularly the Eurofighter Typhoon, and it was an option Norway was willing to exploit.
Demonstrating its intention to fully explore other options to the JSF, the Norwegian government announced on 28 January 2003 that it had signed ‘an overarching industrial participation agreement’ in which Norwegian industry would participate in the further development of the Eurofighter Typhoon.995 Norway committed to contributing up to €10 million over five years, with ‘All financial contributions will be made payable to the Norwegian companies on the basis of agreed work packages’ between Norwegian industry and the Eurofighter companies. 996 The agreement would allow Norwegian industry to participate in the Eurofighter program, which was at the time the largest military procurement programme in Europe.997998 Filippo Bagnato, chairman of the Eurofighter consortium, said the signing of the agreement ‘is positive signal from the government of Norway that the selection of a future combat aircraft is not yet decided for the Norwegian air force and that this procurement will take place in a competition’. 999
In April 2004, Marit Nybakk, chair of Norway’s parliamentary defense committee, took a distinctly aggressive position against the US government and Lockheed Martin following a meeting with the Norwegian defense committee and representatives from
======994 MoD, Norway, ‘New combat aircraft’. 995 Ministry of Defence, Norway, Press Release, ‘Norway to participate in Eurofighter development’, Regjeringen [Government of Norway]
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the Pentagon and Lockheed Martin earlier in the month. A key factor driving Norway’s aggressive position was the discontent among Norwegian industry and opposition politicians over the failure of the government to secure significant work in the JSF Program. 1000 At the meeting, Nybakk claimed, ‘They said they had seldom heard anyone speak out so clearly’. 1001 Norway’s complaint was that ‘negligible contracts have filtered down to Norwegian businesses’ two years after it signed onto the SDD phase. 1002 Nybakk said ‘We think there is something fundamentally wrong between Lockheed Martin and the Norwegian defense industry’. 1003 Giving the US until June ‘to make good on the deal’ for Norway’s industrial participation, Nybakk stated that ‘We mean business when we say Parliament will resolve to pull out of this contract’. 1004
Nybakk outlined a major aspect of Norway’s position, declaring ‘We will make a final decision in 2008. Until then, we want to keep as many opportunities as possible open’. 1005 To that end, Nybakk added another option to the list of JSF alternatives, highlighting Saab’s JAS-39 Gripen, ‘which has not been openly discussed’ as another option, stating ‘The Swedish alternative is also a good one’. 1006 Suggesting a change in Norway’s position and assessments of options, Nybakk stated ‘So far, the American plane Joint Strike Fighter has been the favorite, but now the Swedes are emerging as a strong challenger’, 1007 which ‘came as a surprise even to the Gripen team’. 1008 In response to Nybakk’s statements, Gripen spokesman Owe Wagermark said that this was ‘the first time since Norway chose to join the JSF program that an official from that country has so clearly considered an alternative’. 1009 Nybakk ‘denied that the
======1000 Douglas Barrie and Robert Wall, ‘Industrial expectation and competitive procurement clash over F- 35 JSF acquisition’, Aviation Week & Space Technology 160:17 (26 April 2004) 33. 1001 Doug Mellgren, ‘Norway threatens to pull out of US Joint Strike Fighter project’, Associated Press (15 April 2004) accessed via Factiva 11 January 2014. 1002 Ibid. 1003 Renae Merle, ‘Norway Threatens to Revoke Support for Strike Fighter’, Washington Post (16 April 2004) accessed via Factiva 11 January 2014. 1004 Mellgren, ‘Norway threatens to pull out of US Joint Strike Fighter project’. 1005 Ibid. 1006 Ibid. 1007 Associated Press, ‘Top lawmaker says Norway should consider buying Swedish rather than US fighters’, Associated Press (28 April 2004) accessed via Factiva 11 January 2014. 1008 Lorenzo Cortes, ‘Norwegian Official Sounds Off on JSF, Touts JAS-39 in Surprise to Gripen International’, Defense Daily 4:16 (30 April 2004) accessed via Factiva 21 February 2014. 1009 Ibid.
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possible entry of the Gripen into the contest was an empty threat to wring concessions from Lockheed’. 1010 However, a few months later in September, Norwegian Air Force sources stated that the Gripen was ‘considered unsuitable to meet Norway's future fighter requirements’, 1011 undermining, and essentially denying, the viability of the Gripen as an option for Norway.
While officials from the Pentagon confirmed Norway’s complaints, messages were mixed with some officials ‘largely dismissing the complaints’ and waited to assess ‘to what extent the Norwegian position is merely posturing to try to leverage workshare’. 1012 USAF Chief of Staff General John Jumper ‘expressed regret about Norway's unhappiness regarding its share of potential JSF development and manufacturing opportunities’ and reiterated that ‘the JSF development program does not guarantee any partner country a particular share of the program’. 1013 Jumper said ‘the program is doling out work only to companies providing the best systems at the best prices [and] Norwegian companies are not in that category’. 1014 However, JPO spokesperson Kathy Crawford stated ‘We understand fully and appreciate their concerns regarding the limited success [and] agreed to continue our efforts to improve the success level of Norwegian companies’. 1015 In mid-2004, an unnamed Lockheed Martin executive was reported to have said that they were ‘absolutely committed to finding ways for Norwegian industry and government to move forward with this programme’. 1016
In August 2004, the Norway Post reported that the Norwegian Government and Lockheed Martin came to a secret agreement that Norway’s contributions towards the development of the JSF would be reduced by half for two years due to insufficient
======1010 Inger Sethov, ‘Norway may snub Lockheed, buy Gripen fighters’, Reuters (28 April 2004) accessed via Factiva 11 January 2014. 1011 Craig Hoyle, ‘Norway carries on with JSF but keeps options open’, Flight International
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industrial contracts. 1017 The Parliament had approved Norway’s contribution of US$15m per year on the basis that the Norwegian defence industry would receive ‘worthwhile subcontracts’, but this would be reduced to US$7.5m per year for 2005 and 2006. 1018 The agreement may have been a result of Lockheed Martin shoring up government support against Parliamentary opposition as the Socialist Left Party and the right wing Progress Party unsuccessfully attempted to get a Parliamentary majority to withdraw from the JSF program in June 2004. 1019 The agreement was to be kept secret ‘because it would attract attention in other countries which are also contributing towards the development of the new jet fighter’. 1020 The Dow Jones News Service reported that a ‘government official’ had stated that Norway halved its SDD annual contributions due to ‘dissatisfaction with the level of supply contracts’, but Norwegian, US Government and Lockheed Martin officials did not confirm it. 1021
Importantly, as Teal Group analyst Richard Aboulafia noted on the issue of Norway’s disputes with the Pentagon and Lockheed Martin, ‘The key here would be to distinguish between what these smaller partners were promised and what they thought they were promised when they signed on for the JSF SDD.’ 1022 Indeed, a Norwegian government official stated that ‘Lockheed Martin had promised that some supply contracts for the fighter would be awarded to Norwegian defense companies [but] they always insisted on it being very unofficial’. 1023 Crawford said ‘her office wasn't aware of payment cuts from Norway but reiterated there was no agreement to award Norwegian companies with preferential supply contracts’, specifically stating ‘There are no offset contracts’. 1024 Along the same lines, Lockheed Martin spokesperson John Kent said that ‘no offset agreements had been signed with any of the consortium
======1017 Rolleiv Solholm, ‘Norway to pay less for JSF development’, The Norway Post
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countries’, and that ‘It was very clearly stated from the beginning that work would be awarded on the best bid basis, not on an offset basis’. 1025
On 25 January 2006, Deputy Defense Minister Espen Barth Eide made the emphatic statement ‘Let it be clear - we see the acquisition of new combat aircraft not only in a long-term capability and strategic perspective, but also in a long term industrial perspective’. 1026 Eide’s declared position was that the three aircraft options, Lockheed Martin’s JSF, Eurofighter’s Typhoon and Saab’s Gripen, ‘are good candidates [and] and will all meet our operative requirements’. 1027 He said that industrial packages offered by the manufacturers would be ‘a very important criterion’ in the selection of their next fighter, and Norway will ‘actively use the combat aircraft purchase as a means to promote and develop the Norwegian defence industry’. 1028
In stating that a ‘competitive edge will be gained by placing emphasis on contributing to the creation of the future industry platform in Norway’, Eide leveraged their power as an undecided consumer to manoeuvre the international manufacturers to invest in the long-term strategic development of Norway’s defence industry. 1029 Norway’s efforts had achieved results, with ‘all three candidates [offering] industrial packages that [were] considerably improved compared to what they were a year ago’, but Eide stated that ‘there is still room for improvement’. 1030 With the signing of the PSFD MoU approaching, Eide clarified Norway’s expectations, stating ‘It is not the volume, as much as the technological value of the industrial package, which will be the pivotal point’. 1031
In 2006, tensions again arose between the Norwegian Government and Lockheed Martin over delayed or insufficient industrial contracts for Norway. Defense Industry
======1025 Talley, ‘Norway to Halve $15M/Yr Payout to Lockheed Martin’. 1026 Ministry of Defence, Norway, Press Release, ‘Combat aircraft seminar’, Regjeringen [Government of Norway]
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Daily suggested that Norway’s previous support for the Saab Gripen ‘was scorned by most as an attempt to play hardball with Lockheed Martin, … it did not work, and now discontent from politicians is obviously blooming again’. 1032 In February 2006, Eide strengthened Norway’s bargaining position by stating that Norway would be actively assessing alternative options to the JSF, ensuring that their fighter competition would not tend to favour the JSF. Eide stated The previous government officially kept its options open but it was clear that a quasi-decision had been made in favour of the JSF. We believe that this has been unhelpful to our position. Our perceived preference has contributed to an assumption on the side of Lockheed Martin that Norway was going to buy JSF anyway. To level the playing field, we've very clearly gone back to a situation in which there are four equal candidate aircraft. 1033
It is clear from Eide’s statement that Lockheed Martin’s understanding that Norway intended to procure the JSF undermined it ability to negotiate favourable industrial contracts. Eide stated that he had recently visited Eurofighter facilities, discussed the industrial package Austria received from Eurofighter with Austrian officials, and stated that he planned on visiting Saab’s facilities and explore the industrial options with Saab’s Gripen. 1034 Eide explicitly linked the importance of JSF industry contracts to Norway’s long-term industrial sustainability, stating ‘If our industry is not involved in a meaningful way in the new fighter aircraft, they will be out in the wilderness for a decade, waiting for the next big thing’. 1035
In late February 2006, representatives from the Norwegian Ministry of Defence (MoD) and Air Force visited the JSF research plant and Eide stated that ‘if there are no signs of improved industrial relations between Lockheed Martin and the Norwegian defense industry by the time the next partnership-payment is due, Norway will resign its JSF
======1032 Defence Industry Daily, ‘Norway to Back out of F-35 JSF Over Industrial Share?’, Defence Industry Daily
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partnership’. 1036 Giving substance to the rhetoric, Norway requested a ‘waiver of its contractual requirement to provide 90 days notice of withdrawal from the programme’, which was approved, raising fears that it would be the first international partner to withdraw. 1037
Comments made by Lockheed Martin’s JSF Manager Tom Burbage in an interview on 28 March 2006 ‘were interpreted as direct threats of fines and sanctions against Norway should they go forward with their plans to pull out’. 1038 However, within a week, Lockheed Martin began damage control, and offered Norway ‘a massive industrial package with potential final upper limit of 18 to 19 billion Norwegian Kroner [approximately US$3 billion] – vastly more than what has ever previously been on the table’. 1039 Eide stated that of the 18-19 billion Norwegian Kroner, ‘ NKr12 billion is quite certain if we stay on board’. 1040 The NKr12 billion represented ‘strategic sourcing’ with the balance representing ‘the opportunity to compete for and win’ contracts for Norwegian industry. 1041 The Norwegian Government and industry believed Lockheed’s offer was ‘good enough to stay on board for now’. 1042 However, in announcing Norway’s ‘in principle’ continued participation in the JSF Program, Defence Minister Strøm-Erichsen maintained Norway’s political leverage by not committing to the JSF, stating I want to emphasise that this decision does not mean that we have decided which aircraft Norway will procure, but I am satisfied that our efforts to strengthen Norwegian industry’s opportunities have been rewarded, should we decide to choose JSF. 1043
======1036 DID, ‘Norway to Back out of F-35 JSF Over Industrial Share?’. 1037 Graham Warwick, ‘Norway commits to stay in Lockheed Martin F-35 Joint Strike Fighter programme in principle’, Flight International
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On 22 January 2007, Strøm-Erichsen announced that Norway would sign on to the PSFD phase of the JSF, with agreement previously having ‘been held back in order to achieve more tangible (industrial participation) agreements for Norwegian industry.’ 1044 Strøm-Erichsen stated that What has now been achieved in this respect is substantial enough to continue our participation in the multinational JSF collaboration. … We now believe that the industrial cooperation plans have become significantly more concrete, and based on an overall evaluation have therefore decided to move into the production phase. We have always been very explicit with regards to emphasizing the importance of industrial cooperation. 1045 Strøm-Erichsen also stated that the Norwegian Government decided to ‘continue with three candidates in the combat aircraft acquisition’, and ‘decided to negotiate agreements on development cooperation with JAS Gripen and Eurofighter’, which were ‘well on track’. 1046 By June 2007, Burbage and the JSF PEO officer Brigadier General Charles Davis were of the view that that ‘Norway [was] the country whose commitment to JSF is most in question’, although there were also concerns of the commitment of Demark and Turkey. 1047 The JPO and Lockheed Martin were ‘bracing themselves for the budget and planning effects on production’ should Norway or another country withdraw from the JSF Program. 1048
However, on 20 November 2008, Norwegian Prime Minister Jens Stoltenberg and Strom-Erichsen announced that Norway would procure 48 of Lockheed Martin’s F-35 Joint Strike Fighters. 1049 Despite the official selection of the JSF, in January 2010, Trond Giske, Norwegian Minister of Trade and Industry, reiterated Norway’s
======1044 Ministry of Defence, Norway, Press Release, ‘Defence Minister gives the all clear for JSF production phase agreement’, Regjeringen [Government of Norway]
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conditions for participation in the JSF program during a visit of the Lockheed Martin JSF factory at Fort Worth, Texas. 1050 The purpose of the Norwegian visit was to ‘to clarify to Lockheed Martin that the Norwegian authorities expect a substantial improvement of the contents of the industrial plan related to combat aircraft acquisition’. 1051 Giske stated that Lockheed Martin ‘must take concrete measures that need to produce results soon if our ambitions for industrial participation in connection with the combat aircraft procurement are to be achieved’. 1052 Norway’s ambition was that ‘the value creation associated with industrial cooperation will be of the same magnitude as the total value of the procurement’. 1053 More specifically, in November 2012, Norway's Deputy Defence Minister Eirik Øwre Thorshaug stated the Norwegian government is focused on maximising the country's industrial participation in the Joint Strike Fighter … [with the] aim to win as much in industrial contracts as we spend in acquisition costs on the plane itself. 1054 As with previous examples, Norway ignored the concept of competitive value in the pursuit of maximising Norway’s benefits from its participation in the JSF Program.
In May 2014, the Norwegian MoD articulated is more detailed account of its planned offset arrangements for its procurement of the F-35. The Ministry stated Norway’s goal ‘has been to ensure that the value generated for Norwegian industry equals the value of the aircraft-portion of the acquisition’, which is to be achieved ‘over the course of the lifetime of the aircraft’, estimated at 40 years. 1055 Norway expected the much of the industrial value would come from the production of
======1050 Ministry of Defence, Norway, Press Release, ‘Giske challenged Lockheed Martin’, Regjeringen [Government of Norway]
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components and technology for the manufacture of the F-35, but even more will come through the supply of weapons and ammunition as well as work related to the sustainment of the aircraft. 1056 In large part, Norway’s ability to achieve its planned industrial offset value will be dependent on the extent to which the Norwegian Joint Strike Missile is purchased by other JSF partner nations.
In addition to pushing for an increased role in JSF development and production, Norway has made its purchase of JSF contingent on the US supporting the development of Norwegian weapons for use with the JSF. In June 2011, Rear Admiral Arne Roksund, head of policy and long-term planning for Norway's MoD ‘openly link[ed] a JSF order to its desire for US support for the development and production of Kongsberg's Joint Strike Missile (JSM)’. 1057 He stated that The Norwegian political objective to achieve an industrial return of value equal to the procurement transfer, in my view the purchase of the F-35 is closely linked to our national development of the Joint Strike Missile. 1058 Under development since 2004, the JSM is a long-range precision-guided anti-surface missile being developed in partnership between Kongsberg and the Norwegian Armed Forces, developed from the successful Naval Strike Missile (NSM). 1059 In March 2004, the JPO announced it had awarded Lockheed Martin a sole source contract on behalf of Norway to ‘conduct a study to investigate the technical feasibility, operational implications and cost associated with integrating the Norwegian Naval Strike Missile’ for use with JSF aircraft. 1060 The F-35A and F-35C can carry two JSMs in its internal
======1056 MoD, Norway, ‘JSM - A Considerably Strengthened Norwegian Threshold’. 1057 Bill Sweetman, ‘Missile Maneuvers’, Aviation Week
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weapons bays, or two on each wing, 1061 although the F-35B cannot carry it due to its reduced internal weapons bay. 1062 In July 2014, Raytheon entered a partnership agreement with Kongsberg to compete for the US Navy’s Offensive Anti-Surface Warfare program, which is replacing the Harpoon missile, and to manufacture the JSM for US customers if the Pentagon decides to procure it. 1063 The arrangement allows Kongsberg to gain ‘better access to certain markets’, but also allows Kongsberg to ‘draw on some of Raytheon’s technologies for adding features and for future versions’. 1064 The detailed workshare was not clearly defined but ‘would treat campaign leads for export on a case-by-case basis’.1065
Beyond the economic aspects, Roksund was clear Norway’s demands also related to its strategic interests. Norway expected, or rather demanded, that their JSM be integrated into the JSF 1066 when it reached initial operational capability with the Norwegian Air Force, planned for 2019. 1067 This integration would be based on the JSF’s future Block 4 software upgrade, also planned for 2019, 1068 but since delayed until 2022-24. 1069 Roksund stated that ‘Norway’s area of interest consists of enormous land and sea areas and it’s therefore important to have a long-range precision strike missile with both land and sea capabilities’. 1070 Following on from Roksund’s statements, Bjorn Bjune, Kongsberg’s vice president for business development, stated that ‘If Norway’s F-35s are delivered without a viable weapon to counter the surface warfare threats, then there will be no reason for Oslo to buy the fighters at this time’. 1071 However, Bjune’s comments should not be taken at face value as Kongsberg
======1061 Craig Hoyle, ‘Why Norway wants the Joint Strike Missile’, Flight Global
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benefited greatly from the resulting additional contracts. Perhaps more objectively though, a few months later Colonel Roy Abelsen, Military Attaché at Norwegian Embassy in Washington, stated Norway has authority over huge amounts of sea. An aircraft without weapons is of very little use to us …. We need anti-ship capabilities. While I think the plans (to acquire the F-35 in parliament) are moving along as expected, (Norway) doesn’t want to commit before we know the aircraft has the capabilities that we need. 1072 In May 2014, Norwegian State secretary Øystein Bø declared to a US and Norwegian audience that ‘For us the JSM is deemed necessary for the F-35 to deliver the operational capability we aim at’. 1073
According to Roksund, ‘The size and complexity of the process to complete development of the weapon on the F-35 is a major undertaking for a small nation, [and] active support from relevant F-35 partner nations is therefore vital’. 1074 By this stage, Norway had spent around $1 billion to adapt Kongsberg’s NSM for the JSM, and planned to spend an additional $200 million. 1075 Norway wanted the US Department of Defense to spend $20 million annually over five years to integrate the JSM with the F-35 through Block 4 software upgrades with Norway to contribute an equal amount. 1076 While John Reed suggests that Roksund’s demand required that ‘[the US] buy it and get the other F-35 partners to buy it’, 1077 Bjune acknowledged that the integration of the JSM into the JSF ‘did not mean the US would be required to buy the missile for American versions of the fighter’, but also noted the JSM would be the
======1072 Eddie Walsh, ‘F-35 Doubts’, The Diplomat
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only missile of its type ready for service by 2019.1078 In response to the Norwegian request, Burbage stated that ‘the JSM integration decision must be made by a committee of operational advisers to the F-35 joint programme office’. 1079
Norway achieved success in its lobbying the Pentagon in pursuit of its national interests, in terms of economic and industrial advantages and strategic capabilities, and the Norwegian demands were formally met the next year. In March 2012, the Norwegian defence ministry stated that ‘Norway is cooperating closely with the US government through a bilateral working group, mandated to explore the possibilities for JSM integration on the F-35 as a multinational effort’. 1080 On the 15 June 2012, Minister of Defence Eide announced his authorisation to purchase two JSF aircraft for training purposes in the US, and the intention to purchase an additional two for training by 2016, and 48 operational aircraft from 2017. 1081 Eide stated that ‘The decision to move forward was reached following an extended dialogue with the US Department of Defence aimed at securing opportunities for Norwegian industry’. 1082 The announcement of the authorisation came a few days after ‘Confirmation of JSM integration support was provided in a letter’ from US Secretary of Defence, Leon Panetta to Minister Eide. 1083
In February 2015, the US Department of Defense announced that Lockheed Martin was awarded a $35,600,000 cost-plus-fixed-fee delivery to undertake a JSM ‘risk reduction and integration study’ of the JSF for Norway. 1084 The aims of the study were to ‘further mature JSM weapon design and to ensure compatibility of the weapon
======1078 Carlo Munoz, ‘Norway May Pull Out of JSF If No Missile Deal’, Breaking Defense
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with the F-35’. 1085 Norway was only obligated to contribute US$10m of the contract value, with the work evenly split between Lockheed Martin in Fort Worth and Kongsberg in Norway, and is expected to be completed by March 2018. 1086
Turkey Like Norway, a major characteristic of Turkey’s involvement in the JSF Program has been its dissatisfaction with its industrial workshare, suggestions it would leave the program, and explicit interest in competing aircraft, potentially as a lever for increasing their workshare. Serhat Güvenç and Lerna Yanık argued that the ‘relationship between Turkey and the [JSF] consortium may appear to be rocky … because of Turkey’s many hesitations to commit to the JSF Program’, but that ‘these hesitations are strategic, designed to extract maximum benefits for Turkey’s defence industry’. 1087 While Turkey has certainly been dissatisfied with their workshare, and expressed this dissatisfaction to various US officials and Lockheed Martin, there is some evidence that the public rhetoric did not always match confidential discussion with US officials. It may be the case that statements made by Turkish officials differ depending on the audience, either domestic or international.
As Güvenç and Yanık note, an ‘issue of prime concern for Turkey was local work- share [as] the participation of local industries was made a precondition for Turkey’s participation’. 1088 For Turkey, their allocated work-share would have to include design and development 1089 to improve the capabilities of its defence industries and contribute towards developing their own air superiority fighter. Jane’s Defense Weekly reported that ‘Many Turkish defence industrialists believe increased participation in multinational projects would be an ideal procurement model if Turkey wants to win technological gains’. 1090 In opposition to the best value principle of the JSF Program, the Turkish position was to secure a workshare for domestic industry valued at least 50 ======1085 US DoD, ‘Contacts CR-024-15’. 1086 Ibid. 1087 Serhat Güvenç, and Lerna K. Yanık, ‘Turkey’s involvement in the F-35 program: One step forward, two steps backward?’, International Journal 68:1 (Winter 2012-13) 111. 1088 Ibid, 120. 1089 Lale Sariibrahimoglu, ‘Turkey may withdraw from JSF programme’, Jane’s Defence Weekly (10 November 2004) accessed via ProQuest 27 December 2013. 1090 Sariibrahimoglu, ‘Turkey may withdraw from JSF programme’.
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percent of the JSF’s procurement cost. 1091 Although Turkey had lobbied for Turkish industrial participation ‘from day one’, and signed a letter of intent with Lockheed Martin in October 2001, several years elapsed without an allocation of workshare. 1092
During the July 2002 ceremony for Turkey signing on to the SDD phase of the JSF program as a Level 3 partner, with a $175m contribution, 1093 US and Turkish officials expressed a reserved optimism on the extent to which Turkish industry would contribute to the program. Pete Aldridge, US Under Secretary of Defense for Acquisition, Technology and Logistics, said that the there were ‘no guarantees’ that Turkey’s industries could ‘participate at all’, but also stated that ‘we have done enough homework and Lockheed Martin has been to Turkey, talking to their industry, knowing that there can be a substantial amount of industrial participation in this program’. 1094 Dersan Ali Ercan, Turkish Under Secretary for Defense Industries, stated that ‘we think and hope that the Turkish defense industrialists will be able to take part in most aspects of the project’, but also placed an emphasis on software. 1095 Ercan also ‘declined to say how many JSFs Turkey could buy or when the country could make such a decision’, indicating that these decisions would be made at a later time during Turkey’s procurement process. 1096
By 2004, Turkey had won some subcontractor work in areas such as mechanical and electronic subassemblies, pylons and crash-survivable memory units, 1097 valued at around $74 million, 1098 but was dissatisfied with the level and quality of industrial participation. Murad Bayar, Undersecretary of Turkey's Defence Industries procurement agency Savunma Sanayi Mustesarligi (SSM), argued that in return for committing to buy the fighters, ‘Turkey should be given a significant share of work in ======1091 Güvenç and Yanık, ‘Turkey’s involvement in the F-35 program’, 121. 1092 Ibid. 1093 United States Department of Defense, ‘United States and Turkey Sign Memorandum of Understanding’. United States Department of Defense
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the project’. 1099 While Lockheed Martin and JPO officials stated that Turkey’s position ‘runs contrary to the philosophy of the programme to award all subcontracts solely on the criteria of best value for money’, Bayar noted that Lockheed Martin ‘has been using certain discretion in how this pie will be distributed’. 1100
In November 2004, a senior official with the SSM stated that it was considering withdrawing from the JSF Program ‘due to insufficient workshare for Turkish companies’, with a final decision to be made following a detailed working group study. 1101 Despite the concerns expressed by Bayar and SSM officials, Lockheed Martin and the JPO were positive about Turkey’s industrial opportunities. 1102 Burbage said that Turkey had not given any indication of withdrawing, stating ‘My sense is that they are pretty solidly behind the programme and that they appreciate the work that we are doing to try to enhance their ability to bid for work’. 1103 In an effort to support Turkish industry without directly providing offsets, Lockheed Martin was ‘sponsoring Turkish industrial forums in the US to expose the Turkish companies to US suppliers’. 1104
A November 2004 diplomatic cable from Eric Edelman, the US ambassador in Turkey, indicated that SSM Deputy Undersecretary Faruk Ozlu had ‘dismissed press reports … that Turkey was considering withdrawal from the Joint Strike Fighter (JSF) program due to unhappiness with Turkey's workshare’. 1105 While Ozlu told US officials that ‘it would be difficult for Turkey to leave the JSF program at this point’ he ‘did acknowledge the government's unhappiness with its current JSF workshare’, considering it ‘to be the ‘weak point’ in its participation’. 1106 Ozlu also noted that Turkey’s expenditure of $8bn on the JSF ‘would create difficulties for the government if the Turkish workshare was inadequate’, and that ‘SSM was working with Turkish
======1099 Sariibrahimoglu, ‘Turkey may withdraw from JSF programme’. 1100 Ibid. 1101 Ibid. 1102 Ibid. 1103 Ibid. 1104 Ibid. 1105 Wikileaks, ‘04ANKARA6481_a, Turkey Remains Committed to Joint Strike Fighter Project’, Wikileaks
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firms to increase their competitiveness’. 1107 Similarly in November 2005, Defense Minister Vecdi Gönül told US officials that Turkey was ‘generally happy with the Joint Strike Fighter’, even though he ‘complained about Turkey's insufficient work- share in the program’, and that ‘he was confident that Turkish industry … could (and should) have a bigger role in the program’. 1108 Gönül and Bayar told the US officials that they ‘believed the Turkish parliament would look closely at work-share when considering the budget for JSF next year’. 1109
In order to expand its industrial workshare, Turkey used the 2006 PSFD deadline as leverage against the US and Lockheed Martin. Turkey strengthened its negotiating position in early January 2005 when the SSM issued a request for information to US and European manufacturers for 120 fighters which ‘ran counter to the belief that Turkey’s participation in the JSF was a foregone conclusion’. 1110 In offering Turkey 100 percent offsets and equal rights as a full partner, the Eurofighter consortium proposal was seen as an attractive alternative to the JSF. 1111 Bayar stated that, by the end of 2006, Turkey would choose whether to participate in the PSFD phase and ‘whether to go for the F-35 only, the Eurofighter only, or both’. 1112 Bayar stated that ‘My final target is to receive up to US$6 billion worth of workshare within JSF’, but ‘noted his satisfaction with Lockheed Martin's initial proposal’ of $3.5bn in sub- contracts, 1113 which was provided two months before Eurofighter’s response. 1114 Jane’s Defense Weekly suggested that ‘The Eurofighter consortium's strong lobbying presence in Ankara may have played a critical role in Lockheed Martin's proposal’. 1115
======1107 Wikileaks, ‘Turkey Remains Committed to Joint Strike Fighter Project’. 1108 Wikileaks, ‘05ANKARA6805_a, ASD Flory and MoD Gonul Discuss US-Tu Defense Relations’, Wikileaks
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In August 2010, Muharrem Dortkasli, Turkish Aerospace Industries’ (TAI) president and chief executive officer, said that TAI ‘made significant investment since 2007 in new technologies and facilities required to meet F-35 program requirements’, and since 2008, had been ‘producing increasingly complex components and subassemblies for Northrop Grumman-assembled center fuselages’. 1116 TAI’s production of composite components was facilitated by considerable help from Northrop Grumman, particular in training TAI’s workforce. In 2009 and 2010, TAI staff attended a ‘series of successful composites manufacturing training sessions’ at Northrop Grumman's Advanced Composites Center, which included ‘rigorous classroom and hands-on work to teach the TAI employees how to fabricate an F-35 inlet duct from start to finish’. 1117 In December 2013, TAI delivered its first centre fuselage section to Northrop Grumman at its Ankara facility.1118 Brian Chappel, vice president of Northrop Grumman’s F-35 program, stated that ‘We worked hand-in-hand [with TAI] to manufacture the first center fuselage’. 1119
On 5 January 2012, Turkey placed an order for its first JSFs, but reduced the number from the expected six to two aircraft. 1120 Güvenç and Yanık stated that ‘the initial order was deliberately reduced … in order to make a statement about dissatisfaction with the current level of work-share given to Turkish companies’, as well as frustrations over access to source codes. 1121 In January 2013, Turkey announced its decision to postpone the order placed in January 2012 for it first two F-35s due to rising costs and technological issues. 1122 In April 2012, Turkey suggested JSF Program costs ‘could be reduced by outsourcing more production to Turkish defense and aerospace companies’ because of the lower labor costs in Turkey compared with the US and other European ======1116 Northrop Grumman, ‘Key International Northrop Grumman F-35 Supplier Delivers First Large, Complex Composite Structure’, PR Newswire
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program partners. 1123 Following on from the January 2013 announcement, a senior SSM stated ‘we can compensate for rising costs with larger work share for our domestic industry [and] If things get worse we can consider an F-16 buy’. 1124 On 8 May 2013, Steve O’Bryan, Vice President of F-35 Business Development at Lockheed Martin announced ‘business worth around $12 billion for Turkey’ with the production of 3100 JSF aircraft till 2039. 1125 In October 2013, Bayar announced that by January 2014, SSM would submit a request to renew the JSF order postponed in January. 1126
In May 2013, ‘Lockheed Martin pledged to integrate’ the Turkish Stand-Off Missile (SOM) into the Block 4 software upgrade phase of program. 1127 In September 2013, Roketsan, Turkey’s state-controlled missile manufacturer, announced it had begun developing a variant of its SOM that is compatible with the Joint Strike Fighter, designated the SOM-J. 1128 In late October 2014, Lockheed Martin and Roketsan signed a deal to coproduce Roketsan’s SOM-J cruise missile for the JSF Program. 1129 As well as development and production, the deal between Lockheed Martin and Roketsan includes the ‘marketing, selling and supporting of the SOM-J’ for use with the F-35 or other aircraft. 1130 Defense News reported that ‘Industry sources said the deal comes as part of Turkish local industry participation in the JSF program’, 1131 and Israel’s Defense Update reported that ‘The integration of SOM as part of the weapon mix of
======1123 Burak Bekdil, ‘Turkey Says Cost, Problems Prompted JSF Purchase Delay’, Defense News
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the F-35 was one of the demands posed by the Turkish government pursuing procurement of the F-35’. 1132
Israel Following two years of negotiations and ‘disagreements’, Israeli Defense Minister Ehud Barak approved the in principle the purchase of 20 F-35s in August 2010 at a cost of $2.75 billion.1133 Disagreements with the Pentagon included the Israeli Air Force's ‘demands that Israeli-made systems be installed for specialties such as electronic warfare and communications’ and Israel also ‘want[ing] to expand the plane's capacity to allow it to carry Israeli-made missiles’. 1134 However, the agreement was opposed ‘by defense officials and several ministers’ on the grounds that the ‘JSF was too expensive and failed to demonstrate its promised capabilities’. 1135 The World Tribune reported that Officials said the United States pressured the Netanyahu government to grant final approval to the JSF deal [as] … the administration of President Barack Obama wanted to use the JSF to overcome opposition by Congress to a proposed $60 billion US military deal with Saudi Arabia. 1136 Some members of the General Staff ‘criticized the high price of the deal’ because it did ‘not allow for investment into weapons for the land forces and navy’. 1137 Several ministers ‘expressed concern over the JSF deal’, citing the ‘US decision not to allow Israel to install indigenous systems on the F-35’, including Finance Minister Yuval Steinitz who ‘demanded an examination of F-35 cost estimates as well as the
======1132 Tamir Eshel, ‘Turkey, US to modify the SOM cruise missile for use with F-35’, Defense Update
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repercussions of Israel's defense industry being denied access to the aircraft’. 1138 However, Prime Minister Netanyahu ‘quashed Cabinet discussion of the feasibility of JSF’. 1139
Two weeks before the announcement, Barak and Defense Ministry Director-General Udi Shani ‘visited the United States and met with senior officials in the Pentagon, as well as representatives of Lockheed Martin, to discuss the purchase’. 1140 Shortly before the meeting, Barak indicated the importance of finding ‘an agreed upon balance between our needs and the American readiness to give us access to these advanced planes’. 1141 Israel’s needs, Barak stated, was to participate in production of some parts in our industry [sic] as well as making sure that we can continue keeping our real edge which stems out from Israeli electronics and from our weapons' systems …. if the plane has to serve us for two generations practically we need to be able to adapt to technological developments along the way, EW [electronic warfare] and weaponry, where we have highly advanced systems of our own. 1142 Barak also expressed a desire for some kind of technological compensation for the planned US sale to Saudi Arabia of advanced F-15SA (Saudi Advanced) Eagle strike fighters. 1143 The advanced features of the F-15SA included fly-by-wire flight controls, a digital electronic warfare suite, Lockheed Martin’s infrared search and track system, Raytheon’s AESA radar, and a joint helmet mounted cueing system. 1144
======1138 World Tribune, ‘Israel approves purchase of F-35, under pressure from administration’, World Tribune
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Negotiations led to the agreement that Israel would purchase their first squadron of 20 F-35s from the first production series, with the installation of only ‘a few Israeli-made systems’. 1145 However, the US ‘agreed that if Israel buys more F-35 squadrons from later production series, the installation of more Israeli-made systems will be allowed’. 1146 Shani was reported to have stated that ‘a significant factor in closing the deal included previous agreements on integrating Israeli defense contractors in producing the jet for other clients’, and ‘To sweeten the deal, Lockheed Martin said it would buy parts and systems for the F-35 from Israeli companies at a cost of $4 billion’. 1147
While the Pentagon approved the integration of the Israeli Rafael Python 5 short-range air-to-air missile and Spice precision-guided weapon kit in November 2009, Israeli industry officials ‘continue[d] pushing for a larger role’ industrial role in the JSF program. 1148 Israel Aerospace Industries (IAI) ‘want[ed] a major role in the F-35 supply chain in return for Israel agreeing to sign an order’. 1149 Amnon Weidberg, deputy director for marketing and business development for IAI's Lahav division said that ‘The Israeli air force is an important customer, a very prestigious customer ... I hope the Israeli government will leverage [its clout] with Lockheed Martin to give us more work’. 1150
In 2009, the JPO had indicated that ‘Israeli electronic warfare systems would be excluded from any purchase agreement’, 1151 although Lockheed Martin would ‘tie in Israeli-built command, control, communications, computer and intelligence systems for a unique version of the jet for sale to Israel’. 1152 Jon Schreiber, Director of International Programs for the JPO stated ‘Sometime in the future, if policy changes,
======1145 Pfeffer, ‘Defense Minister Barak approves purchase of 20 F-35 fighters’. 1146 Ibid. 1147 Ibid. 1148 Stephen Trimble, ‘Israeli industry welcomes F-35 weapons agreement, but demands more’, Flight International
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or things change, [the inclusion of Israeli electronic warfare systems] could change as well’ and that ‘Israel would get a relatively inexpensive path for hardware and software upgrades to add future weapons ’.1153 The electronic warfare system was to be manufactured by IAI's Elta Systems subsidiary, who has also ‘lobbied to offer its active electronically scanned array radar for the F-35’, although is also unlikely to be approved. 1154
Schreiber had met with Israeli procurement officials in New York in November 2009 to ‘to discuss a ‘roadmap’ for the proposed government-to-government F-35 sale’. 1155 The US planned to submit its formally submit its offer and prices in January 2010, with Israel to approve it by March and reach a deal with Lockheed on integrating the Israeli weapons and other systems by June or July 2010. 1156 Israel would pay the standard government-to-government Foreign Military Sales commission (FMS), as well as ‘whatever the integration of its systems might cost’. 1157 However, in January 2010, it was reported that ‘radars made by IAI's Elta Systems and Israeli-made electronic warfare equipment [were] still in debate’, and that ‘IAI has even considered playing a role in the development of a two-seat variant’ in the longer term. 1158 While it was not clear how Israeli F-35s would be maintained, Israeli industry expressed the need that ‘F-35 depot maintenance should be performed within national borders’, despite Lockheed Martin’s plans to ‘consolidate European depot maintenance work in Italy’. 1159 With negotiations stalemated, it also emerged in early 2010 that the Israeli Air Force was ‘also objecting to a plan to send systems or complete aircraft to a European support centre’ in Italy. 1160
======1153 Wolf, ‘US pitches unique F-35 fighter jet to Israel’. 1154 Trimble, ‘Israeli industry welcomes F-35 weapons agreement, but demands more’. 1155 Wolf, ‘US pitches unique F-35 fighter jet to Israel’. 1156 Ibid. 1157 Ibid. 1158 Stephen Trimble, ‘Israel sets sights on two-seater F-35’, Flight International
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Barak stated in August 2010 that agreements had been reached ‘for the inclusion of defense companies in the production of the plane … and reciprocal procurements of at least $4 billion’, 1161 with agreements to ‘integrate the Israeli industry in the aircraft's production’ for the Israel Air Force and additional customers. 1162 In addition, Israeli defence officials said there were ‘prospects of upping that amount by at least another $1 billion over the next decade’ as Israeli Ministry of Defence procurement officials were ‘continuing contacts with involved parties with an eye toward reaching $5 billion in JSF buybacks for Israeli firms’. 1163 However, Barak’s statement ‘intentionally omitted details of prospective offset awards, which must be negotiated directly between Israeli firms and Lockheed Martin’ following the official approval by the Israeli government and the finalisation of FMS contracts between Israel and the US. 1164
However, tensions arose between the Israeli Ministry of Defence and Israeli defence industry following the announcement, with industry claiming ‘uncertainty, lack of clarity, lack of confidence, confrontations, and mixed messages’. 1165 Lockheed Martin’s reported position was that if Israeli products are found to be worthy, appropriate, of especially high quality, and at a reasonable price, contracts could be signed to integrate Israeli companies in the production of part or all of the 2,000 F-35s planned to be built. 1166 However, ‘declarations of intent from Lockheed Martin’, or official statements by Barak or Shani, were not considered adequate for some defence companies considering the significant capital investments they would need to make. 1167 Israeli defence sources ‘rejected the claims by the defense companies out of hand, stating the claims were due to ‘ignorance in the best case, and deception in the worst case’, and officially
======1161 Stella Korin-Lieber, ‘Israel defense companies press for bigger stake in F-35’, Globes
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responded that ‘This achievement will enable Israeli companies to participate and enter fields they've never been in before’. 1168 However, Stella Korin-Lieber noted that this was ‘the final stages of negotiations ... [and] several Israeli defense companies [were] trying to use the Ministry of Defense to obtain better commercial terms from Lockheed Martin, [and] the US administration’. 1169
Based on the planned $2.75 billion F-35 procurement, the reciprocal procurement ratio would be 150 percent if the $4 billion target was achieved, or 180 percent for the $5 billion target. 1170 However, following protests in Canada over the unprecedented value of the Israel’s workshare, and particularly given the workshare limitations imposed by the JSF Program’s rules, Israeli Defense officials clarified Israel’s arrangements with Lockheed Martin, admitting that ‘the initial information from Barak's bureau was incomplete, and potentially misleading’. 1171 Israeli officials ‘stressed’ that Barak’s announcement of $4 billion worth of offset contracts ‘was not made from political motives, and that the exaggerations it contained were not an effort to persuade members of the cabinet to approve purchase of the aircraft’. 1172 Israeli Government and industry sources subsequently estimated that Lockheed has actually pledged only some $800 million in JSF- related work [in Israel], most of it associated with supply of Elbit- developed helmet-mounted displays and a separate wing-related production contract with state-owned Israel Aerospace Industries. 1173 Despite the offset arrangements with Israel, Lockheed Martin stated that the industrial workshare was ‘based on the programme's best-value tenet’. 1174
On 4 November 2014, IAI inaugurated wing production line for its Lahav Division, in which it invested ‘tens of millions of dollars. 1175 IAI is scheduled to produce more ======1168 Korin-Lieber, ‘Israel defense companies press for bigger stake in F-35’. 1169 Ibid. 1170 Ran Dagoni, ‘Israel's F-35 demands draw sharp criticism’, Globes
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than 811 pairs of wings over the next decade beginning in mid-2015 for shipment to the Lockheed Martin’s Fort Worth final assembly facility, at a rate of four pairs per month. 1176 IAI claims the arrangements with Lockheed Martin ‘has a potential value of $2.5 billion over 10-15 years’. 1177 However, IAI is only currently contracted to manufacture 20 wings, but a memorandum of understanding with Lockheed Martin covers the production of a total of 811 wings. 1178 As Flight Global reported that ‘The production facility will supply the wings for aircraft to be delivered to customers outside of the programme's nine partner nations, which are already supplied by Alenia Aermacchi’, 1179 so the 811 wings may be potential only as the planned procurement of F-35s by non-partner nations is far less than 800.
Conclusion For Norway and Turkey, the main characteristic of their procurement processes from the beginning of the SDD phase in 2002 were political battles for industrial workshares. However, it should be noted that the promised industrial contracts of 2004 and soon after are not necessarily a direct result of political lobbying by the JSF international partners. By late 2003, the large majority of JSF development contracts were with US companies, but the US supplier production base in some areas was insufficient to meet production levels. 1180 US contractors were ‘asked to set aside some of their excess work to help offset workshare imbalance with international partners’. 1181 As US manufacturers would need to invest millions of dollars in
======1175 Arie Egoiz, ‘IAI opens F-35 wing production line’, Flight International
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expanding infrastructure to meet demand, there was a sound economic logic in outsourcing the excess workshares. 1182
Nevertheless, the themes of Norway’s JSF procurement approach include operational concerns, economic/industrial interests, and a long term assessment processes. By not overly committing to the JSF in the early stages, and actively keeping other aircraft options as viable alternatives open, Norway created political leverage in which it could promote its own interests against those of the US and Lockheed Martin. Norway’s signing on to the JSF SDD and PFSD phases, without committing to purchasing the aircraft, allowed Norway to reap economic benefits from the negotiations of the production phase, and also allowed Norway to retain political leverage for future negotiations until aircraft purchase orders were finalised. In press releases announcing Norway’s continued participation in the JSF program, Norwegian officials made it clear that other aircraft were still being assessed by the Government, with the other contenders appearing to be viable alternatives.
An important theme is clear intention of the nations examined to use their procurement of the JSF to derive long and short term economic/strategic benefits. To varying degrees, each nation used the interests and incentives of Lockheed Martin, who sought to maximise sales, to create investments in their domestic industries. Significantly, the nations examined sought technological advancements to their local industries, as opposed to simply a quantity of local production, and used the global nature of the JSF to develop and promote national capabilities. Of particular note, Norway and Turkey used their participation in the JSF program to lever external assistance in developing their domestic missiles to address their own security needs, but also with the opportunity to export them to other customers, including other JSF procurers. Despite the program principle that only program partners would be able to gain production workshares, Israel was able to negotiate a significant workshare, as well reversing the US position, to some extent, on incorporating indigenous systems in the JSF. What is also evident from the analysis of this chapter is that, given workshare allocation is a zero-sum game in which the production of limited numbers of aircraft limits the total workshare pool, national pushes for increased workshares were
======1182 Hoyle, ‘F-35 contractors offer workshare deals’.
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systemic in the JSF program. In comparison to Australia, this analysis highlights questions as to the extent to which the Australian government considered the JSF as an opportunity to gain long and short term economic/strategic benefits, what actions Australia took to pursue these benefits, and what benefits were actually achieved. These questions are particularly important in assessing the costs and benefits of Australia’s defence policy of not using industrial offsets. Building on this analysis, Chapter 7 will examine the extent to which Australia’s industry policy creates a disadvantage while other nations adopt contrary policies.
Other themes that contrast with Australia’s procurement, thus signalling an opportunity for targeted analysis, include the nature of the Australian responses and outcomes for workshare bargaining. Also, as many of the companies that benefitted from additional workshares were partly or fully nationally owned, there is a question as to whether national ownership results in a stronger willingness to expend political capital in pursuit of additional benefits. Conversely, the willingness and ability of national industries to complain and pressure their governments or defence contractors can be compared to Australia’s procurement. An alternate possibility for investigation is that Australia’s defence industry was much more sophisticated and competitive that those of other partner nations, and it was not necessary to apply pressure to the US or US contractors.
The questions raised from the analysis of this chapter highlight the value in using the broad conceptual/analytical framework. Traditional analytical tools are primarily limited to national contexts, where the policy and national actor environment tends to be taken as fixed, not in themselves subject to analysis. Through recognising the international nature of the JSF program, which includes international and national competition as well as collaboration, Australia’s procurement can be compared and contrasted with other nations on broadly equal terms. With essentially the same procurement taking place in different nations, variables such as government policies can be assessed. The comparative approach results in issues of similarity or difference that may not otherwise be apparent. The similarities and differences can be assessed for importance and relevance, leading to the identification of questions that feed back into a deeper analysis of Australia’s procurement. This deeper analysis will be conducted in Chapters 7 and 8.
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CHAPTER 7: AUSTRALIA’S PROCUREMENT APPROACH
On 27 June 2002, Australia declared its intent to join the JSF Program, as well as announced it had effectively cancelled the selection process and competition to replace its fleet of F/A-18 and F-111 aircraft, selecting the JSF. As Andrew Fowler argued, Australia’s decision to acquire the JSF ‘seemed to bypass the normally intensive investigations that governments put themselves through when making multi-billion dollar defence acquisitions’. 1183 It was an ‘odd’ 1184,1185 decision made and announced with ‘almost no public debate or scrutiny’. 1186 Among the international JSF international partners, this was a unique approach. This chapter tests the assumptions of the RAAF and Australian Government that informed the 2002 declaration, in comparison with Dutch assessments in some cases, and argues that many assumptions have proven to be flawed. It will examine the informal organisational-bureaucratic politics that contributed to the 2002 declaration, particularly the influence of RAAF advice superseding the advice of other defence organisations. From the late 1990s, when the JSF Program was still in its infancy, Australian defence officials, particularly from the Air Force, indicated a distinct preference for the JSF. These preferences are likely to predate the preferences of the Department of Defence for the JSF discussed in the previous chapter.
The timeline of development of the JSF outlined in Chapter 3, particularly the high risk of the Program in the early to mid-2000s, should be considered in the context of Australia’s early enthusiasm for the JSF, and the inherent risk in Australia’s 2002 declaration. The JSF only emerged as a program distinct from its previous incarnation as the JAST Program in early 1996. Lockheed Martin won the competition to develop
======1183 Andrew Fowler, Transcript, ‘Flying Blind’, Four Corners, Australian Broadcasting Corporation
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the JSF at the end of the Concept Development Phase (CDP) in October 2001, 1187 and the F-35A, the Air Force version Australia intended to procure, first flew on 15 December 2006. 1188 Australia’s enthusiasm for the JSF during the late 1990s is surprising considering a single prototype had yet to be selected, and little time had expired between Lockheed Martin’s 2001 selection and Australia’s June 2002 declaration for development processes to be determined and tested.
As discussed in Chapter 3, the US considered the JSF to be a solution to the problem of the need to modernise their tactical aircraft fleet during a period of reducing defence spending during the mid to late 1990s. During this period, Australia was also facing budgetary constraints, with a lack of discretionary funding initially excluding Australia from participating in the early JSF CDP. While cost was stated to be a major factor in Australia’s subsequent participation on the JSF Program, and a rationale for Australia’s JSF industry strategy, the steady increase in estimated airframe and sustainment costs over many years has not affected Australia’s procurement decision. Indeed, this chapter will argue that there has been a wilful ignorance in the Australian Defence Organisation, conceptualised as a ‘conspiracy of optimism’, in which Australian officials have deliberately used optimistic estimates from the US, and rejected more pessimistic estimates of risks, costs and schedules.
Australia has not used its political leverage as a participant in the JSF Program to push for additional economic benefits in the same manner as other nations, especially Norway or Turkey. Australia has explicitly and repeatedly committed to winning ‘best value’ JSF contracts based on the international competiveness of Australia’s industry. While Australia’s defence industry policy opposes using offsets due to the costs financial premiums, the Norwegian and Turkish examples demonstrate economic benefits are obtainable in fact and in potential, without the economic costs associated with conventional industrial offsets, through the exercise of political efforts. Importantly, Australia’s official defence industry policy of excluding offsets is based on a flawed understanding of the nature of JSF Program in which assumptions are
======1187 Christopher Bolkcom, ‘Joint Strike Fighter (JSF) Program: Background, Status, and Issues’, Congressional Research Service (11 January 2002) 2. 1188 Australian National Audit Office, Management of Australia's Air Combat Capability: F-35A Joint Strike Fighter Acquisition (Canberra: Australian National Audit Office, 2012) 88.
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made in reference to previous procurement programs without appreciating the differences with the JSF industry model.
Early Interests and Assessments In mid-1996, Australia was one of the many US allies given a briefing by JSF Program officials, 1189 which were ‘formal sales pitches … to bolster international cooperation’. 1190 It resulted in some European allies signing on to the early phase of the program, 1191 and interest being shown in Australia. In July 1996, Australian Chief of Air Staff Air Marshal Les Fisher ‘expressed a clear preference’ for the JSF to replace the current fleet by 2015, 1192 stating the ‘RAAF is eyeing the US/UK Joint Strike Fighter as the only viable replacement for both its F/A-18 and F-111 fighter aircraft’. 1193 However, he was of the opinion that Australia ‘will not attempt to become involved in the ongoing JSF studies and ensuing development’ because of a lack of funding. 1194 Fisher said Australia ‘would wish to influence the design by participating in an early stage of the programme’, but did not think Australia ‘would be in a position to commit dollars’ joining the CDP or subsequent development phases. 1195 While he acknowledged the other candidates, Fisher indicated a preference for a single aircraft to replace both legacy aircraft, specifically indicating a preference for the JSF to address Australia’s future needs. 1196 He said the F-22, EF 2000 and Rafale ‘would be too expensive’ while the JAS 39 Gripen ‘is disqualified by bad timing - it is becoming available now which is too early’. 1197 However, Fisher stated that the ‘timing and the $25-35 million price of JSF is good. We have to start looking for a replacement in the next four years, and we will be very closely investigating it.’ 1198 ======1189 Vago Muradian, ‘JSF Officials to Visit Belgium to Broaden European Participation’, Defense Daily 191:48 (6 June 1996) accessed via Factiva 16 July 2013. 1190 Vago Muradian, ‘Canada Considers Joining JSF Effort as an Observer’, Defense Daily 192:57 (19 September 1996) accessed via Factiva 23 August 2013. 1191 Ibid. 1192 Joris Janssen Lok, ‘RAAF F/A-18s may go for early retirement’, Jane’s Defence Weekly (26 February 1997) accessed via ProQuest 23 February 2014. 1193 Joris Janssen Lok, ‘Joint Strike Fighter tops Australia’s wish list’, Jane’s Defence Weekly (31 July 1996) accessed via ProQuest 23 February 2014. 1194 Ibid. 1195 Ibid. 1196 Ibid. 1197 Ibid. 1198 Ibid.
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The following year, other senior Australian Defence officials began to publicly express an early interest in the JSF Program. In late 1997, Donald Sinnott, First Assistant Secretary for science policy at Defence Science and Technology Organisation (DSTO) stated the JSF 'will start looking attractive if we can keep our [present] aircraft flying for a very long time’. 1199 Around the same time, Air Vice-Marshal David N. Rogers, Head of Capability Development in Australian Defence Headquarters (ADHQ), considered the JSF as a ‘potential candidate'. 1200 Rogers stated ‘We do have an interest in JSF, and we're giving a lot of consideration to joining’. 1201 1202
In August 1998, Air Commodore Raymond Perry outlined the scope of Australia’s assessment of future fighter procurements in a media interview in Washington. Perry’s position differed from the previous positions as he considered all options ‘on the table’, except for the Rafale, stating that Australia was ‘looking at the F-22, JSF, Eurofighter and even some of the emerging technologies associated with uninhabited combat vehicles’. 1203 He indicated that Australia may select a high-end only procurement, i.e. the F-22, but ‘expect[ed] that we will still probably need to go with something of a mix. 1204 However, Perry acknowledged that ‘fighters will probably not be the central focus of Australia's search’, but that ‘We always look for high-end capability’. 1205
Australia demonstrated enough interest in the JSF in 1997 and 1998 for serious negotiations to take place with US officials for Australia to officially join the JSF program. In an interview with Defence Daily , in February 1998, Mike Ives, acquisition and logistics counsellor at the Australian Embassy in Washington DC, outlined Australia’s progress in the negotiations, and a preference for the JSF. Ives stated that the ‘decision hasn’t been made, but I’ve been tasked to start some detailed
======1199 Aviation Week & Space Technology, ‘Australia to Join JSF Program Soon’, Aviation Week & Space Technology 147:8 (25 August 1997) accessed via Factiva 25 August 2013. 1200 Ibid. 1201 Ibid. 1202 Ibid. 1203 Ibid. 1204 Ibid. 1205 Ibid.
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discussions that would allow a decision to be made in the next few months’. 1206 He believed that while Australia was initially interested in an observer role, Australia would look to expand its participation in subsequent development and manufacturing phases. 1207 He said Australia future participation ‘is not tied exclusively to industrial participation, but would, for example, include interoperability and access to advanced technologies. 1208 Ives acknowledged that while the F-22 had been proposed as a potential candidate for acquisition, ‘it is not under active consideration, largely on price grounds’. 1209 It is not clear why Australia did not join the CDP given favourable reports of the negotiations. 1210,1211,1212
During this period, very high level Australian and US defence officials held meetings in which the JSF was a significant topic. In late June 1998, Defence Minister Ian McLachlan met with US officials in the United States to hold discussions before the Australia-US Ministerial (AUSMIN) talks scheduled to be held in Sydney the following month. 1213 McLachlan separately met US Secretary of Defense William Cohen and Under Secretary of Defense (Acquisition and Technology) Jacques Gansler. 1214 Senior US Defense officials briefed him on ‘the latest space and aircraft technology, including the Global Hawk Unmanned Aerial Vehicle, and the Joint Strike Fighter projects’. 1215 A month later, Defense Secretary Cohen and Secretary of State Madeleine Albright travelled to Australia ‘to discuss security issues and developing military ties throughout the region’. 1216 A senior US Defense Department official
======1206 Vago Muradian, ‘Australia eyes observer role in the Pentagon’s JSF Program’, Defense Daily 198:33 (19 February 1998) accessed via ProQuest 27 December 2013. 1207 Muradian, ‘Australia eyes observer role in the Pentagon’s JSF Program’. 1208 Ibid. 1209 Ibid. 1210 Ramon Lopez, ‘Australia signs for JSF’, Flight International (27 May 1998) accessed via Factiva 16 July 2013. 1211 Aerospace Daily, ‘Turkey seen interested in Joint Strike Fighter’, Aerospace Daily 187:51 (11 September 1998) accessed via Factiva 16 July 2013. 1212 Graham Warwick, ‘USA opens JSF development talks with foreign partners’, Flight International (10 June 1998) accessed via Factiva 5 December 2014. 1213 Department of Defence, Australia, Media Release, ‘Defence Minister visits United States and France’, Department of Defence
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stated that ‘Officials will also discuss Australia's interest in Pentagon plans for upgrading its aircraft with the F-22 stealth fighter and the Joint Strike Fighter’. 1217 The official said it was ‘too soon to discuss potential purchase of new aircraft since such warplanes aren't even in production’, but that he ‘expected very preliminary policy questions that might deal with the possibilities of co-production or simple acquisition’. 1218
In May 1999, the Australian Department of Defence formally defined its activities with the creation of project AIR 6000 – New Air Combat Capability (NACC). 1219 The AIR
6000 project was tasked to ‘consider the ‘whole of capability’ options for providing Australia’s ongoing air combat and strike capability once the F/A-18A/B and F-111 aircraft were withdrawn from service’. 1220 AIR 6000 was also publicly defined in the Defence Acquisitions Organisation’s Defence New Major Capital Equipment Proposals 1998-2003 as a project to ‘acquire new capabilities to replace the F/A-18 fighter aircraft when phased out of service around 2012-15 and, beyond that, when the F-111 strike/reconnaissance aircraft reach their life of type around 2020’. 1221 In 1999, the project was in Phase 1, which was a Capability Definition Study to examine ‘broad capability options, including the scope for a single aircraft type to deliver the capabilities provided by both F/A-18 and F-111 aircraft and other options for strike capability’. 1222 AIR 6000’s Phase 2, a Project Definition Study, was to commence in the 2002-03 financial year. 1223 In November 2001, the AIR 6000 project office ‘released a Market Survey to ensure the broadest possible range of force mix options would be considered’, and a Request for Information ‘seeking additional information
======1217 Schafer, ‘Defense secretary to visit Australia, Indonesia, Philippines’. 1218 Ibid. 1219 ANAO, F-35A Joint Strike Fighter Acquisition, 31. 1220 Ibid. 1221 Defence Acquisitions Organisation, Australia, Defence new major capital equipment proposals 1998-2003 (Canberra: Defence Acquisitions Organisation, 1999) 39. 1222 Ibid. 1223 Ibid.
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on nine potential Air Combat options’ in December, 1224 which closed in February 2002. 1225
During the early months of 2002, Defence Minister Robert Hill indicated that Australia was non-committal regarding the replacement aircraft. During a visit to Washington in January 2002, Hill stated ‘there are a number of different options as I understand within the United States and within Europe so it’s still very much in its preliminary stages’. 1226 In late February, he indicated that even if Australia joined the SDD phase, ‘it doesn't necessarily mean that JSF’ would be selected by Australia. 1227 This attitude would contrast strongly with the commitment Hill would give in announcing the intention to join and procure the JSF six months later.
In February 2002, Australia announced it would make a decision on participation in the SDD phase in April, but in April, the Government deferred it decision until June due to ‘cost concerns’. 1228 In mid-April, Flight International reported that ‘Australia may opt for lower level participation in the [JSF Program] than planned because the proposed … entry fee being considered by the government presents budget difficulties’. 1229 Hill described the Level III contribution as ‘further money for which you don't get any assured outcome… [and] a big [risk] at A$300 million’. 1230 He was ‘initially unimpressed’ with the implicit blackmail involved in the JSF partnership arrangements, stating ‘I didn’t particularly like the take-it-or-leave-it approach’. 1231 Hill was reported as stating that ‘any major changes to Australia's long-term defence capability plan remain dependent on a new strategic review which will now not be
======1224 ANAO, F-35A Joint Strike Fighter Acquisition , 88-89. 1225 Flight International, ‘Timeline: JSF’s first 24 months’, Flight International
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finalised until September. 1232 The Australian DoD and the RAAF were to provide a submission on the JSF in April. 1233
On 20 June 2002, Pete Aldridge, the Pentagon acquisition’s chief, gave a stern public reminder of the 15 July SDD deadline. 1234 At this point, only Italy, Turkey and Australia had yet to sign on to the SDD phase, with Italy expected to sign on June 24, followed by Turkey on July 11. 1235 Defense Daily International reported that while ‘Negotiations are underway to sign Australia’ it was questionable as to whether Australia would meet the 15 July deadline given that Cabinet was ‘not expected to meet to review JSF SDD partnership until June 26’. 1236 Hill however, rejected the imposition of a deadline on joining the JSF Program, stating on 11 June 2002 that ‘I don't think we can be driven by deadlines’, and indicating that Australia was conducting its own investigations on the ‘very complex issue’. 1237 On 18 June, a spokesperson for Hill stated ‘It's their deadline, not ours.’ 1238
One of Australia's major defence industry associations, the Australian Industry Group (AIG), was aware of a favourable attitude towards the JSF within Defence, and attempted to level the playing field for Dassault and Eurofighter, warning that joining the JSF SDD phase ‘must not pre-empt the outcome of the Air 6000 requirement before a competition.’ 1239 In a letter dated 3 June 2002 sent to undersecretary for defence acquisition Michael Roche, AIG executive director Leigh Purnell wrote ‘Any decision to invest exclusively in one solution prior to a complete value for money assessment… will be seen by Australian industry as the worst possible Air 6000 outcome.’ 1240
======1232 Stewart, ‘Buying paper planes’, 24. 1233 Ibid. 1234 Sandra I. Erwin, ‘US 'Paper Aircraft' Spawning Trade Wars’, National Defense
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Nevertheless, on 27 June 2002, the Government announced its decision to ‘participate in the system development and demonstration phase of the Lockheed Martin Joint Strike Fighter’ project at a press conference attended by Minister Hill, Minister For Industry Ian Macfarlane and Chief of Air Force Air Marshal Angus Houston. During the announcement, Macfarlane explicitly disputed the AIG argument, stating that an ‘earlier … final decision’ improved the ability of companies involved in rival bids to ‘move across’ to the JSF project. 1241 While Macfarlane’s position was that industry opportunities were limited to the winner of Australia’s competition, international evidence shows that companies produce components for rival aircraft simultaneously. For example, Britain’s BAE Systems is a major partner in both the JSF and Eurofighter Programs, and Norway’s Kongsberg had been manufacturing parts for the Eurofighter from at least 1999 1242 to 2004. 1243 As noted in Chapter 6, Norway announced it 2003 that it signed an industrial participation in the Eurofighter project, which provided Norway with greater negotiating power.
Analysis of 2002 Selection Decision Australia’s 2002 decision came as a complete surprise to the international competitors, who were expecting a long assessment process. In 2002, European aircraft manufactures Dassault, Eurofighter and Saab were beginning a four to five year campaign for the AIR 6000 competition, expected to be decided in 2006. 1244 Lockheed Martin did not post a full-time sales representative to Australia, and a ‘lively debate’ had been ongoing in the US headquarters for the previous year ‘about much effort to pump into Australia’. 1245 Lockheed Martin was ‘unenthusiastic to begin with because
======1241 Department of Defence, Australia, Transcript, ‘Australia to Join Joint Strike Fighter Program’, Department of Defence
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… the F-35 timetable did not fit’ with Australia’s procurement timetable’. 1246 Mac Stevenson, vice-president for business development was ‘delighted by absolutely flabbergasted that Australia had abandoned its own competition and declared it wanted the F-35 years ahead of time’. 1247 The US Government was also surprised, with Colonel Rick Lester, the US military attaché at the Canberra embassy stating ‘Normally, these are the kind of things I would like to know before – I had no indication of what direction Australia would go’. 1248
While announcing Australia’s decision to effectively procure the JSF, Hill stated that ‘What we start with today is a process to negotiate a Memorandum of Understanding with the United States’. 1249 These negotiations included Australia’s industrial workshare and ‘issues of technology transfer that have been so important’ to Australia. 1250 As discussed in Chapter 5, Australia’s position on source code was optimistic, and lacked the forceful negotiation approaches of other partner nations. Hill stated that he did not think Australia would opt out of the JSF Program, ‘expect[ed] to be able to execute [the SDD] Memorandum of Understanding’ later in the year, and stated that Australia was ‘going into the Memorandum negotiation expecting the Memorandum to be signed’. 1251 Similarly, Houston indicated that joining the SDD phase would increase Australia’s ability to access source code, stating Australia would be ‘a much better position to negotiate the release of the top line software that we require to make the aircraft highly capable’. 1252
While Hill made it clear that his declaration did not commit the Government to buying the JSF, he did make it quite clear that that the Government has effectively selected the JSF, and would no longer actively look at other options. Hill stated that ‘acquisition of the aircraft … [is] obviously our intention’ because ‘we don't believe that there's any other alternative that would meet our capability requirements’ within the budget of the
======1246 Stewart, ‘Buying paper planes’, 26. 1247 Ibid. 1248 Ibid, 27. 1249 Ibid. 1250 Ibid. 1251 Ibid. 1252 Ibid.
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2000 Defence White Paper.1253 While other partner nations expressed some uncertainty as to their procurement selections, giving them a lever in negotiations for additional advantages, Australia’s position was to publicly commit to procuring the aircraft, then enter into negotiations. When Australia officially joined on the JSF Program in October 2002, Hill stated that ‘negotiations with the United States Government have gone very well’ as Australia had ‘achieved in four months what other partner countries have negotiated over one to two years’. 1254 Given the tough negotiating approaches adopted by other JSF partner nations, as discussed in previous chapters, the speed of Australia’s agreement may have been the result of passivity and acquiescence.
The centrality of the RAAF, as opposed to the ADF or Department of Defence, in promoting the JSF culminating in the 2002 declarations supports the proposition of service bias and influence in decision making. Notably, Chief of the Air Force Air Marshal Angus Houston solely represented the broad Defence Organisation at the press conference. Additionally, Minister Hill repeatedly referred to the advice and influence of the Air Force in reaching the decision to select the JSF, without referring to any advice or assessments of other members of the Australian Defence Organisation (ADO). To meet Australia’s strategic needs, Hill said that ‘in terms of capability, the advice of the Air Force to us is that there's really no choice’. 1255 Hill stated that the Government decided to join the SDD phase, and end the competition, ‘on the basis of advice from the Air Force that they believe it will meet the capability requirements’ for the AIR 6000 project. 1256 Perhaps indiscreetly, Hill said that ‘the RAAF [has] guided the government in this direction’, but he immediately corrected himself with the statement ‘Advised the government in this direction’. 1257
Hill indicated that his confidence in the JSF aircraft and Program came, at least in large part, from Lockheed Martin via the RAAF. He stated ‘The Air Force has made a ======1253 Department of Defence, ‘Australia to Join Joint Strike Fighter Program’. 1254 Department of Defence, Australia, Media Release, ‘Negotiations completed for Australia’s entry into JSF program’, Australian Parliament House
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number of visits to Lockheed Martin and been briefed at a confidential level on the capabilities as are known at the moment and as they are expected to develop’. 1258 In November 2001, Houston sent Air Commodore John Harvey, who would later be Australia’s JSF program manager, to the US to be briefed by the JPO. 1259 Harvey returned impressed by the JSF, and Houston ‘was impressed enough’ to dispatch two more senior officers to Washington to find out more, Air Vice Marshal Ray Conroy and Major General David Hurley. 1260 Conroy had ‘a powerful friend in a very high place’ in the JSF Program, Lockheed Martin’s chief JSF salesperson, Tom Burbage. 1261 Additionally, senior Australian military officials visited the JPO, to ‘receive classified brief on programme participation and JSF capabilities’ in May 2002. 1262 Houston was reported to have been ‘seemingly swayed by the enthusiasm of his US counterpart’. 1263 An unnamed former Defence official who was ‘closely involved’ in the AIR 6000 project stated that in 2002, Houston had ‘told several people at the time that the Chief of the US Air Force had said this was the right aeroplane for Australia and so Angus thought that was the correct answer, that this was the right aircraft for us’. 1264 Australia’s response, particularly that of Houston, may be indicative of the ‘kid brother/poor relations syndrome’ in which the services consider they need the same cutting-edge equipment as the US or UK.
It is clear that the advice from the RAAF led the Government to effectively cancel the AIR 6000 competition, as the Air Force was of the opinion that the JSF was, in the words of Hill, ‘the aircraft for us in the future’.1265 Hill said that ‘in terms of capability, the advice of the Air Force to us is that there's really no choice’, and ‘the Air Force gave us advice that there really wasn't, in terms of capability, any competition’. 1266 Hill indicated that Cabinet’s decision ‘was primarily driven by the capability of the aircraft’ to meet Australia’s requirements, based on RAAF advice, and that stated that ‘to be ======1258 Department of Defence, ‘Negotiations completed for Australia’s entry into JSF program’. 1259 Ibid. 1260 Stewart, ‘Buying paper planes’, 24. 1261 Ibid. 1262 Flight International, ‘Timeline: JSF’s first 24 months’. 1263 Andrew Fowler and Clay Hichens, ‘Pentagon general issues warning on JSF blow-outs, Australian Broadcasting Corporation
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quite frank, I don't think [that] when Cabinet was convinced on the capability issue, Cabinet didn't need a lot of convincing’ to join the program. 1267
In terms of assessing the credibility of information, it is certain that Lockheed Martin and the JPO would have provided optimistic assessments in order to promote sales, rather than more objective sources, such as the US Government Accountability Office (GAO) or other similar organisations. As discussed in Chapter 3, the GAO has repeatedly found Lockheed Martin’s and the JPO’s estimates on costs and schedule to be overly optimistic. Hill noted that ‘this project itself has been costed in a different way to previous military aircraft development so that it is affordable … [leading] those responsible for the project to be so confident that the costs can be contained, 1268 but Lockheed Martin’s use of cost as an independent variable (CAIV) and computer modelling have been shown to be ineffective in achieving affordability. Additionally, as discussed in Chapter 4, with the US having a range of interests in exporting the JSF to allies, it is likely, if not certain, that the JPO would have provided optimistic advice regarding the cost, capabilities and schedule of the JSF. The relationships between the JPO and Lockheed Martin, as well as between Australia and the JPO and Lockheed Martin, demonstrate an unwillingness to acknowledge unoptimistic assessments, indicating a ‘conspiracy of optimism’, which will be discussed later in this chapter.
An accurate understanding of cost and production schedules would be a critical element of the business case presented by the RAAF to, and approved by, the National Security Cabinet. While the broad range of advice provided to the Australian Government on the JSF aircraft and program is not publicly known, the emphasis Hill placed on the RAAF’s advice is important to consider in relation to assessments made by the Defence Science and Technology Organisation (DSTO) and the Department of Defence’s Defence Capability and Investment Committee in 2000 and 2002 respectively.
In 2000, Australia’s DSTO conducted a ‘first-cut analysis’ of Australia's future fighter requirements in its Preliminary Assessment of Inhabited Platforms for AIR 6000
======1267 Department of Defence, ‘Australia to Join Joint Strike Fighter Program’. 1268 Ibid.
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study. 1269 The study is significant ‘because it is one of only a handful of studies that looked at alternatives to the JSF’, and finally ‘recommended narrowing Australia's choice of a new fighter jet to only three: the JSF, the American F-15E and the French Rafale’. 1270 The study stated that if Australia signed on to the JSF Program, ‘it would be doing so without knowing the plane's final capability and costs’ and ‘warned of hi- tech risks in the program because of tight schedule and cost targets’. 1271 Specifically, the study asserted that the JSF had serious shortfalls in engine performance and incomplete sensor-fusion capability … The aircraft lacks engine thrust in the baseline configuration due to the high weight, affecting the use of manoeuvrability to defeat missile attack … The JSF would not be cheaper to acquire than other fighters, but would be cheaper to maintain and service. 1272 However, it gave the JSF ’strong marks for its stealth, range, payload and its all weather, 24-hour lethality’. 1273 While the study ‘warned that the new Joint Strike Fighter would be a high-risk venture for Australia’, it was also more critical of the other European and American options and ‘favour[ed] the JSF over other options’. 1274 In March 2002, three months before Hill’s announcement, the Investment Analysis Branch of the DoD prepared an agenda paper for the Defence Capability and Investment Committee highlighting lack of information on the JSF aircraft and the risks involved in joining the JSF program during the early stages. The purpose of the agenda paper was to ‘consider the case’ for Australia's participation in SDD phase, and to ‘recommend a course of action to the Defence Committee’. 1275 In the context of the issue of effective defence procurement processes, particularly the utility of checks and balances to counter the biases of particular organisations, it worth examining the
======1269 Cameron Stewart, ‘Scientists warned defence department against Joint Strike Fighter’, The Australian
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formal responsibilities of the Investment Analysis Branch and the Defence Capability and Investment Committee. The Investment Analysis Branch (IAB) provides independent analysis and review of capability issues, including the overall balance of investment in current and future capability; the future structure of the ADF; major investment proposals; preparedness; and priorities. 1276 The role of the Defence Capability and Investment Committee (DCIC) is to endorse, for Government consideration, affordable options for current and future capability that will achieve the Defence outcome in a cost-effective way, taking into account risk. The primary responsibility of the committee is to ensure that capability and investment proposals … provide an acceptable return on capital and recurrent expenditure; avoid unacceptable strategic, technical or financial risks [and] consider trade-offs between capability, cost and schedule. 1277 Importantly, while the RAAF analysis would have been focused on capabilities, which it would naturally be supportive of, the roles of IAB and DCIC are intended to provide a broader and independent assessment of procurements, including risks, economic efficiencies, and balancing capabilities and costs.
The IAB was far less confident than Hill or the RAAF in the ability of the JSF to meet the capabilities of AIR 6000, acknowledging ‘a lack of definitive knowledge about the JSF’ 1278 given the very early stage of its development. Importantly, it was also the case that ‘US is not yet willing to release the necessary information’ to make a comprehensive assessment of the JSF’s capabilities. Additionally, the IAB noted that the ‘tradeoffs between capability, cost and schedule will continue until the Critical Design Review’ of the JSF Program planned for October 2003. 1279 The IAB also noted discrepancies between claims of the JPO and Lockheed Martin as to the advantages of
======1276 Department of Defence, Australia, ‘Investment Analysis Welcome Introduction’, Department of Defence
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slots in the production run, where contributions were linked to preferential access. 1280 Ultimately, the IAB advised that ‘Given the paucity of information available to date, it is not possible to make an accurate assessment of the JSF's abilities to replace the capabilities currently provided by the F/A-18 Hornet and F-111’. 1281 With insufficient information to conduct an informed assessment on the cost, schedules, risks and capabilities of the JSF, for the IAB, the decision to join the SDD phase ‘hinge[d] primarily on the potential value to Australian industry’, as well as a ‘secondary less tangible, but real, benefit [of] strengthening ties with the USAF’. 1282
While cost is always a critical element of defence procurements, it is particularly relevant to the JSF, as explicitly, the ‘focus of the Joint Strike Fighter Program is affordability—reducing the development, production, and ownership costs of the program relative to prior fighter aircraft programs’. 1283 Interestingly, Minister Hill stated that when Australia would formally commit to procuring the JSF around 2006, ‘we will have a very firm understanding of the costs involved in the acquisition and the design parameters of the aircraft’. 1284 Additionally, Hill stated that the cost was ‘not known at the moment, but it is believed to be in the vicinity of about 40 million US per aircraft’. 1285 Such admissions undermine Hill’s confident claims of having a clear understanding of the costs, risks and capabilities of the aircraft, and perhaps represent unfounded faith in the claims of Lockheed Martin and the JPO.
In comparison to Australia’s 2002 judgments, it is informative to consider the assessments made by the Netherlands Court of Audit (NCA) in 2006 regarding the certainty of costs and related information channels. Even four years after Australia’s decision, the NCA stated that ‘It is currently not possible to validate the ultimate cost price of the JSF’, noting that this is a serious issue as the Dutch government, like Australia, ‘decided to participate in the JSF programme on the assumption that it
======1280 DCIC, ‘Australian Participation in the US JSF SDD Phase’. 1281 Ibid. 1282 Ibid. 1283 United States General Accounting Office, Joint Strike Fighter Acquisition: Development Schedule Should Be Changed to Reduce Risks (Washington DC: Government Accountability Office, 2000) 4. 1284 Department of Defence, ‘Australia to Join Joint Strike Fighter Program’. 1285 Ibid.
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would buy the best aircraft at the best price’. 1286 The NCA stated that, in its opinion, Lockheed Martin was the ‘primary source’ of cost information, while the ‘American government is reluctant to release such information’. 1287
Minister Hill stated that the advantages of joining the JSF Program as a partner were ‘overwhelming’, 1288 and some of the ‘distinct broad benefits’ of SDD phase participation were outlined in the IAB’s advice to the DCIC. 1289 IAB advised that participation would allow Australia to gain ‘project knowledge’, allowing ‘a better understanding of the project, risks, costs, schedules and the F-35 aircraft’s planned capabilities’. 1290 However, as will be discussed, the optimistic information provided by Lockheed Martin and the JPO has been less accurate on risks, costs and schedules than publicly available estimates by other US government organisations. In terms of capabilities, the US has been willing to provide sensitive information to non- participant nations, such as Japan, for a relatively small fee. During negotiations in 2009, the US asked Japan to pay around ¥1 billion (around US$11m) for sensitive information on the capabilities of the F-35, but also that the it would ‘not provide information on the F-35’s radar-evading capabilities until Tokyo makes a decision to purchase it’. 1291 Also, Singapore and Israel, the latter of which has decided to procure JSF aircraft, contributed $50m each to join the SDD phase as Security Cooperative Participants, 1292 providing them with ‘limited access to program information’, but no presence in the Program Office. 1293
======1286 Court of Audit [Algemene Rekenkamer], Netherlands, ‘Monitoring the Procurement of the Joint Strike Fighter’, Court of Audit
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Participation would also provide Australia with the ‘direct financial benefits’ of avoiding Foreign Military Sales (FMS) charges and nonrecurring costs’. 1294 FMS is the US Government’s program for exporting military equipment and/or services to international customers, and is funded by administrative charges to foreign purchasers, with no cost to the US Government. 1295 While the IAB memo indicated the FMS surcharge to be 3%, it was 2.5% between 1999 and 2006, after which it increased to 3.8%. 1296 The US DoD is also required to recoup non-recurring costs on the export of items to international customers, which present a pro rata payment of nonrecurring production costs, and nonrecurring research, development, test and evaluation costs. 1297 These costs can be waived, 1298 as was the case with Australia’s procurement of the F/A-18. 1299
The JPO had advised that the non-recurring cost would be US$6.02m for each F-35, and the IAB noted that a waiver of non-recurring costs ‘would need to be confirmed and formally agreed to during the SDD negotiations’. 1300 SDD participation would also provide Australia with small royalty payments when the aircraft was sold to non- participant nations, which would was 0.5% of the estimated $6.02m non-recurring cost for each aircraft. 1301 However, Australia is making payments for non-recurring costs, as is discussed later in this chapter. Also, the NCA noted that JSF Program partners ‘may unilaterally decide to waive payment of the non-recurring costs’ to incentivise non-partner procurements, forgoing their royalty payments, 1302 and recouping royalty payments is not certain.
======1294 DCIC, ‘Australian Participation in the US JSF SDD Phase’. 1295 Defense Security Cooperation Agency, US Department of Defense, ‘Foreign Military Sales: Frequently Asked Questions’, Defense Security Cooperation Agency
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As the Netherlands is as a Tier 2 SDD partner, and Australia a Tier 3 partner, a direct economic comparison is made difficult by the different contributions and opportunities, but it is still useful to compare the differences in how the Dutch and Australian governments considered the program contributions. Hill stated that Australia’s joining and financially contributing to the JSF Program would ‘actually save us about $600 million off our ultimate purchase’ of the JSF. 1303 In contrast, the Dutch government stated that as a result of their participation and the requisite contributions to the JSF Program for the SDD phase, ‘the costs for the State are higher than they would be if it were simply buying the jet 'off the shelf'’’. 1304 To ‘offset’ the additional costs, the government required Dutch manufacturers to contribute a portion of their income derived from the JSF Program to the government. 1305
Strategic analyst Hugh White, who was a Deputy Secretary at the Department of Defence from 1995 to 2000, was particularly critical of Australia’s JSF procurement decisions in 2002, stating that the Government had ‘taken an unusual approach’ as it had ‘aborted the usual protracted Defence procurement process’ and declared its intent to procure and aircraft still under development while telling other contenders ‘not to bother bidding’. 1306 White argued that ‘by committing itself to buy an aircraft so early in its development, the Government has made itself hostage to the inevitable problems and delays which beset every aircraft project’. 1307
Australia’s decision to end the competition for a new aircraft, effectively selecting the JSF for procurement, denied Australia leverage in negotiations with the US and Lockheed Martin for the critical early years of the Program. As comprehensively demonstrated in Chapter 6, delaying their procurement decisions allowed JSF Program partners to exercise leverage to obtain advantages, and such an approach was advocated by White. He considered the way in which the procurement process was conducted to be ‘a serious tactical error’ which ‘completely swept aside [Australia’s] ======1303 Department of Defence, ‘Australia to Join Joint Strike Fighter Program’. 1304 Government of the Netherlands. ‘F-35 Programme’, Government of the Netherlands
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capacity to negotiate with the sellers on the terms of the deal’. 1308 Given Australia’s recent experiences with Lockheed Martin, it would seem obvious and prudent to adopt a strong bargaining position. White noted the importance of maintaining a strong position and leverage against US defence industry, stating that Lockheed Martin had ‘squeezed us mercilessly the last time when we bought the Hercules C-130J without a competition’. 1309 White stated that for the JSF procurement, Australia would need all the negotiating leverage we can get on issues like price, delivery schedule, performance guarantees, access to sensitive technology and work for Australian industry. Forget all the soft soap about joining a partnership: they will give nothing away, and we will need to fight for everything. 1310 He suggested the Australian Government could use problems and uncertainty which could develop in the JSF Program to ‘win back some of the negotiating advantage that [the acquisition] announcement surrendered to the hard men from Lockheed Martin’. 1311 However, as will discussed in this chapter, Australia’s repeated public support for the JSF as the ‘right aircraft for Australia’, which has become a reflexive mantra for successive government and ministers, and optimistic assessments, have negated the opportunity to win back negotiating advantages.
Australian National Audit Office Assessments From the perspective of the ‘formal politics’ of Australia’s procurement, the process has significantly deviated from standard major procurement processes, essentially rendering an assessment of the formal politics irrelevant. The intention to acquire the JSF under the AIR 6000 project received first pass approval from the National Security Committee (NSC) of Cabinet in November 2006, 1312 but the way in which the decision was made was queried by the Australian National Audit Office (ANAO). ANAO noted that ‘the process for the identification and approval of the broad option set submitted for first pass consideration of the project followed a different path from that outlined in
======1308 Fowler, ‘Flying Blind’. 1309 White, ‘New fighters all very well, but we have to stay airborne in the interim’. 1310 Ibid. 1311 Ibid. 1312 Australian National Audit Office, Planning and Approval of Defence Major Capital Equipment Projects (Canberra: Australian National Audit Office, 2009) 88.
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the DCDM and Process Map’. 1313 The Department of Defence’s Defence Capability Development Manual (DCDM), released in February 2006, specifies that a proposal ‘passes through two essential decision points - First Pass approval and Second Pass approval’, and ‘Both of these decision points are approvals by Government rather than Defence’. 1314 First pass approval is the decision point at which Government considers alternatives and approves a capability development option(s) to proceed to more detailed analysis and costing, with a view to subsequent approval of a specific capability’. 1315 It is important to note that, in providing First Pass approval, the Government is not committed to acquiring the capability, only to the conduct of detailed studies, analysis and, possibly, funded industry studies. 1316 While the opportunity existed to rectify problems in Australia’s processes and bring it in line with standard procurement practices, as other countries have done, the rushed 2002 decision was been allowed to stand.
The DoD offered a limited defence to ANAO’s queries, for the most part deferring responsibility to the government and offering circular logic in response to procedural problems. The Department advised ANAO that ‘a broad range of options had been considered prior to First Pass but the option set had been reduced to one option by Government direction’. 1317 Defence stated that while a Market Survey and Request for Information was issued in November and December 2001 respectively, an opportunity to join the program via the SDD phase existed in early 2002, and ‘Defence sought Ministerial approval to prepare a business case.’ 1318 Defence stated that ‘the NSC considered the business case and authorised Defence to enter into negotiations to enter the JSF partnership’ in June 2002, and in October 2002, ‘NSC approved entry by Australia into the JSF SDD program and at the same time formally terminated any further consideration of other combat platforms’. 1319 In addition, the Department of
======1313 ANAO, Planning and Approval of Defence Major Capital Equipment Projects, 88. 1314 Department of Defence, Defence Capability Development Manual, 28. 1315 Ibid. 1316 Ibid , 29. 1317 ANAO, Planning and Approval of Defence Major Capital Equipment Projects, 88. 1318 Ibid. 1319 Ibid , 89.
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Defence ‘was not able to provide a copy of the Capability Proposal First Pass (CPFP)’ request by ANAO, stating ‘the existence of a CPFP for AIR 6000 is evidenced by approval to proceed to Second Pass and Australia’s further commitment to the JSF program through entry into the PSFD … MoU’. 1320
The DCDM defines the second pass approval as a decision point ‘at which Government agrees to fund the acquisition of a specific capability system with a well- defined budget and schedule, and to allocate future provision for through life support costs’. 1321 While the 2009 Defence White Paper ‘outlined the Government’s commitment to acquire JSF’, it only provided a limited budget as it only ‘announced approval for the purchase of the first 14 JSF aircraft at a cost of around $3.2 billion’. 1322 Citing the US restructuring of the JSF Program in the previous year, 1323 Defence avoided specifying a detailed budget and timeframe for the total acquisition on the JSF, which is an important issue discussed later in this chapter.
Procurement, Sustainment and Follow-On Development (PSFD) Phase As discussed earlier in this chapter, Australia entered SDD negotiations on the assumption that nonrecurring costs for Australia’s procurement of the JSF would be waivered as an economic justification for joining the Program. However, participants in the JSF Program who signed on the PSFD Memorandum of Understanding in 2006- 07 are required to make significant payments to cover non-recurring costs. Each partner nation is required to make a contribution calculated on its proportion of total procurement quantities for production, sustainment and follow-on development costs. The maximum contribution Australia will be expected to contribute is US$690m in then year dollars. 1324 This Maximum Contribution figure can be changed with a
======1320 ANAO, Planning and Approval of Defence Major Capital Equipment Projects, 89. 1321 Department of Defence, Defence Capability Development Manual, 30. 1322 Department of Defence, Australia, Media Release, ‘2013 Defence White Paper: Air Combat Capability’, Department of Defence
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Table 4: Australia’s PSFD Contributions as at 8 November 2015 1325 Contract Contract Contract Value Publish Date Description Number Period (AUD) 20-Jul-11 411236 PSFD and DMS MoU 5-Jul-2011 to $139,242,236.80 Payments 30-Jun-2014 6-Dec-11 450445 PSFD and DMS MoU 30-Nov-2011 $5,303,228.80 Payments to 30-Jun-2014 19-Jun-12 625401 PSFD and DMS MoU 1-Feb-2012 to $1,343,524.00 Payments 30-Jun-2014 2-Jul-13 1537621 PSFD and DMS MoU 17-Jul-2012 to $14,693,132.80 Payments 30-Jun-2014 6-Aug-13 1649821 PSFD and DMS MoU 25-Jul-2013 to $5,137,872.00 Payments 30-Jun-2014 2-Jan-14 1962421 PSFD and DMS MoU 19-Dec-2013 $822,354.80 Payments to 30-Jun-2014 23-Sep-14 2583991 PSFD MoU Payments 11-Sep-2014 $251,511,908.34 to 30-Jun-2023 16-Dec-14 2752581 PSFD MoU Payments 23-Sep-2014 $20,583,401.30 to 30-Jun-2023 3-Mar-15 2892082 PSFD and DMS MoU 12-Feb-2014 $2,946,231.27 Payments to 30-Jun-2014 3-Mar-15 2888982 PSFD MoU Payments 29-Jan-2015 to $16,392,768.70 30-Jun-2023 2-Jun-15 3111922 PSFD MoU Payments 28-May-2015 $4,450,586.28 to 30-Jun-2023 Total $462,427,245.09
modification to the MoU, but the cost allocations have not changed from the 2006-07 MoU to the 2009 MoU Update. Importantly, the NCA of Audit considered ‘the agreements on financial cost ceilings to be a potential risk’, particularly as the withdrawal of participation or the reduction in procurement quantities by PSFD MoU
======1325 Figures sourced from AusTender , November 2015. https://www.tenders.gov.au/
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signatories would automatically increase the proportional Maximum Contributions, 1326 as may be the case with Canada’s potential withdrawal.
While the cost ceiling does not appear to have changed, the actual contributions made by Australia appear to steadily increase, as can be seen in Table 4 (above). Multi-year payments were made for periods between July 2011 and June 2014, and between September 2014 and June 2023, there have been smaller payments that progressively accumulate for those main contract periods. As of November 2015, Australia has made payments of AU$462,427,245.09 for non-recurring costs. What should be noted is the inclusion of Diminishing Manufacturing Sources (DMS) payments with PSFD payments. DMS represents the ‘loss, or impending loss, of manufacturers or suppliers of items’, but the term also includes ‘functional obsolescence’ which describes a situation where ‘an item, although still available commercially, no longer functions as intended because of hardware, software, and/or requirements changes to the system’. 1327
While a range of factors can cause DMS, 1328 the high concurrency of development and production of the JSF Program is likely to be a particularly accurate factor. DMS costs were not explicitly mentioned in the PSFD MoUs, and the details and value of DMS payments, as separate from PSFD payments, is not publicly known. As previously discussed in previous chapters, the JSF Program involves interdependencies not apparent in other major defence procurements, and the apportioning of non-recurring cost allocations demonstrates how the procurement policies of other nations can affect Australia. For the US, charging international partners 23 percent of non-recurring costs, i.e. not variable costs associated with the production of aircraft, offers significant budget savings for the US. Similarly, it is in the economic interest of each participant to reduce their portion of total costs, either through additional participants or increasing the procurement quantities of existing participants, or avoiding the reduction of procurement quantities of other nations.
======1326 Court of Audit, ‘Monitoring the Procurement of the Joint Strike Fighter’, 5. 1327 Defense Standardization Program Office, US Department of Defence, Diminishing Manufacturing Sources and Material Shortages (DMSMS): A Guidebook of Best Practices and Tools for Implementing a Robust DMSMS Management Program
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Australia has declared it would procure up to 100 new aircraft to replace its fleets of F/A-18s and F-111s since the 2000 Defence White Paper, but has currently only committed to 72, and this uncertainty results in significant cost to Australia. As of November 2015, the RAAF position was that Australia still planned on procuring up to 100 JSFs, stating ‘In the future, a fourth operational squadron will be considered … for a total of 100 F-35As’. 1329 If Australia decided to limited its procurement to 72 aircraft, this would decrease its Maximum Contribution, based on 2009 PSFD MoU calculations, to US$496m in then year dollars, a reduction of US$194m. While the figure of $194m is an estimated and potential reduction in costs, Australia’s actual expenditure can be calculated on the assumption that Australia reduced its procurement to 72 aircraft, a reduction of 28 percent, by 2011. A 28 percent reduction applied to PSFS and DMS payments made since 2011 would have resulted in a reduction of expenditure of AU$129,479,628. In short, if Australia only procures 72 F-35s, and this was declared in 2011, Australia would have avoided costs worth nearly $130m.
Conspiracy of Optimism According to Air Commodore John Harvey, the Director General of the RAAF’s NACC project team, Defence Minister Brendan Nelson ‘had stipulated four conditions for ongoing involvement in the JSF project’ and signing on the PSFD phase: ‘good technical progress, an acceptable multilateral MOU, assured access to sensitive technology, and involvement of Australian industry’. 1330 Harvey stated that each ‘were being met’, and that he would ‘take that to government so they can make a decision’ to join the PSFD phase by the end of 2006. 1331 While Australia’s limited efforts to gain access to sensitive technologies was discussed in detail in Chapter 5, it should be noted here that Australia’s position was more optimistic than that of other nations, and Australian assessments of technical progress and the involvement of Australian industry will be examined later in this chapter. Generally, Australia’s view of the JSF
======1329 Royal Australian Air Force, ‘F-35A Lightning II’, Royal Australian Air Force
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Program, especially by senior RAAF officers, displayed characteristics of a ‘conspiracy of optimism’ during the crucial period of 2002-10.
A conspiracy of optimism, which occurs in the public and private sectors, is a situation where purchasers ‘appear eager to accept unrealistically low tenders from suppliers who then rely on ‘scope creep’ to drive the price up to realistic but unbudgeted levels’. 1332 In the context of British defence industry, a conspiracy of optimism exists between MoD [Ministry of Defence] and industry, each having a propensity, in many cases knowingly, to strike agreements that are so optimistic as to be unsustainable in terms of cost, timescale or performance. 1333 According to the group, optimistic defence procurement assumptions are ‘based on policy dogma, Service aspirations, and Government reluctance to fully fund commitments lead to an overheated defence programme’. 1334 The RUSI Acquisition Focus group argue that the difficulty in getting new defence projects fully funded leads to ‘entryism’, which is where ‘the initial cost and schedule are deliberately under- estimated’. 1335 ‘Entryism’ is equivalent to the ‘buy-in syndrome’ evident in the Australian and American literature, and buying-in should be considered a sub-set of a broader ‘conspiracy of optimism syndrome’.
RUSI outlines the nature of the implicit ‘conspiracy’ as cases where the MoD and industry both ‘knew very well at the time that the offer made was unrealistic in terms of either cost, timescale or delivered performance’. 1336 While neither the MoD or industry ‘would acknowledge that it was actively part of a conspiracy, … the behaviours clearly exhibited all the same characteristics’ of a conspiracy. 1337 The outcomes of a conspiracy of optimism is that the estimated cost and production
======1332 International Centre for Complex Project Management, Complex Project Management: Global Perspectives and the Strategic Agenda to 2025: The Task Force Report
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schedules are ‘almost always far too low’, leading to cost overruns and schedule slippages, ‘when in reality these were inevitable outcomes of the bidding process’. 1338
An element of the conspiracy of optimism syndrome is the underestimation of technology risks, 1339 and this is also evident with the JSF Program. In May 2000, the GAO stated that the JPO ‘implementation of its acquisition strategy will not ensure that the Joint Strike Fighter program will enter the engineering and manufacturing development phase with low technical risk’. 1340 Similarly, in October 2001, the GAO advised Congress that the JSF Program ‘is at risk of not meeting its affordability objective because critical technologies are not projected to be matured to levels that we believe would indicate a low risk program’. 1341 These assessments are reflected in the IAB and DSTO previously discussed.
That the syndrome affected the JSF Program was confirmed by the Pentagon’s acting procurement chief Frank Kendall, who delivered a scathing assessment of the JSF’s approach to development and production. In February 2012, Kendall stated that ‘Putting the F-35 into production years before the first test flight was acquisition malpractice’. 1342 Kendall said that the Pentagon had made ‘optimistic predictions about the capabilities of design tools, simulations and modelling to build a fighter that would breeze through test flights without problems’. 1343 A degree of optimism in the JSF Program was publicly evident following Lockheed Martin’s selection in 2001 to develop and manufacture the JSF, with JSF manager Tom Burbage stating that the SDD phase would be conducted under a ‘very aggressive schedule’. 1344 The use of ‘aggressive’, which can be read as marketing speak for optimistic, was often used during the early years of the JSF Program. In 2006, the JPO described the JSF’s flight
======1338 RUSI, ‘The Conspiracy of Optimism’, 60. 1339 Ibid. 1340 United States General Accounting Office, Joint Strike Fighter Acquisition: Development Schedule Should Be Changed to Reduce Risks (Washington DC: Government Accountability Office, 2000) 4. 1341 United States General Accounting Office, Joint Strike Fighter Acquisition: Mature Critical Technologies Needed to Reduce Risks (Washington DC: Government Accountability Office, 2001), 2-3. 1342 Dave Majumdar, ‘Kendall: Early F-35 Production ‘Acquisition Malpractice’, Defense News
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test schedule as ‘the longest, most complex and most aggressive in the history of modern military aviation’. 1345 A 2011 Rand report into cost overruns with the JSF Program considered it to have an ‘aggressive’ schedule, and that cost growth was ‘driven in large measure by optimistic cost and schedule estimates’, as well as ‘unrealistic performance expectations’ and ‘unrealistic expectations for cost improvements’. 1346
In response to the Pentagon’s restructures for addressing problems in the JSF Program leading to cost escalation and schedule slippages, the Australian Government and Defense Organisation has repeatedly stated that their assessments were not as optimistic and Lockheed Martin or the JPO. However, evidence suggests that Australia’s assessments prior to 2010 were overly optimistic, and it is likely that the 2010 restructure of the JSF Program required the Australian Government and Defense Organisation to alter their expectations in line with US changes.
In March 2010, Defence Minister John Faulkner said that the Government’s ‘staged acquisition strategy for the JSF includes significant cost and schedule buffers to deal with project risks which will ensure initial operational capability (IOC) in 2018 is met. 1347 Additionally, Falkner stated that ‘Australian Defence planning has always adopted a cautious approach to JSF cost estimates by factoring in significant amounts of contingency funds to deal with cost risks’. 1348 Using similar language, Minister for Defence Materiel Jason Clare stated that Australia had ‘always adopted a conservative approach to JSF cost estimates and has explicitly included contingency funds and buffers to the schedule’ following the implementation of the JSF Program restructure announced the previous year. 1349
======1345 Joint Strike Fighter Program Office, ‘F-35 2005 Year in Review’, Joint Strike Fighter Program Office
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The Australian Strategic Policy Institute (ASPI) argued that the subsequent delays and cost over-runs did not ‘come as a complete surprise to the ADF’ as its Defence sources maintained that Australia’s estimates of ‘the cost and schedule for the JSF program were not based on the early projections by Lockheed Martin or the Pentagon, which can be seen now to be quite unrealistic’. 1350 ASPI argued that the New Air Combat Capability (NACC) project team ‘had made its own independent cost and schedule estimates’, which were ‘reasonably conservative and carr[ied] a robust level of contingency. 1351 If it is the case that the NACC project team ‘obviously expected to pay more for the F-35A than Lockheed Martin was suggesting’ in 2002, 1352 then the assumptions of cost made to justify the 2002 decision were flawed, as was the RAAF’s and Government’s reliance of Lockheed Martin’s estimates.
Despite the claims of conservative schedule estimates by the NACC project office, Australia’s schedule has repeatedly slipped, with significant slippage occurring since the schedule planned in 2002. During the June 2002 announcement, Hill stated that he expected that Australia would be receiving F-35s from 2012. 1353 In 2006, the RAAF planned on the first F-35s to be delivered in 2012, and expected IOC to be reached in 2014 with Block 3 software, but had a ‘fall-back option’ of declaring IOC with Block 2 software in line with the US Marines. 1354 In May 2006, Nelson acknowledged that there were ‘a lot of uncertainties in the JSF program’, but stated that ‘in the key elements it's on track. All of the evidence I have got is that we may reasonably expect to see one here in 2012.’ 1355 With the release of the 2011 Defence Capability Plan, the IOC for the first JSF squadron slipped from 2015 to 2018. 1356 While Australia’s first
======1350 Mark Thompson, The Cost of Defence: ASPI Defence Budget Brief 2010-11 (Barton, ACT: Australian Strategic Policy Institute, 2010) 204. 1351 Ibid. 1352 Ibid. 1353 Department of Defence, ‘Australia to Join Joint Strike Fighter Program’. 1354 Mark Thompson, The Cost of Defence: ASPI Defence Budget Brief 2006-07 (Barton, ACT: Australian Strategic Policy Institute, 2006) 182. 1355 Patrick Walters, ‘New-age jet fighters are coming, Nelson promises’, The Australian (11 May 2006) accessed via Factiva 21 November 2015. 1356 David Watt, ‘The Joint Strike Fighter: overview and status’, Parliament of Australia
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two F-35As were delivered in 2014, 1357 the IOC for the first squadron is currently planned to be completed in 2020. 1358
Despite Nelson’s public optimism in 2006, he requested Defence develop contingency plans to cover a capability gap between the retirement of the Australia’s F-111s and the introduction of the JSF. 1359 Although Australia subsequently procures 24 Super Hornets, senior RAAF officers were adamant at the time that the bridging capability was not needed. In March 2006, Chief of Air Force Air Marshal Geoff Shepherd told a parliamentary committee that the RAAF did not think an interim fighter would be needed. 1360 During another parliamentary committee hearing in November 2006, Shepherd stated that there would not be a capability gap as he believed ‘the schedule that the JSF is on at the moment still meets our requirement in the correct time frame’, and ‘stress[ed]’ that ‘we are seeing no indications’ of the JSF schedule slipping. 1361 Similarly, in October 2006, Deputy Chief of Air Force Air Vice Marshal John Blackburn, stated that ‘We are confident that, with the program as it is currently progressing, we shouldn't need an interim solution … and we have full confidence of the program delivering the JSF on time.’ 1362 However, by the end of 2006, the Australian Government was discussing the procurement of Super Hornets with the US Government. 1363 Detecting an opportunity, Boeing and the US Navy held a series of
======1357 Lockheed Martin, Press Release, ‘First Two Australian F-35s Roll Out Of Factory’, Lockheed Martin
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meeting with Nelson in 2006, and ‘hinted to Nelson and his advisers that the Royal Australian Air Force chiefs may have got their assessment wrong’. 1364
The reluctance of senior RAAF officers to allow the Super Hornet to fill an interim need could be considered a reluctance to dilute Australia’s force structure with Super Hornets, replacing some, or potentially all, JSF aircraft. While there were some arguments that Australia would be ‘best served by operating a mixed fleet of JSFs and Super Hornets’, senior RAAF officers ‘remain firmly convinced that the F-35 is the best aircraft to meet Australia's air combat requirements’. 1365 The risk for the Chiefs of Air Force was that the Government could decide that the Super Hornet were adequate in the short to mid-term, even though, according to Harvey in 2007, ‘Defence has always made the point and is still consistent that our long-term aim is an all JSF fleet to be the core of our air combat capability’.1366
As discussed in Chapter 3, while the JSF was advertised to be cheaper to operate than the legacy aircraft it would replace, in 2013 the USAF estimated that the F-35A would cost around $32,000 per flying hour, which was significantly more than legacy fighters. 1367 In 2006, Harvey stated that the RAAF had ‘been reasonably conservative’ in estimating that the ‘operating costs per hour for the JSF will be similar to the F18’. 1368 However, the Super Hornets operating costs are estimated at ‘about $16,000 to $17,000 per flight hour’, 1369 with the Classic Hornets costing 25-30% more than Super Hornets. 1370
======1364 Richard Baker, ‘The Hornet's nest’, The Age
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With regard to costs in general, Stephen Gumley, Chief Executive Officer of the Defence Materiel Organisation and head of the NACC project team for a period, indicated that Australia lacks the capacity to ‘to make our own independent judgments on the various source data’ for JSF costs, and Australia’s estimates are based on a middle ground between pessimistic and optimistic estimates. 1371 Gumley indicated that there were four main groups in the US responsible for estimating JSF costs: Lockheed Martin, which tend[s] to report the lowest costs; they are quite optimistic. The joint program office tend[s] to add contingency for risk, and they are a bit higher. The CAIG [Cost Analysis Improvement Group], and then the Government Accountability Office tends to have the most pessimistic view. 1372 As shown, the ‘conservative’ estimates expressed by Australia Defence officials regarding costs and schedules have proven to be less than rigorous, and were frequently changed to reflect actual changes in the JSF Program. The weight given to GAO reports in Australia’s assessments may not be high given that Australian defence officials have never publicly supported GAO assessments, and often deferred to Lockheed Martin and JPO assessments. It should be noted, however, that the RAAF did selectively use GAO assessments of F-22 costs as evidence to justify the JSF as a much cheaper procurement than the Raptor. 1373
Indeed, Australian defence officials have been explicitly dismissive of GAO reports that were critical of the JSF Program’s performance with regard to risk, cost, and schedule slippage. Harvey rejected the GAO’s March 2006 report which argued that the JSF development strategy was ‘very risky and is similar to strategies of past programs with poor outcomes’. 1374 Harvey stated that ‘We agree with the US Department of Defence position: it's the right balance of cost and technical risk’, and that Defence had a ‘much deeper understanding of the technical aspects than a lot of ======1371 Joint Standing Committee on Foreign Affairs, Defence and Trade, Australia, ‘Department of Defence annual report 2006-07: Hearing Transcript, 29 August 2008’, Australian Parliament House
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people in the GAO’. 1375 In 2010, Harvey was ‘philosophical’ about reports from the Pentagon’s Joint Estimating Team (JET) and Director of Operational Testing and Evaluation (DOT&E), and the US Navy’s NAVAIR office, which were ‘pointing towards potential cost, technical and schedule blowouts’ for the JSF Program. 1376 For Harvey, the individual reports were simply ones taken into account by the US procurement chief, along with the views of Lockheed Martin and the JPO. 1377
Similarly, Gumley, rejected the findings of a March 2008 GAO report that recommended that the US DoD revise their Mid-Course Risk Reduction plan because of the ‘elevated risks and valid objections raised by the test community and other DoD offices’. 1378 The report also stated that the GAO did ‘not think the program cost estimate is reliable when judged against cost estimate standards used throughout the federal government and industry’. 1379 When asked if the GAO assessment was wrong, Gumley responded that ‘The GAO’s comments have been contested by the program, the contractor and others. It becomes a matter of balance as to how pessimistic or optimistic you are’. 1380 Australia’s response to the GAO report was to wait for JPO’s independent assessment on cost to be finalised, and the DMO would not investigate the issues, other than through information provided by staff embedded in the JPO. 1381 A common response from Australian defence officials is that Australia maintains clear visibility of costs and delays through its staff located in the JPO, but the value of this information is questionable given that the JPO tends to report optimistically. Though pessimistic, the independent assessments of the JSF JET were taken as reliable and informed the 2010 restructure of the JSF Program. The JET, which was led by what was formerly the CAIG, was created in January 2008 at the request of the
======1375 Geoffrey Barker, ‘RAAF chief shoots down fighter report’, The Australian Financial Review (12 May 2006) accessed via Factiva 21 November 2015. 1376 McLaughlin, ‘Getting the NACC’, 48. 1377 Ibid. 1378 United States Government Accountability Office, Joint Strike Fighter: Recent Decisions by DoD Add to Program Risks (Washington DC: Government Accountability Office, 2008) 4. 1379 Ibid , 3. 1380 Joint Standing Committee on Foreign Affairs, Defence and Trade, Australia, ‘Department of Defence annual report 2006-07: Hearing Transcript, 10 July 2008’. Australian Parliament House
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JPO. 1382 In November 2009, in a similar vein to Gumley, Pentagon spokesperson Geoff Morrell stated that the US Secretary of Defense would balance the pessimistic JET analysis against that of the JPO, which was ‘generally much more optimistic’. 1383 However, in February 2010, Pentagon acquisition chief Ashton Carter formally restructured the JSF Program in accordance with the JET report, and in response to other problems, which can be seen as ‘implicitly accepting the JET … findings as valid’. 1384
Assessing the applicability of a conspiracy of optimism with regard to cost is made difficult by the funding ‘envelope’ used by the Australian Defence Organisation in which cost increases are always covered by contingency funds. In 2004, Air Marshal Houston acknowledged that JSF ‘costs may well rise before the aircraft goes into full rate production’, but that Australia was ‘budgeting on this to a certain extent’. 1385 In May 2007, when the RAAF revised the estimated flyaway cost of Australia’s F-35As from $66 million to around $80 million per plane, Harvey stated that ‘the F-35 price remains within the expected parameters’. 1386 Similarly, in March 2012, NACC Program Manager Air Vice-Marshal Kym Osley stated that ‘the AIR 6000 project remains within the cost envelope approved by the Government in 2009’. 1387 Gumley stated that Australia has ‘always traditionally used contingency in … project estimates … because major projects do increase in cost’, and the contingency decreases as the project progresses. 1388 Due to ‘commercial factors’, the value of the contingency is not made public, but in the case of the JSF, it represents ‘a significant proportion of the
======1382 Inside the Navy, ‘Obama Administration Directs Update of JSF Jet Estimate’, Inside the Navy 22:30 (3 August 2009) accessed via Factiva 27 November 2015. 1383 Inside the Pentagon, ‘DoD Official: JSF 'Will Likely Breach' Critical Nunn-McCurdy Target’, Inside the Pentagon 25:44 (5 November 2009) accessed via Factiva 27 November 2015. 1384 Jeremiah Gertler, ‘F-35 Joint Strike Fighter (JSF) Program: Background and Issues for Congress’, Congressional Research Service (16 February 2012) 20. 1385 Houston, ‘Is the JSF good enough?’, 12. 1386 Cameron Stewart, ‘F-35 slowly wins a corridor war’, The Australian (26 May 2006) accessed via Factiva 21 November 2015. 1387 Kym Osley, Department of Defence, Australia, ‘Review of the Defence Annual Report 2010-2011: Submission No. 8’, Australian Parliament House
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total price’. 1389 In comparison, the Dutch Government specified a 10 percent ‘risk reserve’ in 2013 for the investment and operational budgets of the JSF fleet. 1390
The Defence Capability Plan 2004-2014 provided a notional budget for the AIR 6000 project of $11.5bn to $15.5bn. 1391 As Andrew Davies noted in 2008, the cost of the JSF procurement had ‘increased in real cost by at least 30%’ since the decision in 2002 to join the JSF Program, but the JSF budget still accommodated the procurement of 100 F-35A aircraft. 1392 If the cost increased to 50 per cent above the 2002 estimates, which was ‘consistent with historical trends’, the RAAF would still be able to procure 90 F-35A aircraft within the budget. 1393 That the budget for the JSF includes a significant contingency indicates undermines the veracity of statements made since 2002 regarding confidence in the cost of the procurement and stability of the JSF Program. It also suggests that low cost was not as important a factor as was stated in 2002, and Australia has been focused on acquiring the aircraft largely independent of cost.
Australia’s Industry Approach In July 2000, the Australian and US Departments of Defence signed the ‘Statement of Principles for Enhanced Cooperation in Matters of Defense Equipment and Industry’, with the intention of ‘greatly simplify[ing] the transfer of defence equipment and technology’ between Australia and the US. 1394 ‘Statement of Principles’ covered topics including ‘cooperation on research and development, maximising technology transfer, harmonisation of military requirements, acquisition processes and export procedures’. 1395 Aside from ‘symbolis[ing] the closeness of the security partnership ======1389 JSCFADT, ‘Department of Defence annual report 2008-09: Hearing Transcript, 30 March 2010’. 1390 Court of Audit [Algemene Rekenkamer], Netherlands. ‘Validation of the policy document ‘In the Interests of the Netherlands’’. Court of Audit
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that has developed between Australia and the US’, the arrangements were intended to ‘facilitate the interoperability’ of Australian and US forces. 1396 As well as improving military interoperability, the ‘Statement of Principles’ was intended to contribute towards integrating Australian and US defence industries. It declared the = wish to enhance the environment for mutual defense equipment and industrial cooperation for their mutual benefit by establishing a framework that will facilitate greater integration of their defense companies, = and ‘envisage[d] a more unified and stronger US and Australian industrial base’. 1397 It should be noted, however, the ‘Statement of Principles’ specified that its principles were ‘not intended to be legally binding’. 1398 Nevertheless, given the ‘special status accorded to Australia’, the explicit intentions to tie the US and Australia closer politically, militarily and industrially in 2000 and 2001 would have created positive expectations for Australia’s involvement in the JSF Program.
While the closer integration of US and Australian defence industries would support the growth of Australian industry by increasing market opportunities and access to technologies, it would also serve to reduce the opportunities to support domestic industries through the offset approaches of other nations described in Chapter 6. For the US, greater cooperation with the defence industries of allied nations would minimise the costs borne by US industry involved in providing offsets for external procurements. According to Suzanne Patrick, the Pentagon's top official for industrial policy, codevelopment programs such as the JSF ‘offer a huge potential to break the offset paradigm’. 1399
Since the 2000 Defence White Paper, Australia’s defence industry policy has been based on the principle of a competitive industry that is not reliant on government
======1396 Department of Defence, ‘Meeting with US Secretary of Defense’. 1397 Department of Defence, Australia, ‘Statement of Principles for Enhanced Cooperation in Matters of Defense Equipment and Industry’. Department of Defence
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financial support. The White Paper declared that it was Government’s objective to have ‘a sustainable and competitive defence industry base, with efficient, innovative and durable industries, able to support a technologically advanced ADF’. 1400 Minister of Defence John Moore indicated the intention to maximise cost efficiency with public funds, and with regard to offsets in procurements, stated that Australia would not ‘pay unreasonable premiums for domestically-produced equipment and services’. 1401 While the JSF Program differs from traditional procurement programs, with a different type of offset arrangement, this national industry policy element became embedded in Australia’s JSF industrial strategy and policies.
In June 2003, the Government released the ‘Australian Industry Engagement Strategy for the Joint Strike Fighter Program’, which represented a different approach to other JSF partner nations. Unlike previous defence programs, Australia’s participation in the JSF program ‘provided the opportunity for the Government to take equity in the industrial program of the aircraft it expects to purchase’. 1402 Whereas other JSF partner nations used the uncertainty of their procurement selections to leverage additional industrial benefits, the Industry Engagement Strategy stated that Australian industry would benefit from ‘leveraging off declared expectation of buying the aircraft’. 1403 The objective of the Strategy was to integrate Australian industry in a global supply chain as opposed to previous efforts that were limited to the production of Australia’s procured equipment. Australia’s strategy was based on a ‘Team Australia’ approach, representing a ‘whole-of-government and industry partnership’. 1404 The Government’s role in the Team Australia approach has been to facilitate cooperation between Australian companies against international competition, rather than competing among themselves. 1405 The creation of industry capability teams
======1400 Department of Defence, Australia, Defence 2000: Our future Defence Force (Canberra: Department of Defence, 2000) xv. 1401 Department of Defence, Australia, Media Release, ‘New Opportunities for Australian Industry’, Department of Defence
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(ICTs) has made it easier and cheaper for international contractors to assess the value of Australian industry. 1406
In 2004, the Australian Department of Industry, Tourism Resources (DITR) noted that the ‘JSF acquisition strategy differs from previous arrangements’ in that suppliers would be sourced on a ‘best value’ principle rather than ‘traditional offset arrangements’.1407 DITR stated that offset programs were ‘largely limited to short build to print productions runs for a limited quantity of aircraft’, and that ‘due to the inefficiency …, they [typically] result in increased program price to the customer’. 1408 It also provided the ‘significant example’ of offset inefficiencies with the ‘local assembly of F/A-18s in a purpose built facility that had no subsequent use’. 1409 However, DITR was slightly critical Lockheed Martin failure to adhere to the JSF Program’s best value principle stating that ‘the people tasked with the job of actually producing the aircraft … are less convinced of the benefits’. 1410 Under the best value principle, companies would be contracted to the JSF Program ‘through demonstration of world class products and technologies representing cost advantages to the program’. 1411 However, in response to significant dissatisfaction by JSF partners at inadequate workshares in 2002-03, Lockheed Martin introduced the Strategic Best Value Sourcing (SBVS) approach, described the US DoD as ‘an apparent compromise between directed workshare and a full-and-open competition’. 1412
With SBVS, a particular type of offset arrangement, Lockheed Martin designated industrial work packages to ‘supplement the industrial opportunities/awards through best value competition’ for those partners who actively seeking greater workshares, and ‘promise[d] to strengthen international partnerships and expand industrial participation’. 1413 If the company provided the SBVS workshare could not complete
======1406 DITR, ‘Inquiry Australians Defence with the United States: Submission No 14’, 9. 1407 Ibid, 4. 1408 Ibid. 1409 Ibid. 1410 Ibid. 1411 Ibid, 6. 1412 Office of the Deputy Under Secretary of Defense, JSF International Industrial Participation: A Study of Country Approaches and Financial Impacts on Foreign Suppliers, US Department of Defence (June 2003) 13. 1413 Ibid.
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the work for the pre-determined cost, it would be reallocated on a best value basis. 1414 As such, SBVS are not fixed in the long term, and Lockheed Martin’s cost goals prevent significant increases in costs. As discussed in Chapter 6, Norway made significant efforts in levering their procurement of the JSF to gain a greater workshare. According to Lockheed Martin’s JSF Executive Vice President and General Manager JSF Program Integration Tom Burbage, half of Norway’s contracts, as of June 2006, were the result of ‘strategic sourcing and half is work that its industry will have the opportunity to compete for and win’. 1415 Following discussions with Australian officials in 2003, the US DoD stated that ‘Australia believes that strategic sourcing contracts will help overcome [difficulties in winning contracts] somewhat but Australia is still very much in favor of the best value arrangements’. 1416
The anti-offset policy was entrenched in the 2010 policy document Building Defence Capability: A Policy For a Smarter and More Agile Defence Industry Base, in which the Australian DoD made it clear that industrial offsets ‘have not place in the Government’s defence industry policy’ as they are ‘costly and counterproductive’. 1417 Government procurement policy has ‘moved away from offsets programs towards competitive procurement based on value for money criteria that encourages Australian industry to be internationally competitive and globally integrated’. 1418 This policy has resulted from the ‘significant consolidation and globalization of the defence industry’, 1419 and from past experiences in industrial offsets. The industrial outcomes of offset arrangements for the F/A-18 seem to have resulted in the assessment that offsets ‘provide a revenue stream only for the period of the acquisition contract and related only the goods being procured at the time’.1420 =
======1414 ODUSD, JSF International Industrial Participation , 13. 1415 Graham Warwick, ‘JSF special: Going global’, Flight International
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Australia’s acquisition of the F/A-18 Hornet included ‘designated and offset work’ conducted by Australian industry, attracting a premium of 17% of acquisition and support costs. 1421 The premium was justified on the basis of ‘flow-on benefits to Defence and defence industry, … expected to include addition work for Australian industry, in excess of the investment costs and the skills and technology transfer’. 1422 However, Defence’s 1994 review of the F/A-18 industry program ‘found that few of the stated industry objectives were fully realised.1423 Apparently, without economic incentives, either offset requirements or competitiveness, US subcontractors ‘generally refuse[d] to allow Australian firms to continue to manufacture their products or use their processes beyond the mandated production program’. 1424
Building Defence Capability specifically excludes the use of industrial offsets in the JSF program as = applying an offsets approach for JSF would only see Australian industry competing for work on about 100 aircraft, as opposed to the current situation where they are competing for work on more than 3000 aircraft – a much more significant revenue stream. 1425 = However, this is not the case. Partner and non-partner nations have clearly pushed for offsets in producing components in quantities that far exceed their own procurement quantities. As mentioned in Chapter 4, Italy’s company Alenia is currently committed to producing 835 pairs F-35 wings, 1426 while, as discussed in Chapter 6, Israel Aerospace Industries is scheduled to produce around 811 pairs of wings. 1427 As the Department of Defence announced in mid-2013, 14 Australian companies were under contract to build parts for the global JSF supply chain, not just Australian aircraft, with
======1421 Department of Defence, Building Defence Capability , 57. 1422 Ibid. 1423 Ibid. 1424 Ibid. 1425 Ibid. 1426 Tom Kingston, ‘Amid Local Opposition, Italy Begins F-35 Assembly’, Defense News
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‘almost every F-35 built having some Australian parts and components’. 1428 By 2007, Melbourne-based GKN Aerospace Engineering Services had ‘designed a substantial part of the JSF airframe’, representing the largest engineering contribution outside the primary contractors Lockheed Martin, Northrop Grumman and BAE Systems. 1429 Airframe design relates to all F-35 aircraft, not just those to be procured by Australia. While these examples contradict the Defence Industry policy claim, and indeed undermines its argument against offsets, the policy remains in place. Even if the use of SBVS created increased costs, a 2008 GAO assessment found that the performance of suppliers was only one among a myriad of factors contributing to increased procurement costs. 1430 In any case, with other nations taking advantage of SBVS opportunities, Australia would pay a premium whether it had offset arrangements or not. = Although Australia has pushed for additional industrial contracts, the efforts have not been as assertive as Norway, and seem to display an unwillingness to expend political efforts to obtain economic benefits beyond the prescribed ‘best value’ principle of the JSF program. A Lockheed Martin-led industrial team came to Australia to promote program participation in April and May 2002, providing a briefing on opportunities in participation. 1431 However, Flight International reported in April 2002 that documents it had seen indicated that ‘the JSF industry package offered by Lockheed Martin to Australia contain[ed] little in the way of high technology workshare’. 1432 Promisingly, by November 2002, Australia had received a significant number of Letters of Intent (LoI) from Lockheed Martin in comparison with other JSF partners: Australia received 19, only behind the UK with 20, Norway with 21 and Italy with 27 LoIs. 1433 In contrast, Canada had received 10 LoIs, the Netherlands 16, and Turkey only 7. 1434 In late October 2002, shortly before Hill officially signed on the SDD phase, Industry
======1428 Department of Defence, Australia, Media Release, ‘First Australian Joint Strike Fighter takes shape’, Department of Defence
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Minister Ian Macfarlane stated that he was ‘impressed by … the willingness of Lockheed Martin and its project partners to investigate Australia's industry capability’. 1435 Lockheed Martin’s enthusiasm for Australian industry may have been a negotiating ploy, as the LoIs were not translated into firm contracts by the following year. = = By May 2003, Australia had not won a contract in the JSF Program, with Peter Morris, director general aerospace and electronics industry capability at the Defence Materiel Organisation, stating that Australian industry was facing ‘quite a significant crisis of confidence’. 1436 By June however, GKN Aerospace had been awarded the first Australian contract to ‘participate in the design, analysis and manufacture of metal and composite JSF centre fuselage components’. 1437 In July 2003, Minister Hill suggested that there was not ‘a level playing field’ for Australian industry. 1438 His comments followed the revelation that Australia’s Hawker de Havilland ‘lost a major composites work package to a Lockheed Martin subsidiary’. 1439 Hill stated that Australian industry ‘need[ed] to match aggressive competition and political pressure from Europe’, 1440 but it would appear this was to be done on the basis of ensuring contracts were won on a competitive basis, rather than as a result of political pressure. Hill ‘sought reassurance’ from Lockheed’s Tom Burbage that Australian industry ‘would be fairly treated in the competition process’, and ‘requested evidence’ of why the Hawker de Havilland bid was unsuccessful. 1441 Before signing the SDD MoU, there was an Exchange of Letters between the US and Australian Governments, which ‘affirm[ed] the importance of have no predetermined work share for any participating country and of maintaining a level playing field’. 1442 Despite the assurance in the Exchange of Letters, Australia was not granted the level playing field on which its industrial strategy was based. ======1435 Department of Defence, ‘Negotiations completed for Australia’s entry into JSF program’. 1436 Peter La Franchi, ‘Australia voices concerns over work share on JSF’, Flight Global
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In May 2004, with 12 Australian companies winning contracts worth $30 million, Hill seemed more that satisfied, stating that it was a result ‘far beyond that which [he] imagined 12 months ago’. 1443 Cameron Stewart noted that Hill’s ‘enthusiasm contrasts sharply’ with the views expressed by Norway, Denmark and the Netherlands, who had ‘complained that not enough work is coming their way from the JSF project’. 1444 By May 2007, however, 22 Australian companies had won contracts worth $128 million, and the Australian Government ‘argue[d] this is not enough [as] other partner countries [had] won a disproportionate share of spin-off deals’. 1445 In February 2007, Defence Minister Nelson stated that he ‘expressed directly to Lockheed Martin and to those in the US military who are involved in the JSF program that the allocation of some of the contracts has surprised us.’ 1446 In this period, while other JSF partner nations were pushing hard politically for greater industrial workshares, Australia’s public position seems to have been limited to publicly expressing discontent. = By 2009, Australia’s negotiating approach was only slightly more aggressive. Greg Combet, Minister for Defence Personnel, Materiel and Science, visited the Lockheed Martin JSF factory in Fort Worth, Texas, in September 2009. 1447 In discussions with Lockheed Martin, Combet ‘reiterated that confidence in securing a good outcome for Australian industry in both JSF production and sustainment’. 1448 He stated that ‘several major opportunities are currently being negotiated with Australian companies and I encouraged Lockheed Martin to continue working closely with the companies involved to ensure the work comes to Australia’. 1449
Combet’s appeal for an additional share of industrial participation is weaker than the position and language used by the Norwegians or Turks, particularly with regard to ‘encouraging’ Lockheed Martin to work closely with Australian companies. 1450 In ======1443 Cameron Stewart, ‘Hill admits jet failings’, The Australian (21 May 2004) accessed via Factiva 6 January 2014. 1444 Stewart, ‘Hill admits jet failings’. 1445 Stewart, ‘F-35 slowly wins a corridor war’. 1446 Ibid. 1447 Department of Defence, Australia, Media Release, ‘Combet Reviews Progress of JSF’, Department of Defence
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addition, it would be difficult to take a hard line against the US Government and Lockheed Martin to allow leverage to demand increased economic benefits with Combet’s very positive assessment of the JSF. Combet stated that the visit ‘reinforced [his] confidence that the JSF is the right aircraft to meet Australia’s future air combat needs and represents value for money for the Australian Taxpayer’. 1451 = With a finite number of JSF aircraft and support materiel to be produced, JSF industrial workshares are a zero-sum game in which contracts awarded to one country removes the opportunity for other countries to win that contract. National rivalries are not always the case, and there is some international collaboration, such as Turkish companies ‘form[ing] partnerships with Australian counterparts to strengthen their chances of securing workshare’. 1452 Generally, however, companies of partner nations frequently compete for production contracts. For example, Northrop Grumman contracted several companies as second-source suppliers of composite parts and subassemblies for F-35 centre fuselages, including Hawker de Havilland in Australia, Kongsberg in Norway, Terma in Denmark and Turkish Aerospace Industries (TAI). 1453 = = In June 2004, Lockheed Martin and subcontractor Northrop Grumman offered large orders for mid-fuselage composite work, valued at US$50-300 million to Australia's Hawker de Havilland, as well as Denmark's Terma and Turkey's Tusas Aerospace Industries, to ‘counter a new wave of workshare protests from international partners’. 1454 Negotiations were also underway with Norway's Kongsberg for a similar deal. 1455 What should be noted is the particular economic logic at play in outsourcing the excess workshares, in conjunction with political pressures of partner nations for additional industrial contracts. By 2004, US contractors were unable to manufacture the quantity of JSF products needed to meet demand due to limited production facilities. US manufacturers would have needed to invest millions of dollars in expanding infrastructure to meet demand, but instead opted to outsource the excess
======1451 Department of Defence, ‘Combet Reviews Progress of JSF’. 1452 Lale Sariibrahimoglu, ‘Turkey may withdraw from JSF programme’, Jane’s Defence Weekly (10 November 2004) accessed via ProQuest 27 December 2013. 1453 Warwick, ‘Going global’. 1454 Craig Hoyle, ‘F-35 contractors offer workshare deals’, Flight International
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workshares to partner nations. 1456 A consequence of the outsourcing, however, is the shifting of capital investment costs and risks to the companies of partner nations. = In May 2005, Hawker de Havilland was awarded a $70m contract with Northrop Grumman for the production of composite parts and subassemblies for the JSF center fuselage. 1457 According to Janis Pamiljans, Northrop Grumman vice president and F- 35 program manager, Hawker de Havilland was ‘Chosen for its best value approach’. 1458 In June 2005, TAI signed a long term agreement with Northrop Grumman worth $100m to produce composite parts and subassemblies for the JSF center fuselage. 1459 In May 2006, Burbage stated that Northrop Grumman had provided Kongsberg with a letter of intent to supply composite centre-fuselage components. 1460 Burbage stated that ‘This is strategic, not competitive, sourcing. It is available to Kongsberg if it meets a competitive price’. 1461 In February 2007, Northrop Grumman announced it had signed Letter of Intent with TAI for the production of ‘a minimum of 400 center fuselages’, with a ‘potential value in excess of $3 billion in then-year dollars’. 1462 = = As comprehensively discussed in Chapter 6, Kongsberg and TAI achieved significant success in obtaining large workshare due to the political efforts of their national governments, and Denmark’s Terma achieved some success, but was severely hampered by the no offset clause in the agreement with Lockheed Martin. In this example, where various national companies compete for a share of the same piece of work, the size of the workshare may be as much a product of political pressure as best value. The Australian Government’s preference or Australian companies to win contracts on the best value principle, and an unwillingness of to politically push for ======1456 Hoyle, ‘F-35 contractors offer workshare deals’. 1457 Louise Muniak, Northrup Grumman, Press Release, ‘Hawker de Havilland Awarded F-35 Joint Strike Fighter Work by Northrop Grumman’, GlobeNewswire
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greater workshares by levering the JSF procurement, may have resulted in fewer opportunities and reduced workshares. Additionally, as discussed in Chapter 6, Northrop Grumman provided TAI’s workforce with hands on training at their Advanced Composites Center, 1463 and worked with TAI ‘hand-in-hand’ to manufacture their first centre fuselage. 1464 There does not appear to be evidence that Northrop Grumman provided similar technical training and assistance to Australian companies, and the assistance to TAI undermines Australian advantages in technical expertise in a best value approach. = = = Conclusion = In terms of organisational-bureaucratic politics, this chapter demonstrates the RAAF had significant influence in Australia’s 2002 decision to procure the JSF, and continued to exert influence over the next decade. In 2013, former Defence Minister Joel Fitzgibbon publicly criticised senior RAAF officers as single-minded in their intention for Australia to acquire the JSF and accused them of obstructing his efforts to examine other options. 1465 He said that the ‘air marshals, were obsessed with the [JSF] project and were disproportionately influential’ with the former Howard, Rudd and Gillard governments. 1466 Fitzgibbon stated that = When I was trying to put some strategic competition into the debate by inquiring about access to the F22 Raptor, and aircraft like the Eurofighter, I was . . . pilloried by those in uniform. Interference was run. 1467 = While Fitzgibbon’s claims have not been corroborated, it seems possible that Australia’s failure to adopt a strong negotiating position throughout its involvement in the JSF Program may be largely attributable to senior RAAF officers who consider procuring the aircraft as a priority that overrules the pursuit of other benefits. ======1463 Northrop Grumman, ‘Key International Northrop Grumman F-35 Supplier Delivers First Large, Complex Composite Structure’, PR Newswire
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This assessment of the RAAF’s influence, however, would have been adequately addressed by previous procurement analytical frameworks, and the value of the broader framework proposed by this thesis is linking Australian organisational- bureaucratic to international actors. The connection between the Australian NACC project office and the US JPO and Lockheed Martin reinforces institutional and service biases that would not have been as influential in a strictly Australian political environment. While strong civilian oversight exists in the US, particularly with the GAO, the more pessimistic assessments, including those of some US defence organisations are excluded from Australian defence assessments, and generally excluded from Australian civilian oversight. The common interests of the JPO/Lockheed Martin and the RAAF/Australian NACC office allow their inherent biases to dominate the procurement process. However, the premature decision to acquire the JSF in 2002, precludes the types of international politics evident for other nations, particularly America’s manipulation of Norway’s procurement, for example. It is important to note that irrelevance on active international influence is itself a reflection of the rationality, or perhaps irrationality, of Australia’s procurement. = = As noted in Chapter 3, the JSF Program demonstrated the characteristics of the ‘buy- in’ syndrome in the US where the initial cost is knowingly presented as lower than the expected longer-term cost, on the assumption that additional funding will be provided. This chapter has shown that the buy-in syndrome is evident in Australia’s procurement, as the JSF was touted a significantly cheaper option, but knowing that the cost would increase. Australia’s procurement exhibits the characteristics of a conspiracy of optimism, which expands concept of buying-in to include development and production schedules, and performance. This chapter has shown that there has been a significant conspiracy of optimism with JSF schedules, which has the effect of significantly increasing costs when the interim fighter procurement is taken into account. While the Dutch government and military would be as culpable as Australia’s in a conspiracy of optimism, the use of the broad analytical framework in benchmarking and comparing the procurement approach of the Netherlands to Australia allows a more rigorous assessment not available with conventional approaches. =
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Australia’s industry policy for the procurement of the JSF is based on assumptions that are not valid for the JSF’s new type of procurement, and places Australia at a disadvantage compared to other nations. Australia’s anti-offset policy was based on previous experience, notably with the F/A-18 procurement, but this conceptualisation of offsets is not compatible with the new type of industrial offsets represented by SBVS in the JSF Program. The argument that an offset policy would only apply to the number of F-35A’s procured by Australia, and result in a significant premium being paid, is completely at odds with reality of the JSF Program. Australia’s adherence to the Program’s competitive best value principle potentially places it in a position of significant disadvantage when other nations have politically pushed for greater workshares, particularly where there is a direct competition for the production of the same components. While Australia does have technical skills that are translated into competitive advantages, these are undermined by the ability of other JSF partner nations to import technical skills to enhance their workforce as a result demanding greater industrial returns. While there is sound logic in developing an internationally competitive Australian defence industry, one that is not artificially supported by subsidies or offsets, the JSF partnership model differs significantly enough from previous defence acquisition arrangements that real economic benefits can result. =
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CHAPTER 8: AUSTRALIA’S STRATEGIC NEEDS AND JSF CAPABILITIES =
While Chapter 7 broadly examined Australia’s procurement approach, highlighting problems and contrasting it with the approaches of other nations described in Chapter 6, this chapter will conduct a detailed and critical examination of capabilities, in terms of the requirements of AIR 6000, the capabilities of the F-35, and the RAAF’s assessments of F-35 capabilities and Australia’s capability requirements. In a similar way that Chapter 7 tested the assumptions that underpinned the 2002 decision, finding many to be false, this chapter will test the capability assumptions that informed the 2002 decision. This chapter will also examine Australia’s procurement through the lens of the analytic framework advocated by this thesis, which is based on an expansion of the ‘syndromes’ outlined in Chapter 2. Particular attention will be given to the process of defining the quantity of aircraft needed to meet Australia’s strategic requirements. In contrast, this chapter will also examine the JSF procurement as a catalyst for capability transformation in the RAAF in the context of the RAAF’s Plan Jericho.
The chapter begins by outlining the requirements envisaged in the late 1990s to replace Australia’ F/A-18 and F-111 fleets, and also examines timeframe assumptions in phasing out legacy aircraft and introducing the F-35. The Australian National Audit Office’s assessment of the AIR 6000 procurement process was outlined in the previous chapter, but this chapter will conduct a detailed examination of the assessments and capability requirements specified in the AIR 6000 project. Specifically, this chapter will examine the change in capabilities sought by AIR 6000 before and after the 2002 decision.
In examining Australia’s procurement of capabilities, this chapter will assess the extent Australia was willing to actively pursue critical capabilities, such as long range and maritime strike, against a passive desire to acquire the aircraft. It will also conduct a critical assessment of the concept of ‘fifth-generation’ capabilities in terms of the JSF and Australia’s declared needs, and argues that the term functions as a marketing tool to promote a specific product, and simplifies the process of capability assessment. To
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complement the cost analysis of Chapter 7, which focused on escalating costs for procuring the JSF, this chapter will examine the costs of gaining the New Air Combat Capabilities, which includes infrastructure costs, the costs of maintaining an interim capability and extending the life of Classic Hornets, and the procurement of the EA-18G Growler to address the electronic warfare deficiencies of the JSF.
Replacing the F/A-18 and F-111 Defence’s broad position on the 2002 decision in terms of procurement process was that ‘the direction and management of AIR 6000 was in accordance with the Government’s guidance in the Defence White Paper 2000 and Defence Capability Plan’. 1468 In 2004, Air Marshal Angus Houston stated that in the 2000 Defence White Paper, the ‘government announced that it planned to replace both [the F/A-18 and F-111] with a single new platform’, 1469 but this is not exactly what was specified for the AIR 6000 project, or what was stated in the White Paper. Rather, Defence 2000 stated that the the Government will examine options for acquiring new combat aircraft to follow the F/A-18, and potentially also the F-111. Provision has been made in the Defence Capability Plan for a project to acquire up to 100 new combat aircraft to replace both the F/A-18 and F-111 fleets. 1470 The important caveat on the decision was that Much work remains to be done over the next few years to define and refine our requirements, and to establish the optimum balance between capability and numbers. That time will also allow better evaluation of a number of competing aircraft types.1471 These statements obfuscate both the original intention of AIR 6000, and the reshaping of the project following the 2002 JSF declaration.
======1468 Australian National Audit Office, Management of Australia's Air Combat Capability: F-35A Joint Strike Fighter Acquisition (Canberra: Australian National Audit Office, 2012) 66. 1469 Angus Houston, ‘Is the JSF good enough? Can Australia’s air combat requirements be met by the JSF, or do we need the F/A-22?’, Australian Strategic Policy Institute (August 2004) 1. 1470 Department of Defence, Australia, Defence 2000: Our future Defence Force (Canberra: Department of Defence, 2000) 87. 1471 Ibid.
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In the mid-1990s, Australian defence planners began considering options to replace Australia’s two main air combat aircraft, the F/A-18 and F-111, but there were no ideal options to replace them as Defence officials considered ‘the few aircraft types available in the next several years [to be] between generations’. 1472 The two options for Australia were to replace either the F/A-18 or F-111 early and ‘stagger the cost of two new aircraft, or buy one type for both replacements’. 1473 From the beginning, senior RAAF officers supported the option of procuring a single type of aircraft to simplify Australia’s force structure and reduce costs. In 1996, Chief of Air Staff Air Marshal Les Fisher stated that it ‘would be highly desirable to replace both aircraft with a single new type … [as] a single fighter type would offer training and logistics benefits’. 1474 The following year, Air Vice Marshal David N. Rogers, head of Capability Development in Australian Defence Headquarters (ADHQ), was of the view that procuring one type of aircraft was ‘a very sensible option’. 1475
In 1997, Air Vice Marshal Doug Riding, Assistant Chief of Air Staff for Materiel, stated that the RAAF was ‘considering early retirement of its tactical fighter fleet of 70 F/A-18A/Bs to avoid a massive block replacement of its F/A-18s, F-111s and P-3Cs between 2015-20’. 1476 Riding indicated that RAAF was now actively looking at the programming of our replacement plans, including looking at the options we have, if indeed we could not afford to replace all three types in the same timeframe.’ 1477 One option put forward by Riding to avoid the ‘indigestible’ financial problem of block obsolescence was to ‘to replace the F/A-18s by 2005 with either F/A-18E/F Super Hornets or Eurofighter 2000s’, but the RAAF was also considering the Dassault Rafale and Saab Gripen. 1478 Riding stated that if the RAAF instead decided to keep its F/A-18 Hornets operational until the end of their life of type, the JSF or the F-22
======1472 Aviation Week & Space Technology, ‘Australia to Join JSF Program Soon’, Aviation Week & Space Technology 147:8 (25 August 1997) accessed via Factiva 25 August 2013. 1473 Ibid. 1474 Joris Janssen Lok, ‘Joint Strike Fighter Tops Australia’s Wish List’, Jane’s Defense Weekly (31 July 1996) accessed via ProQuest 23 February 2014. 1475 Aviation Week & Space Technology, ‘Australia to Join JSF Program Soon’. 1476 Joris Janssen Lok, ‘RAAF F/A-18s May Go for Early Retirement’, Jane’s Defence Weekly (26 February 1997) accessed via ProQuest 23 February 2014. 1477 Ibid. 1478 Ibid.
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‘would be ideal candidates’. 1479 In late 1997, Donald Sinnott, First Assistant Secretary for science policy at Defence Science and Technology Organisation (DSTO) stated the JSF ‘will start looking attractive if we can keep our [present] aircraft flying for a very long time’. 1480
As discussed in the previous chapter, 1481 the program to replace the Australia’s F/A- 18A/B and F-111 aircraft was formalised as AIR 6000 – New Air Combat Capability (NACC) in 1999. 1482 The first phase of the project involved determining how long the F/A-18 and F-111 airframes could be flown for, and when they would need to be retired. The RAAF determined that it would withdraw the F/A-18 Hornet around 2012- 15 when its airframe life would expire, and the F-111 in the 2015-20 timeframe. 1483 While a procurement decision was not expected to be made until at least 2005, the RAAF determined that it would adopt a multi-state procurement approach, beginning with replacing the Hornets from 2012, with a second tranche in 2015-18, and the third tranche in 2028-30. 1484 Rear Admiral Chris Ritchie, head of Capability Systems Development at Australian Defence Headquarters (ADHQ) stated that a multi-stage acquisition strategy would allow the Australian Defence Force (ADF) to maintain an appropriate capability edge and rolling enhancements …. will allow integration of enhanced capabilities into force structures and allow evolution of those structures and the associated doctrine. 1485
As well as considering ‘the scope for a single aircraft type to deliver the capabilities provided by both F/A-18 and F-111 aircraft’, AIR 6000 was also tasked with examining ‘broad capability options … and other options for strike capability’. 1486 By
======1479 Lok, ‘RAAF F/A-18s May Go for Early Retirement’. 1480 AW&ST, ‘Australia to Join JSF Program Soon’. 1481 Page 219. 1482 ANAO, F-35A Joint Strike Fighter acquisition, 31. 1483 Department of Defence, Australia, Transcript, ‘Australia to Join Joint Strike Fighter Program’, Department of Defence
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late 1999, options under consideration at the ADHQ for replacing the F-111 included cruise missiles and unmanned combat aerial vehicle (UCAVs). 1487 In May 2000, Minister for Defence John Moore that the AIR 6000 project had ‘generally freed itself from a 'platform replacement' mindset and is investigating a range of capabilities and strategies as it seeks new ways of approaching old problems’. 1488 The project was ‘billed as a capability-based program to assess how best to address the air superiority and long-range strike requirement, rather than just what fighter to buy’. 1489 The ‘options analysis’ of AIR 6000 was to examine ‘a variety of ways to address [air power] missions, including unmanned combat aircraft and transporters capable of deploying missiles’, but these would not expected to be ready for the first tranche of AIR 6000. 1490 Consideration was also given to a high-low mix combining ‘average capability’ and ‘very capable’ weapons and/or platforms. 1491 AIR 6000 was also to include a ‘mission analysis’, which would ‘closely examine what portion of air defense [would] fall to AIR 6000, versus land-based air defenses or the new SEA 4000 [air warfare] destroyer program’. 1492
The second analysis stage aimed to ‘conduct force structure analysis of a spectrum of future force mix options’, 1493 and was expected to be completed after July 2002. From this analysis, ‘several force options’ were to be ‘presented to an investment committee which [would] narrow the number to be evaluated so more detailed studies can be undertaken’. 1494 The third stage was to be the ‘Options Definition stage of the capability definition phase’, which aimed to deliver a range of force structure options that offer decision-makers clear guidance on enhancing ADF capability … [and] inform
======1487 La Franchi, ‘Australia Confirms Multi-stage Fighter Purchase’. 1488 John Moore, ‘Keynote Address’, in Keith Brent, ed., Air Power and Joint Forces: The Proceedings of a Conference Held in Canberra by the Royal Australian Air Force, 8-9 May 2000 (Canberra: Aerospace Centre, 2000) 4. 1489 Robert Wall, ‘RAAF Eyes Stealth in Next Fighter Choice’, Aviation Week & Space Technology 154:22 (28 May 2000) accessed via Factiva 2 March 2013, 48. 1490 Ibid. 1491 Ibid. 1492 Ibid. 1493 Department of Defence, Australia. Defence Capability Plan 2001-10: Public Version (Canberra: Defence Publishing Service, 2001) 57. 1494 Wall, ‘RAAF Eyes Stealth in Next Fighter Choice’.
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decision-makers of the cost and capability implications of all possible options. 1495 This phase would take a further two years to determine the ‘specific aircraft or mix of aircraft to buy’. 1496 As discussed in the last chapter, this process was derailed by the 2002 decision to effectively end the assessment and selection process.
During the 2002 announcement, Houston stated that AIR 6000 would subsequently ‘look at how we're going to fit the Joint Strike Fighter into the ADF Force structure of the future’, and ‘perhaps’ look at emerging UCAV technology, but stated ‘in terms of comparing specific aircraft types, the nine candidates, that's well and truly in the past’. 1497 Hugh White claimed that ‘To question the F-35 inside the Defence Department is a dangerous career move’, 1498 which would effectively obstruct any assessment of alternatives in the following years. As Aldo Borgu argued, it is difficult to understand how the RAAF made a rigorous assessment of the suitability of the JSF to meet Australia’s needs as ‘they hadn't even finished defining what our requirements actually were’. 1499
The main documents which ‘define the capability the AIR 6000 project is seeking to acquire’ are the Operational Concept Document (OCD) and the Function and Performance Specification (FPS), which ‘defines a validated set of requirements for the New Air Combat Capability’. 1500 The development of the OCD for AIR 6000 began in 2002, with a Preliminary OCD produced for First Pass to Cabinet in 2006, followed by a Second Pass in 2008. 1501 A preliminary FPS was developed in 2006, followed by a first draft FPS in March 2008. 1502
======1495 Department of Defence, Defence Capability Plan 2001-10 , 57. 1496 Ibid. 1497 Department of Defence, ‘Australia to Join Joint Strike Fighter Program’. 1498 Cameron Stewart, ‘Top-gun fighter in a spin’, The Australian
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In January 2002, the RAAF’s Strike Reconnaissance Group, which operated F-111s, was amalgamated with the Tactical Fighter Groups, operating F/A-18s, ‘at the direction’ of Chief of Air Force Air Marshal Errol McCormack, who wanted to ‘position the RAAF to transition to the JSF’. 1503 Whether this was a case of prudent preparation, or an example of a service chief attempting to influence procurement policy through operational policy, or a combination of both, is not clear. However, it does indicate the RAAF’s preference and confidence, and indeed presumption, as the decision to acquire the new platform(s) was not expected to be made until 2006 at this point in time.
As discussed in Chapter 2, a characteristic of major defence procurements is the justification of acquiring new platforms based on the significant cost of maintaining existing platforms, and this was a key feature of Australia procurement of the JSF. In 2003, Defence Minister Robert Hill had been ‘convinced by the Chief of Air Force’, Air Marshal Angus Houston, to retire the F-111 fleet from 2010. 1504 Houston’s advice were based on the rapidly increasing costs of maintaining the F-111’s airworthiness and the aircraft’s structural fatigue, but he ‘also had in mind a restructuring of the RAAF combat power, and saw the window of opportunity to sign up to the JSF program on favourable terms’. 1505 Between 2000 and 2003 Australia’s F-111s faced critical airworthiness and safety certification problems, 1506 with only one third of the fleet available for operations between November 2001 and February 2002. 1507 The RAAF stated that the F-111 required 30 maintenance hours per flying hour in 2002, 1508 but required 180 hours of maintenance time per flying hour by the time they were withdrawn from service. 1509 The cost of maintaining Australia’s 17 F-111Cs and four
======1503 Mark Lax, Australia's Strategic Weapon: How the F-111 Changed the Royal Australian Air Force and Australian Defence Policy, doctoral thesis, University of New South Wales, Australian Defence Force Academy, Canberra, Australia, 2011, 267. 1504 Lax, Australia's Strategic Weapon , 268. 1505 Ibid. 1506 Australian National Audit Office, Management of Air Combat Fleet In-Service Support (Canberra: Australian National Audit Office, 2007) 14. 1507 Flight Global, ‘RAAF reveals lack of F-111 availability despite high alert’, Flight Global
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RF-111C aircraft in 2007-08 was $146m 1510 representing five times the cost per flying hour of that of the F/A-18 Hornet. 1511
The revised timetable for Australia’s new air combat capabilities planned on withdrawing the F/A-18A/B Classic Hornet from July 2015 and completed by June 2018, but in February 2014, Brown announced the intention to extend the life of the Classic Hornet out to 2022. 1512 Between 1995 and 2015, systems and weapons upgrading and structural refurbishments cost an estimated $3,678m for the total Hornet fleet. 1513 As of 2012, airframe structural refurbishments planned to 2021 were estimated to cost $288m, with sustainment to 2021 estimated to cost an additional $1,552m. 1514
Capability Requirements Many details regarding the JSF capabilities are confidential, most of which are probably appropriate in maintaining information security for the aircraft itself. However, capabilities that are withheld from JSF partners by the US are issues that warrant an examination in the broad international context of this thesis’ analytical framework. One example particularly relevant to Australia, of which there is limited publicly available information, is the exclusion of the Mobile User Objective System (MUOS), a next-generation military satellite communication (SATCOM) system, to JSF allies until 2015. MUOS is an ultra high frequency (UHF) narrowband satellite communication system designed to provide worldwide coverage, comprising of a set of four geosynchronous satellites. 1515 According to Lockheed Martin’s Narrowband ======1510 Department of Defence, Australia, Defence Portfolio Budget Statements 2007-08 (Canberra: Department of Defence, 2007) 177, 289. 1511 Andrew Davies, ‘What’s Plan B?—Australia’s Air Combat Capability in the Balance’, Australian Strategic Policy Institute (12 May 2011) 7. 1512 Department of Defence, Australia, ‘Jobs Remain in Australia under Hornet Contract’, Department of Defence
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Communications vice president Iris Bombelyn, for the first time, mobile forces will be able to have ‘secure, high fidelity voice conversations, networked team calls and data exchange, including video, with anyone around the world connected with a MUOS terminal’. 1516 The advantage of MUOS over legacy UHF SATCOM systems is the Wideband Code Division Multiple Access (WCDMA) payload, which offers a much faster transfer of data for tactical communications links, 16 times that of legacy UHF SATCOM. 1517
The F-35 was designed with communications links to MUOS’s WCDMA payload, but allied nations would not have received the WCDMA enabled communication pods as it was ‘reserved for US use only’. 1518 While allies procured JSFs ‘on the assumption that they would be fitted with [MUOS] communications pods’, Harold Haney, chief of space and missile defense in US Strategic Command, stated that ‘MUOS was conceived as a US only constellation’ because of its encryption component. 1519 Following ‘years of allied complaints’, US policy was ‘quietly’ changed in April 2015, allowing allied access to WCDMA payload, although the US was still ‘discussing access terms with Canada, Australia and other allied governments’ as of November 2015. 1520
Access to MUOS capabilities is of particular relevance to Australia considering it had signed a Memorandum of Understanding with the US in November 2007 on a joint MUOS ground station at the Kojarena facility in Western Australia, 1521 which was first
======1516 Naval Technology, ‘US Navy's MUOS-4 satellite encapsulates prior to scheduled launch’, Naval Technology
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approved by the Australian Government in December 2005. 1522 The Australia facility is one of four supporting ground stations, with the others in Italy, Hawaii, and Virginia in the continental US. 1523 The Australian Department of Defence stated that the MUOS was a network ‘designed to support US and Australian military users’. 1524
Canada’s issues with JSF SATCOM capabilities, which were discussed in Chapter 5, 1525 provides a basic benchmark for comparison, but the international politics for Australia are more complicated. While it is beyond the scope of this thesis to address the issue in detail, the application of the new analytical framework provides questions that can be addressed in subsequent work. Access to the MUOS system provides another example of the complexity of governance with the JSF, with significant capability dependency on the compliance of US actors outside the JSF Program. In mapping out influence in JSF governance, it would be important to determine the reasons behind the change in US policy, and the source of pressures to change the policy. For example, it would be important to ascertain the extent to which the international partners in the JSF Executive Steering Board (JESB) pressured the Program’s Executives, or if the change in policy resulted from pressure from other sources.
While advanced SATCOM capabilities are considered a key feature of the F-35, the exclusion of other JSF nations from using the technology until 2015 raises questions as to the rigour of capability assessments. Australia’s decision in April 2014 to commit to procuring a further 58 F-35As 1526 was apparently made with a known capability deficiency, and without consideration of using the additional procurement as leverage for MUOS access in negotiations. It is not evident the extent to which the Kojarena facility was linked to Australia’s procurement of the JSF, or if they were treated as ======1522 Department of Defence, Australia, Media Release, ‘MoU Signed for Australia-US Joint Military Communications Ground Station’, Department of Defence (8 November 2007) accessed via Factiva 5 December 2015. 1523 Sam LaGrone, ‘Navy Accepts Fourth MUOS Communication Satellite’, US Naval Institute News
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discrete projects. Specifically, it is not publicly known if the provision of US access to the joint facility was contingent on access to the MUOS SATCOM system, including for the JSF, or if the negotiations for the Kojarena facility including leveraging the JSF procurement for MUOS access. It is significant to note that 13 years after Australia had committed to procuring the JSF, the precise nature of the capabilities Australia would acquire were not clearly known, and that international political pressure was still required to be exerted to gain advantages to support Australia’s national interest.
In 1997, Air Vice Marshal Rogers stated that ‘Australia's biggest requirement is range because of the size of the country’. 1527 As Air Vice Marshal Peter Nicolson noted, ‘The problem is that there is nothing to replace [the] F-111’ in terms of the strike range it provided. 1528 Acquired for its ability to be able to bomb Jakarta without the need to refuel, the F-111s combat radius of 1,000nm with was around twice that other strike aircraft. Arguing that the ‘emphasis is moving from airframe to weapon’, Sinnott thought long-range standoff weapons were a possible option for addressing the range issue. 1529 For Rogers, the JSF was ‘a potential candidate’, and although ‘is supposed of have a range of less than 1,000 miles … it can be looked at in conjunction with [a] refueling [aircraft]’. 1530 Similarly, as Australia began to look seriously at fighter options and considered signing on the JSF Program, Air Commodore Raymond Perry, air attaché at the Australian Embassy in Washington, stated ‘something that is always very important is range. It has to have legs.’ 1531 By 2001, DSTO was examining later versions of the Eurofighter Typhoon with extended-range tanks and Dassault's Rafale with external fuel tanks as possible options. 1532
During negotiations to join the SDD phase of the JSF Program in July-September 2002, Australia explored options to equip some of its planned JSFs as ‘long-range
======1527 AW&ST, ‘Australia to Join JSF Program Soon’. 1528 Ibid. 1529 Ibid. 1530 Ibid. 1531 Michael D. Towle, ‘Australia to Look at F-22, Joint Strike Fighter, Deal Could be Worth from $10 billion to $20 billion’, Fort Worth Star-Telegram (13 August 1998). 1532 Wall, ‘RAAF Eyes Stealth in Next Fighter Choice’.
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surveillance and reconnaissance aircraft’ 1533 in an effort to replace the capabilities of the RF-111C reconnaissance aircraft. The concept would involve a removable fuel tank in one internal weapons bay, and a ‘multi-sensor surveillance suite’ in the other. 1534 Tom Burbage stated that while the concept was ‘feasible’, Australia would be required to entirely fund the non-recurring development costs as there was ‘no other country that want[ed] that capability’. 1535 However, it seems that the RAAF was not willing to pay or push for capabilities which would suit Australia’s needs if they were not in the US plans. Air Vice Marshal Ray Conroy, who was leading the negotiating team, indicated that Australia would procure as standard the USAF version of the JSF, rejecting the notion of ‘a special model for Australian conditions’. 1536 For the purpose of ‘containing the costs’ in the development of new capabilities, the RAAF’s position was it was ‘far better off having something pretty close to the stock standard variant of the largest operator’. 1537
In contrast, to the Australian approach, the Israelis have demonstrated a willingness to shape the JSF aircraft and program to include external drop tank capabilities. In 2010, negotiations with the US on procuring the JSF included ‘an Israeli requirement’, to which the US did not object, to install a external detachable fuel tank (i.e. drop tank) to increase the F-35’s range, with ‘several senior officers of the Israel Defense Forces and defense ministry officials’ critical of the aircraft’s range and payload. 1538 By 2013, Lockheed Martin was examining Elbit Systems’ 425 gallon drop tanks, which featured ‘special attachment pylons that would completely separate from the wing’ so that the
======1533 Peter La Franchi, ‘RAAF Mulls Surveillance Modifications for JSF’, Flight Global
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aircraft would regain full stealth capability after separation. 1539 Australia’s position on the Israeli development of drop tanks is not known.
Considering Australia’s defence policy is predicated on a maritime strategy, and with maritime denial a key operational requirement, Australia’s limited activity in acquiring a dedicated high-end standoff maritime strike missile is surprising, and perhaps indicative of a focus on platforms rather than capabilities. The only advanced maritime strike missile planned for integration with the JSF is Norway’s Joint Strike Missile (JSM), which was discussed in detail in Chapter 6. 1540 If it were not for Norway’s acute lobbying for the JSM, Australia may have lacked an effective maritime strike weapon in the medium-term. =
Australia began considering the JSM in early 2008, 1541 and evaluations for a standoff maritime strike missile were formalised in the 2010 update to the Defence Capability Plan as project JP 3023. 1542 While AIR 6000 Phase 3 will provide air-to-ground weapons for the JSF, and AIR 6000 Phase 5 will provide air-to-air weapons for the Super Hornet and the JSF, both estimated to cost $500m-$1,000m each, JP 3023 is ‘intended to provide a new strike weapon suited for strike against well-defended maritime targets in the complex littoral environment’ for the JSF at a cost of $300m- $500m. 1543 There is no public information as to why JP 3023 is separate to the AIR 6000 project, but it may the case that Defence is able to claim that the NACC project is within budget limits by shifting some costs outside of AIR 6000.
In 2013, Air Vice Marshal Osley stated that Australia had ‘been very supportive of Norway not in a financial sense but certainly in supporting their aim at getting a very
======1539 David Eshel, ‘Israel Will Be First Non-US Customer to Fly F-35’, Aviation Week
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capable maritime strike missile onto the F-35’. 1544 However, Osley said that the RAAF’s current plans ‘revolve around’ the AGM-154-C1 Joint Stand-Off Weapon (JSOW), and although he thought the JSM would be a ‘very serious contender’ in the JP 3023 competition, Australia was planning on achieving JSF final operating capability (FOC) with the JSOW-C1. 1545 However, Australian Strategic Policy Institute analysts argue that it is less effective than the JSM, stating that the JSOW would be ‘effective against low- to medium-capability shipborne defensive systems [but] Against ‘top end’ targets it’s likely to prove less successful and riskier for the attacking aircraft’. 1546 In order to maximise the effectiveness of the JSF’s maritime strike capability, as well as the aircraft’s survivability, a ‘greater stand-off distance and a more sophisticated weapon’ is required, such as the JSM, 1547 which has over twice the standoff range as the JSOW-C1. With the JSOW-C1 planned for Block 4 software upgrades, along with the JSM, it is unclear what priority either missile will be accorded given that in mid-2015, the USAF was migrating capabilities planned for Block 3F to Block 4 1548 and deferment of Block 4 capabilities due to delays in developing to software and pressures to meet operating capacity deadlines.
Australia continued to express increasing interest in the JSM with Norwegian Air Force Lieutenant Colonel Sigurd Fongen, a senior staff officer for the F-35 program, stating that ‘Australia expressed interest in buying them’ in mid-2014. 1549 While it did not commit Australia to procuring the JSM, Australia took a definitive step in February 2015 by announcing the intent to enter into a cooperative agreement with the
======1544 Parliamentary Joint Committee on Foreign Affairs, Defence and Trade, ‘Department of Defence Annual Report 2011-12: Hearing Transcript, 16 May 2013’, Australian Parliament House
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Norwegian Ministry of Defence to develop the JSM. 1550 Defence Minister Kevin Andrews stated that the agreement would ‘ensure the weapon capability is developed and integrated onto the F-35A in the timeline required by Australia, should the Joint Strike Missile be ultimately considered for acquisition’, 1551 and in time for Australia's JSF FOC in 2023. 1552
Number of aircraft As discussed in Chapter 3, the capabilities of the F-35 have been assessed to be many times that of legacy aircraft it replaces, which should affect Australia’s procurement numbers. In relation to Australia’s legacy aircraft, a US Navy study found that the JSF would be around five times more capable than the F/A-18A Classic Hornet and 50 percent more capable than the Block 2 F/A-18E/F Super Hornet. 1553 Australia’s one- for-one replacement of existing platforms is indicative of the ‘replacement syndrome’ in which new equipment is procured to replace the old without adequate consideration of changing capability requirements. With the procurement final tranche of F-35s to be decided in the next decade, the current procurement of 72 aircraft is indicative of the tendency to reduce the number of platforms procured rather than opting for a greater number of cheaper platforms.
As previously mentioned, the 2000 Defence White Paper specified that the ‘provision had been made… to acquire up to 100 new combat aircraft to replace both the F/A-18 and F-111 fleets’, but this number was provisional and was to be subject to detailed further analysis. As indicated earlier, the, the White Paper explicitly stated that ‘Much work remains to be done’ to determine requirements and the quantity of aircraft
======1550 Nigel Pittaway, ‘Norway, Australia to Join on Naval Missile’, Defense News
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required for procurement. 1554 Hugh White, a principal architect of the 2000 White Paper, stated the calculation of ‘approximately 100 planes’ was based on replacing 71 F/A-18s and ‘some 30 F-111s’, and was intended to be a basis for planning to allocate funding in the Defence Capability Plan. 1555 White acknowledges that the calculation ‘was not, of course, an adequate basis for deciding how many JSF we would really need’, and argued that ‘The fact that the number we chose as an initial planning assumption has survived until now tells you something rather unsettling about Defence capability planning’. 1556 In 2002, Minister Hill stated that what Australia was ‘looking for is a capability equivalent of 100 aircraft, [but] by the time we get to the acquisition decision it might be decided that less aircraft can achieve that capability’. 1557 However, beyond the number of operational squadrons, there is little evidence that such assessments have been made as to the number of F-35s Australia requires to meet its needs.
In 2005, Chief of Air Force Air Marshal Geoff Shepherd said that while the RAAF’s ‘assessment is that we ultimately need four squadrons of combat platforms, … there’s nothing magical about the 100 aircraft number referred to in the White Paper [and] what we need to do is look at the effect we need to achieve’. 1558 In 2007, Group Captain Brian Walsh, Director of Operational Requirements for the NACC project, said that ‘Currently, we feel that a fleet of up to 100 JSFs … is the most cost effective solution to address Australia’s unique air combat capability needs’. 1559 Given the provisional nature of the ‘up to 100’ figure, it is likely that this is simply a repetition of the 2000 Defence White Paper. However, also Walsh stated that ‘A final decision on total aircraft acquisition numbers … is subject to ongoing analysis and … what our Government decides in 2008’. 1560
======1554 Department of Defence, Defence 2000, 87. 1555 Hugh White, ‘The mystery behind Australia's 100 JSFs’, Lowy Institute Interpreter
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The Air Combat Capability Review commissioned by the Australian Government, which informed the 2009 Defence White Paper, concluded that Australia required ‘a fleet of around 100’ new aircraft to meet Australia’s strategic needs. 1561 Initially, Australia would acquire three operational squadrons comprising of ‘not fewer than 72 aircraft’ in addition to the Super Hornets, with a fourth operational squadron to be introduced with the withdrawal of the F/A-18F Super Hornet fleet. 1562 However, the 2013 Defence White Paper did not specify the number of aircraft to be procured, only that the Government remained committed to acquiring the JSF, ‘with three operational squadrons planned to enter service beginning around 2020’. 1563
Fifth-generation capabilities Terming the F-35 a fifth-generation aircraft facilitates favouritism for specific brand names or individual aircraft, a procurement syndrome outlined in Chapter 2, 1564 and this is especially the case where the stated requirement is for fifth-generation capabilities. The term simplifies the procurement process as Lockheed Martin produces the only two operational fifth-generation aircraft. In essence, the term describes the latest and most technologically advanced fighters, hence its appeal to defence forces that tend to favour technologically advanced weapon systems independent of need or cost. However, as a largely subjective term, it obfuscates the examination of capability needs and options available by imposing a somewhat arbitrary categorisation.
Fifth-generation capabilities and the F-35 as a fifth-generation aircraft have continually been a fundamental rationale for Australia’s procurement, particularly by senior Defence officials and politicians, despite the terms lacking an objective or clear definition. Hugh White stated that considerations of Australia’s future air combat needs for the 2000 Defence White Paper were based on the assessment that Australia ‘needed a fifth-generation aircraft’, and the Department of Defence ‘recommended to
======1561 Department of Defence, Force 2030 , 78-79. 1562 Ibid. 1563 Department of Defence, Australia, Defence White Paper 2013 (Canberra: Department of Defence, 2013) 88. 1564 Page 34.
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government that they plan on the basis of the JSF’.1565 In terms of the strategic need of fifth generation aircraft, the 2009 Defence White paper stated that ‘that ‘a fleet of around 100 fifth generation multirole combat aircraft would provide Australia with an effective and flexible air combat capability to 2030’. 1566 Defence Minister Johnston stated in late March 2014 that ‘The F-35 Joint Strike Fighter will provide the Royal Australian Air Force with genuine 5th Generation capability and ensure it retains a regional leading edge air combat readiness.’ 1567 Similarly, Prime Minister Abbott’s media release for the announcement of Australia’s purchase of an addition 58 F-35As in April 2014 stated that the ‘fifth generation F-35 is the most advanced fighter in production anywhere in the world.’ 1568
Bill Sweetman claimed that Lockheed Martin ‘labelled the F-35 a ‘fifth-generation’ fighter [using] a term it borrowed from Russia in 2004 to describe the F-22’, 1569 and it has since became ubiquitous in the Lockheed Martin media lexicon. In the public literature, the use of the term was predominantly used during the mid-1990s to refer to new-generation aircraft being developed in Russia, with Russian Air Force stated requirements for a ‘fifth-generation’ fighter in the F-22 Raptor class. 1570 While the MiG-MAPO Project 1.42 multi-role fighter and Sukhoi's Su-35 were considered fifth- generation combat aircraft in some reports, 1571 the US Office of Naval Intelligence (ONI) described a distinct fifth-generation fighter (FGF) project, with FGF technologies incorporated into fourth-generation fighters such as the Su-35. 1572
======1565 White, ‘The mystery behind Australia's 100 JSFs’. 1566 Department of Defence, Force 2030 , 78. 1567 Department of Defence, Australia, Media Release, ‘Delivery of the First Australian-made F-35 JSF Vertical Tail’, Department of Defence
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According to the ONI, the ‘common features of [the new] generation of fighters are reductions in aircraft signature, increased aircraft agility, and ability to fire sophisticated stand-off weapons at both air and surface targets’. 1573
While the term has been used in the West occasionally prior to 2005 in describing the JSF, it was synonymous with term ‘next-generation’. For example, in a 2002 meeting with Minister Hill in Fort Worth, Lockheed Martin described the JSF as a ‘fifth- generation international aircraft’, although Tom Burbage explained how ‘the F-35's combination of next-generation technologies will provide capabilities far superior to those of current-generation multirole fighters’. 1574 The term fifth-generation became embedded in Lockheed Martin’s public relations statements, along with excluding ‘next-generation’, following declarations made in September 2005 by Rob Weiss, vice president for Lockheed Martin Aeronautics Business Development, which ‘detailed the game-changing advantages and unmatched capabilities that only 5th generation fighters can bring to the United States and its allies’. 1575 Weiss released a Lockheed Martin study that found that fifth-generation fighters were ‘clearly the best value for the money today and the only fighters that can survive and defeat the threats of tomorrow’. 1576 Unsurprisingly, the study found that Lockheed Martin’s F-22 and F-35 were the only fifth-generation aircraft available to the US and its allies, and were the only aircraft that met future capability and cost requirements. Weiss defined fifth- generation characteristics as ‘Very Low Observable (VLO) stealth, speed, manoeuvrability, persistence, sensor fusion, improved sustainability and lean deployment in a single platform’. 1577
In 1997, the Congressional Budget Office (CBO) assessed the size and level of aircraft modernisation in selected countries, based on analyses and taxonomies by the
======1573 ONI, Worldwide Challenges to Naval Strike Warfare, 15. 1574 Lockheed Martin, ‘F-35 JSF Brings Australian Defence Minister, Government Officials to Texas’, PR Newswire
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Brookings Institute and the ONI. 1578 At one end were ‘First Generation’ aircraft, such as the Soviet MiG-15 and MiG-19 and US century series fighters, which were designed in the 1940s and 1950s. 1579 Somewhat confusingly, the other end of the modernisation spectrum consisted of ‘Fourth Plus’ or ‘Fifth Generation’ aircraft; ‘Fourth Plus’ aircraft included F-117s Nighthawks, F-22s Raptors, F/A-18E/Fs Super Hornets, and JSFs. 1580 Fifth-generation aircraft, the CBO claimed, were ‘Planes developed during the 1980s and 1990s’, including the F-22 (again), Dassault Rafale, Eurofighter EF-2000 Typhoon, and the Su-35. 1581 When the term emerged, there were no clear definitions of features of fifth-generation fighters, including for the JSF.
Giovanni de Briganti argued that Lockheed Martin’s public relations machine ‘coined a meaningless catchphrase’, and the term fifth-generation ‘has gained widespread acceptance throughout the world by the sole virtue of repetition ad nauseam ’.1582 Craig Penrice, a member of Eurofighter's business development team, ‘challeng[ed] the notion of fifth generation jets, insisting it is a term that seems to be mainly used for marketing purposes [creating] mis-understandings and spread[ing] mis- information’. 1583 While a Eurofighter company representative is certain to have interests is disputing claims by Lockheed Martin, and statements should treated with scepticism and assumed to be biased, Lockheed Martin’s articulation of fifth- generation aircraft and capabilities should be treated similarly for the same reasons. De Briganti also argued that the use of the term serves political purposes, stating that Politicians know next to nothing about defense, so being able to pepper their sentences with expressions like ‘the only fifth- generation aircraft’ gives them instant credibility in the eyes of the trusting public, and leaves other politicos with no come-backs,
======1578 Lane Pierrot and Jo Ann Vines, Congressional Budget Office, A Look at Tomorrow’s Tactical Air Forces (Washington DC: Congress of the United States, 1997) 11-14. 1579 Ibid, 14. 1580 Ibid. 1581 Ibid, 15. 1582 Giovanni de Briganti, ‘F-35 Reality Check Ten Years On -- Part 1: ‘Fifth-Generation’ and Other Myths’, Defense-aerospace.com
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especially if it is followed up with references to the moral obligation of ‘buying the best equipment for our military’. 1584 The overlap in interests between Lockheed Martin selling JSFs to national governments, and governments ‘selling’ JSF procurements to their people, creates a mutually reinforcing articulation of matching needs and requirements.
That the term is promulgated by Lockheed Martin as a marketing tool is implicitly supported by the Office of the Auditor General (OAG) of Canada, who used a critical definition of fifth-generation aircraft in a report to parliament in 2012. The OAG report stated that fifth-generation aircraft are Fighter jets that, according to manufacturers, incorporate the most modern technologies, such as stealth, advanced radar, and integrated avionics. There is no accepted or objective definition of fifth generation capability. 1585 Similarly, the Australian Department of Defence definition recognises the ambiguity and subjectivity in the term: There is no central authority on what constitutes each fighter generation and the terms are open to interpretation for marketing purposes by aircraft manufacturers (particularly claims of 4.5 or 4.75 generation aircraft). 1586 For example, Jeremiah Gertler of the US Congressional Research Service notes that supporters of the Boeing Super Hornet argue that the aircraft is a fourth-plus or 4.5 generation fighter ‘because it incorporates some fifth-generation technology, particularly in its sensors’. 1587 The US FY2010 Defense Authorization Act defined 4.5 generation as current aircraft, including the F-15, F-16 and F/A-18, that have advanced capabilities, including active electronically scanned array radar, high capacity data- links and enhanced avionics, and have the ability to deploy current and reasonably ======1584 de Briganti, ‘‘Fifth-Generation’ and Other Myths’. 1585 Office of the Auditor General of Canada, Report of the Auditor General of Canada to the House of Commons: Replacing Canada’s Fighter Jets (Spring 2012) 23. 1586 Department of Defence, Australia, ‘Budget Estimates Hearing – 2 & 3 June 2014: Review of the Defence Annual Report: Question on Notice No. 26 - Joint Strike Fighter – 4th / 5th Generation Comparison’, Australian Parliament House
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foreseeable advanced armaments. 1588 While the Australian definition recognises that the ambiguity and subjectivity in definitions are used for marketing purposes by JSF competitors, such as Eurofighter and Boeing, it suggests that is less the case with Lockheed Martin using its own definitions in support of its own interests.
Despite the lack of an objective definition, the Department of Defence argues that ‘informed observers broadly agree on the attributes of each generation and the aircraft which fall under each category’. 1589 The attributes include ‘designed-in stealth’ through low observable aircraft design, aircraft materials and emissions, particularly the use of internal weapons bays. 1590 Additionally, fifth-generation aircraft feature very powerful Advanced Electronically Scanned Array (AESA) radars with associated electronic attack and protection abilities, integrated and fused sensors, and advanced data links to share information. 1591 The combination of these features, advanced stealth, sensors and data links provides a pilot of a fifth-generation aircraft ‘unprecedented situational awareness’. 1592 While AESA radars were limited to the F-22 Raptor in the early 2000s, and planned for the JSF, they are now relatively common in various air forces and for 4 th and 4.5 generation fighters, including F-16 variants, 1593,1594 ,1595 F-15 variants, 1596,1597 F/A-18
======1588 United States Congress, House of Representatives, National Defense Authorization Act for Fiscal Year 2010 (Washington: US Government Printing Office, 2009) 31. 1589 Department of Defence, ‘Budget Estimates Hearing – 2 & 3 June 2014’. 1590 Ibid. 1591 Ibid. 1592 Ibid. 1593 Defence Industry Daily, ‘Top Falcons: The UAE’s F-16 Block 60/61 Fighters’, Defence Industry Daily
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Classic Hornets, 1598 F/A-18F Super Hornets, 1599 Rafale, 1600 Typhoon, 1601 and Gripen. 1602
Gertler stated that fifth-generation aircraft are ‘considered to be generally more capable than earlier-generation aircraft’ as they incorporate the most modern technology and new developments, including thrust vectoring, composite materials, supercruise (the ability to cruise at supersonic speeds without using engine afterburners), stealth technology, advanced radar and sensors, and integrated avionics to greatly improve pilot situational awareness. 1603 Australian Defence has not been consistently clear on the classification of fourth and fifth generation aircraft, with the 2007 media release announcing the decision to procure the Super Hornet quoting Aviation Week’s statement that ‘supporters’ of the Super Hornet say that it will have a fifth-generation capability similar to that of the F- 22 Raptor and F-35 Joint Strike Fighter’. 1604 Alternatively, Defence has stated that ‘the most significant factor distinguishing the JSF from fourth-generation aircraft was the level of situational awareness it provides through its multispectral capability’. 1605 As Andre McLaughlin notes, ‘Some commentators claim the ability to supercruise and the
======1598 Stephen Trimble, ‘AESA Upgrade Battle Heats up for F/A-18 Hornets’, Flight Global
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possession of all-aspect VLO stealth should also be used to categorise fifth generation aircraft’, but only the F-22 has these characteristics. 1606
According to the Air Marshal Brown, Generation 4.5 aircraft were developed through ‘enhancements to 4th generation fighters through the addition of radar absorbent materials, thrust vector-controlled engines, greater weapons carriage and extended range performance’. 1607 Also, the ‘addition of an AESA radar was a significant enough game-changing combat capability for these redesigned fighters to be deemed a generation of their own’. 1608 For Brown, fifth-generation capabilities required the combination of stealth, decision superiority, and advanced weapons systems. Stealth represents minimal electronic emissions and broad-spectrum low visibility, including infrared, visible and radar frequency spectrums. 1609 Decision superiority is based on passive detection and tracking of enemy target using multi-spectral onboard sensors networked with multiple off-board sources. 1610 Flowing on from passive detection, the lethality weapons systems is derived from the ability to eliminate threats without being detected, and survivability is enhanced through an advanced countermeasures suite. 1611
Brown’s qualitative articulation of fifth-generation characteristics is much more nuanced than the alternative categoric definitions, but the characteristics represent the features of F-35 rather than an objective articulation of Australia’s capability requirements. For Brown, the answer to why the RAAF requires fifth-generation aircraft ‘is simple … we need to ensure we conduct tomorrow’s air combat operations with tomorrow’s capabilities’. 1612 This position reflects the tendency, discussed in Chapter 2, of the services desiring the most technologically advanced weapons largely independent of other considerations, including strategic requirements and costs. It is a
======1606 Andrew McLaughlin, ‘Air Combat Operations 2025 and Beyond: Seminar Executive Summary’, Second Line of Defense
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gross simplification to conduct defence procurement policy based on acquiring the most technologically advanced platforms and systems, but this tends to be the effect of declaring that the fifth-generation JSF meets Australia’s need for fifth-generation technologies. There is evidence of Lockheed Martin explicitly seeking to shape Australia’s capability requirements to suit their ‘fifth-generation’ aircraft. In a 2001 briefing on Australian market penetration of the F-22, Lockheed Martin stated that their ‘Goal is to heavily influence RAAF requirements definition’. 1613
While stealth was a key feature in Australia’s decision to effectively select the JSF in June 2002, and continues to be an important capability of the aircraft, the utility of radar stealth has increasing been questioned since the late 2000s, and particularly in the mid-2010s with the development of counter-stealth technologies by Russia and China. During the June 2002 announcement, Houston stated that ‘If you've got stealth on your side, you've got a huge advantage… So this stealth capability is absolutely crucial to the … future effectiveness in that environment’. 1614 In 2004, Minister Hill stated that ‘Stealth is one of the great advantages of this aircraft’. 1615 In procuring the JSF, Australia has paid a premium for stealth, and while low observability will retain a utility in the future, it is important to note that its utility will degrade over time. The current technological advantages of the JSF will diminish over the coming decades, but the complexity of this issue is not sufficiently encompassed by fifth-generation rhetoric.
The F-35, along with other stealth fighters such as the F-117 Nighthawk and F-22 Raptor were designed to be very low observable to the higher frequency radars in the Ku, X, C and parts of the S bands 1616 ‘in order to significantly limit the range at which they can be successfully detected by engagement radars’. 1617 In is important to note
======1613 Wikileaks, ‘Lockheed Martin F-22 Australian market penetration briefing, 2001’, Wikileaks
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the F-35 is not as all-aspect stealthy as the F-22 as independent analysis and modeling has concluded that the F-35’s stealth will be weaker from the sides and the rear’. 1618 Most stealth measures are ‘designed to defeat acquisition and fire control radar in the X band’, which uses centimetre wavelengths. 1619 The short wave length of higher frequency band radars allow for high resolution imaging for target identification and missile tracking, and until recently, ‘a focus on higher frequencies have not been a problem’ because low frequency radars have traditionally been unable to ‘generate weapons quality tracks’. 1620
However, the physics of longer wavelength and resonance enables very high frequency (VHF) and ultra high frequency (UHF) radar, which use decimetre- to meter-long wavelengths, to detect stealth aircraft, 1621 and ‘Acquisition and fire control radars are starting to creep down the frequency spectrum’. 1622 The Russians and the Chinese have developed powerful digital AESA VHF acquisition radars, which ‘enables the detection of narrowband stealth aircraft such as the F-35 at greater ranges [and] also offer faster and more accurate cueing of engagement radars, enhanced resistance to jamming’. 1623 Currently Chinese Type 52C Luyang II and Type 52D Luyang III guided missile destroyers have both high and low frequency radars. 1624 Guy Plopsky and Fabrizio Bozzato note that the F-35 ‘could be detected by enemy radar operating in the VHF range’, as some of its airframe, such as the wing and elevator edges are ‘smaller than the 1-3 meter wavelength within which such radars typically operate’. 1625 Generally, the longer wavelength of VHF radars generally lack sufficient accuracy to guide a missile to a target on their own and are therefore used to cue higher frequency, shorter
======1618 Defence Industry Daily, ‘Lightning Rod: F-35 Fighter Family Capabilities and Controversies’, Defence Industry Daily
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wavelength engagement radars to the approximate location of the target. 1626 However, lower frequency radars are ‘getting better and better at discerning targets more precisely’ as computing power increases. 1627 Additionally, Russia’s Sukhoi T-50 PAK-FA fighter is reported to be equipped with lower frequency L-band radar arrays that are ‘able to detect the presence of a fighter-sized stealth aircraft’. 1628 Dave Majumdar argues that ‘While the L-band radar would not allow the PAK-FA to target a stealth aircraft, it would allow the pilot to focus the jet’s other sensors on a particular area of the sky’. 1629
The debate on the utility of radar stealth is fuelled, in large part, by Boeing’s attempts to undermine Lockheed Martin’s F-35 in favor of promoting the electronic attack (EA) features its own EA-18G Growler, a dedicated EA aircraft, to boost sales to the US Navy and Air Force. Given the RAAF’s definition of fifth-generation capabilities, it would seem Australia favours the Lockheed Martin position over that of Boeing, but is problematised by the Growler procurement. Boeing representatives describe low observable technologies as a ‘perishable’ asset, arguing that ‘The Growler is the only aircraft that has [a] full spectrum sensor and jamming capability’. 1630 It should be noted the erosion of the advantages of stealth has been a recurring argument since the late 1990s, with the ONI describing stealthiness as ‘perishable’ in 1997. 1631 In the same year, the Congressional Budget Office cited the ONI assessment in its critical discussion on the future utility of stealth, noting that ‘developing technology for fighting wars is an ongoing game of cat and mouse’.1632 Mark Gammon, Boeing’s F/A-18E/F and EA-18G program manager, stated that ‘Stealth is delayed detection and that delay is getting shorter’ due to low frequency early warning radar networked into surface-to-air (SAM) radars, but also that a ‘threat is developing out of spectrum ======1626 Plopsky and Bozzato, ‘The F-35 vs. the VHF Threat’. 1627 Majumdar, ‘Chinese and Russian Radars on Track to See Through US Stealth’. 1628 Dave Majumdar, ‘The Russian Air Force’s Super Weapon: Beware the PAK-FA Stealth Fighter’, The National Interest
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sensors like IRST [infrared search and track] systems on … fighters. Stealth has no capability to delay an IRST detection and track. 1633 The US military appears to lack a consensus on the issue, with some officials ‘wholeheartedly concurred with Boeing’s assessment’ while ‘others dismissed the company’s claims out of hand’. 1634 The more nuanced middle ground position held by many US military officials is that stealth and electronic attack always have a synergistic relationship because detection is about the signal to noise ratio. Low observables reduce the signal, while electronic attack increases the noise. 1635
While stealth is widely considered to be advantageous, there are differences between the importance in the long and short terms between the US Air Force and Navy, in part based on US procurement politics. The US Navy has ‘taken a more skeptical approach’ to stealth, and has argued for ‘balanced survivability using a combination of assets including electronic attack, stand-off weapons’ and stealth aircraft such as the F-35. 1636 In 2012, US Chief of Naval Operations Admiral Jonathan Greenert argued that while improvements in anti-stealth technology ‘do not herald the end of stealth, but they do show the limits of stealth design’, 1637 and in 2015 stated that ‘stealth may be overrated’ in the future environment. 1638 In what could have been a long-term AIR 6000 assessment, Greenert argued that it was time to consider shifting our focus from platforms that rely solely on stealth to also include concepts for operating farther from adversaries using standoff weapons and unmanned systems—or employing electronic-warfare payloads to confuse or jam threat sensors rather than trying to hide from them. 1639
======1633 Majumdar, ‘Stealth vs. Electronic Attack’. 1634 Ibid. 1635 Ibid. 1636 Dave Majumdar, ‘The US Military's $1,000,000,000,000 Question: Is Stealth Worth It?’, The National Interest
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Aviation analyst Richard Aboulafia indicated that Greenert was not alone in a critical approach to stealth and the JSF, but that it was present ‘across the naval aviation community’ who were ‘just not that into the F-35’. 1640 In contrast, the USAF has ‘publicly embraced stealth as the end all and be all’ 1641 and stated that the F-35 will be able to operate in a strongly defended enemy airspace without the need of supporting aircraft 1642 such as the USN’s EA-18G Growler. Majumdar argues that some of the difference in the two services’ diverging positions can be explained by different political messaging strategies and priorities. 1643 For the USAF, admitting the utility and/or need for electronic warfare support or supporting platforms would undermine public support for the JSF, an already controversial program which is providing the bulk of the USAF’s tactical strike inventory. 1644 On the other hand, with the USN facing a range of large capital investment expenditures, it ‘doesn’t see the performance differential between the F/A-18E/F and F-35C as being worth the massive cost’ of procurement and sustainment. 1645 Additionally, the limited range and payload of the F- 35C limits the utility of aircraft carriers in A2/AD environments such as the Western Pacific, and would have implications for future budget allocations and US force structure.
Perhaps more objectively, Israel’s persistence in pushing for indigenous electronic warfare capabilities for the JSF, as discussed in Chapter 6, 1646 indicates a limited faith in the long term utility of current stealth technology. In 2012, an unnamed senior Israeli air force official stated that ‘We think the stealth protection will be good for 5- 10 years’, and stressed the importance of upgrading EW capabilities on their F- 35Is. 1647 In 2014, Yuval Steinitz, Israel’s Strategic Affairs Minister, was reported to be of the opinion that ‘there is no certainty that the F-35 … will have a true stealth profile
======1640 Greenert, ‘Payloads over Platforms’. 1641 Majumdar, ‘Is Stealth Worth It?’. 1642 Colin Clark, ‘Gen. Mike Hostage on the F-35; No Growlers Needed When War Starts’, Breaking Defense
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given the expected advances in radar carried by enemy plans, a factor that will reduce its air superiority’.1648
While the RAAF has publicly adopted the USAF’s confidence in stealth and fifth- generation capabilities, it has also adopted the USN policy of incorporating EA-18G Growlers into its force structure. Indeed, despite the arguments made of the superiority of the JSF to rival aircraft, the Growler is considered by senior Australian leaders as a critical element of Australia’s future air power. In August 2009, Air Marshal Mark Binskin stated that he ‘would like to acquire’ the Growler as ‘it is that final part of [Australia’s] air combat capability’.1649 With Australia’s first Growler rolling off Boeing’s assembly line, Air Marshal Brown ‘predict[ed]’ that the Growler ‘will have one of the biggest strategic effects for the ADF since the introduction of the F-111’.1650 Prime Minister Tony Abbott indicated in 2015 that the plan for future RAAF would involve ‘mov[ing] to the F-35 Joint Strike Fighter, Growler electronic warfare planes and more unmanned aircraft’.1651 The critical role of the Growler undermines Lockheed Martin’s claim that the JSF makes ‘all current fourth generation fighters obsolete’,1652 and the RAAF assessment of a single aircraft to meet future capability requirements.
Catalyst for Capability Development In a similar way that Australia’s procurement of the F-111 in the 1960s and early 1970s unintentionally became a strategic driver for Australia’s defence policy,
======1648 Stuart Winer, ‘Ministers May Look to Shoot Down F-35 Jet Deal’, The Times of Israel
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Australia’s procurement of the JSF has been explicitly identified a catalyst for modernising the ADF. As Mark Lax argues, the F-111 aircraft forced a post-Vietnam RAAF to systematically mature the way it commanded, operated, maintained and developed its capabilities, not only for its strike/reconnaissance force, but for its entire order of battle. 1653 The capabilities of the F-111, particularly its long range, ‘caused a rethink of Australia’s offensive strike options, gave credibility to the concept of deterrence in the Australian environment’, and contributed to prompting the RAAF to finally develop its own indigenous air power doctrine. 1654 Lax notes that unlike previous aircraft procurements, which were simple replacement of like for like, the F-111 was ‘a quantum leap ahead of its Canberra [bomber] predecessor in technological complexity and maintenance demands’ and ‘forced the RAAF to become technologically adept’. 1655
The new capabilities offered by the JSF provided an opportunity to update the ADF to an equivalent technological and doctrinal standard. Brown stated that the F-35 is perhaps the greatest opportunity for evolutionary change the RAAF has been presented. We’re introducing into service a revolutionary capability, and our evolution as a force must align with the opportunities this offers us. 1656 According to Brown, the RAAF needs a ‘generational change in the ISR [intelligence, surveillance, and reconnaissance], network and Comms systems and other capabilities that will support the F-35 if we are to get the most out of the aircraft’s capabilities’. 1657 The evolution, however, was conceptualised to extend beyond the RAAF to include the Army and Navy to create a joint and networked force. In late 2002, the RAAF began undertaking experimental simulations and modeling designed to examine ‘how ======1653 Lax, Australia's Strategic Weapon , vi. 1654 Ibid, 273. 1655 Ibid. 1656 Australian Aviation, ‘F-35 Rollout Highlight’s RAAF’s ‘Greatest Opportunity for Evolutionary Change’’, Australian Aviation
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aircraft, ships and sensors could be integrated’ in the future, with the procurement of the JSF identified as ‘a major catalyst for the new experimentation process’, 1658 and will continue with ‘a greater focus on experimentation and testing’ under Plan Jericho. 1659 According to Air Vice Marshal Chris Deeble, Australia’s JSF Program Manager, Australia needs ‘a paradigm change in our future force development processes’ and the ‘JSF is a catalyst for change’. 1660
The transformation is being implemented via the RAAF’s Plan Jericho, which intends to use the introduction of the JSF ‘to transform the Australian air force into a fifth- generation air force, and ultimately transform the operations of the entire Australian Defence Force’. 1661 Broadly, the vision of Plan Jericho Vision is to ‘develop a future force that is agile and adaptive, fully immersed in the information age, and truly joint’, and its implementation over the next few years is expected to drive transformation across almost every aspect of [the RAAF] enterprise—systems, operations, training, simulation, acquisition, sustainment and personnel management—in order to fully realise the opportunities afforded by the latest technologies. 1662 The elements of training, simulation and sustainment are strongly supported by the features of the JSF outlined in Chapter 3, 1663 particularly the virtual training suite and the single global supply chain via the Autonomic Logistics Information System (ALIS). Critically, one of the main tasks of Plan Jericho is to develop operational concepts which ‘will outline the way the Air Force of the future will fight and win through enhanced command and control, information sharing and decision
======1658 Peter La Franchi, ‘RAAF Devises Experimental Approach for New Equipment, Flight International 4863:162 (31 December 2002) 14. 1659 Royal Australian Air Force, ‘Plan Jericho Booklet’, Royal Australian Air Force
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superiority’. 1664 The transition to the future air force will not be easy, with the Australian National Audit Office determining the ‘Integration of JSF into ADF systems of systems has been underestimated’, 1665 driven in large part by the ‘Lack of timely data and releaseability of JSF program information’. 1666
Australia is not alone in planning new ways of conducting networked warfare with the introduction with other JSF partners adopting similar processes of evolution. In the Netherlands for example, the introduction of the JSF is ‘seen as a catalyst for change’ in how it operationally views future air power and ‘quicken[ing the] evolution of Netherlands air force’, and also politically in ‘prompting cohesion, with bilateral and trilateral discussions with other European operators’. 1667 However, the British and Italian air forces are also undergoing transformations, but are not solely dependent on the JSF as they will both operate ‘fourth-generation’ Eurofighter Typhoons alongside F-35As and F-35Bs. 1668 The UK and Italy are upgrading their Typhoon fleets which will ‘add support and strike capabilities to an F-35 enabled air power force’. 1669
Interoperability As discussed in Chapter 4, 1670 the JSF Program, in large part, is based on increasing the interoperability of US forces with allied nations to ‘develop a fully interoperable allied fleet’. 1671 In parallel, US interoperability has increasingly become a key driver in Australia’s defence policy, especially with regard to procurement. The major issues discussed in the 1998 Australia–US Ministerial Consultations (AUSMIN) discussions were improving the interoperability of the Australian and US forces, and ‘prevent[ing] ======1664 RAAF, ‘Plan Jericho Booklet’, 4. 1665 Australian National Audit Office, 2013–14 Major Projects Report (Canberra: Australian National Audit Office, 2014) 189. 1666 Ibid, 187. 1667 Tony Osborne, ‘Netherlands Preparing for F-35 Introduction’, Aviation Week & Space Technology
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‘a technology gap’ from opening between their militaries as they prepare for the high- tech warfare of the next century’. 1672 A solution considered for these problems was the close collaboration of Australia with the US development of high technology weapons and equipment. 1673
The Joint Standing Committee on Foreign Affairs, Defence and Trade stated that ‘Interoperability can exist at different levels …. [from] the ability to communicate effectively through to seamless operation of complex platforms in a network centric environment’, but also noted that ‘interoperability is not solely based on operating the same equipment’. 1674 As well as equipment, the ‘elements of interoperability’ include communications, doctrine, logistics and planning. 1675 The Australian Department of Defence declared that Interoperability with US forces and the ability to contribute to multinational coalitions are central themes in Australia's policies, acquisition programs and training plans. Australia's effective, high- end contributions to US-led coalition operations in Afghanistan and Iraq demonstrate the high degree of interoperability and the shared values that characterise the Australia-US relationship. 1676 More specifically, one of the RAAF’s Strategic Intents specified in The Future Air and Space Operating Concept document is to ‘be able to integrate with allied air forces, notably those of the United States (US) and United Kingdom (UK), and be interoperable with coalition and regional partners’. 1677
Throughout Australia’s procurement process, the JSF Program has been considered a key mechanism for strengthening ties with the US, as with defence industry for example, but especially military interoperability. When announcing the intent to acquire the JSF in June 2002, Air Marshal Houston repeatedly indicated the high
======1672 Jim Mannion, ‘US, Australian Defence Chiefs Meet on Military ‘Technology Gap’’, Agence France-Presse (31 July 1998) accessed via Factiva 16 July 2013. 1673 Ibid. 1674 Joint Standing Committee on Foreign Affairs, Defence and Trade, Australia’s Defence Relations with the United States: Inquiry Report (Canberra: Commonwealth of Australia, 2006) 30. 1675 Ibid, 30-31. 1676 Ibid, 31. 1677 Royal Australian Air Force, Australian Air Publication AAP 1000–F: The Future Air and Space Operating Concept (Canberra: Air Power Development Centre, 2007) 7.
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degree of interoperability with the US as a critical factor in acquiring the JSF, beyond the capabilities for the defence of Australia. Houston stated interoperability is very very important. And if you think of anything we might get involved [in] beyond Australia, interoperability has to be a very very important factor for us to consider. Indeed, defence of wider interests, a war on terrorism or whatever it is, interoperability with our good ally and friend the United States, is something we really need to keep a very close eye on and it's a very high priority. 1678 In 2013, as Opposition Leader, Tony Abbott stated that he believed the JSF was ‘the best aircraft for our future … If we want to be interoperable with our best ally, obviously it's best if we're using that same aircraft’. 1679 A 2014 joint media release by Australia’s Prime Minister and Defence Minister stated that that Australia’s procurement of the JSF would ‘reinforce the ADF’s ability to operate seamlessly with US forces and Australia’s capacity to continue supporting our shared strategic interests under the US alliance’. 1680 Air Marshal Brown stated that Australia always tried to be ‘seamlessly interoperable’ with both the US Navy and Air Force, and that ‘We also look like the US Air Force in many respects’. 1681
As discussed in Chapter 4, 1682 interoperability problems between the US and its European allies during the 1990-91 Gulf War and the Kosovo air war was a major driver of the joint concept underpinning the JSF Program. Similarly, the capability deficiencies of the RAAF, which precluded Australian contributions to ‘high-end’ US operations in the Middle East can be seen a driver for Australia’s JSF procurement. For several military operations conducted in the Gulf during the late 1990s and early ======1678 Department of Defence, ‘Australia to Join Joint Strike Fighter Program’. 1679 Enda Curran, ‘New Australia Government Would Stick With Old Jet Plan’, The Wall Street Journal
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2000s, ‘the threat environment [was] assessed as too hostile for the Hornet and F-111, which have lacked the electronic warfare self-protection equipment required to confront emerging air defence systems’. 1683
Notwithstanding the reluctance of Labor Party members in Prime Minister Bob Hawke’s Government, the ‘main reason’ that RAAF F-111s were not deployed for the Gulf War in 1990-91 was ‘their lack of self-protection, as they were only fitted for, but not with, modern electronic warfare equipment’. 1684 During the Iraq crisis of 1998, where Saddam Hussein defied United Nations weapons inspectors, Australian Prime Minister John Howard’s desire to contribute to the US led air strikes against Iraq were curtailed by limited RAAF capabilities. 1685 Strategically, Howard’s view of the US- Australian alliance, in which Australia was a ‘strategic follower of US policy’ and a ‘supporter of US global policies’, required Australia to provide a ‘niche yet meaningful’ commitment. 1686 Howard wanted to deploy F-111s to Iraq, but was ‘furious’ when informed that it was ‘not feasible because they lacked adequate electronic warfare self-defence’. 1687
During the early stages of the War on Terror, Australia’s F/A-18As were limited to escort duties based at Diego Garcia despite the intention to include them in high-end US strike operations. 1688 As Australia’s Hornets ‘lacked the secure connectivity to be an effective member of a US-led coalition’, they could not ‘share targeting data with US and other coalition aircraft and command centres’ and lacked the capability to operate with the networked US forces. 1689 Although the Hornets were subsequently
======1683 Gregor Ferguson, ‘Giving the Hornet a HUG’, in Mark Thompson and Andrew Davies, eds., The Cost of Defence: ASPI Defence Budget Brief 2006-07 (Barton, ACT: Australian Strategic Policy Institute, 2006) 197. 1684 Lax, Australia's Strategic Weapon , 215. 1685 Paul Kelly, The March of Patriots: The Struggle for Modern Australia (Carlton, Vic: Melbourne University Press, 2009) 446-447. 1686 Ibid, 446. 1687 Ibid, 447. 1688 Ian McPhedran, ‘Old Jets Leave RAAF Grounded’, Herald-Sun (5 December 2002) accessed via Factiva 26 November 2014. 1689 Ferguson, ‘Giving the Hornet a HUG’, 197.
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involved in combat, their ‘operations over Iraq were planned to avoid [electronic warfare self-protection] shortfalls’. 1690
While the concept of interoperability represents a spectrum of the ability to conduct activities between nations, the type of interoperability desired by the RAAF, and provided with the JSF, is the ability to effectively contribute to high-end conflicts as a part of a US led force. The ‘seamless’ quality of interoperability provided by the broader JSF system provides Australian air combat elements with a ‘plug-and-play’ capability in which they can be rapidly and easily integrated in a US force structure. Beyond operating the same aircraft, plug-and play integration is facilitated by the joint training and sustainment mechanisms embedded in the JSF system.
Two of the revolutionary elements of the JSF Program outlined in Chapter 3 1691 are the suite of training systems that promote interoperability among JSF allies, and the Autonomous Logistics Information System (ALIS). Virtual simulators allow standardised training to be undertaken by allied air forces by themselves, or networked with allies. To maximise interoperability and international cohesion in operations, the JSF Program ‘established common training facilities’ at the Eglin and Luke US Air Force Bases (AFB) ‘so that all partners and customers on the program receive similar training’ and achieve similar combat readiness. 1692 Australia’s first two F-35As were flown to Luke AFB in December 2014 for training pilots, and were the first non-US aircraft to join the multi-national training fleet.1693 The Australian F-35As were used in the international ‘pilot training pool’ where they would be ‘integrated into a US Air Force squadron as part of the pilot training continuum’. 1694 Brigadier General Scott Pleus, the commander of the USAF’s 56th Fighter Wing at Luke AFB stated that the
======1690 Peter La Franchi, ‘Australia to Include War Lessons in Review of Defence Capability Plan’, Flight Global
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collaborative training … will better prepare our combined forces to assume multi-role missions … The relationships we’re building now will be invaluable when we deploy together around the world protecting our respective countries. 1695
Capability Costs From a strictly programmatic perspective, the costs associated with acquiring new air combat capabilities are those of the AIR 6000 project. Some of these costs were not known during the first decade of Australia’s procurement, such as the US$82.9m 1696 contribution towards the construction of a software laboratory for Australia’s JSF mission data files, 1697 as discussed in Chapter 5. 1698 However, as Defense Industry Daily noted, Australia’s procurement of interim fighter aircraft ‘are an obvious cost of the F-35 program’, and so are ‘forced extensions’ to the legacy Hornet fleet. 1699 In order to address a capability gap from developing from the delayed delivery of the JSF, Australia procured 24 F/A-18F Block II Super Hornet fighters at a cost of $2,762m with their total sustainment to 2021 estimated to cost $1,557m. 1700 If the procurement of the 12 EA-18G Growler electronic warfare aircraft is considered as a capability not provided by the JSF but part of the new air combat capability, its procurement adds $3.7 billon, 1701 in addition to sustainment and upgrade costs similar to the Super Hornet.
Beyond the cost of procuring the aircraft and engines, which are purchased separately, the AIR 6000 budget includes costs for purchasing weapons and infrastructure to ======1695 McLaughlin, ‘First RAAF F-35 arrives at Luke AFB’. 1696 United States Department of Defense, ‘Contacts CR-066-15’, United States Department of Defense
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support the aircraft. The cost of infrastructure development for Australia’s F-35s is many times higher than that for previous fighter procurements but is also of a larger scale. As the RAAF procures more technologically advanced platforms from the US, it has needed to introduce higher levels of security for air and ground crews who have access to sensitive US technology 1702 resulting in higher procurement and sustainment costs. In May 2015, work began on upgrading RAAF base facilities at two main operating bases and eight forward operating bases to support the New Air Combat Capability at an estimated cost of $1,477.4m, with all work is expected to be completed by 2022. 1703 By comparison, the total costs to develop facilities for the introduction on the F/A-18 Hornet, scheduled to enter service by April 1985, was $302.97m, 1704 which is $909.12m in 2014 dollars. 1705 The cost to modify facilities and infrastructure to support the transition from the F-111 to the F/A-18F Super Hornet in 2008 was $117.1m. 1706
The characteristics of the F-35A require the extension of a runway at RAAF Base Williamtown, from 8,000 to 10,000 feet, to ‘enable training pilots to take off and land safely’ and for noise abatement. 1707 Additionally, the complexity of the JSF Program requires a range of support facilities and infrastructure not needed for previous fighter procurements. A ‘key issue’ with the NACC infrastructure project was ‘the security requirements of the new aircraft’, which are higher than was previously the case, and ‘significantly exceed[ed] those required for Classic Hornet security’. 1708 The training and simulator devices needed to support the F-35 were numerous, including full mission simulators, deployable simulators, aircraft systems maintenance trainers, ejection system maintenance trainers, weapons load trainers, and propulsion
======1702 Gregor Ferguson, ‘Air Power Review to Examine RAAF Capability Options’, Australian Defence Magazine
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maintenance trainers. 1709 As well as traditional maintenance facilities, the F-35 requires a special maintenance and testing facility for the stealth surfaces, and a ‘specialised facility to enable technical support of the F-35A information system and associated hardware’. 1710
Conclusion While new procurement costs and the timing of introducing new aircraft and withdrawing old aircraft were key issues as Australia began planning in the late 1990s, the broad costs for introducing the new capabilities have been significant, particularly with regard to additional procurements to address capability gaps. This is at odds with the emphasis of low costs claimed during the early years of Australia’s procurement, demonstrating a reluctance to re-evaluate procurement decisions following the demonstration of flawed assumptions. Australia’s procurement of Boeing’s fourth- generation EA-18G Growler electronic warfare fighter undermines the confidence expressed by Defence in selecting the JSF to meet Australia’s future air combat needs. Australia’s articulation of fifth-generation capability requirements strengthens the justification for the JSF procurement, but has hindered a more sophisticated long-term assessment of capability needs and procurement options.
Australia’s procurement of the JSF has displayed a mixture of the platform-centric ‘replacement’ and ‘requirements’ syndromes, as well as capability acquisition. While the new capabilities offered by the JSF and the envisaged transformation of the RAAF refute claims of a replacement syndrome, the quantity of aircraft planned for procurement is strongly indicative of the syndrome. In rejecting modifications the JSF to suit Australia’s requirements, unlike many other JSF customers, Australia’s procurement does not involve the ‘gold-plating’ syndrome. However, Australia’s procurement efforts appear to be more focused on procuring the aircraft than broad strategic capabilities, such as acquiring an advanced standoff maritime strike missile. Indeed, the 2002 decision to procure the JSF effectively derailed the process of assessing the range of capability options planned for Australia’s new air combat capability. ======1709 PSCPW, New Air Combat Capability Facilities , 5. 1710 Ibid, 10.
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It is not possible to clearly identify if Australia’s procurement of the Joint Strike Fighter is a platform replacement or a capabilities based acquisition as it demonstrates characteristics of both. It is clear, however, that it displays the characteristics of the ‘poor relation/kid brother’ syndrome in the military pursuit of the same technologically advanced weapons systems as Australia’s main ally. While US interoperability has consistently been a theme of Australian defence procurement over the past decades, the JSF procurement creates ‘plug-and-play integration’ in which Australia’s air combat elements can be quickly and effectively incorporated into high-end US led operations.
Australia’s decisive procurement of the JSF contrasts with the lacklustre pursuit of some critical capabilities, such as an advanced standoff maritime strike missile or extended combat range. Norway’s demands to integrate their JSM with the JSF, and to pressure the US and Lockheed Martin into contributing to development costs, is starkly different to Australia’s behaviour. Similarly, Israel’s insistence of an advanced indigenous electronic warfare capability is different to Australia’s approach, which includes the Growler procurement. Indeed, the Growler procurement represents a key failure of the revised AIR 6000 project and is incompatible with the repeated and confident claims that the JSF was the only choice for Australia. Although a much deeper analysis would be required, the British and Italian transformation plans, using a mix of fourth- and fifth-generation aircraft provides an alternate policy option to that taken with the 2002 JSF decision.
While the transformation of the RAAF into an information age force has a valid strategic basis, it should also be evaluated in terms of the broader analytical framework. The transformative process can be considered a service specific capability buy-in; having committed to procure the JSF, the RAAF will need to develop and procure additional capabilities to make the effective use of the JSF’s capabilities. While the transformation will require the updating and recapitalisation of the Army and Navy equipment and doctrine, the process could be considered as an effort by the RAAF to increase its power over the other two services as a part of lingering inter- service rivalry.
As the JSF will become a highly capable and central information node in joint operations, the role of the pilot will change from a deliverer of ordnance to a battle
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space manager. Having the greatest level of situational awareness in an area of operations, JSF pilots will have responsibilities in the command and control of Navy ships and Army units in combat operations. As the top RAAF leaders are invariably fighter pilots, their inherent biases should be considered as an important element in using the JSF to transform how Australia will conduct warfare in the future. While traditional analytical frameworks assess how the interests of individual services influence procurement decision making, the proposed broader analytical framework demonstrates the utility of extending analysis of service power beyond procurement to power and authority in the operational battle space. Beyond an individual service using its influence and power to shape procurement processes, the procurement outcome shapes the power relationships between the services.
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CHAPTER 9: CONCLUSION
This thesis has demonstrated that the current analytical tools for assessing Australian defence procurements are not adequate to comprehensively understand Australia’s procurement of the JSF in terms of the politics that shape procurement outcomes and the political and economic outcomes of procurement approaches and policies. There are certainly benefits in using existing analytic tools as many of the syndromes and other determinants remain evident in Australia’s procurement, while others have changed or become irrelevant. However, the international nature of the JSF Program requires analytical tools that can examine politics between international, national and sub-national actors. These politics were examined in this thesis by expanding the scope of bureaucratic-organisational models used previously, and ontologically varying the level of analysis as required.
Australia’s procurement of the JSF demonstrates many of the ‘syndromes’ identified in the literature review chapter, with the 2002 decision by-passing a range of measures introduced to improve the procurement process. Australia’s procurement displayed characteristics of the ‘requirements approach’ identified by Tange, in which the services specified the weapons systems they intended to purchase with little or no regard to cost, generally in pursuit of high-technology systems used by major allies. Although there are merits in acquiring the latest technologies, the reforms of Tange and those after him sought to temper the military service’s bias through rigorous assessments processes, such as the two-pass system.
As Cheeseman and Ball argued, the services can be the dominant actor in procurement processed, particularly with the use their technical expertise, and this is evident with the RAAF’s central role in advocating for the JSF in the lead-up and following the 2002 decision. RAAF technical expertise plays a part in the process of stating the ‘fifth-generation’ capability needs of Australia, and capabilities of the JSF. As discussed in Chapter 8, the use of the term can be seen as favouritism for specific brand names or individual aircraft, which was a procurement syndrome outlined by Ball. The appeal of the JSF fifth-generation capabilities represents the over- enthusiasm for advanced technology, which can be an end in itself, as Bennett noted.
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Indeed, Bennett’s conceptualisation the ‘seductive appeal’ of technology, with politicians basking in the glory of new weapons, 1711 reflects many aspects of Australia’s JSF procurement. Considering the significant support of the Chiefs of Air Force, Bennett’s ‘infallible requirement, a reluctance to reduce requirements to better manage costs once a Service Chief has approved the operational requirement, is certainly a factor in Australia’s procurement, particularly with Hugh White noting the career limiting prospects of criticising the JSF. Beyond an individual service using its influence and power to shape procurement processes, the procurement outcome shapes the power relationships between the services with the JSF having a key role in making fighter pilots battlefield commanders.
Australia’s procurement displays the characteristics of Schaetzel’s ‘poor relation/kid brother’ syndrome, and US interoperability has become a central element in Australia’s procurement. However, the concept of interoperability has grown, with the JSF procurement creating ‘plug-and-play integration’ in which Australia’s air combat elements can be quickly and effectively incorporated into high-end US led operations. Plug-and-play integration allows the ADF to provide government with a more immediate option in responding to global events and demonstrating solidarity with US foreign policy.
However, not all syndromes are clearly evident, and Australia’s procurement has displayed a mixture of the platform-centric ‘replacement’ and ‘requirements’ syndromes, as well as capability acquisition. While the new capabilities offered by the JSF and the envisaged transformation of the RAAF refute claims of a replacement syndrome, the quantity of aircraft planned for procurement is strongly indicative of the syndrome. However, Australia’s procurement efforts appear to be more focused on procuring the aircraft than broad strategic capabilities, such as acquiring an advanced standoff maritime strike missile. Australia’s procurement does not involve the ‘gold- plating’ syndrome to the extent that it rejected modifications the JSF to suit Australia’s requirements, but the procurement itself could be considered an exercise in gold plating, particularly with most other nations operating mixed fourth- and fifth- generation fleets.
======1711 Bennett, The Amateur Managers, 62-63.
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Despite the persistence of these syndromes and determinants, older analytical tools used to compare overseas sourced with domestically developed and manufactured platforms are of little relevance. Whereas overseas sourcing equated to off-the-self procurements with the advantages of a history of service life, simple purchasing and quick delivery, these are factors with the co-development of the JSF, but acquiring the last technologies and logistic commonality are inherent advantages which contributed to the decision to procure the JSF. While domestic production is not an option with the JSF procurement, domestic industrial benefits is a key feature of Australia’s JSF procurement, but the contours of this can only be clearly seen through the use of the expanded analytical framework in comparing the international use of offsets.
This thesis also introduces a new concept to the Australian defence procurement literature, a conspiracy of optimism, albeit one which expands on the ‘buying in’ syndrome. However, determining a conspiracy of optimism required the use of the expanded analytical framework to identify the military-to-military links in the JSF governance structure that facilitates the promotion of mutual interests, and the exclusion of other US actors that provide critical assessments. The primary link between Australia and the US, between the JPO and the NACC project office, facilitates a conspiracy of optimism as both have mutual interests and have been shown to be overly optimistic in comparison with other national organisations. =
The Australian position that there are no offsets in the JSF Program contrasts sharply with the procurement approaches of other nations outlined in Chapter 6. The value of the broader analytical framework is demonstrated in its ability to contrast Australia’s actions and policies against that of other JSF international partners. While Australia has steadfastly stuck to the ‘official rules’ of the JSF Program, the other international partners have been willing to challenge those rules where they limit their national interests. While this thesis has shown that Australia’s adherence to the Program’s competitive best value principle potentially places it in a position of significant disadvantage in terms of industrial workshares, it is beyond its scope to examine the actual outcomes of this potential. However, Bradley Perrett argues that as the JSF Program has generally been characterised by the use of offsets to gain political support from partner nations, the loss to Australia may be minimal despite the general offset
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policy in place. 1712 In essence, despite Australia’s potentially damaging position, it may have obtained benefits by free-riding on the political pressures applied by other nations. = = Australia’s 2002 decision to effectively cancel the fighter competition contrasts strongly with the approaches of other nations, opening up the conceptual and analytical room to investigate why Australia did so, what the consequences were of its decision, and why it did not reverse its decision. The effects of intra-national determinants can be magnified when the consequences extend beyond national boundaries. For example, the RAAF’s enthusiasm for the JSF and its dominance as service strongly influenced the Government’s procurement decisions, but the broader effect was the limit the Government’s options and bargaining position with international actors. A comparison with other nations allowed the assumptions made by Australia in signing on the SDD phase and cancelling the AIR 6000 competition to be tested, and the analysis conducted found many assumptions to be flawed. While some elements of the JSF’s international politics are generally consistent with the JSF procuring nations, such as alliance interoperability, there are significant differences in international politics from Australia’s perspective, particularly with regard to alliance management. For example, as Patrick Walters argued, Australia’s early commitments to procure the JSF sent ‘a powerful political signal to Washington about Canberra's willingness to help ensure the F-35 evolves into a highly successful program’.1713
Defence officials may suggest that politics should be excluded from policy development and procurements, which should be objective and rational. From this perspective, procurement should be a simple process of procuring capabilities to meet needs, and political gaming or seeking other objectives risks inhibiting strategic or critical capabilities. When conceptualising procurement from the rational perspective, external factors are not relevant; discreet needs and solutions are assessed objectively without the influence of political interests. This would seem to be the approach of Australian Defence, whose enthusiasm for the JSF undermined Australia’s ability to negotiate other advantages. In short, Defence considered the JSF program as simply as ======1712 Bradley Perrett, ‘Tails They Win: Canberra will not demand offsets, but its F-35 suppliers have them’, Aviation Week & Space Technology 177:3 (16 February 2015) 50. 1713 Patrick Walters, ‘Advance purchase could well put Defence out on a wing’, The Australian (28 November 2009) accessed via Factiva 26 November 2015.
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a procurement and not an opportunity to advance other Australian national interests. However, as this thesis has discussed, major defence procurement are never entirely objective and rational, and the interests of actors is always present. When informal politics is conceptualised as a part of procurement, the opportunity to exert influence in different areas, both to and from a particular procurement, becomes apparent; as external factors shape procurement processes, so to, procurement processes can be used to shape external factors, such as using procurements as leverage for economic or strategic advantages.
The US is neither a beneficent or impartial actor in the JSF Program, and has a range of interests in making the JSF available to international allies, including reducing the development and acquisition costs to the US government and increasing the effectiveness of US led international interventions. Additionally, the US has increased its power over allies through it management of the Program on behalf of allies, and with the US permanently chairing the JESB, managing ALIS and the global supply chain, and controlling mission data file updating. A price that allies are more than willing to pay for access to leading-edge technology is greater dependency on the US, notwithstanding occasional demands for sovereign capability. The level of interoperability with allies the JSF facilitates, i.e. plug-and-play integration, contributes to reinforcing US leadership in international politics and coalition operations.
This thesis demonstrates that the nature of the JSP Program creates interdependencies between the US, Lockheed Martin, and all other partner nations that are not features of Australia’s previous defence procurements. JSF partner nations expression dissatisfaction with the Program contributes to doubts in other partner nations, which is to be avoided as reductions in procurement numbers would increase costs for all participants. Australia’s public role as an enthusiastic supporter of the Program strengthens the international partnership, reducing the risk of rising costs, but also limits the extent to which Australia can use dissatisfaction as capital in negotiations for increased benefits. Alternatively, manufacturing contracts provide a useful tool for national governments in justifying their participation in the JSF Program, and is a significant objective in negotiations. However, it is also a tool used by Lockheed
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Martin to prevent customers from withdrawing from the program or reducing procurement numbers as it would result in significant losses in jobs and revenues.
Unlike previous procurements, the details of the management of the F-35 have been determined before the aircraft has been purchased, and cannot be changed without the consent of all JSF partner nations. The arrangements set out in the PSFD MoU will remain in place for the full lifecycle of the F-35, estimated to be 30-40 years. The abrogation of some sovereignty in operating the JSF air system is predicated on a confidence, or perhaps faith, in the continuing good relationship between the US government and the Pentagon, Lockheed Martin, and the US allies. Irrespective of whether the US actively exercises its influence or power, the governance arrangement of the JSF provides the US with political leverage over JSF partners. The ALGS, of which ALIS is one component, will be managed by the JSF PEO for the duration of the PSFD MoU, essentially granting the Pentagon authority over, and potentially a veto of, the lifetime sustainment of the JSF.
All defence procurements have a political element, but international politics is a fundamental element of JSF procurements. As a network-centric platform, allied interoperability is a more necessary capability for coalition operations that for previous aircraft. However, more than just the F-35, the JSF Program as a whole promotes a strategic interoperability which leads to a degree of integration. Functionally, the characteristics of the JSF Program complement and strengthen the strategic relationship and dependency objectives of US policies. The complete JSF system is monolithic, and functions cannot be conducted independently; the JSF cannot operate without ALIS, and is governed by the JPO executive. Similarly, the development of the full capabilities of the F-35 after it enters service, and follow-on development, will be conducted only with JESB approval.
One issue noted was ambiguous or conflicting messages delivered by government officials, such as those by Turkish officials, to domestic or international audiences. While it could be considered that the uncertainty of statements undermines the evidence for arguments made, and indeed the arguments themselves, the ambiguity should be seen as another aspect of international politics. While it was beyond the scope of this thesis to do so, an examination of government management of the
309 = = Chapter 9: Conclusion =
tensions between international and domestic political goals would strengthen an understanding of international defence procurement.
The international dimension to the analytical framework extends the implications of its findings beyond defence procurement, to include alliance relationships. Britain and Australia were both of the mistaken belief that supporting the US War on Terror would result in the relaxing of limitations to the sharing of advanced and critical technologies. While top officials in the Bush administration and some military officials were happy to share technologies, senior JPO officials and US agencies were not as open. Despite the warm relations at the high levels of international politics, domestic US politics remained an immoveable barrier. Although Australia did gain access to a leading-edge weapons system in the JSF procurement, it was still US policy that it would retain its technological predominance. It could be argued that Australia was not willing to damage the alliance in pursuit of national interests, but it could also be argued that Australia was not willing to damage the alliance on issues it knew it could not win. This is a question for subsequent analyses.
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