1977-80 Fighter Aircraft Project
Can We Learn from Successful Procurements?
PAUL MANSON
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Apr 22, 2021

The history of military equipment acquisition in Canada includes some notable failures. The infamous Ross Rifle was a disaster for our soldiers in the First World War, and the Avro Arrow fiasco still stands out as a costly national embarrassment. Somewhat less well remembered was the cancellation of the EH-101 Helicopter program by Jean Chrétien, on his first day as Prime Minister in November 1993, at huge cost and causing massive delays. Then there was the purchase of used submarines for the Navy... and the list goes on.

To be sure, there have been numerous procurement successes through the years, but there is no denying the fact that, for various reasons, the acquisition of new systems and equipment for Canada’s Armed Forces has increasingly become controversial, costly, and damaging to our nation’s defence posture.

In the search for answers to this troubling situation, one might do well to look at a particularly successful major procurement, namely the New Fighter Aircraft (NFA) program of the late 1970s that brought in the RCAF’s current fighter aircraft, the CF-18 Hornet.

It began in March 1977 with a Cabinet directive calling for the acquisition of a single multirole fighter to replace three existing and outdated Air Force fleets: the CF-101 Voodoo (employed in NORAD’s defence against the threat of Soviet manned bombers), the CF-104 Starfighter (based in NATO Europe as nuclear strike, photo reconnaissance and conventional attack aircraft), and the CF-5 Freedom Fighter (employed in tactical support of the Army, the reinforcement of NATO’s North Flank, and fighter pilot training). All three of these aircraft were of 1950s vintage, brought into Canadian service in the early to mid 1960s, and replacement was on the horizon.

The Government’s directive was quite specific. There was to be a formal competition, and seven contenders were named, constituting a roster of the best free-world fighter aircraft then available. Operational effectiveness was the key requirement, a fleet size range was specified, a fixed budget was allocated for the acquisition, and industrial regional benefits (IRBs) were to be an important factor in the selection of the winning bid.

On the day of the Cabinet directive, a Thursday, I was attending a French class in Quebec City as a participant in the Federal Government’s Bicultural Development Program when I was called away by an urgent phone call from NDHQ informing me that I had been appointed NFA Program Manager and was to appear in Ottawa on Monday morning to get things underway as quickly as possible. 

On my arrival in Ottawa, I learned that my first task, in the absence of any allocated resources, was to build the program from scratch. 

Thanks to truly remarkable cooperation from the headquarters staff and the principal government departments involved in defence procurement, we quickly established a full-time multi-departmental team working together in a downtown office building. 

It was an exciting time, as we set out to plan the hugely complex project in all its detail.

To make a long story short, the key events went like this:

  • September 1977 – Request For Proposal (RFP) issued to contending manufacturers.
  • February 1978 – RFP responses received and evaluated. Flight tests and visits to manufacturers conducted.
  • June 1978 – Supplementary proposals requested.
  • August 1978 – Supplements received and final evaluation carried out.
  • November 1978 – Government announces Short List selection: General Dynamics F-16 and McDonnell Douglas F/A-18 (termed CF-16 and CF-18 in the Canadian context).
  • November 1978 to August 1979 – fully actionable contracts negotiated with the two finalists. 
  • September to December 1979 – rigorous comparative analysis and evaluation of finalists’ bids.
  • February 1980 – evaluation results and recommendation presented to Cabinet. The CF-18 was immediately selected as Canada’s New Fighter Aircraft.
  • April 1980 – contract signed with ­McDonnell Douglas.

And so, in three short years, this major procurement was successfully concluded despite two federal elections being held during that period. 

Given the intensity of the competition, there was some isolated criticism of the selection. Also, because the Hornet was a new design – Canada was the first foreign buyer – a few early technical problems generated considerable media attention, but these were quickly corrected. The negative views quickly dissipated as the new planes were put into service. 

In retrospect, the best measure of the NFA’s success is the fact that the CF-18 Hornet has performed exceptionally well since the first aircraft were delivered to the Air Force almost 30 years ago.

An obvious question in all this is what factors contributed to that favourable outcome and – more importantly – can any of these be applied effectively in the struggle to reverse the continuing decline in Canada’s defence procurement situation today? 

Without referring specifically to the major acquisitions currently facing the government, but having observed these from a distance with dismay, especially (for obvious reasons) in the ongoing current efforts to replace the venerable CF-18, I can offer what I believe were the major reasons for the NFA’s success. Here they are, more or less in an admittedly subjective order of significance:

1. A key element was the creation of a stand-alone Program Office team composed of full-time senior officials from all the relevant government departments. Although the team members effectively represented the interests of their home departments, they ensured that high national goals were always paramount. The degree of cooperation was excellent throughout.

2. The assignment by the government of a rigidly fixed budget (U$2.36B in 1976) eliminated the possibility of growth in the capital acquisition cost. Regarding recurring costs, the evaluation team estimated these in order to compare the relative life-cycle costs of the competing aircraft programs over an assumed service life (15 years). There was no attempt to determine an accurate lifetime cost because of the many variable and indeterminate factors at play. Unfortunately, in today’s politicized procurement environment such estimates are routinely publicized for major defence acquisitions (by the Parliamentary Budget Officer, for example). The Canadian public is thus presented with huge numbers, aggregated over an unknown system lifetime, that are little more than guesswork. For example, the inclusion of total personnel costs over a presumed in-service period is indefensible, given that these are rough estimates at best and which in any case would likely be similar for competing systems. The net result of news about multi-billion projections is to cause unwarranted alarm and a loss of public support for major defence equipment programs.

3. A distinctive feature of the NFA program was the decision to negotiate fully actionable contracts with the two finalists, in effect lacking only the final signatures. Program evaluators were therefore able to draw their conclusions on the basis of firm commitments rather than promises. The two draft contracts were specific about the number of aircraft to be delivered, massively detailed performance capabilities, fixed cost, and countless other factors. Conscious of the political importance of industrial regional benefits, each manufacturer committed contractually to an attractive industrial program that would be effected in the event that it won the competition.

4. In many respects, the NFA program’s success can be attributed to the remarkable speed with which the entire process, from Cabinet go-ahead to contract signing, was conducted. Compare those three years with the decade already spent on the effort to replace the CF-18, still without a decision. Allowing a major equipment acquisition to stretch out this way introduces the risk of changes that will, in turn, cause further delays and inevitable cost increases. Typically, such changes might include modified operational and technical specifications, to say nothing about revised political direction.

5. Keeping the public well informed is vital yet not easy, given the highly technical and dynamic nature of modern warfare. The media have an understandable tendency to focus their reporting on single-issue arguments, whereas a given acquisition truly calls for comprehensive knowledge across a broad spectrum of critical factors. Those in charge of today’s defence procurements, whether at government or bureaucratic level, need to tell the whole story in a way that is comprehensive, factual and understandable to the Canadians who will eventually pay for these big-ticket items. 

Today’s defence procurement environment is vastly different from what existed in the late 1970s, so one must be cautious about applying lessons learned in the course of the 1977-80 NFA program. However, there is common agreement that, given the undeniable need to provide our nation’s military with high quality and appropriate equipment, ways must be found to improve the procurement system. To this end, politicians, government officials, industry leaders and the military would do well to study past successes, of which the selection of the CF-18 is a noteworthy example. 

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A former fighter pilot, General Paul Manson served as Canada’s Chief of the Defence Staff from 1986 to 1989, culminating a distinguished 38-year career with the Royal Canadian Air Force and the Canadian Armed Forces.

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