National Fighter Procurement Secretariat Secrétariat national d’approvisionnement en chasseurs Overview of the work of the National Fighter Procurement Secretariat May 8, 2013

The Seven-Point Plan The Auditor General Spring 2012 report on replacing Canada’s fighter jets was critical of how Canada’s acquisition of the F-35 aircraft has been managed to date. The Government agreed with the AG’s recommendation and conclusions and put in place a Seven-Point Plan on April 3, The Seven-Point Plan aims to ensure Canada acquires the fighter aircraft it needs to complete its core missions and to ensure public confidence in an open and transparent acquisition process that will be used to replace the CF-18 fleet.

Role of National Fighter Procurement Secretariat The National Fighter Procurement Secretariat is responsible for the coordination and implementation of the Seven-Point Plan. Is Executive Secretariat to the Assistant Deputy Minister and Deputy Minister-level Committees and the Independent Review Panel for the Evaluation of Options. The Secretariat is guided by three core principles: 3 1. Due diligence through strong governance 2. Third party oversight 3. Open and transparent communications

4 Due diligence through strong governance Assistant Deputy Minister-level Interdepartmental Steering Committee Deputy Minister Governance Committee acts as a non-partisan decision- making body Public Works and Government Services, National Defence, Industry Canada, Treasury Board Secretariat, Privy Council Office, Finance Canada, National Security Advisor two independent members from outside the public service

5 Third party oversight Non-governmental independent third parties provide necessary challenge function Enhances openness, impartiality and transparency of Seven-Point Plan DMGC’s two independent members: Denis Desautels, former Auditor General of Canada (1991–2001) Kenneth Norrie, economic historian at McMaster University Independent Review Panel supporting Evaluation of Options: Keith Coulter, former CF-18 pilot, Head CSE, Head Corrections Canada Philippe Lagassé, professor of Public and International Affairs at University of Ottawa Jim Mitchell, former Assistant Secretary of the Treasury Board and to the Cabinet Rod Monette, former Comptroller General of Canada

6 Open and transparent communications Secretariat is committed to coordination of communications through: regular reporting to Parliament ongoing briefings with stakeholders a dedicated website to post and share information regular updates on the status of implementing the action plan

Release of documents a milestone on Seven- Point Plan implementation On December 12, 2012, the NFPS released six documents that deliver on the Seven-Point Plan: – National Fighter Procurement Secretariat’s Seven-Point Plan: Status Report; – Terms of Reference for the evaluation of options to sustain a Canadian Forces fighter capability; – National Defence’s Annual Update, setting out comprehensive life- cycle cost estimates for the F-35; – KPMG’s report which established a comprehensive life-cycle framework for reporting costs; – KPMG’s independent review of the National Defence Annual Update; – Industry Canada’s report on Canadian Industrial Participation in the Joint Strike Fighter Program. 7

Next Key Milestone: Completion of Evaluation of Options Work All options are on the table until the Seven-Point Plan is complete We will take the time to do a complete assessment of all available aircraft The work is being led by the Royal Canadian Air Force, supported by the NFPS, and informed by guidance from the Independent Review Panel Involvement of third-party oversight ensures the work completed is both rigorous and impartial NFPS is engaging industry through a market analysis. This will support a rigorous examination of available fighter aircraft options on the market 8

Other Work Underway: Seven-Point Plan 9 Funding envelope for the acquisition of F-35 frozen → Acquisition funding has been frozen Immediately establish Secretariat within Public Works and Government Services Canada → The NFPS became operational within Public Works and Government Services Canada in June 2012 Department of National Defence to provide annual updates to Parliament on cost of F-35 → First Annual Update released December 12, nd Annual Update will be released following receipt of data from the JSF program office Department of National Defence to evaluate options to sustain a Canadian Forces fighter capability → Work advancing through the Independent Review Panel. Treasury Board Secretariat to commission independent review of costs → The RFP for independent review of the next DND Annual Update issued to pre-qualified bidders on February 13, 2013 Treasury Board Secretariat to ensure full compliance with procurement policies prior to approving project → On January 25, 2013, the contract was awarded to Samson and Associates to review the acquisition process to apply lessons learned going forward. Work will be completed in the Spring. Industry Canada to provide updates to Parliament on Canadian industrial participation in the F-35 Joint Strike Fighter Program → Industry Canada will continue to regularly update Parliament

Summary The goal of the Seven-Point Plan is to ensure that the Royal Canadian Air Force acquires the fighter aircraft it needs to complete its missions and to restore public confidence in the process to replace the CF-18 fleet. The work of the Secretariat will continue to be guided by the principles of due diligence, third party oversight and transparency. Canada will remain in Joint Strike Fighter program to keep the F-35 option open until the Seven-Point Plan is complete. No decision on a replacement aircraft will be taken until the Seven- Point Plan is complete. 10