F-35 Purchase

[cybercoma]

Everything is accounted for, these additional costs are accounted for in the O&M budget within DND's annual budget. the augument is not if we should account for it, but rather it is accounted for twice, once during the orginal contract as required by the AG and once by DND annual budget.

And by appling these new rules, what happens when the orginal guess is short, how do they do to increase funds, do they need to revist the entire purchase and what happens at the end of 35 years and there is a surplus where does it go...

Currently as a DND annual budget if they run short other parts of the budget are shifted over to make up the difference, you can't do this if it's already part of the purchase contract...there is no flexibility.

They're not new rules. They're the rules the DND has followed and they're the rules the Treasury Board has in place. The problem is the Conservatives not presenting the costs these way for accountability purposes.

Edited April 12, 2012 by cybercoma

[waldo]

They're not new rules. They're the rules the DND has followed and they're the rules the Treasury Board has in place. The problem is the Conservatives not presenting the costs these way for accountability purposes.

yowzer! Hard to believe you have to continue to explain this basic, fundamental premise - previously adopted by the Treasury Board... per the Harper Conservative's own initiative!

of course, understanding the complete costs is required for no other reason than to recognize just how much money is actually going to the military, whether capital or operational.

[Smallc]

They're not new rules. They're the rules the DND has followed

When? They have never reported the cost of a project through lifecycle costs, because it's misleading.

[cybercoma]

When? They have never reported the cost of a project through lifecycle costs, because it's misleading.

As a rule, I respect your opinion, but you are seriously way off base on this one.

Read this article: http://www.ipolitics.ca/2012/04/12/mackay-dnd-at-odds-with-government-guidelines-on-f-35-costing/

Here's a snippet, but please take the time to read the entire article.

During a finance committee meeting on Nov. 17, 2010, members formally asked the government to provide documents that “outline acquisition costs, lifecycle costs, and operational requirements associated with the F-35 program and prior programs (CF-18).”

The key term? “Lifecycle costing,” something DND’s own costing handbook says is a way to calculate “total cost of ownership.” According to the guide, lifecycle costing includes the operations and maintenance budget. That O&M budget, it says, in turn should account for personnel costs, maintenance cost of equipment, and total operating costs for facilities and materials – among others.

[Smallc]

I've already told you I don't care about that. The opposition was on a witch hunt, and they were looking for a dagger with which to attack the government. Now, they have it, because the media and the opposition are being dishonest with numbers, and the, public is too stupid to understand.

[punked]

I've already told you I don't care about that. The opposition was on a witch hunt, and they were looking for a dagger with which to attack the government. Now, they have it, because the media and the opposition are being dishonest with numbers, and the, public is too stupid to understand.

If they didn't lie about the numbers in the first place maybe the public would have listen to their explanation of the numbers but now they have lost that right in the court of public opinion.

[Smallc]

If they didn't lie about the numbers in the first place

They didn't lie, they omitted.

[The_Squid]

I've already told you I don't care about that.

You don't care to read his link because it may contain facts that don't align with your point of view?

It's funny how the partisan hacks some folks won't let facts get in the way of supporting the Harper Government.

[Smallc]

You don't care to read his link because it may contain facts that don't align with your point of view?

I don't care because I know the facts when it comes to pricing and the actual price of the aircraft. If and when Harper does something that I disagree with, I'll let you know.

Edited April 13, 2012 by Smallc

[cybercoma]

They didn't lie, they omitted.

Well that changes everything.

[Smallc]

Well that changes everything.

But you still refuse to understand. The lifecycle costs are not the true net costs. As long a we operate fighters, we'll have to buy fuel, and we'll have to maintain. The real cost is simply that of the jets, less any upgrades that our current jets would need to keep operating - less than $9B.

[cybercoma]

I've already told you I don't care about that.

You said that's the way it has always been done. I provide you a link that says that's not the way it has always been done and you say you don't care about that. Ok then. Silly me for thinking you would actually care about facts. I guess you're one of those Machiavelli-types that believes the ends justify the means.

[Smallc]

I provide you a link that says that's not the way it has always been done

I can't read the link, and I happen to know that it's wrong anyway. I've been watching military procurement far longer than you have, I can promise you that.

[cybercoma]

I can't read the link, and I happen to know that it's wrong anyway. I've been watching military procurement far longer than you have, I can promise you that.

Good thing I didn't write the article then. Besides, I couldn't possibly care less how long you've been "watching" military procurement because that's completely irrelevant.

[punked]

Because it is a new way doesn't mean it is a wrong way. The US went this route and found it kept costs down because you can't hid costs, so this is how it is done by everyone now.

[Smallc]

Good thing I didn't write the article then. Besides, I couldn't possibly care less how long you've been "watching" military procurement because that's completely irrelevant.

No, it isn't. What's always reported is the cost of the thing we're buying, and the cost of the maintenance over how long we sign the maintenance contract for. Lifecycle costs have never been the norm for DND contract numbers. Not for the Leopard 2A6M CAN and 2A4M CAN, nor the CH-148, nor the CH-147. It isn't part of the NSPS either (in that case, maintenance costs aren't part of it, either). You're wrong, and the article is wrong.

[Smallc]

Because it is a new way doesn't mean it is a wrong way.

It doesn't accurately reflect the net cost. It takes into consideration far too many costs that we're already going to have to pay anyway.

[punked]

It doesn't accurately reflect the net cost. It takes into consideration far too many costs that we're already going to have to pay anyway.

Again it has benefits.

[Smallc]

Again it has benefits.

Not when it's released to the general public. It's good for overall budgeting purposes for DND. All it does in public is cause confusion. See this forum for confirmation of that. You guys still don't understand the true net cost.

I'd be fine with all the numbers always being public (except for a few security things) if the opposition and media wouldn't try to blow it out of proportion. I've been reading news articles all week talking about how the costs were claimed to be $16B and are now accepted to be $25B - not true.

Edited April 13, 2012 by Smallc

[cybercoma]

But you still refuse to understand. The lifecycle costs are not the true net costs. As long a we operate fighters, we'll have to buy fuel, and we'll have to maintain. The real cost is simply that of the jets, less any upgrades that our current jets would need to keep operating - less than $9B.

No. You refuse to understand proper accounting procedures for procurement, as followed by the military and hidden by the Conservatives because they didn't feel like revealing those numbers was important enough for the people to whom they're accountable. I understand perfectly well what you're saying. I also understand that the Conservatives refused to provide the full life-cycle costs because it politically beneficial for them not to do so. I also understand that the DND followed proper accounting procedure and calculated these costs, even though the Conservatives said that there were no other numbers. I also understand that NATO uses full life-cycle costs for decision making. I also understand that the US government uses full life-cycle costs when it comes to procurement. I also understand that the Treasury Board requires full life-cycle costs to be disclosed when it comes to procurement.

What you fail to understand is that it does not matter that "life-cycle costs are not the true net costs." The government doesn't simply fund the difference between the two pieces of equipment. They have to fund the full entire costs of the equipment over the entire life of that piece of equipment. You're saying that the decision makers don't need to consider as closely as possible how much money they're going to need to provide over the entire life of the equipment. I don't know how else to tell you that you're wrong, but you're really wrong. So incredibly wrong that two auditor generals, the parliamentary budget officer, the DND, the treasury board, NATO, the US government, and Conservatives' own internal documentation all disagree with you entirely. The decision to make an equipment purchase is not based on the difference in cost between the two pieces of equipment. It's based on how much it costs to fund that piece of equipment over its entire life-cycle, including maintenance and operation (which includes personnel).

The Conservatives cooked the books and you're rationalizing it because you think we absolutely need the F-35. I haven't disagreed with you about needing the F-35 because this isn't about the planes. What I disagree with are dishonest bastards in government lying to parliament when asked the FULL costs of a program they entered us into. What I refuse to condone is a government refusing to disclose billions of dollars of funding that will be necessary over the next 40 years, if the F-35s last as long as the CF-18s.

I'm seriously disappointed in you, Smallc. I thought you were more principled about accountability than this. I thought you believed in open, honest, and responsible government.

[cybercoma]

Oh and since that funding is going to come out of Canadian taxpayers' pockets, they have every right to know exactly how much it's going to cost them.

[Smallc]

Oh and since that funding is going to come out of Canadian taxpayers' pockets, they have every right to know exactly how much it's going to cost them.

This particular program isn't going to cost them $25B. What is so difficult to understand about that? We have fighter jets anyway. Even if we don't buy anything new, we're still going to have to operate and maintain them.

[punked]

This particular program isn't going to cost them $25B. What is so difficult to understand about that? We have fighter jets anyway. Even if we don't buy anything new, we're still going to have to operate and maintain them.

No this program is going to cost more but that is beside the point. If we have jets they will cost us the public should know that.

`

[cybercoma]

This particular program isn't going to cost them $25B. What is so difficult to understand about that? We have fighter jets anyway. Even if we don't buy anything new, we're still going to have to operate and maintain them.

Because the taxpayers don't have to pay the O&M costs?

[cybercoma]

Seriously... I don't understand why you insist on only citing the difference.

If I'm paying a $35/month cellphone bill and I go buy a smartphone that costs me $70/month, then I need to fund $70/month. The smartphone isn't costing me $35/month. If someone asks me how much it costs me to have a smartphone, I don't tell them $35/month. I tell them it costs $70/month. When I decide whether I can afford a smartphone or not, I don't just look at whether I can afford $35/month. I look at whether I can afford $70/month. Why? Because $70/month is the true cost. What I'm currently paying is inconsequential because I need to be able to pay $70/month for the duration of my contract.