The Government of Canada is tweaking the terms of a $19 billion contract to purchase 88 fighters, in order to allow US’ F-35 jet to enter into the competition, according to the Canadian media.
Under the current terms, bidders were required to offer industrial benefits to Canada as part of the competition.
“That system, which would have disadvantaged the F-35, will now be amended,” government sources said Thursday.
The changes will allow for a more flexible approach in determining the value of the benefits bidders offer to Canadian defence firms, the sources added.
However, those companies that do guarantee work for Canadian firms will receive more consideration under the new rules.
"A bidder that is not willing and able to sign a contract and guarantee them (the benefits) can still bid and still be competitive but they will get less points in the economic benefits category" than firms that do offer a watertight commitment, said the source.
The Canadian Government arrived at the decision after a series of discussions with Washington, and threats by the Pentagon to withdraw the jet from consideration, the report further stated.
The US’ F-35 programme prohibits partner nations from imposing requirements for industrial benefits in fighter jet competitions.
“We cannot participate in an offer of the F-35 weapon system where requirements do not align with the F-35 Partnership,” US Navy Vice-Adm. Mathias Winter told Canadian officials in a letter sent in December.
Canada has contributed roughly $500 million over the past 20 years toward developing the F-35, while Canadian companies have won nearly $1.5 billion in contracts associated with the stealth fighter. The country will also be able to buy the F-35 jets for price cheaper than non-members.
In late 2017, Canada launched the contract for the purchase of new fighters and previously, the competition was between Lockheed Martin F-35, Boeing’s Super Hornet, Eurofighter Typhoon and Saab’s Gripen.
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