Request for binding information - combat aircraft

Press conference, Oslo, 28 April 2008
 

Minister, excellencies, ladies and gentlemen!
It is a great pleasure for me to welcome you to this presentation. We have come a long way in our process of procuring a future combat aircraft capability. Today is an important milestone for us.  With the reception of the answers to our Request for Binding Information we are now able to start the final analysis- and evaluation process, which brings us one step closer to our goal – deciding the most suitable combat aircraft for Norway.

Since taking office in October 2005, this Government has made dedicated efforts to ensure that this is a fair, transparent and credible competition. I think we have succeeded so far. The confirmation of this is what we can see here today. Two very capable candidates, with their respective Governments and industries behind them, are contending in this competition, and have made a tremendous effort answering our request. It’s very impressive what these two candidates have accomplished in such a short time.

Background
We need a combat aircraft that can meet the particular requirements of a country where few people live on a large territory, with vast sea areas to look after, and with many of its key interests related to the security developments in the high north. Norway has several security concerns and requirements that it shares with its allies and partners, but also some that we may have to look after ourselves, which means that we need to make our own calculus of what is the best choice for Norway.

No military system can beat the combat aircraft in swiftness and immediate deployability and power projection, and we consider it as a key component of a future-oriented, robust, and network-based Norwegian armed force. Modern combat aircraft should work with other air, sea and land forces and be able to provide defensive and offensive counter air, air interdiction, surveillance, and support to naval as well as ground troops, which is why only multi-role or swing role aircraft are relevant contenders in our case. Unlike larger countries, Norway can not afford the luxury of having various types of combat aircraft for different purposes. The costs would be too high and the fleet too small for such an option. Furthermore, in some of the security-policy scenarios that we are looking at, air superiority can not be taken as a given, which again means that the package of capacities contained in the combat aircraft itself are even more important than in larger systems where the individual aircraft is but one of many systems working together.

Combat aircraft are essential to Norway’s defence today and well into the foreseeable future, and the Government has made it abundantly clear that we do want to keep this crucially important capacity in our defence structure well beyond the life-span of our current F-16s. This decision was taken by the Norwegian Government in December 2006 through its approval of the document referred to as the Conceptual Solution.

In the spring of 2007, we signed a new set of agreements with both the Governments and industry of the three different candidates. This was essential in order to obtain necessary information about the candidates, and at the same time make Norwegian industry more competitive and more involved in the development of all the candidates. Judging from some of the industrial cooperation agreements already underway, I think we can already conclude that this was money well spent.

Then, at the beginning of this year, we sent our Request for Binding Information to all the candidates. The reply date specified in the RBI was 28 April, which, again, is why we are gathered here today.

When making our judgement based on these RBI replies, our primary focus will be on identifying the contender that best meets our Norwegian military requirements at the best possible price. With price, I do not only refer to the price at the day of purchase, but also the entire life-cycle cost as well as the potential for cost-effective solutions for international co-operation. Furthermore, the “price” of a military aircraft is not comparable to the price of a car in the consumer market. Our experts will also go into the fine print and evaluate the assumptions under which the price offers are made. For instance, to which extent they presuppose overall production numbers and other assumptions that neither we nor the contender can fully control.

Beyond this obvious number one priority, my Government put great emphasis on the importance of ensuring a high level of industrial participation for the Norwegian defence- and security related industry. We believe that strong partnerships between Governments and industry, in a 21st century mode, is very important in this large and strategically important sector. We have very positive experiences with previous industrial offset packages – for instance in the case of the F-16 programme and with the very successful Frigate purchase from Spain’s Navantia. The question here is not the label put on the industrial component – “classical offset” or “best value industrial participation” – but what it delivers in quality and quantity to Norwegian industry. It should be remembered that in the years during which we will pay for the new combat aircraft, this 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. In a country largely living on the export of fossil fuels, this would not be a sound strategy for the future transformation and further modernization of our technology-intensive industry.

Competition
As I said at the outset, I do feel that we have succeeded in making this a fair and credible competition. While I am not going to enter into any kind of judgement or evaluation between the candidates here and now, we do know enough to say that both the candidates represented here today – F-35 Lightning II and JAS Gripen – are highly capable and potentially very good candidates for Norway’s future needs.

Genuine competition was not a given, since our history with one of the candidates present here dates back much longer than with the other, and since not only the proposed aircraft themselves, but also the cooperation and procurement programmes, are so different in character. Hence, balance can not be achieved by formal equal treatment alone, but by a deliberate strategy of equality of result. We have seen it in the best interest of Norway to take active steps to level the playing field and to take a long-term balanced approach. It means that we need to compare apples and pears in a transparent and intelligent way. The more genuine the competition is, the fairer is the process for the contender and, we assume, the better is the final offer to us.

It is with regret I must conclude that Eurofighter has decided not to respond to our request, and that Eurofighter, by implication, no longer is a part of this competition.

With two impressive candidates remaining in the competition, I am convinced that we will get a good competition as we enter into the final leg of the race,. We will choose the best aircraft for our needs, and hopefully we will also benefit from the competition ¬– price down and the quality up. To be able to make this decision early is actually a privilege, because it gives ample time both for the final set of negotiations, for preparing the Air Force and its logistics support organization for optimal phasing out of the old fleet and phasing in of the new fleet, and for ensuring substantial Norwegian industrial contributions at a time while the doors are still open. I am therefore convinced that we are right in sticking to the demanding timeline we decided upon a few years ago.

Let me also reiterate – yet again – the emphasis this Government places on ensuring a transparent process reflecting high ethical standards in all aspects of the relationship between the contenders and representatives of the public sector, be it in the Armed Forces, in the relevant Ministries, or Parliament. This is a policy that will be strictly enforced throughout the process. I would also like to emphasize that it is my hope that this also will hold true for the broader environment involved, including in the media. Experiences from other countries and other processes underlines that clear procedures and a high degree of consciousness about these aspects is crucially important.

The Road ahead
Towards the end, let me say a few words about the road ahead. There has been some confusion in the press lately, which is why The Norwegian Government decided last year that it is no longer a separate option simply to prolong the lifetime of our existing F-16 fleet. Our approach now, and my order to the Program is: Find the optimal point in time to phase out the existing F-16 fleet, and to phase in a new fleet of combat aircraft. The estimate so far is that the optimal point in time is some where between 2016 and 2020. But this is not concluded. This is one of many important issues the Program has to look into the next months. I would also like to be very clear on one point to all in this room; neither I or the Program, nor other people, will comment on data or specifications given to us by the two competitors through their respective RBI-responses here today. As I have said, we will now start our evaluation process and such a process is going to take some time. I therefore hope you will accept that we can not come with any advance results at this stage. 

I now look forward to hear the presentations from the two very able contenders.