Monitoring the procurement of the Joint Strike Fighter

Political decision-making
The government and the House of Representatives decided last year that the Netherlands would take a final decision on the procurement of the JSF in 2012 rather than in 2010. The surveys carried out to advise a future government on the ambitions and composition of the armed forces and on the Ministry of Defence's expenditure can therefore be included in the decision-making process. In our opinion, this is advisable. As in the previous year, we concluded that the Ministry of Defence does not seem to be anticipating the consequences of procuring any type of aircraft other than the JSF in 2012. On the basis of the comparison made in 2008, the Ministry considers the JSF to be the sole remaining candidate to replace the F-16. We believe this focus exclusively on the JSF represents a risk.

Financial considerations
The State Secretary for Defence has followed up the recommendations we made in our previous monitoring reports on the JSF that he should prepare a full and updated overview of comparable costs for the JSF programme. The Annual Report for 2008, however, does not include all supplementary and related costs that are recorded in internal memoranda. The amounts disclosed in these memoranda suggest that the investment budget for Defence equipment might be increased by an estimated €194 million to €298 million. The future cost of the JSF remains uncertain. It is thought that more will be known at the end of 2010.

Preparations: information security
Lockheed Martin will deliver the JSF with its own information system: the Autonomic Logistics Information System (ALIS). There are still many uncertainties about the security of information that is intended for Dutch eyes only in ALIS. We would also note that there are uncertainties regarding the implementation of ALIS. The ministry has said internally that a budget of €44 million is available to implement ALIS but at the time of our audit it was uncertain what activities had to be carried out and what they would cost. The project to replace the F-16 was not included in the Ministry of the Interior and Kingdom Relations' most recent summary of large ICT projects, in which projects with an ICT component of €20 million or more must be disclosed.

We recommend that the Secretary of State for Defence:
-  ensure that necessary management information is available on all activities needed to implement ALIS within the Defence organisation, paying particular attention to the coherence of the activities and the time, money and manpower that are available;
-  before a final decision is taken on the replacement of the F-16, determine how the security of sensitive Dutch information can be safeguarded in ALIS and, if necessary, take additional measures;
-  determine what the budget is to implement ALIS and, if necessary (if it is more than €20 million), report on it to the Ministry of the Interior and Kingdom Relations.

In his response to our report, the Secretary of State for Defence noted that our conclusion regarding the exclusive focus on the JSF ignored the measures taken to update the evaluation of candidates originally made in 2008, the consultation with the House of Representatives in spring 2009 on the outcome of the evaluation, and the political decisions taken so far. He observed that, in view of the Netherlands' participation in the development of the JSF, the project to replace the F-16 was concerned chiefly with preparing for the procurement of the JSF. According to the state secretary it was not necessary to add ALIS to the list of large ICT projects. He referred to the revised reporting model, in which ministries had agreed that ICT components that were an integral part of an infrastructure project and equipment procurements where separate management and monitoring were neither possible nor meaningful did not have to be included in the government report on large ICT projects.