Poland Resigns from the F-35 Offset

January 15th, 2020 (last updated)

Polish Offset Committee adopted the MoD’s recommendation to resign from making use of offset in case of the F-35 acquisition. “The American proposals have not been satisfying for us. These pertained to incomplete maintenance capabilities for the F-16 and C-130 aircraft, with a cost exceeding 1 billion dollars. The cost-effect ratio was simply not profitable, especially in the light of the fact that the money saved can be allocated to other modernization programmes (…) The F-35 programme is closed, entirely” – representatives of the MoD told us. They also added that Poland is going to express its willingness to join the Loyal Wingman programme at the earlier stage, so that it could also enjoy industrial benefits.

The Offset Committee issued a positive opinion with regards to the recommendation made by the MoD to resign from the offset arrangements associated with the F-35 acquisition. Recommendation as such was issued in December last year and was also subjected to a vote today, 10th January. It was accepted, without any votes against it. The above means that the intergovernmental agreement pertaining to the F-35 deliveries would not be accompanied by a preceding offset contract. Meanwhile, the industrial cooperation is to take place via business-to-business arrangements with relevant talks already going on.

The MoD’s representatives told us and repeatedly emphasized it to us that offset-related proposals did not meet the Polish expectations. After it turned out that securing a proper set of offset arrangements is impossible due to a closed profile of the programme, the Poles requested establishment of relevant manufacturing potential related to F-16 and C-130 aircraft.

“The American proposals have not been satisfying for us. They pertained to incomplete maintenance capabilities for the F-16 and C-130 aircraft, with a cost exceeding 1 billion dollars, that would be further increased by the cost of tailoring the Polish facilities to receive the tech. In a situation as such, the offset arrangement would not be cost effective, hence the resignation. Requirements contained within the Technical Modernization Plan are quite broad. The money saved would be allocated to other modernization tasks, with a benefit for the Polish military” – as representatives of the MoD emphasised.

The Poland could not have obtained relevant maintenance or manufacturing capacity related to the F-35, as, despite the proposals made during the PO-PSL term of office, it did not join the programme at the earlier stage. At the present moment the division of tasks between the participants of the programme is fixed, no changes can be introduced.

“The F-35 programme is completely closed. Both when it comes to manufacturing of the aircraft, the elements of the aircraft, as well as in case of servicing and operational support. This is done via the Global Support Solution and ALIS. There is no possibility to gain industrial benefits for the nation that has not been a part of the F-35 programme. Poland had a capacity to join the programme during the PO-PSL term of office when the MoD was headed by Bogdan Klich”, representatives of the MoD claim. They also stress the fact that procurement of the F-35 is a top priority for the MoD. “Acquisition of this aircraft is required to provide a proper set of operational capabilities for the Polish Air Force. This purchase is going to be implemented”.

The MoD wants the industrial cooperation related to the F-35 acquisition to take place via business-to-business memorandums. Formula as such would provide the parties involved with a greater degree of flexibility, even though those agreements would not be tied to the delivery contract in a rigid manner. The business-to-business memorandums are already a subject to an ongoing negotiation. “Within the framework of the offset we can only obtain capabilities that are considered to be indispensable within the scope of protecting the basic national security interest associated with the specific programme in question, in line with the offset act”, the MoD representatives said. They also added that industry-industry memorandums are not a subject to limitations as such.

Furthermore, the MoD is also planning to join the “Loyal Wingman” programme aimed at developing a UAV that would be operationally tied to the F-35, also in case of combat sorties. This would be done so that Poland becomes an industrial partner, similarly as in case of the F-35 programme partner nations working both to bring the benefit for own air forces, as well as any other user of the fifth generation aircraft. Acquisition of unmanned aircraft that could cooperate with the F-35 is also mentioned within the 2021-2035 Technical Modernization Plan adopted in October 2019, as a part of the “Harpy Claw” programme.

“Minister Błaszczak wants to avoid the mistakes made by the predecessors. The fact that Poland had not decided to join the F-35 programme earlier on really weakened our negotiating position when it comes to acquiring any industrial capacity within the framework of the offset. Thus, the MoD is already planning negotiation pertaining to the Loyal Wingman programme, once it is launched. Entering the programme at that stage could provide us with a transfer of technologies and industrial capacity” – the representatives of the MoD said.

Earlier on the MoD had also declared that it would be driven to finalize the F-35 contract in the beginning of the year. The new aircraft are to become a part of the Polish Air Force, replacing the obsolete MiG-29 and Su-22 airframes that are also increasingly more difficult to maintain. The request pertaining to acquisition of F-35A via FMS, via an intergovernmental agreement, was sent to the US in May 2019. Later in 2019, during the second part of the year, the transaction has been approved by the Department of State and the US congress. This paved the way towards negotiation of a contract that is to be concluded soon.

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