Summary

Information was requested on the cost of the U.S. F/A-18 strike fighter aircraft. The U.S. F/A-18 aircraft's unit cost was compared to the the same aircraft ordered by Canada.

The Canadian unit cost estimate of the F/A-18 aircraft is lower than the unit cost of U.S. aircraft which will be delivered over the same time period. However, the estimate for the Canadian purchase does not include research and development costs and certain nonrecurring production costs. In addition, numerous other factors were considered in comparing the unit cost estimates for the U.S. and Canadian aircraft, including the following: (1) the Canadian purchase was a direct sale transaction between Canada and the F/A-18 prime contractor; (2) the Canadian purchase represented a commitment for full procurement quantity, whereas the U.S. purchase must be approved in increments each year; (3) the Canadian contract called for a fixed conversion rate for U.S. and Canadian currency; (4) considerable industrial benefits will result for Canada; (5) the Canadian aircraft will be produced on the same production line as the U.S. aircraft; and (6) the periodic payment provisions of the Canadian contract are more attractive to the contractor than provisions in U.S. contracts which limit periodic payments to 80 percent of costs.