Belgian Fighter Competition Hinges on Legal Opinions

This table lists the selection criteria for Belgium’s competition to replace its F-16 fighters, with the weighing assigned to each category and sub-category. (BE MoD)

PARIS --- Britain and France last week tried to nudge Belgium’s fighter competition forward, as it nears its self-imposed mid-February 2018 deadline to select a new combat aircraft to replace the F-16 fighters it plans to retire by 2023.

The Belgian government is currently reviewing the offers submitted on Sept. 7 for the Lockheed Martin F-35 and Eurofighter Typhoon, but that orderly process was been thrown off its stride by the unexpected French offer of a strategic partnership around the Dassault Rafale instead of a proper bid.

Brussels is claiming legal uncertainties to explain the lack of progress since September, and contradictory statements between Defense Minister Steven Vandeput, who launched the competition, and cabinet colleagues, including the Prime Minister and at least one deputy Prime Ministers, further complicate the standoff.

Vandeput says evaluating the French offer requires him to cancel its Request for Government Proposals, which would make the Belgian state legally liable. The government cabinet, however, differs, and has asked for new legal opinions, for which it says it is still waiting.

Laurence Mortier, Vandeput’s spokeswoman, told Defense-Aerospace.com by telephone that “The decision for the replacement of the F-16s will be taken by the government,” not the defense ministry, but declined further comment.

Clearly, the competition now hinges on whether Belgium will look at the French partnership offer, or instead rule it out on legal grounds. This suggests a degree of embarrassment and a lack of direction.

It is not clear why this should be so.

Legal liabilities?

The notion of legal liability seems questionable. A Legal Notice on page 13 of Belgium’s own Request for Government Proposal, the document which sets out the procedures and rules that govern the competition, clearly states that “The issuance of this RfGP is not to be construed in any way as a commitment by the Belgian Government to conclude an agreement or a contract.”

It further adds that “No legal liability against the ACCaP office and by extension Belgian Defence and the Belgian Government, for payment of any sorts, shall arise as a result of activities related to responding to this RfGP.”

This is also the view of Dr. Aris Georgopoulos, Assistant Professor in European and Public Law at the University of Nottingham, and a specialist in defense procurement issues. “Under EU rules (the defence and security procurement directive), there is no obligation to conclude a procurement competition once started. Governments have the choice to stop the competition.”

The only possible exception is if the Belgian Government had “changed its position and communicated this change to the relevant bidders in a way that gives rise to legitimate expectations -- for example, through assurances to the contrary via letters addressed to the relevant contractors. I do not think that the Government is legally obliged to continue with the process,” he added.

Interestingly, three of Belgium’s top law firms, which are normally eager for media quotations, turned down our requests to comment on legal aspects of the competition, on whether the French offer is admissible and on the possible legal consequences if the competition was canceled.

France, UK Nudge the process forward

Meanwhile, to nudge the competition forward, French Armed Forces Minister Florence Parly on Dec. 5 published an Op-Ed piece in two of Belgium’s two leading newspapers, Le Soir (in French) and De Tijd (in Dutch) detailing the benefits it offers.

Two days later, on Dec. 7, the Eurofighter consortium issued a press release in which it “revealed further details of its industrial offer to Belgium as part of the ongoing bid to replace the Belgian air force’s F-16 aircraft.”

The single remaining US bidder, Lockheed Martin, continues a low-key marketing campaign from which talk of benefits is mostly absent, but political pressure is sustained.

Only Lockheed can offer no benefits

The campaign in favor of the F-35 is necessarily low-key because Lockheed and the US government can offer no benefits to reduce the impact of the high cost of F-35 acquisition and sustainment.

This is because the F-35 is an international program ruled by regulations that prohibit compensations such as offsets or “just returns” on acquisition costs. Instead, F-35 production contracts must be awarded to the lowest compliant bidder, and be renewed every three or five years. This means Lockheed can neither offer nor guarantee any benefits to Belgian industry.

In a Nov. 28 speech explaining why Belgium should buy the F-35, U.S. Chargé d'Affaires Matthew Lussenhop described the benefits for Belgian industry in just 42 words, out of a total 1,936.

Moreover, he could only promise that Belgium’s aerospace sector will “likely” be “very competitive” for contracts “to sustain and support the F-35,” which will probably not reassure Belgian industry.

And, strictly speaking, even this is not true. Belgium would not even be allowed to maintain its own F-35s, because maintenance work for European F-35s has already been awarded to Italy (airframes) and Turkey (engines), with the UK, Norway and The Netherlands already selected as alternates.

European procurement rules limit offsets

To ensure it could freely manage the replacement of its F-16s, Belgium invoked Article 346 of the Treaty on the Functioning of the European Union (TFEU). This allows EU members to avoid strict European public procurement regulations, but also severely limits “the factors that the purchasing Government can lawfully take into account for choosing the winning contractor,” Dr Georgopoulos said.

Consequently, for the competition Belgium can only take into account offers that protect its Essential Security Interests (ESI). These were previously identified by Belgium’s Council of Ministers, and are set out in Annex D of the Request for Government Proposal, the document which sets out the procedures and rules that govern the competition to pick an F-16 successor.

The Eurofighter consortium detailed its “industrial offer” to Belgium in a Dec. 7 press release, which promises:
“-- Potential creation of more than 1,800 new jobs in Belgium;
--Builds on 40,000 jobs currently sustained across the Belgian supply chain and wider economy by the Eurofighter partners;
--Positions Belgian industry as a key player in the future European defence and aerospace sector through participation in the Eurofighter programme.”

The Dec 7 press release also describes other benefits, but refers more to Europe than to Belgium, as in this quote by Anthony Gregory, Campaign Director for Belgium at BAE Systems: “Our proposal ensures that every Euro invested by Belgium on Eurofighter would help sustain more than 100,000 direct jobs across the continent, including in Belgium.”

“It offers an opportunity for Belgium to have a voice and play an active role in the future development of Eurofighter and, through this, opportunities in any next generation combat aircraft programme in Europe,” Gregory adds.

France offers strategic partnership

Parly writes that the partnership includes close cooperation with the French air force in joint operations, training and maintenance, as well as participation in the future French-German combat aircraft to be developed to replace both Rafale and Eurofighter in the 2030s.

France has also promised to maintain the current work it provides to Belgian industry, which is worth €800 million per year, for the next 20 years if Belgium picks the Rafale. This work is estimated in the Belgian media to be worth €20 billion, and to sustain at least 5,000 Belgian jobs.

France would also create 3 R&D centers, one in each region, with the Brussels center dedicated to predictive maintenance, a Rafale MRO center and a Falcon business parts stock in Flanders, and the development of projects around the “smart base” and “smart city” concepts in Brussels.

Parly’s article notes that “the partnership proposed by France includes over 150 Belgian companies that have been contacted, and around a hundred industrial or technology projects valued at €4 billion.”

-ends-

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