Swiss Armament chief Martin Sonderegger and project manager Darko Savic signed the procurement contract with the U.S. government at the Federal Armaments Office (Armasuisse) in Bern on September 19, 2022. The procurement of 36 F-35A fighter aircraft has been contractually agreed upon after Parliament approved a commitment loan on September 15. The aircraft will be delivered from 2027 to 2030 and replace the F/A-18 Hornets and F-5 Tigers fleet.
The procurement deal for purchasing 36 F-35A aircraft has a value of 6.03 billion Swiss francs, less than the maximum amount authorized by Swiss voters. The armaments chief, Martin Sonderegger, signed the agreement and the project manager for procuring the new combat aircraft, Darko Savic. The American authorities had already signed the procurement contract last October.
In addition to the aircraft, the procurement costs for the F-35A include mission-specific equipment, armament and ammunition, logistics packages, mission planning and evaluation systems, training systems and initial training. In addition, the costs for integration into the Swiss management and information systems (e.g. adjustments to the existing logistics systems), for support services by industry, a risk amount, inflation in the manufacturing country USA and value added tax on imports are also included.
The prices are binding
Switzerland is procuring the aircraft from the U.S. government via “Foreign Military Sales” (FMS) under the same conditions that it applies to itself. The U.S. government, in turn, handles the procurement via its contract with the manufacturer Lockheed Martin, which the DDPS can view. In this, the prices and the contract conditions are binding and are also demanded utilizing strict supervision.
In addition, Switzerland and the USA have negotiated a specific clause and signed a separate declaration that states the fixed price character.
Offset agreement concluded parallel to the procurement contract
Simultaneously with the procurement contract, the head of the Air2030 program, Peter Winter, and the project manager for the F-35A, Darko Savic, signed the offset agreement with Lockheed Martin. This forms the basis for U.S. manufacturers to do business with the Swiss industry, which offsets Swiss procurement costs. This way, Swiss companies receive orders of around 2.9 billion Swiss francs.
A convoluted purchase procedure paired with a tumultuous past
In addition to a difficult history of procuring fighter planes, the Swiss procurement procedure is highly political. It is not unusual for Switzerland to utilize referendums — a direct democracy in Switzerland – to get the populace’s support for a multibillion-dollar purchase.
This is not the first time referendums have been used to acquire military planes. In 2011, the Saab-made Gripen fighter plane won the competition to replace the F-18 in the Swiss Air Force. Three years later, however, the Swiss voters narrowly rejected a plan to free up money, halting the purchase process and dealing a severe blow to the Swedish industrial company.
Consequently, the contract was terminated, and a fresh offer and vote were implemented before the new selection. In 2020, Swiss voters approved the government’s intention to spend $6.5 billion on a new fighter aircraft by a razor-thin majority of 50.1%. Now that the Federation Council, Switzerland’s executive arm, has chosen the winning bidder, the last step will be to get permission for the acquisition from the Swiss Parliament. In Switzerland, however, major acquisition agreements are highly politicized and consequently susceptible to political headwinds.
F-35 vs Gripen vs Rafale
The choice to buy the F-35 stands in sharp contrast to the prior decision to acquire the Gripen, a non-stealth fourth-generation fighter. The F-35 was the only fifth-generation aircraft capable of providing stealth, superior sensor capabilities, and network connectivity. Considering Switzerland’s air policing needs and geopolitical climate, however, a fifth-generation fighter aircraft with such capability may be deemed excessive.
If the F-35 is genuinely an operational and technological overkill for Switzerland, what other factors may have prompted the Federation Council to make such a difficult decision? The solution lies in the sphere of politics, where strategic and military connections are crucial for the procurement of a fighter plane.
Switzerland had also cancelled an MoU for the supply of French Rafale fighters.
According to a confidential document seen by Swiss public broadcaster SRF, France offered Switzerland a financial inducement valued at an estimated CHF3.5 billion to purchase its Rafale fighter planes instead of US F-35A aircraft.
The Rafale, which first flew in 1986 and was inferior to the most recent American and Soviet designs even at that time, is a rather old aircraft with limited capability for future modifications. This is especially true in comparison to the F-35, which is just starting its development cycle and is anticipated to undergo modifications and continue in production for at least two decades. Even though the F-35 is a far heavier and more modern fighter than the Rafale, the bigger scale of manufacturing and higher efficiency of the U.S. defence industry has enabled it to be offered at a comparable price, with the F-35 repeatedly winning several bids. Furthermore, because of the disparity in engine performance, the F-35’s single F135 engine generates more thrust than the Rafale’s two M88 engines combined.
Switzerland operates and manages the maintenance infrastructure and armaments for American fighters, and since the Rafale is the only fighter in the competition that is incompatible with U.S. ammunition, acquiring the aircraft would necessitate the liquidation of all existing stock.