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Objective
The objective of this basis for decision is to present the results of the New Fighter Programs
evaluation of the three fighter candidates included in the Danish fighter aircraft selection process. The
Danish Defence Agreement 2013-2017 requires the establishment of the best possible basis for a
political decision on fighter aircraft type selection. The rationale behind the focus on new fighters in the
defence agreement is partly an identification of a Danish security policy need for fighter aircrafts and
partly a recognition of the fact that the current Danish F-16 fighter aircrafts are nearing the end of their
lifespan. In 2020, the Danish F-16 will have been flying for approximately 40 years and there will be
significant operational, technical and economic challenges associated with their continued use.
Fighter aircraft candidates
The three fighter candidates in the Danish fighter aircraft selection process are:
The Eurofighter, developed in a partnership between the United Kingdom, Germany, Italy and Spain.
The primary manufacturer behind the Eurofighter is the European company Airbus. The German
Federal Ministry of Defence is the supplier of the aircraft on behalf of Germany.
The F-35A Joint Strike Fighter, developed in a collaboration between nine partner countries (the USA,
the United Kingdom, Italy, the Netherlands, Turkey, Australia, Norway, Denmark and Canada). The
primary manufacturer behind the Joint Strike Fighter is the American company Lockheed Martin. The
Joint Strike Fighter Program Office is the supplier of the aircraft on behalf of the United States.
The F/A-18F Super Hornet, developed in the USA. The primary manufacturer behind the Super Hornet
is the American company Boeing. The U.S. Navy International Programs Office is the supplier of the
aircraft on behalf of the United States.
Evaluation areas and frames
In order to provide the best possible basis for a political decision on the fighter aircraft type selection,
the three candidates have been evaluated within four specific areas:
Strategic aspects: the ability of the candidates to support or fulfil overarching Danish defence and
security policy objectives, including the potential for cooperation with other countries.
Military aspects: the ability of the candidates to successfully conduct fighter missions (mission
effectiveness), the candidates survivability, opportunities for keeping the aircraft operational and
technically relevant within its expected lifespan (future development) as well as the risks associated
with each candidate that cannot be economically quantified (candidate risk).
Economic aspects: the estimated life cycle costs of the candidates, including costs associated with
procurement, ongoing operations and sustainment as well as quantifiable risks.
Industrial aspects: the ability of the candidates to support significant Danish security interests through
industrial cooperation with the Danish defence industry.
The evaluations are based on an operational period of 30 years for the new fighter aircrafts (20202049). Additionally, the evaluations have assumed a continuation of the current tasks and level of
ambition of the Danish F-16 fighter capability.

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This means that the point of departure has been that a future Danish fighter aircraft capability must be
able to continue to conduct:
> National tasks involved with maintaining a permanent quick reaction alert capability which can
perform tasks involving surveillance and defending sovereignty and which can be scrambled with
extremely short notice. Additionally, other national tasks such as supporting the Danish national police
and other public authorities.
> International operations and NATOs collective defence tasks with a fighter contribution on high alert
state in which four fighters can be deployed for a period of up to 12 months every third year. In
addition, periodic fighter contributions to NATO Air Policing missions.
The primary underlying basis of information has been the responses to the request for information, the
so-called Request for Binding Information (RBI), which was sent out to the candidates on 10 April
2014. At the time of the resumption of the fighter aircraft type selection process, the Swedish fighter
Gripen was also a candidate. However, the Gripen withdrew from the process when the Swedish
authorities decided not to respond to the RBI. The New Fighter Program received responses from the
suppliers of the Eurofighter, the Joint Strike Fighter and the Super Hornet on 21 July 2014.
In order to ensure the validity of the information in the RBI responses, the responses to each of the
approximately 950 questions in the RBI have been carefully reviewed in a validation process. In cases
where the New Fighter Program uncovered insufficiencies, unresolved issues or possible risks of
misunderstandings, a validation strategy has been implemented at three levels:
> Forwarding clarifying questions to the suppliers within each area of evaluation (so called Request
for Clarification (RFC)).
> Clarifying dialogue in the form of, for example, briefings or information updates by suppliers or the
primary manufacturers with a view to understanding the context in which the responses were given or
in order to ensure an understanding of any correlations and assumptions which were not clearly set
out in the original responses.
> Using reference data, including information on the F-16 fighters.
In the strategic evaluation, the New Fighter Program did not make use of the RBI because Danish
defence and security policy interests cannot be assessed on the basis of information from suppliers.
Instead, the point of departure has been, among others, Danish and other countries policy papers as
well as countries reporting to NATO.
Evaluation methods
The New Fighter Program has developed distinct evaluation strategies and models for each evaluation
area. The evaluation models were developed prior to sending out the RBI. In the models, there is a
detailed description of how the individual evaluations were to be conducted, including the order in
which each step of the process was to be completed.
The evaluations of the strategic, military and industrial areas have been largely based on qualitative
analyses and evaluations. In these areas, the New Fighter Program has made use of various expert
panels, which have ultimately evaluated and ranked the candidates. The participating experts have
represented a broad range of competencies and experience related to the specific evaluation areas.
The expert panels have been conducted according to the Delphi method which focuses on improving
the quality of the expert evaluations through a structured and documented process of repeated rounds
of voting and discussions.
In contrast, the evaluation of the economic aspects has been based on a quantitative approach. In this
regard, a dynamic economic model was used which was developed
by the New Fighter Program in cooperation with Deloitte. This model was used to calculate the
estimated life cycle costs of the candidates.

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External quality assurance
In order to ensure external and independent control, external quality assurance has been conducted of
the products prepared by the New Fighter Program in developing this basis for decision. Quality
assurance has been carried out by Danish experts from Deloitte in cooperation with international
experts from RAND Europe assisted by QinetiQ and Vorderman Consultancy. As Deloitte was
involved in developing the economic model, the quality control of the evaluation of the economic
aspects was undertaken by RAND Europe.
Evaluation results
Table 0.1 lists the final ranking for the candidates within each of the evaluation areas.

A brief review of the results is presented below.


Strategic aspects
In the strategic evaluation, defence and security policy implications along with the potential for
strategic cooperation associated with the respective candidate have been identified. The evaluation
model has followed a step-by-step approach in which strategic criteria have been developed on the
basis of a review of Danish foreign and security policy. The New Fighter Program has provided the
basis of information for handling these criteria through analyses of, for example, NATO documents
and the policies and historic roles of the respective user countries. Ultimately, an expert panel has
assessed the candidates ability to safeguard and achieve overarching Danish defence and security
interests.
The assessment of the expert panel has been that the selection of the Joint Strike Fighter will entail
the greatest potential for promoting Danish interests, in terms of both security policy and military
strategy and that the Joint Strike Fighter will provide the highest degree of flexibility at the political
level with regards to future tasks. The broad scope of the group of Joint Strike Fighter users will foster
both Denmarks transatlantic ties and the countrys collaborative relations with a range of European
partners.
The European dimension in the group of countries using the Eurofighter has been a significant aspect
in the expert panels ranking the Eurofighter number two. The expert panel has particularly
emphasised the fact that the Eurofighter will open up for strengthening the defence and security policy
cooperation with Germany.
The importance of maintaining a close relationship with the USA in the area of fighter aircraft is
particularly stressed by the expert panel in relation to the Super Hornet. However, the small group of
Super Hornet users and the geographical location of those users far from Denmarks neighbouring
areas have been contributing factors for the expert panel having ranked the Super Hornet number
three.

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Table 0.2 shows the votes that have led to the expert panels final ranking of the candidates with
respect to strategic aspects. The uneven distribution is due to the fact that the experts have had the
opportunity to rank the candidates evenly.

Military aspects
The evaluation of military aspects comprises the subareas survivability, mission effectiveness, future
development and candidate risk.

The evaluation of survivability considers how well the fighter aircraft is capable of protecting itself
against enemy weapon systems so as to minimise the risk of loss of aircraft or crew. The evaluation of
mission effectiveness considers how well the fighter aircraft performs the task assigned. Altogether,
survivability and mission effectiveness reflect the fighters military ability to perform tasks. Future
development evaluates the extent to which the fighter aircraft is expected to constitute a relevant
operational and technically applicable fighter aircraft capability throughout the entire 30-year lifespan
of the fighter aircraft, whereas the evaluation of candidate risk considers the risks that cannot be
quantified economically. The economic costs that will incur provided the individual risk occurs are
considered in the economic evaluation. This applies also to the costs associated with risk-mitigating
measures.
The New Fighter Program has carried out a large number of technical and operational analyses.
Expert panels have subsequently given the candidates marks and ranked them on the basis of the
analyses. Using the Delphi method within each of the four sub-areas, the experts have assigned
marks to the candidates on a scale from 1 to 5 with 5 representing the best mark.
Figure 0.1 displays the candidates average marks under each sub-area of the military evaluation.
Under survivability and mission effectiveness, the Joint Strike Fighter comes out better than the two
other candidates. This is due to a number of circumstances, including for example the low radar
signature of the aircraft as well as the application of advanced systems and sensors that enhance the
pilots tactical overview and ensure the survival of the aircraft and efficient mission performance. In
terms of survivability and mission effectiveness, the Super Hornet does slightly better than the
Eurofighter.
With respect to future development, the Joint Strike Fighter ranks better than the two other candidates.
The reasons are, among other things, that the aircraft is expected to be produced in a large number
and that the contractual and development basis for keeping the aircraft technically and operationally
relevant throughout its lifespan is present. With regard to the Eurofighter and the Super Hornet, the
expert panels evaluation is that the candidates future development is at the same level.

In relation to the sub-area of candidate risk, the Super Hornet has been assessed to carry the least
risk of the three candidates even though the candidates in this area are almost equal. The reasons
are, among other things, that already today the Super Hornet is used operationally by other countries,
and that risks associated with, for example, the procurement and implementation of the aircraft are
assessed to be low. The risks associated with the Joint Strike Fighter and the Eurofighter are
assessed to be higher.
Altogether, the result of the military evaluation is that the Joint Strike Fighter is ranked number one,
the Super Hornet ranked number two and the Eurofighter ranked number three, noting that there is
less difference between the Super Hornet and the Eurofighter.

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Economic aspects
The economic evaluation compares the candidates estimated life cycle costs on the basis of
calculations in the quantitative economic model. The life cycle costs cover costs linked to
procurement, ongoing operations and sustainment as well as quantifiable risks over a period of 30
years.
The estimated life cycle costs are lowest for the Joint Strike Fighter, second-lowest for the Super
Hornet and the highest for the Eurofighter. The reason is primarily that the airframe of the Joint Strike
Fighter is designed to be capable of flying 8,000 hours, whereas the Eurofighter and the Super Hornet
are both designed to fly 6,000 hours. In order to perform the required portfolio of tasks over a period of
30 years, fewer Joint Strike Fighter airframes are therefore required compared to the Eurofighter or the
Super Hornet. The calculations in the economic model have identified a need for 28 Joint Strike
Fighter airframes, 34 Eurofighter airframes and 38 Super Hornet airframes, respectively, in order to
perform the same portfolio of tasks. Another reason is that the Super Hornet is a two-seat aircraft,
which implies a greater need for flight instruction hours and training of crews than the Eurofighter and
the Joint Strike Fighter. Furthermore, the Eurofighter has higher maintenance costs per flight hour than
the Joint Strike Fighter and the Super Hornet. The procurement price per aircraft is the highest for the
Eurofighter.
Figure 0.2 shows the estimated life cycle costs broken down by procurement, sustainment as well as
risks. The vertical line shows the degree of uncertainty of the estimate.
Sensitivity analyses show that the result of the economic evaluation is in general robust with regards
to changes to key preconditions such as airframe lifespan. Airframe lifespan is a term used for the
number of flight hours an aircraft can fly before it has been worn out.

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Industrial aspects
The industrial evaluation assesses the extent to which the fighter manufacturers proposals for
industrial cooperation with the Danish defence industry can support essential Danish security
interests. The New Fighter Program has considered the manufacturers proposals for cooperation
initiatives in accordance with current guidelines for industrial cooperation.
Subsequently, an expert panel has assessed the initiative packages through the Delphi method. The
combined value of the industrial cooperation proposals for the Eurofighter is DKK 18.7 billion
consisting of 30 initiatives. The corresponding value for the Joint Strike
Fighter is DKK 26.5 billion consisting of 26 initiatives, and for the Super Hornet the value is DKK 15
billion consisting of 68 initiatives.
The expert panel has assessed that the industrial cooperation initiatives proposed by Lockheed Martin
(Joint Strike Fighter) support the safeguarding of essential Danish security interests to a greater extent
than the initiatives of the other two candidates. This is due to the large volume and duration of the
initiatives, the relatively high degree of feasibility, and the maturity of the initiatives. Furthermore it is
due to the potential associated with the forthcoming sustainment phase. Therefore, the Joint Strike
Fighter is ranked number one with regard to industrial aspects.
The initiatives proposed by Boeing (Super Hornet) and Airbus (Eurofighter) are assessed to support
the safeguarding of essential Danish security interests to the same extent. However, the Super Hornet
is ranked number two, as the overall package of initiatives proposed by Boeing was assessed to have
a higher degree of feasibility and maturity than the package proposed by Airbus. Therefore, the
Eurofighter is ranked number three.
Table 0.3 shows the votes that have led to the ranking of the candidates with respect to industrial
aspects. For the purpose of the voting, a ranking scale from A to E has been used. The figure shows
which indicators the ranking scale has covered.
It should be underlined that the results of the industrial evaluation are associated with a number of
significant uncertainties, among other things, as a result of an essential difference regarding the
framework for industrial cooperation for the candidates. For the Joint Strike Fighter, there is a
particular element of uncertainty associated with the fact that the Joint Strike Fighter will not be subject
to an industrial cooperation requirement. The realisation of the industrial cooperation initiatives that
Lockheed Martin has proposed is,
therefore, conditioned upon the ability of the Danish defence industry to win contracts in accordance
with the best-value principle. Thus, there are no guarantees that the initiatives will be implemented.

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TABLE OF CONTENT

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TABLE OF CONTENT

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1. INTRODUCTION
The objective of this basis for decision making is to present the New Fighter Program's evaluation
results for the three combat aircraft candidates included in the Danish fighter aircraft selection,
Eurofighter, Joint Strike Fighter and Super Hornet.
The Danish Defence Agreement 2013-2017 states that Denmark also in the future must have a
combat aircraft capability. Combat aircraft should continue to be a part of the Danish defense and
solve tasks that contribute to maintaining the Danish security policy interests.
According to the defence agreement the purpose of the process leading to type choice is to provide
the best possible basis for a political decision on type selection among the participating combat
aircraft. The type selection will then form the basis for starting negotiations with the selected candidate
on a subsequent purchase, and also creates the basis to partly establish the financially and
operationally most favorable in- and outphasing-times for the fighter jets and partly to start discussions
on multinational cooperation and the ambition level.
The reason for the defense agreement's focus on new fighters is due to the report from the Defence
Commission of 2008 and the Defense Agreement 2010-14, which require a continued Danish security
policy requirement for fighter aircraft to upholding the sovereignty of the national airspace, monitoring
of areas of national interest, as well as to deploy combat aircraft for international missions. This should
be seen in light of that the current Danish F-16 aircraft are approaching the end of their life. In 2020,
the Danish F-16 aircraft have flown about 40 years and there will be significant operational, technical
and economic challenges associated with continued use.
In order to provide the best possible basis for a political decision on the fighter aircraft type selection,
the three candidates have been evaluated within four specific areas, that are not weighted against
each other:
> Strategic aspects: the ability of the candidates to support or fulfil overarching Danish defence and
security policy objectives, including the potential for cooperation with other countries.
> Military aspects: the ability of the candidates to successfully conduct fighter missions (mission
effectiveness), the candidates survivability, opportunities for keeping the aircraft operational and
technically relevant within its expected lifespan (future development) as well as the risks associated
with each candidate that cannot be economically quantified (candidate risk).
> Economic aspects: the estimated life cycle costs of the candidates, including costs associated with
procurement, ongoing operations and sustainment as well as quantifiable risks.
> Industrial aspects: the ability of the candidates to support significant Danish security interests
through industrial cooperation with the Danish defence industry.
The content of the evaluation areas have been based on the factors for type choice of combat aircraft
specified in Defence Agreement 2010-2014.
1.1 GENERAL FRAMEWORK
The evaluations are conducted with the basis of the level of ambition set out in the Danish Defence
Agreement 2013-17. It requires that the Defence's capabilities should be able to participate in the full
spectrum of international operations from international policing, stability operations to high-intensity
combat operations, while concurrently should be able to solve national tasks such as defending
sovereignity and surveillance tasks. In addition, the Agreement establishes that the Air Force must
maintain flexible and ready capabilities that can be deployed at short notice in both domestic and
international operations, as is described in the Law on Defence.

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Figure 1.1 The four main evaluation areas


The basis for evaluation is the current task complexity and ambition of the Danish F-16 combat aircraft
capability. Thus the evaluations make the assumption that a future Danish combat aircraft capabilities
should continue to solve:
> National tasks involved with maintaining a permanent quick reaction alert capability which can
perform tasks involving surveillance and defending sovereignty and which can be scrambled with
extremely short notice. Additionally, other national tasks such as supporting the Danish national police
and other public authorities.
> International operations and NATOs collective defence tasks with a fighter contribution on high alert
state in which four fighters can be deployed for a period of up to 12 months every third year. In
addition, periodic fighter contributions to NATO Air Policing missions.

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The evaluation is thus based on that Danish combat aircraft also in the future should be able to carry
out the national defense readiness and should be used to solve both national and international tasks,
as is the case with F-16 capacity today. In addition, the starting point assumes a 30-year period of use
of a new Danish combat aircraft (period 2020-2049).
1.2 ORGANIZATION OF WORK OF New Fighter PROGRAM
This basis for decision has been prepared by the Ministry of Defence New Fighter Program to prepare
the type selection and implement the following acquisition and implementation of the New Fighter in
the Defence. The work in the New Fighter Program is organized according to the joint government
program model which follows the principles of the international program standard, Managing
Successful Programmes (MSP).
New Fighter Program refers to a program steering group chaired by the Ministry of Defence's
Permanent Secretary. The Program Steering committee also comprises the Chief of Defence, which
contributes with his professional military advice, the MoD's Director for Strategic Management, and the
program director for the New Fighter Program. The Program Steering Group has led the work and
approved the products underlying the decision basis, including program clarification, evaluation
models and methods, information needs and information gathering and evaluation reports and the
decision-making basis itself.
To ensure efficient contact and flow of information to and between relevant ministries's type, an interministerial collaboration on secretary level has been established within the selection process where
the Prime Minister's Office, Ministry of Finance, Foreign Affairs, Defence and the Business and Growth
Ministry is represented.
The New Fighter Program has as far as possible made use of experts from other ministries as well as
authorities under the Ministry of Defence in the preparation and implementation of evaluations. The
New Fighter Program has also continuously involved the Attorney General in dealing with legal
matters and involved external consultants.
To ensure the involvement of relevant experience and good practice, the New Fighter Program has in
the preparation of the type of election process followed a number of recommendations from, among
others the Government Audit Office's report from 2009 on the basis for a possible purchase of new
fighters. Likewise, there are implemented experiences and recommendations from previous phases of
the type selection process, among other written by Deloitte and Technological Institute. Finally,
McKinsey & Companys analyzes and recommendations on Defence equipment acquisitions from 2011
have also been used.
1.3 INFORMATION COLLECTION AND DIALOGUE WITH CANDIDATES
The acquisition will be carried out in a so-called Government-to-Government process, ie a purchase
and sale between the two governments. (2) The alternative would be direct purchases from the fighter
manufacturer (known as Direct Commercial Sale). The process is chosen based on the assumption
that the information from a government that have acquired and using the product, will have a greater
degree of validity. Table 1.1. shows candidates, suppliers and main manufacturers in the Danish type
selection process.
(2) A future requirements on industrial cooperation will be settled between Danish companies and the
main producer behind the chosen combat aircraft and subcontractors
The term 'supplier' is used in this context to describe who offers Denmark the fighter aircraft on behalf
of other governments. The US government is represented respectively by the Joint Strike Fighter
Program Office and U.S Navy International Programs Office, while Germany is represented by the
German Ministry of Defence. It is with the supplier that Denmark shall negotiate and conclude a
purchase agreement in connection with the acquisition.

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Table 1.1 Overview of the candidates, suppliers and main manufacturers


The term 'main manufacturer' is used to describe the company's main producer behind each
candidate. The main manufacturer produces aircraft in cooperation with a number of suppliers.
The New Fighter Programs information gathering consisted of three main parts:
> Dissemination of information request to suppliers
> Validation of information received
> Collection of information from other sources
The evaluation's primary information basis is the responses to the information request 'Request for
Binding Information' (RBI), which was forwarded to the suppliers April 10, 2014. The use of the RBI
helped to ensure equal treatment of candidates, as all suppliers were asked to answer the same
questions, as also the responses received was treated in an equal way.
The RBI describes the framework and terms for the Danish type selection process. In addition, the RBI
comprises approximately 950 questions broken down by field of evaluation. Following the RBI's
submission, the suppliers have had the opportunity to ask questions to the New Fighter Program for
possible clarifications. The Attorney General contributed with legal assistance in connection with the
RBI's form and submission. At the re-start of the type selection process, the Swedish fighter Gripen
also participated as a candidate, but Gripen opted out, as the Swedes chose not to answer the RBI.
The New Fighter Program received replies from the suppliers of the Eurofighter, Joint Strike Fighter
and Super Hornet on July 21, 2014. The information received describing the candidates, is owned by
the selling government and / or the main manufacturer and is made available to the New Fighter
Program . This information can therefore not be disclosed to third parties without prior written
agreement with the government and / or the main producer. In addition, a part of the information is
classified as the information relates to military or commercially sensitive material.
To ensure the validity of the information contained in the suppliers' RBI-responses, the answer to each
of the approximately 950 questions in the RBI have been carefully examined in a validation process. In
cases where the New Fighter Program has revealed shortcomings, outstanding or potential
misunderstandings, a validation strategy was conducted in three steps:
> Submission of clarifying questions to the suppliers within each evacuation area (a so-called 'Request
for Clarification' (RFC)).

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> A clarifying dialogue in the form of, among other briefings or orientations of the suppliers or the main
manufacturers in order to explain the context in which the answers were given in, or to ensure
understanding of the contexts and assumptions which did not clearly answer.
> Use of reference data, including Danish F-16 data.
Within the evaluation of the military aspects, the responses were further validated through test flights,
flight simulation and user interviews and technical studies.
In the evaluation of the economic aspects, in addition to the validation strategy was also made a
comparison with economic data from open official sources. (3)
(3) For example, an audit report (Bemerkungen des Bundesrechnungshofes 2013 zur Haushalts- und
Wirtschafsfhrung des Bundes - Weitere Prfungsergebnisse - of 29 April 2014) from the German
National Audit Office have been used in the validation of RBI responses from supplier of the
Eurofighter. Similarly, official SAR reports that interprets the DoD's contribution to the US national
budget, have been used in the validation of RBI responses from suppliers of the Joint Strike Fighter
and Super Hornet.
With regard to the industrial aspects the validation have also included a business survey based on
interviews with Danish companies which the combat aircraft producers has identified as potential
partners their RBI responses.
In the strategic evaluation the New Fighter Program has not made use of RBI replies since the Danish
defense and security interests cannot be assessed on the basis of information from suppliers. Instead
the the basis is among other Danish and foreign policy papers as well as the countries' reporting to
NATO.
The information gathering was completed on 31 January 2015. Any information received after this date
and until the type selection decision is systematically collected and analyzed separately. This will be
done through the use of impact assessments that will identify whether the information is relevant to the
evaluation results or not. Additionally, the New Fighter Program actively seek information from relevant
reports, etc., which can be expected to affect the results. This will also be made separately to the
decision basis.
1.4 EVALUATION PROCEDURES
Within each field of evaluation the New Fighter Program has developed separate evaluation strategies
and models. The evaluation models have been developed before issuing the RBI. In the models it is
prescribed in detail how the individual evaluations were to be carried out, including the order in which
the individual process steps were carried out.
The evaluations on the strategic, military and industrial areas are largely based on qualitative analyzes
and assessments. In these areas, the New Fighter Program made use of various expert panels, which
ultimately has assessed and ranked the candidates. The participating experts have represented a
wide range of skills and experience related to the specific evaluation areas. The expert panels are
completed according to the Delphi method, which focuses on, through repeated rounds of voting and
discussion, the strengthening of the quality of expert assessments in a structured and documented
process. The expert panels compositions are described in the each chapter in this decision making
document.
The evaluation of the economic aspects on the other hand had a quantitative basis. In this regard, a
dynamic economy model was used, developed by the New Fighter Program in collaboration with
Deloitte. This model has been used to calculate the estimated candidates life cycle costs.

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1.5 EXTERNAL QUALITY ASSURANCE
To ensure external and independent verification, and external quality assurance has been carried out
on the products produced by the New Fighter Program for the purpose of this decision-making. Quality
assurance has been made by Danish experts from Deloitte in cooperation with international experts
from RAND Europe assisted by QinetiQ and Vorderman Consultancy. As Deloitte helped to develop
the economy model, the quality assurance of assessment of economic conditions was conducted by
RAND Europe.
The external quality assurance has among other things served to ensure compliance with the six
quality criteria, as shown in Table 1.2.

Table 1.2 Quality criteria that have formed the basis for external quality assurance
Validity: assessing the quality of the methods, processes, analyzes and information, and whether
these are transparent and traceable and reinforces the conclusions drawn.
Completeness: assessment of whether the methods, processes, analyzes and information in terms of
depth and width are adequate and proportionate to the conclusions drawn, which is thought to be part
of decision making.
Consistency: assessment of whether the methods, processes and analyzes are mutually logically
coherent, ensures candidates equal treatment and are otherwise in accordance with the information
program available.
Presentations: assessment of whether the dissemination of methodologies, processes and analyzes is
understandable and reflects underlying documentation loyal.
Timeliness: assessment of whether the decision making is essentially based on available information
that is relevant at the time when the resolution is expected to be taken.
Optimization: assessment of whether the use of methods or organization of the program can be
optimized in order to shorten the duration and reduce the time spent or minimize risks of delay.

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Based on these criteria, the external quality assurance been organized into four chronological steps:
1. Evaluation Strategies, evaluation methods and model complex
2. Structure and formulation of the RBI
3. Analyses and evaluation reports for the four areas
4. The basis for decisions
The quality assurance is thus carried out and completed step by step as illustrated in Figure 1.2.
The National Audit Office has there indicated that it will review the process at a later date.

Figure 1.2 Step by step process for external quality assurance

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1.6 UNCERTAINTY
The evaluations are associated with a number of uncertainties that are different across the four
evaluation areas. These are handled in different ways in each area through analyzes and
assessments of risks, sensitivity analyzes and the use of Monte Carlo simulations.
In the strategic assessment it is very uncertain to predict the long-term geopolitical developments and
also the future strategic context of which a new Danish fighter will have to operate in. The robustness
of the evaluation results is tested through a number of alternative future scenarios that worked as
sensitivity analyzes.
In the military evaluation, the candidate risk was treated as a separate sub-area. This has included
candidate associated risks which cannot be quantified, because the risks which may be assigned an
economic value, are treated in the financial evaluation. The military evaluation also included future
proofing as an independent sub-area. Future proofing focuses among others on the uncertainties
associated with the ability of each combat aircraft to be able to provide meaningful technical and
operational usable capacity throughout their lifetime.
The economic assessment is subject to considerable uncertainty to estimate the lifetime costs over a
period of 30 years. Factors such as fluctuations in exchange rates and fuel prices is essential for this
uncertainty. The economic evaluation has also focused on the sensitivity with respect to the key
factors such as candidates' airframe lifetime and the efficiency of the future logistics structure that the
aircraft is going to be part of. Finally, the potential economic impact of the candidate-specific risks
identified in the type-selection process has also been included.
In the industrial evaluation there is a number of significant uncertainties. These stems, among other
things, by the fact that the combat aircraft manufacturers are asked to provide proposals for initiatives
with a 30-year time horizon. In such a long perspective, the nature and relevance of cooperation
initiatives involve considerable uncertainties. The various uncertainties are discussed in the expert
panels assessments. For the Joint Strike Fighter there is a particular uncertainty associated with the
fact that Lockheed Martin is not covered by the requirement of industrial cooperation. The realisation
of the industrial cooperation initiatives that Lockheed Martin has proposed, is conditional to that the
Danish companies can provide for 'best-value' principle. Thus, there are no guarantees for the
implementation of the initiatives.
1.7 description of the candidates
The following sections describe the three fighter candidates in the Danish type selection process.
Then follows a disposition of the remainder of this decision-making.

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1.7.1 EUROFIGHTER
Eurofighter is a twin-engine multi-role fighter, produced by the European company Airbus as the main
producer. The plane was developed in a partnership between the UK, Germany, Italy and Spain. The
plane flew first time on 27 March 1994 and is currently used operationally by Britain, Germany, Italy
and Spain as well as export customers Austria, Oman and Saudi Arabia. The plane has so far
produced 410 copies of an expected production of a total of 720 aircraft.
Several different sensors and systems are integrated into the fuselage, for example a heat-sensitive
targeting system, Electronic Warfare Systems, an advanced air-to-air and air-to-ground radar and a
machine gun. In addition, Eurofighter equipped with mludpegningsudstyr that can be used for image
capture, to identify ground targets and to control the laser-guided bombs.
The aircraft's weapons can be worn under the wings and fuselage of a total of 13 weapons stations.
Three of these stations may be used for fuel tanks. With empty external fuel tanks can Eurofighter pull
up to nine G. Up to eight air-to-air missiles can be placed on the plane while air-to-ground weapons
can be placed on seven of weapon stations. These weapons can be either laser and GPS-guided
bombs weighing between 250 and 500 kg or long-range cruise missiles. For operations of short and /
or slippery runways are Eurofighter equipped with brake monitor. The plane is designed to fly 6,000
hours during its lifetime. The aircraft type is found in both a single and a seat-to-seat variation and is
gradually modified in a number of model series, designated the tranche. It is the single-seater version
of tranche 3-series model that is evaluated in the Danish type of election process.

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Figure 1.3: Overview of the Eurofighter user community. It consists of partner countries Italy, Spain,
Britain and Germany as well as export customers Saudi Arabia and Austria. A third export customer,
Oman has ordered Eurofighter.

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1.7.2 JOINT STRIKE FIGHTER
Joint Strike Fighter is a US-produced single-engine multi-role fighter, which has the US company
Lockheed Martin as the main producer. The aircraft first flew on 15 December 2006 and is expected to
be partially operational in the summer of 2015. The aircraft is per. February 1, 2015 produced in 115
copies out of an expected production of approximately 3,000 aircraft to the partner countries. The
plane was developed in a collaboration between nine partner countries: USA, UK, Italy, Netherlands,
Turkey, Australia, Norway, Denmark and Canada. The plane is so far ordered by the United States,
Britain, the Netherlands, Australia, Norway, Israel, Italy, South Korea and Japan.
Several different sensors and systems are integrated into the fuselage, for example a heat-sensitive
target acquisition system, Electronic Warfare Systems, an advanced air-to-air and air-to-ground radar
and a machine gun. The aircraft targeting systems are also incorporated and can used for image
capture, to identify ground targets and to control the laser-guided bombs.

The aircraft's weapons can be worn either inside the fuselage or in the future under the wings of a total
of 11 weapons stations (internal and external). Joint Strike Fighter can draw up to nine G. Up to six airto-air missiles can be placed on the plane, while air-to-ground weapons can be placed on six of
weapon stations. These weapons can be laser or GPS guided bombs weighing between 125 and
1,000 kg. for operations of short and / or slippery runways aircraft can be equipped with a brake
monitor . the aircraft is produced in a one-seat version and is available in three variants: a
conventional variant that can be operated from ordinary runways, a variant that can operate from
aircraft carriers and a variant that can take off and land vertically. It is the conventional variant (F-35A)
with internal weapons inventory is evaluated in connection with the Danish type selection process. the
plane is designed to fly for 8,000 hours during his lifetime.

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Figure 1.4: Overview of the Joint Strike Fighter-user community. The aircraft is being delivered to
Australia, Holland, Israel, Italy, Norway, UK and USA. The plane is also contemplated acquired by
Japan, South Korea and Turkey. It is also expected that Singapore will acquire Joint Strike Fighter.
Canada has postponed a decision on the acquisition of new fighter aircraft.

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1.7.3 SUPER HORNET
Super Hornet is an American two-engine multi-role fighter planes produced by Boeing. The plane first
flew November 29, 1995 and is currently used operationally by the US Navy and Australia. The plane
is per. February 1, 2015 produced in over 500 copies of an expected production of 741 aircraft.
Several different sensors and systems are integrated into the fuselage, for example, Electronic
Warfare Systems, an advanced air-to-air and air-to-ground radar and a machine gun. In addition,
Super Hornet is fitted with targeting equipment that can be used for image capture, to identify ground
targets and to control the laser-guided bombs and missiles.
The aircraft's weapons can be worn under the wings and fuselage of a total of 11 weapons stations.
Five of these stations can be used for fuel tanks. With empty external fuel tanks can Super Hornet pull
up to 7.5 G. Up to ten air-to-air missiles placed on the plane while air-to-ground weapons can be
placed on seven of weapon stations. These weapons can be either laser and GPS-guided bombs
weighing between 250 kg and 500 kg as well as air-to-surface missiles. the aircraft are in both a
single-seat (S-type) and a two-seat (F-model) variant. in the latter model sits a weapon system
operator in the rear seat. the plane is progressively modified in a number of model series, referred to
as blocks. Denmark has for type election process evaluated the two-seater F-model in block II series.
the plane is designed to fly at 6000 hours.

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Figure 1.5: Overview of Super Hornet-user community. User circle consists of Australia and the United
States (the US Navy).

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1.8 THE DECISION BASIS' STRUCTURE
The following chapters focus on each of the four evaluation areas:
Chapter 2: Strategic Aspects
Chapter 3: Military Aspects
Chapter 4: Economic Aspects
Chapter 5: Industrial Aspects
Each chapter presents the results from each evaluation area. It also describes the approach used in
each area.

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Chapter 2: STRATEGIC ASPECTS
2.1 SUMMARY AND CONCLUSION
In the strategic assessment the three combat aircraft have been assessed for fulfillment of the overall
Danish defense and security policy objectives. The purchase of new fighter aircraft is in itself an
important security policy signal, and with combat aircraft follows a number of opportunities for
cooperation with other countries.
The total and justified ranking of the three candidates with regard to strategic matters are made by an
expert panel consisting of senior experts from the Ministry of Foreign Affairs, the Danish
representation in NATO, Defence, Joint Services Defence Command and the Ministry of Defence's
Acquisition- and Logistics Organisation.
Joint Strike Fighter is rated to give the highest degree of political flexibility in relation to the future
tasks. The width of the circle of the Joint Strike Fighter users will promote both Denmark transatlantic
ties and Denmark's partnership relations with European partners. The presence of several Arctic
countries in the circle of the Joint Strike Fighter users are also assessed as a strength of the panel.
Therefore, the Joint Strike Fighter of the panel of experts ranked as number one.
The European dimension in the Eurofighter-user community is a significant aspect of the expert
ranking of Eurofighter as number two. The Eurofighter will provide an opportunity to strengthen
defense and security cooperation with Germany, in the longer term is expected to strengthen its
security profile and influence. User countries' geographical location and international security policy
orientation will overall give Denmark a greater potential to ensure freedom of action and cooperation
opportunities than if the choice falls on the Super Hornet.
The importance of maintaining close relations with the United States in the combat aircraft is
particularly emphasized by the Expert Panel on the Super Hornet, but in the overall assessment the
narrow circle of users and user countries' geographical location far from Denmark's neighbourhood
draws down.
2.2 UNCERTAINTY AND UNPREDICTABILITY
Having to evaluate strategic relationship over an expected period of use of 30 years implies that there
must be analyzed from a number of assumptions associated with a significant unpredictability. The
fact that the future cannot be predicted accurately, does not make an analysis of strategic issues
irrelevant if it is based on familiar and plausible assumptions, and the robustness of these
assumptions subsequently tested.
2.3 SCOPE AND METHODOLOGY
The strategic evaluation has focused on clarifying the defense and security implications and the
strategic cooperation opportunities associated with the choice of the respective candidates. The
strategic evaluation is carried out with regard to the partly politically strategic (mainly security policy)
implications for Denmark, and military strategic implications for the Danish defense.

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This applies in particular to the potential for cooperation with other nations, which will be linked to the
choice of the individual aircraft. The cooperation potential is primarily tested for the type specific
cooperation and focusing on that a smaller military force in Denmark can increase the effect of its
combat aircraft capability through close cooperation with other countries. It should be noted that the
lack of potential for type specific cooperation does not mean that there cannot be cooperation with
other nations on fighter aircraft.
The strategic evaluation has followed the six steps outlined below.

Figure 2.1 Strategic evaluation model

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Based on the relevant Danish policy's Step 1 identified a starting point for the strategic evaluation.
New Fighter Program has conducted a policy review with the aim to derive strategic objectives of
relevant Danish policy on defense and security matters compared to what is in a strategic perspective
sought by the Danish fighter. The policy review was primarily conducted as a literature review of
relevant Danish documents. Experts from the Ministry of Foreign Affairs, Ministry of Defence, the
Defence and research institutions have been continuously involved in the preparation of policyreviewed, including in connection with an expert seminar in May 2014. Expert involvement was
intended to ensure that all relevant policy documents and aspects involved in the policy-review and
that the identified strategic objectives reflect Danish policy. The following documents have been
examined: the Law on Defence, Defence Agreement (Agreement on defense matters 2013-2017 as
well as Defence Agreement 2010-2014), government security policy reports, relevant parts of the
report of the Defence Commission of 2008, the government basis (current and former) and the
Kingdom of Denmark Strategy for the Arctic 2011 -2020.
In Step 2, the New Fighter Program mapped out the strategic context for a new fighter. This is done
through the systematic collection of evidence in the form of existing and current policy papers and
analyzes. The previous Danish experience of strategic cooperation in the combat aircraft have also
been documented in step 2. There has not been drawn up independent future analyzes, as has been
based on existing evidence, particularly NATO's Strategic Foresight Analysis (SFA), prepared NATO's
Allied Command Transformation in order to be able to form a alliance common basis for the future
development of NATO and NATO countries' forces.
In Step 3, the strategic criteria and improvement targets that form the basis for the strategic analysis of
the three candidates was developed and defined. The strategic criteria are developed on the basis of
the objectives that have been identified in the policy-budget review and the strategic context. The
criteria have been defined by a broad panel of experts with experts from the Ministry of Foreign Affairs,
Defence and Armed Forces, which together have expertise and insight with regard to defense policy,
NATO and international fighter operations. The expert panel has submitted its recommendation as a
single panel, not as representatives of respective authorities. Expert Panel's work has resulted in eight
strategic criteria and a number of improvement targets.
In Step 4, the New Fighter Program made a collection of information that can shed light on the user
countries intent on the air military field and in relation to each candidate for use in the strategic
analysis of the candidates (step 5). Where step 2 has covered the general, contextual information
base (the outside world), stage 4 comprised a review of relevant specific and updated sources with
regard to the individual candidate and the identified criteria and benchmarks.
In Step 5, the New Fighter Program analyzed the three candidates in each of the strategic criteria
based on the candidate specific information. The strategic analysis have an overall picture of the longterm positive and negative implications of Denmark's choice of the individual candidate. The strategic
analysis of each candidate have been compiled in a document that has been presented to the expert
panel for the final ranking.
In Step 6 a final recommended rank has been made on the three candidates in terms of strategic
issues. The ranking is made by a panel of experts based on the strategic analysis of the individual
candidate. The expert panel was comprised of ten senior experts from the Ministry of Foreign Affairs,
Ministry of Defence and Defenders (eg ambassadors, heads of department and generals). panel is
through a series of surveys and discussions, reached a justified ranking of the three combat aircraft
with regard to strategic issues. The panel has initially ranked the candidates in relation to each of the
strategic criteria after which the panel has made an overall ranking of the candidates.

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To test the sensitivity and robustness of the overall ranking, this ranking has then been compared to a
number of alternative scenarios that have challenged the basic assumptions or assumptions in the
strategic analysis. Thus was completed a kind of strategic sensitivity analysis.
Specifically, the panel of experts were asked to consider how the alternative scenarios and potential
changes in the candidates' user communities have been able to affect the evaluation and ranking of
the candidates. The ranking has been documented and summarized in a report on strategic issues.

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2.4 CRITERIA
As described in step 3 the strategic criteria have been developed based on the objectives that have
been indentified in policy-budget review and the strategic context. Table 2.1 states the eight criteria.
Table 2.1 Overview of the criteria in the evaluation of strategic relationship

Political-strategic criteria
Criterion 1
The choice of a new Danish fighter planes will help to strengthen Denmark's security ties and
cooperation.
Criterion 2
The choice of a new Danish fighter planes will help to strengthen Denmark's freedom of action and
flexibility in relation to the safeguarding of Danish security and Danish interests.
Criterion 3
The choice of a new Danish fighter must contribute to strengthening Denmark's international
cooperation opportunities in relation to the Defence deployment - nationally and internationally.
Criterion 4
The choice of a new Danish fighter should be able to help strengthen key international organizations
(UN, NATO and the EU) in the ability to deal with global security challenges now and in the future and
strengthen Denmark's position and influence in these organizations.
Military-strategic criteria
Criterion 5
The choice of a new Danish fighter must contribute to strengthening the potential for collaboration on
further development and technical upgrading of the fighter capacity.
Criterion 6
The choice of a new Danish fighter must contribute to strengthening the potential for collaboration on
operations and maintenance with other countries in relation to a Danish combat aircraft capability.
Criterion 7
The choice of a new Danish fighter must contribute to strengthening the potential for cooperation in
education with other countries.
Criterion 8
The choice of a new Danish fighter must contribute to strengthening the potential for collaboration on
joint training and problem solving.

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Each criterion has been defined as a statement (see. Table above) with associated metrics. A
summary of the criterion aims and associated measurement points are reproduced below:
Criterion 1: Denmark's security ties and cooperative relations
The procurement's implications in the short and long term; an assessment of the immediate as well as
long-term foreign and security policy implications for Denmark, respectively a choice and a rejection of
each candidate.
Criterion 2: Denmark's scope and flexibility
The overall impact of Denmark's freedom of action and flexibility. The action space should be
understood in relation to the width of the circle of users and users using fighter aircraft, their deterrent
effect and the possibility of time-critical support from user countries to Denmark in operations. Timecritical support in this context as an aid to operate fighter in situations of high security political pressure
or controversy.
Criterion 3: Denmark's international cooperation opportunities
Potential for cooperation with other countries in relation to operations, including the will and
experience of working closely with a smaller ally like Denmark, among other potential cooperative
relations with countries that are considered to lead larger coalition or alliance air operations (US, UK
and France), as well as the potential to strengthen the Nordic defense cooperation.
Criterion 4: Key international organizations (UN, NATO and EU)
The potential to contribute warplanes for operations where the United Nations, NATO and the EU
provide the organizational framework, in cooperation with other user countries. Core international
organizations understood here both as an operational framework within which a Danish capacity to be
aligned and as a collection of countries in which Denmark has a certain position and influence. In the
UN context, focusing on the potential if the UN framework had to be relevant in combat aircraft
aspects. In NATO focuses on NATO's prioritised transformation goals. Furthermore focus on fighter
potential of the European defense and security policy if the defense opt out is repealed.
Criterion 5: Cooperation on further development and technical update
Coinciding interests for long-term development of the overall combat aircraft capability. The criterion
focuses on the users' long-term potential and willingness to develop the fighter aircraft in all roles, the
total operational experience that users will be able to lay the basis for further development and
updating, and policy uniformity and standardization.
Criterion 6: Cooperation for operation and maintenance
The broad potential for cooperation resulting from the user community, and the countries' intentions in
operating and maintenance area. The potential for assistance in connection with sudden events, as
well as users' aspirations and determination with regard to engage in various forms of cooperation on
operation and maintenance.
Criterion 7: Cooperation on training
The broad potential for cooperation resulting from the user community, and the countries' intentions
with regard to education. The criterion focuses on the potential for assistance to sudden training needs
and users' aspirations and determination with regard to engage in various forms of cooperation on
basic and advanced training.
Criterion 8: Cooperation on joint training and problem solving
The ability to work in close cooperation with other countries in connection with major benchmark
exercises and training activities as well as close cooperation in the deployment of forces. The criterion
looks at the opportunity to practice and engage in greater operational frame than otherwise possible
for a small country like Denmark. The user countries' capacity for example, air refueling and electronic
warfare as well as users' intention to enter into a close multi-national cooperation in NATO and to
conclude with fighter in the multinational force formations, including the NATO Response Force.

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2.5 ANALYSIS RESULTS
The strategic analysis (step 5) is divided into three separate analysises, one for each candidate. The
overall objective of the strategic analysis is to draw a complete picture of the long-term positive and
negative implications of Denmark's choice of the individual candidate who could be the basis for the
final ranking of the candidates.

The candidates user communities' participation in selected international operations are shown in Table
2.2. Similarly, an inventory of countries' statements in relation to NATO's transformation goals are
shown in Table 2.3.
In the following sections the results of the analysis are summarized for each candidate.

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Table 2.2 The various candidates user communities air military participation in relevant international
operations

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Table 2.3 The various candidates user communities stated intentions with respect to NATO's
transformation goals - or development - in fighter aircraft specific areas

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2.5.1 EUROFIGHTER
With a choice of Eurofighter will be a great potential for close cooperation with major European military
powers such as Britain and Germany. Denmark's security ties and cooperative relations could be
reinforced in a European context, and the choice will be a positive European political signal with
regard to the maintenance a European military technological capacity. As for deployments in
Denmark's neighbourhood, the analysis shows that especially Germany's presence in the user
community can lead to a potential for a Danish-German cooperation in the Baltic region due to the
close geographical location and concerns. Denmark will, with a choice of Eurofighter become part of a
circle of several major countries, which are active in UN operations and air operations with a UN
mandate, and therefore could potentially be partners if fighter operations may be required in the UN
context. The user circle, including Britain, are generally active in the current EU operations (4) and the
countries' contributions represent the majority of fighter set out in the EU's strength catalogues. With
Eurofighter Denmark would be able to have partners in the combat aircraft area if the EU opt out in
defense matters had to be abolished.
(4) Presently no air military operations
As far as cooperation in international operations, a choice of Eurofighter potentially lead to
opportunities for time-critical support and cooperation in international missions, with the partner
countries Britain, Germany, Italy and Spain all announced an intention to contribute to international
operations and largely has participated in the same operations as Denmark over the past 15 years.
There is a potential in relation to cooperation on deployment in the Middle East and North Africa. An
overview of the different users' participation in relevant international operations are illustrated in Table
2.2.
The NATO countries in the Eurofighter user community is generally very active in NATO Response
Force and participates regularly in major combat aircraft exercises, providing a collaborative potential
for a small nation like Denmark.
[BLACK]
All NATO nations with the Eurofighter aircraft are participating in the so-called European Air Group
cooperation. (5) More Eurofighter-country participation in the air NATO military projects provides a
potential for further cooperation in relation to the type-specific cooperation.
(5) European Air Group is a multinational, air military cooperation between Belgium, France, Holland,
Italy, Spain, the UK and Germany with headquarters in High Wycombe, United Kingdom.
In most user countries, the Eurofighter is included in fighter fleets that comprises several different
types of fighter aircraft, including specialized fighter for example, offensive or defensive tasks. It could
limit the common interests in the development of the platform in all relevant offensive and defensive
roles. NATO countries in the Eurofighter user circles have all experienced greater reductions of their
fighter fleet, which can lead to demands for a wider applicability of the remaining fighters, and thus a
common interest in the future to develop the Eurofighter as a multirole fighter (offensively and
defensively). NATO countries with Eurofighter aircraft have different intentions that would meet
NATO's transformation goals on the combat aircraft area. In order to be able to position Denmark
appropriately in NATO, it is relevant to look at the user circle's stated intention in relation to NATO's
transformation goals in the combat aircraft area, according to table 2.3.

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With a choice of Eurofighter, the Danish aircraft would constitute approximately 4 per cent of the user
countries' total fleet and thus fill up very little in the total fleet. In addition to cooperation in the
Eurofighter organization (NETMA), there is primarily a picture of a bilateral potential for cooperation on
operations and maintenance with regard to the Eurofighter. This is also true in the training area, where
the potential for cooperation primarily is related to Britain's international training program. With the
Eurofighter Denmark will get into a circle of countries, where all the NATO-members have in-flight
refuelling capacity which match Eurofighter and where [BLACK]
2.5.2 JOINT STRIKE FIGHTER
The Joint Strike Fighter is a result of America's largest military collaborative program and has the
potential for continued and long-term close military cooperation between the US and several European
countries in a situation where the US security focus increasingly moved from Europe and the Middle
East to Asia. With a choice of Joint Strike Fighter, Denmark will be included in a group of users, many
of whom have a relevant geographical location in relation to cooperation both in the Baltic region and
in the Arctic environment. With regard to international operations, NATO countries in the Joint Strike
Fighter user community greatly participated in similar international air operations as Denmark (see.
Table 2.3), and virtually all Joint Strike Fighter user countries have in recent years been operating with
fighters in sharp operations.
The breadth and the geographical range of the total user base could also help strengthen the flexibility
of deployment in the Baltic Sea region and for cooperation on deployment distant from Denmark (in
the Middle East, North Africa and East Asia). With regard to UN operations there in the Joint Strike
Fighter-user community a number of countries (such as Norway and Australia) that could potentially
be partners. The European users of the Joint Strike Fighter are generally active in the current EU
operations and put over a third of all the fighters set out in the EU's strength catalogues. Conversely,
the potential for cooperation with Germany will be limited by a choice of the Joint Strike Fighter.
Joint Strike Fighter also holds great potential for cooperation on exercises and deployment of fighter
aircraft. The countries of the user community is generally very active in exercises within the combat
aircraft area (these are typically held by the United States), as well as the NATO Response Force. The
Netherlands and Norway are part of today (like Denmark) in the F-16 cooperation (EPAF) (6),
including cooperation on a joint force structure - Expeditionary Air Wing. Several other countries are
either members or associates of the European Air Group cooperation. (7 ) Additionally, the smaller
countries in the Joint Strike Fighter community (mainly the Netherlands and Norway) have experience
in deploying integrated fighter contingents in close cooperation with other countries. The Joint Strike
Fighter furthermore incorporates a great potential for cooperation in connection with fighter
capabilities. several of user countries participating in NATO projects on cooperation on deployable
bases and several countries [BLACK]
(6) European Participating Air Forces, cooperation between the legacy F-16 buyers Belgium,
Denmark, Norway and the Netherlands, later expanded with Portugal.
(7) European Air Group is a multinational, air military cooperation between Belgium, France, Holland,
Italy, Spain, the UK and Germany with headquarters in High Wycombe, United Kingdom.
(8) [BLACK]

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[BLACK]
Regarding the strategic cooperation on operation, maintenance and training, it should be noted that
the Danish aircraft with a choice of Joint Strike Fighter would represent only about 1 per cent of the
user countries expected total fleet. Denmark would get into a circle of users, where especially the
presence of the US Air Force could help ensure the necessary redundancy and experience as to
assist smaller nations like Denmark in relation to training needs and other support needs. Moreover,
there are among the Joint Strike Fighter user countries small and medium-sized countries with an
interest in and experience with solving training tasks together in a multinational framework.
The user's long-term intentions within the combat aircraft area means that the Joint Strike Fighter will
be included in fleets of fighters with several different types as well as in fleets where the Joint Strike
Fighter in the future will be the only fighter type in smaller fleets of fighter jets. The Joint Strike Fighter
is expected in the future to become the dominant fighter type in the US Air Force. Based on user
countries' long-term intentions it may be expected that there is a broad common interest among NATO
countries in the Joint Strike Fighter-user community to continue to develop the platform with respect to
all roles. The Joint Strike Fighter is within the NATO context also a central capacity for most other user
countries in relation to the fulfilment of NATO's long-term transformation goal in the combat aircraft
(see Table 2.3). With the US Air Force, as well as the larger and smaller European air forces in the
Joint Strike Fighter-user community, there may be solid experience basis for the continued updating of
the Joint Strike Fighter.
2.5.3 SUPER HORNET
Super Hornets user base consists of two countries (US and Australia). The largest user, the US Navy
is as a service bigger than the Western European Air Forces. A choice of Super Hornet will maintain
the security-political ties and relationships across the Atlantic in both the short and long term. The
selection would, however, also to a certain extent be seen as a political signal of unwillingness to
invest in the maintenance of a European military-technological capacity. The Super Hornet's strategic
cooperation potential in operations in the Baltic region and the potential for cooperation in with the
deployment of aircraft from land bases in the Arctic will have to be seen in relation to the geographical
distance to the user country Australia and the US Navy's aircraft carrier-based use of the Super
Hornet. In international operations, both user countries (USA and Australia) are very active fighter
users (see Table 2.2 in the previous section) and have in recent years operated in sharp operation
environments. The US Navy fighter is deployable and operates from the US aircraft carriers. In
international operations it is expected that the US Navy will not have a significant interest in
cooperation on deploying combat aircraft to land bases close to a mission area. Australia has
experience of working closely with other countries in international operations, although not involving
fighter aircraft. With regard to operations in the UN context, Australia because of its regional role had
the most mature reflection on the use of fighter aircraft in UN operations. A choice of Super Hornet
would also could lead to a potential for cooperation in relation to possible future deployment in Asia.
With a choice of Super Hornet there will be the potential for cooperation in relation to exercises, as
both Australia as well as the US Navy participates in and organizes advanced fighter exercises. In
consideration of the user's experience in the combat aircraft area are no examples that users
(Australia and the US Navy) have been active with land-based fighter aircraft in NATO's Response
Force, or in multilateral cooperation for the establishment and deployment of fighter aircraft. However,
Australia has cooperation experience in areas other than the purely air-military.
[BLACK]

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There are regarding Super Hornet a solid operational experience base that can form the basis of a
relevant development and updating. Super Hornet is part of the US Navy and Australia fighter fleets
with several different types of fighter aircraft and is planned still to be used as a multi-role combat
aircraft (that is both defensive and offensive). The introduction of new multirole fighter in both the US
Navy and Australia may lead to a specialization of the Super Hornet. In NATO, the US Navy's intention
with the development of the Super Hornet could help ensure that Denmark can position themselves
appropriately in relation to NATO's transformation goals (see. Table 2.3). Regarding the strategic
alliance for the development of a land-based combat aircraft capability, Australia could potentially be
an attractive partner.
In terms of strategic cooperation potential for operation, maintenance and training there are
opportunities for cooperation, primarily in bilateral cooperation with the US Navy. In the overall picture,
Danish Super Hornets, where appropriate, would constitute about 7 per cent of the user countries
expected total fleet, and the needs of a Danish Super Hornet fleet would fill relatively little compared to
the total capacity.
2.6 RANKING
The ranking was made by an expert panel consisting of ten senior experts from the Ministry of Foreign
Affairs, Defence and Armed Forces.
First, the panel of experts ranked the candidates in each of the eight criteria. Here's Joint Strike
Fighter ranked as number one within each criterion. The picture has been more sophisticated in terms
of the distance between the position as the number two and three. Table 2.4 shows the ranking in
each of the eight criteria.
Next, the panel of experts carried out an overall ranking of the candidates. Here, the Joint Strike
Fighter ranked as number one, Eurofighter as number two, while Super Hornet was ranked as number
three. The Expert Panels voting on the overall ranking is shown in Table 2.5. The uneven distribution
of votes is because the experts have had the opportunity to rank the candidates equally.
Table 2.4 Expert panel's ranking of the candidates within each strategic criteria

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Table 2.5 Expert Panel votes cast in the final ranking in strategic relationship

In the reasoning for ranking Joint Strike Fighter as number one the expert panel has paid particular
attention to the possibility of both to promote US and European relations and cooperation opportunities
including maintaining the transatlantic link, and to promote a continued American commitment to
Europe. Furthermore, the connection to the European partners was highlighted as particularly
important in light of the US rebalancing in relation to Asia and growing pressure for European partners
to take greater responsibility in NATO. The circle of Joint Strike Fighter users is broad and includes
several nations with common interests with regard to the further development and updating of the Joint
Strike Fighter as a multi-role fighter aircraft. Furthermore the user community includes several
countries the size of Denmark (for example, Norway and the Netherlands), countries which are close
to Denmark, both geographically and politically, both in the Baltic region as the Arctic, as well as
countries with extensive operational experience with sharp insertions in international operations. There
is emphasis on the possibility of building cooperation with a wide circle of countries in the context of a
deployment.
The expert panel's ranking of Eurofighter in front of the Super Hornet is specially based on an
assessment that Germany's future defense and security policy role likely would be strengthened. A
choice of Eurofighter could create the potential for strengthened cooperation with Germany as well as
maintaining a close relationship with Britain. The choice of Eurofighter will allow cooperation with
European countries in geographic proximity to Denmark and a large and extensive contacts in Danish
interests. A choice of Eurofighter could create a potential for cooperation with Western powers with
regard to deployment both in the immediate area (Baltic Sea) and in international operations.
However, it has been noted that Denmark will be a little use compared to most other countries in the
user community, which potentially will help ensure that Denmark would find it more difficult to fulfil any
of its wishes.
As for the Super Hornet it is the US that is considered to be Denmark's most important strategic
partner, the US role and the US Navy's global presence has been highlighted by the expert panel.
Denmark could with the choice of Super Hornet get access to strategic cooperation with the United
States. Conversely, the circle of Super Hornet users is small with fewer opportunities in Denmark's
neighbouring area (both the Baltic and the Arctic), partly due to the present users operative focus. As
for the Super Hornet, it has been assessed that the user community is comprised of two attractive
partners within the combat aircraft area. On the other hand, in the longer term, a more specialized role
of the aircraft, as the users also will purchase other and newer types of fighter aircraft.
2.7 RANKING AGGREGATE SENSITIVITY
The sensitivity and robustness of the overall rank system has been studied through the treatment of a
number of alternative scenarios that have challenged the basic assumptions or assumptions on which
the strategic analyzes have built.

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The Panel has considered the alternative scenarios that were prepared for the seminar, as well as the
alternative scenarios as the panel in addition considered it appropriate to include. The Expert Panel
has assessed how the alternative scenarios and potential changes in the candidates' user
communities have been able to influence the evaluation and ranking of the candidates within each
strategic criteria as well as to the overall ranking of the candidates. There are a total treated 11
alternative scenarios:
Option 1: A new Cold War situation
Option 2: An isolationist USA
Option 3: No US shift towards Asia
Option 4: US military withdrawal from Europe
Option 5: Changed Danish security priorities (no international operations)
Option 6: A major defense and security policy role for EU
Option 7: A more significant and active German defense and security policy profile.
Option 8: advancing the development and deployment of unmanned fighter aircraft systems than
anticipated
Option 9: An increased level of conflict in the Arctic
Option 10: A stronger European security policy focus on Asia
Option 11: A collapse of the EU's defense cooperation
The strategic sensitivity analysis has shown that the total ranking of the three candidates is very
robust. The expert panel has concluded that the Joint Strike Fighter would continue to be ranked as
number one regardless of the alternative scenario.
However, the Eurofighter and Joint Strike Fighter would share the ranking as number one in
the alternative scenario 6 (a major defense and security policy role for the EU).
The ranking as number two and three could have been able to change in favor of the Super Hornet in
three alternative scenarios:
 An increased level of conflict in the Arctic (option 9)
 A stronger European security policy focus on Asia (alternative 10)
 A collapse of the EU's defense cooperation (alternative 11)
The ranking of the Eurofighter as number two has been relatively robust, and it would be unchanged in
the majority of the alternative scenarios.

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EMPTY

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3. MILITARY ASPECTS
3.1 SUMMARY AND CONCLUSIONS
The evaluation of the candidates' military aspects is implemented in four areas:
> Survivability: How well the fighter aircraft is capable of protecting itself against enemy weapon
systems so as to minimise the risk of loss of aircraft or crew.
> Mission Effectiveness: How well the fighter aircraft performs the task assigned.
> Future Development: The extent to which the fighter aircraft is expected to constitute a relevant
operational and technically applicable fighter aircraft capability throughout the entire lifespan of the
fighter aircraft,
> Candidate Risk: Which candidate specific risks associated with the acquisition, operation and
operational use of the fighter jets, that cannot be quantified economically.
The candidates are rated and ranked by panels of experts in each of the four professional military
subareas based on a variety of technical and operational analysis by the New Fighter Program. The
ranking has taken place in the form of grading. Within each area, using the Delphi method, there has
been made a candidate specific grade. The rating is given on a scale of 1 to 5, where 1 represents the
lowest score and 5 the highest. (9) Each area is weighted equally in the context of the overall military
ranking of the candidates and thus counts each with 25 percent.
(9) The same scale is used for all, but for each subarea different criteria have been used to determine
the character.
Figure 3.1 shows the result of the Expert Panels' assigned grades for each area.
In terms of survivability and mission effectiveness, the panel of experts assessed that the Joint Strike
Fighter is doing better than the other two candidates. This is partly due to the aircraft's low radar
signature ('stealth' properties) and the use of advanced systems and sensors that enhance the pilot's
tactical overview, ensuring the aircraft's survival and effective mission execution. The Super Hornet is
rated to perform marginally better than the Eurofighter. This is because the Super Hornet due to
among other better range, interoperability and the variety of weapons available to the fighter is
rated to have a better mission effectiveness than the Eurofighter, while the survivability of the two
aircraft is estimated to be at the same level.
In terms of future development the expert panel assessed that the Joint Strike Fighter is doing better
than the other two candidates. This is partly due to the aircraft being expected to be produced in large
numbers, as well as the contractual and developmental basis for keeping the aircraft technically and
operationally usable through the lifetime is estimated to be established. For the Eurofighter and the
Super Hornet the expert panel has concluded that the candidates degree of future development is
generally at the same level, although the Eurofighter gets slightly higher marks because the expert
panel has assessed slightly better industrial relations for this type than the Super Hornet.

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Within the area of candidate risk, the expert panel has assessed that the Super Hornet is less risky,
even if the candidates are at about the same level in this area. This is partly due to the Super Hornet
aircraft already been used operationally by other countries, and the risks associated with for example
acquisition and implementation of the plane consequently is estimated to be low. Within the same
area, it is estimated that the Joint Strike Fighter and Eurofighter is a little riskier, although the
differences between all the candidates are marginal.
Overall, the evaluation of the military aspect has shown that the Joint Strike Fighter is the best in three
out of the four sub-areas. In the last area the Super Hornet is placed as number one, but with marginal
difference to the Joint Strike Fighter which is ranked second. Therefore, the Joint Strike Fighter is
ranked as number one in the military aspects, while Super Hornet is ranked as number two in front of
the Eurofighter, as there are minor differences between the Super Hornet and the Eurofighter.

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3.2 SCOPE AND METHODOLOGY
The method used to evaluate the military situation is carried out within four sub-areas. The way in
which the four sub-areas are evaluated is reviewed in this section, after which the results for each area
is presented.
Survivability and mission effectiveness
The evaluation of the candidates' survivability and mission effectiveness is based on a scenario-based
approach, where each candidate's ability to survive enemy weapons systems and simultaneously
solve the task given is evaluated in a number of NATO's current mission types of fighter aircraft and in
operational environments of different nature. Six selected mission scenarios have been composed so
that they constitute a representative sample of the NATO mission types for combat aircraft and has in
that order a growing threat intensity. The mission scenarios are developed to flesh out the specific
conditions that apply to candidates survivability and mission effectiveness, and to ensure that the
entire evaluation frame is covered so that the completion of the missions in the entire conflict spectrum
is illuminated.
Table 3.1
Overview of selected mission scenarios
Applied mission scenarios to evaluate survivability and mission effectiveness
Mission Type
Scenario Description
Non-Traditional Intelligence, Surveillance and Reconnaissance (NTISR)
A mission scenario, which takes place in the Arctic region in peacetime, the task consists of monitoring
a sea area for illegal fishing or pollution, as well as to assist a rescue mission aimed at ships in
distress.
Strike, Coordination and Reconnaissance (SCAR):
A mission scenario where own aircraft autonomously must search over a larger area of land in order to
identify and engage hostile activity, while unintended harmful effects minimized. This mission type is
known from Danish F-16 aircraft taking part in missions in Libya in 2011.
Close Air Support (CAS):
A mission scenario in which to be provided air support to their own ground forces, which is engaged
mainly in urban combat with enemy forces. This mission type is known from Danish F-16 aircraft
taking part in missions in Afghanistan in 2002-2003 and in Iraq in 2014-2015.
Defensive Counter Air (DCA):
A mission scenario where its own planes to defend a given territory against enemy aircraft. This
mission type is known from Danish F-16 aircraft taking part in missions in the Balkans in the period
1998-2001.
Air Interdiction (AI):
An offensive mission scenario where its own planes should bomb targets in enemy territory, which is
protected by both ground-based missile defense systems and combat aircraft. This mission type is
known from Danish F-16 aircraft taking part in missions in the Balkans in 1998-2001, in Libya in 2011
and Iraq in 2014-2015.
Suppression / Destruction of Enemy Air Defences (S / DEAD):
An offensive mission scenario where own aircraft must locate and engage the enemy ground-based
missile defense systems in hostile territory, which is also protected by fighter aircraft.

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The scenarios reflect a new Danish fighters possible portfolio of tasks, which may consist of tasks
within the entire conflict spectrum. There is thus evaluated on task performance in both peacetime and
in crisis and war at the time when the first fighter can be expected to be delivered (2020) . The chosen
mission scenarios underlying the evaluation includes both surveillance and rescue tasks, defensive air
tasks and offensive tasks. In addition the candidates' survivability and mission effectiveness have
been evaluated in varying weather and light conditions (in cloudy weather, in daylight and at night).
This means that the evaluation of the candidates can illuminate both their strengths and weaknesses
of a so-called multi-role fighter (10) that can deploy globally in both defensive and offensive missions
and in the complete conflict spectrum. As the assumed task complex is based on the entire conflict
spectrum, the mission scenarios are weighted equally relative to the ranking of the candidates within
the survivability and mission effectiveness. The missions a fighter traditionally is designed to carry out
is, however, in the high end of the conflict spectrum (in crisis or wartime). In order to illuminate any
possibilities and limitations, the candidates have therefore been evaluated in more high intensity
mission scenarios than in scenarios with lower threat and emission intensity. The conflict spectrum
and the applied mission scenarios are illustrated in Figure 3.2.
(10) As mentioned, a multi-role fighter solve both air combat tasks and tasks aimed at surveillance,
information gathering or attacks on sea or on land.

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The candidates' survivability and mission effectiveness have been evaluated partly by analyzing the
suppliers' RBI responses and partly in connection with the validation of the information provided by the
suppliers, where Danish F-16 pilots have completed evaluation flights in aircraft and flight simulators.
As for the Joint Strike Fighter the evaluation flights was solely completed in simulators. In addition, the
New Fighter Program have gathered experience from other countries via interviews with other users of
the aircraft. The marks for the candidates' survivability and mission effectiveness have been given by
a panel of Danish experts with extensive practical and theoretical experience with fighter operations.
The panel has been supplemented by researchers with detailed knowledge of aircraft subsystems,
sensors, weapons and so on.
Future Development
The evaluation of the candidates' future-proofing is completed within three sub-areas, each of which
have an impact on whether the combat aircraft can maintain its operational and technical relevance
over its life expectancy. These sub-areas are: operational conditions, technical conditions and
contractual conditions.
With regard to the operational conditions it has been evaluated how the combat aircraft in the long
term will maintain its survivability and mission effectiveness.
With regard to technical conditions it has been evaluated how the combat aircraft in the long term from
a technical perspective can be maintained and developed.
With regard to the contractual conditions is has been evaluated whether each candidate has
contractual measures which can help to uncover or possibly prevent significant increases in costs
associated with maintenance and development of combat aircraft during its lifetime.
A panel of experts has assessed the importance of each sub-region and on this background has been
given each candidate a grade in terms of future-proofing.
Candidate Risk
The evaluation of the candidates' survivability, mission effectiveness and future security, together with
the structural analysis, (11) as detailed in the evaluation of the economic environment (Chapter 4), led
to the identification of a number of candidate-specific risks, which may affect either acquisition or
operation of the combat aircraft. The consequence or any preventive measures for each of these risks
have been sought to be quantified economically. Quantifiable risks are included in the candidates' total
lifetime costs and further highlighted in the review of economic conditions.
(11) Analysis of, for example, the required number of airframes or by the personnel structure that is
associated with the combat aircraft.
The risks, which it has not been possible to quantify, comprises the basis for grading in the evaluation
of candidate risk. Here a panel of experts from the Ministry of Defence resort assessed each risk in
terms of the likelihood that the risk will occur, the consequences if this were to occur and the risk
proximity, ie, when the risks are likely to occur. In addition, the expert panel considered possible
enhancing opportunities (called 'opportunities') and based on this given each candidate a character on
the risk area.
The candidates' overall risk is a combination of the risk character, each candidate has received, and
the funds allocated either to prevent risks or to manage the risks that occur.

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3.3 RESULTS FROM THE EVALUATION OF THE CANDIDATES SURVIVALABILITY
The candidates' survivability is evaluated within the six mission scenarios where the aircraft's ability to
survive is tested on various threat levels of intensity. Each mission scenario confronts the fighter with a
number of threats, where the scope and nature of the threats varies in intensity. The results from the
evaluation of the candidates' ability to survive are justified in this section with a description of each
candidate's identified strengths and weaknesses, followed by the grade within each mission scenario.
The rating reflects the risk that the aircraft are shot down or otherwise lost during the mission where 5
means that a loss is not probable and 1 means that heavy losses are expected. The overall grade for
each candidate survivability is an equally weighted averaging of the characters, the expert panel has
given for each of the six mission scenarios.
A Danish F-16 aircraft are evaluated within the same mission scenarios to provide a known reference.
Therefore, the results from the evaluation of the F-16 aircraft's survivability is shown in connection with
the candidates' results.

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Eurofighter's survivability
[BLACK]
[BLACK]
The expert panel's sub-grades for each of the mission-scenarios and the average grade for each
mission scenario appears in table 3.2.

(12) [BLACK]

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Joint Strike Fighters survivability

[BLACK]

[BLACK]

[BLACK]

This can be seen from Table 3.3, where the experts partial grade for the respective mission scenarios
as well as the average score for each mission scenario appears.

Table 3.3
Joint Strike Fighter - grades for survivability in the evaluated mission scenarios

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Super Hornets survivability
[BLACK]
[BLACK]
[BLACK]
The expert panel's partial grade for the respective mission scenarios and average score for each
mission scenario is shown in table 3.4.

The average of the Super Hornet's grade for the six mission scenarios have resulted in a total grade
for survivability of 3,2.
(13) For example, the ability to distinguish between friend and foe.

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Summary - survival
Figure 3.3 shows the candidates' ability to survive in the six evaluated mission scenarios. The figure
shows that the Joint Strike Fighters survival is only slightly affected by an increasing threat level and
that the aircraft generally have good survivability in the entire conflict spectrum. The Eurofighters and
Super Hornets survivability decreases in proportion with the growing complexity and composition of
threats and are generally worse at the high end of the conflict spectrum.
A Danish F-16 fighter have been assessed for the same mission scenarios to provide a known
reference. Therefore the result from the evaluation of the F-16 aircraft survivability is depicted in figure
3.3. The F-16 fighters survivability is generally good on the first two mission scenarios, but on the
following missions is assessed to be generally poorer than the three candidates.

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3.4 RESULTS FROM assessment of applicants MISSIONS EFFECTIVENESS
The candidates mission effectiveness is evaluated with the same mission scenarios as in the
evaluation of aircraft survivability. Each mission scenario challenges the planes with a number of
unique tasks, and the extent and severity of these tasks varies in intensity. The results from the
evaluation of the candidates' mission effectiveness in this section are justified by a description of each
candidate's identified strengths and weaknesses, followed by the grades for each mission scenario.
The grading scale is from 5 to 1, where 5 means that mission completion is expected, while the mark
of 1 means that the mission completion is unlikely. The overall grade for each candidate mission
efficiency is an equally weighted averaging of the characters, as the expert panel has given each of
the six mission scenarios.
A Danish F-16 is assessed for the same mission scenarios to provide a known reference. Therefore,
the F-16 aircraft's mission effectiveness is compared to the candidates' performance.

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The Eurofighters mission effectiveness
[BLACK]
[BLACK]
[BLACK]
Expert panel partial grade for the respective mission scenarios and the average score for each
mission scenario shown in Table 3.5.

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Joint Strike Fighters mission effectiveness
[BLACK]
[BLACK]
[BLACK]
[BLACK]
This can be seen from Table 3.6, where the expert partial grade for the respective mission scenarios
as well as the average score for each mission scenario appears.

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Super Hornets mission effectiveness
[BLACK]
[BLACK]
The expert panel's partial grade for the respective mission scenarios and the average score for each
mission scenario are shown in Table 3.7.

(13) For example, the ability to distinguish between friend and foe.

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Summary - mission effectiveness
Figure 3.4 shows the candidates mission effectiveness in the six mission scenarios. Generally it can
be concluded that the Joint Strike Fighters mission effectiveness seem to be unaffected by rising
mission intensity level and that the aircraft can therefore be tasked for the full conflict spectrum, while
the Eurofighters and Super Hornets mission efficiency is lower with increased mission intensity level.
[BLACK]
A Danish F-16 has been assessed for the same mission scenarios to provide a known reference point.
Therefore, the result from the evaluation includes the F-16 aircraft mission effectiveness in Figure 3.4.
F-16 aircraft's mission performance is generally reasonable in terms of the first three mission
scenarios, but for the remaining scenarios is in general considered to be less than the three
candidates.

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3.5 RESULTS FROM THE EVALUATION OF FUTURE PROOFING
The results of the evaluations operative-, technical and contractual conditions, respectively , the total
framework of the analysis in terms of future-proofing are presented below for each candidate.
Within the operative conditions it is evaluated how the fighter aircraft from a technical perspective in
the long term will retain its survivability and mission effectiveness. The operational conditions could
include the implementation of operational tests or operational experience collecting as translated into
specific updates of the plane.
With regard to the technical conditions it is evaluated how the fighter jet from a technical perspective in
the long term can be maintained and developed. It includes among other things the changes and
modifications which of technical and economic considerations must be implemented in order to
support both training as operational deployment of the aircraft.
With regard to the contractual conditions it is evaluated, how far each individual candidate have
measures which can help to uncover or possibly counteract significant cost increases associated with
the development and maintenance of combat aircraft during its lifetime.
Each sub-region are weighted equally when determining the overall future-proof nature. The grading
scale is from 5 to 1, where the grade 5 means an expected high degree of future-proofing throughout
the aircraft's life and character 1 means an expected deterioration future proofing in the aircraft's
lifetime.
Eurofighters Future Proofing
In the evaluation of the operative conditions the expert panel has concluded that the Eurofighter
aircrafts survivability and mission effectiveness probably can be maintained throughout the lifetime of
the aircraft. The cooperation established among the Eurofighter user countries is assessed to ensure
that operational requirements and needs are incorporated and transformed into relevant updates and
modifications in terms of both software and hardware. The Eurofighter organization is also estimated
to have the necessary expertise and knowledge to support ongoing development in line with that the
new technology matures.
[BLACK]
In the evaluation of the technical conditions, it is estimated that the technical development with high
probability can be maintained throughout the lifetime of the aircraft. This is primarily due to that the
aircraft's basic configuration (airframe and engine) is the same for all user countries. Moreover, it is
estimated that the technical organization behind the Eurofighter aircraft is robust enough to be able to
implement the updates, which may prove to be necessary.
[BLACK]
In the evaluation of the contractual conditions the expert panel has assessed that the future cost
increases by high probability can be counteracted throughout the lifetime of the aircraft.

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[BLACK]
Overall, the expert panel gave the Eurofighter aircraft the grades shown in Table 3.8 in each sub-area
of the future-proofing.

(14) This version is referred tranche 3

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Joint Strike Fighters future Proofing
In the evaluation of the operational conditions the expert panel has assessed that the future
survivability and mission effectiveness likely is guaranteed for the entire lifetime of the aircraft. The
Joint Strike Fighter organization's handling and use of user forums is considered overall to be a
satisfactory basis to support ongoing development as the new technology matures. The access to the
necessary test equipment and test capabilities, such as test pilots and test facilities, is estimated to be
adequate and redundant in order to support users' ongoing needs for development of the plane.
[BLACK]
In the evaluation of the technical conditions, it is estimated that the technical progress is likely is
guaranteed for the entire lifetime of the aircraft.
[BLACK]
[BLACK]
Finally, the production of new Joint Strike Fighter aircraft is expected to continue until the late 2030s.
The possible use of the immediate benefits of an open production line in the development of new
technological solutions and designs are supposed thereby to be present in large parts of the aircraft's
life, like the expected production figure of approximately 3,000 aircraft constitutes a quantitative
strength, since the proportionate share of common costs for updates thereby is reduced.
The Expert Panel has granted the Joint Strike Fighter aircraft the grades shown in Table 3.9 in the
respective sub-regions with respect to future proofing.

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Super Hornet's Future Proofing
In the evaluation of the operational conditions the expert panel has assessed that the Super Hornet
aircraft's future survivability and mission effectiveness by high probability can be maintained
throughout the lifetime of the aircraft. The Super Hornet user group consists of the US Navy and
Australia, where the US Navy operates approximately 95 per cent of the total fleet. There is within the
US Navy established formal operational cooperation forums, which are believed to be able to support
the Super Hornet's continued operational relevance.
[BLACK]
In the evaluation of the technical conditions it is estimated that the Super Hornet by high probability
can be kept technically updated throughout the lifetime of the aircraft. This is primarily due to that for
all three variants (15) of the Super Hornet there is a large overlap in terms of airframes, engines and
other basic designs. Moreover, it is estimated that the technical organization behind the Super Hornet
is able to execute the development and updating of the aircraft's lifetime.
[BLACK]
[BLACK]
[BLACK]
The expert panel's grades for Super Hornet aircraft's future proofing within the respective sub-areas
are shown in Table 3.10.

(15) The Super Hornet is produced in a one-seat version, a two-seat version and a version specifically
designed for electronic warfare.

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The evaluation has shown that the grading difference between Eurofighter and the Super Hornet is
marginal and that the two candidates, therefore, generally can be characterized to be equally future
proof. The grade difference between the two candidates is mainly based on the expert assessment of
the contractual conditions for the Super Hornet, where a single expert voice has been crucial to the
outcome.
The results of the expert polls have generally shown great coherence between the individual grading
and the final grading. In seven of the nine sub-areas is the grade (type number) remained unchanged.
At the same time, the degree of consensus among the expert panel participants have been
strengthened over the individual rounds of voting, which supports the expert rectification and
strengthens the grades reliability.

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3.6 RESULTS FROM THE EVALUATION OF CANDIDATE RISK


The risks included in the evaluation of candidate risk, has been identified in the evaluation of the other
areas that were assessed during the military conditions, as well as in the analysis of structural factors
that are detailed in Chapter 4 (economic conditions).
The evaluation of candidate risk can be divided into the risks that can be quantified and subject to an
economical value, or where preventive measures can be identified and their costs can be calculated.
The economic consequences are examined in Chapter 4 of the examination of the economic
conditions. (16)
(16) See. In Section 4.4.3. Risks.
The remaining risks, where it has not been possible to quantify the economic impact, comprises
together with any potential 'opportunities' the basis for the expert panel's ranking of the candidates in
terms of candidate risk.
The following describes the results and the expert panel's ranking of the candidates in relation to the
non-quantifiable risks. The ranking is done by using a grading scale that goes from 5 to 1, where the
grade 5 means minimal project risk, and grade 1 means maximum project risk. The non-quantifiable
risks are divided into five risk categories: acquisition, operations, future proofing, survivability and
mission effectiveness. The expert panel has assessed the individual risk categories as total set of
risks, and has in the argumentation for their assessment in some cases mentioned specific risks of
particular significance to the outcome. According to the information material that is submitted to the
candidates, the overall grade in the candidate risk constitute an evenly weighted average calculation
of the grades, as the expert panel has given to each risk category.

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3.6.1 RESULTS FROM THE NON-QUANTIFIABLE RISKS
Eurofighter
Within the risk categories 'acquisition', 'future-proofing' and 'survival', the exclusively identified risks
are deemed to have a smaller project impact. Within the risk category 'operation' there have been
identified risks that are deemed to have a moderate impact. Finally, in the risk category 'mission
effectiveness' risks are identified that are judged to have greater impact.
In the risk category 'operation' the expert panel has assessed that the risk category includes some
risks that overall, could affect the ability to solve the task. This was assessed to have moderate impact
on the operation of the aircraft.
[BLACK]
The number of risks and opportunities as well as the grades for each risk category is shown in Table
3.11.

The average of Eurofighters characters within the five risk categories has resulted in an overall rating
of candidate risk of 3.4.

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Joint Strike Fighter
Within risk categories 'future-proofing' and 'acquisition' there is exclusively identified risks considered
to have minimal project impact. In the other risk categories there have been identified risks that are all
deemed to have a moderate impact on the project.
With regard to the risk category 'operation' the expert panel has assessed that the risk category
contained some risks that could affect the aircraft's ability to solve the task. The cumulative probability,
impact and proximity degree of the risk categories' seven risks have been offset against the two
opportunities positive effect. Here the panel of experts especially placed great value on the possibility
of reduced operating costs resulting from the bonus-based logistics contracts.
[BLACK]
The number of risks and opportunities as well as the grades for each risk category is shown in Table
3.12.
Table 3.12
Joint Strike Fighter - The number of risks and opportunities as well as characters of candidate risk in
the evaluated risk categories

The average of Joint Strike Fighters characters within the five risk categories has resulted in an overall
rating of candidate risk of 3.8.

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Super Hornet
Within the risk categories 'acquisition', 'future-proofing' and 'survival' the exclusively identified risks are
assessed to have either little or minimal project impact. The risk categories 'operation' and 'mission
effectiveness' have been identified risks that are assessed to have moderate project impact.
[BLACK]
[BLACK]
[BLACK]
The number of risks and opportunities as well as the grades for each risk category is shown in Table
3.13.
Table 3.13
Super Hornet - number of risks and opportunities as well as grades of candidate risk in the evaluated
risk categories

The average of the Super Hornets characters within the five risk categories has resulted in an overall
rating of candidate risk of 4.0.

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4. ECONOMIC ASPECTS
4.1 SUMMARY AND CONCLUSIONS
The economic evaluation includes a comparison of the estimated lifetime costs of the Eurofighter,
Joint Strike Fighter and Super Hornet. Lifetime costs consist of costs associated with purchasing and
operating the combat aircraft capacity in the period 2020 - 2049 as well as costs related to the risks
that have been identified in connection evaluation of the military aspects.
There is considerable uncertainty associated with estimating costs over a 30 year period. As part of
the economic evaluation, the New Fighter Program also conducted an analysis of the uncertainty as to
the estimated lifetime costs, including uncertainty information from suppliers and uncertainty attached
to macroeconomic conditions.
The estimated lifetime costs are shown in Figure 4.1, where the columns show each candidate's
estimated lifetime costs, divided into acquisition costs, operating costs and quantified risks. The
vertical black line shows the degree of uncertainty in the estimate of the candidate's life-cycle costs in
the form of a range that lifetime costs likely lies within.

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The estimated lifetime cost is lowest for the Joint Strike Fighter, second lowest for the Super Hornet
and the highest for the Eurofighter. The Joint Strike Fighter is therefore ranked as number one, the
Super Hornet as number two and the Eurofighter as number three in economic conditions. The
following three factors had a significant influence on the result of the financial evaluation:

 The Joint Strike Fighter airframes are designed to fly 8,000 hours, while the Eurofighter and
the Super Hornet is designed for 6,000 flight hours. In order to solve the same task it therefore
requires to buy fewer airframes with the purchase of the Joint Strike Fighter than the
Eurofighter or Super Hornet. The calculations in economics model has identified a need for 28
Joint Strike Fighter airframes, 34 Eurofighter airframes and 38 Super Hornet airframe. The
significance of this factor has led to the New Fighter Program has commissioned external
validation of documentation information provided by suppliers and conducted sensitivity
analyzes (see Section 4.6.1).
 The Super Hornet is a two-seat aircraft and therefore greater need for flight hours for training
crews than the Eurofighter and Joint Strike Fighter.
 The Eurofighter has indicated higher maintenance costs per. flight hour than the Joint Strike
Fighter and Super Hornet. Similarly, the purchase price per aircraft is highest for the
Eurofighter.
There is less uncertainty regarding the lifetime costs of the Eurofighter and most uncertainty about the
lifetime cost of the Super Hornet. In relation to this makes the following three conditions apply:

 The costs of purchasing and operating the Eurofighter is not affected by exchange rate
uncertainty to the same extent as in the case of the Joint Strike Fighter and Super Hornet.
This is because the majority of life cycle costs are paid in euros, while the US dollar is the
primary currency of the other two candidates.
 There is greater uncertainty about the supplier submitted economic conditions for the Joint
Strike Fighter than the Eurofighter and the Super Hornet. The reason for this is that the aircraft
is still being developed, and that the production line is open during maturation. The New
Fighter Program has been assumed that the price per. Joint Strike Fighter in the basic
configuration can increase by 25 per cent. compared to what was reported.
 The uncertainty about the future of the dollar is most important for the Super Hornet, as this
has higher total lifetime costs compared to the Joint Strike Fighter. This fact means that the
lifetime costs of the Super Hornet is overall associated with greatest uncertainty.
4.2 SCOPE AND METHODOLOGY
The following describes the method for calculating the estimated lifetime costs as well as the data
applied.
4.2.1 CALCULATION OF ESTIMATED LIFE CYCLE COST
The economic evaluation included a comparison of the three candidates estimated lifetime costs,
which consists of:
> Acquisition Costs
> Operating and maintenance costs
> Costs related to risks
The calculation of lifetime costs were based on preliminary analysis of the fighter aircraft (number of
pilots, flight hours, airframes, etc.) that are necessary for the three candidates to solve the stated task
complex described in section 1.1. The lifetime cost is then computed per year in the period 2020-2049,
thereby achieving an accrued cash flow for the acquisition and operation of the fighter capacity. The
sum of this payment flows constitute the candidate's total estimated lifetime costs.

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The evaluation uses the so-called Net Present Value principle (NPV principle), which takes into
account the cost of capital or alternative return on the money. The basic idea is that public resources
have an opportunity cost, as resources can be used for alternative purposes, which gives a return or to
repay debt. Payments can be delayed, will be placed in alternative applications and generate a return.
This means in practice that the estimated lifetime costs more or less becomes smaller, the further into
the future the payments are made.
The evaluation of the candidates are made in real terms, and all figures are expressed in 2014 prices.
The assumption is a real growth in wages and prices of 1.25 per cent per year and an implicit inflation
rate of 1.8 per cent per year.
4.2.2 UNCERTAINTY ANALYSIS
Although it is based on the best possible estimate, there are large uncertainties associated with
estimating life-cycle costs over 30 years. This uncertainty is quantified by calculating a range of life
cycle costs in addition to the best estimate. New Fighter Program has calculated the uncertainty
interval using the so-called Monte Carlo method, which carried out a large number of life-cycle cost,
and where in each calculation is drawn new values for a number of uncertain input. This takes into
account the simultaneous variation in the uncertain inputs, including for example the fact that the effect
on the cost of uncertainty about fuel consumption compounded by uncertainty about the price of fuel.
It incorporates uncertainty about the significant cost drivers such as exchange rate, fuel price, airframe
prices, maintenance costs and so on. For structural factors such as airframe life expectancy the
uncertainty is illuminated through sensitivity analyzes, including on the candidates airframe lifetime
and efficiency of the future logistics structure that aircraft must be part of.
The range for the candidate's life costs expresses the total potential variation in lifetime costs of the
assumed uncertainty of each input for the calculation of lifetime costs. There is generally used a 95per-cent. confidence interval of the calculations. This means that there is 95 per cent. probability that
the lifetime costs lay within the estimated time period. (17)
(17) It is emphasized that the confidence interval depends on the assumed uncertainty of each input
and of which variables are provided unsafe.
4.2.3 LIMITS
The purpose of the financial evaluation has been to compare the candidates' estimated lifetime
costs with a view to establishing an objective basis for the decision of type selection in the
context of new fighter aircraft. The aim has not been to provide budget figures for the purchase
or operation of a coming New Fighter capability.
(18) There are, however, omitted a number of costs which are not considered to be significant for the
evaluation, including the phasing out of the F-16 and the phase-out of the New Fighter capability.
4.2.4 DATA BASIS
The primary data source is the suppliers RBI replies. A number of such data is used directly in the
economic evaluation, including prices for aircraft and engine, payment plans, currency conditions,
delivery schedules for planes and so on.

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Any other information in the RBI are treated in New Fighter Programs structural analysis prior to use in
the economic evaluation. The purpose of the structural analysis have been getting military experts
validation of supplier information and ensure that information is properly applied in a Danish context.
The Defense has provided data on pay, relocation costs and prices of operation of infrastructure, etc.,
and F-16 reference data. The Ministry of Finance has set a number of macroeconomic parameters in
the lifetime calculation, including real growth rate and discount rate. Nordea [Danish bank] has
provided forecasts of trends in fuel prices, while Nordea has compiled currency unit of economic
analysis model for the Treasury and the New Fighter Program.
In addition to the validation strategy described in Section 1.3, in the economic evaluation, the New
Fighter Program has carried out a comparison of the enlightened master data with open official
sources. This has included the US defense official contribution to the US budget (SAR reports (19)) as
well as a report from the US General Accounting Office (GAO). (20) These have helped to qualify the
uncertainty analysis. Furthermore, it has covered a published analysis of the Eurofighter from German
audit office. (21)
(19) Selected Acquisition Report (SAR), F-35 Joint Strike Fighter Aircraft (F-35), As of FY 2014
Presidents Budget; Selected Acquisition Report (SAR), F-35 Joint Strike Fighter Aircraft (F-35), As of
FY 2015 Presidents Budget og Selected Acquisition Report (SAR), F-35 Joint Strike Fighter Aircraft
(F-35), As of FY 2016 Presidents Budget af december 2014.
(20) F-35 Sustainment, Need for affordable strategy, greater attention to risks, and improved cost
estimates from september 2014.
(21) Bemerkungen des Bundesrechnungshofes 2013 zur Haushalts- und Wirtschafsfhrung des
Bundes Weitere Prfungsergebnisse from 29. April 2014.
4.2.5 ECONOMIC analysis model
The connection with the evaluation of the economic conditions the New Fighter Program have in
collaboration with Deloitte developed a dynamic analysis model. The model is dimensioning the fighter
structure for a given task complex and then calculates the associated lifecycle costs. The model is
developed using the following principles:
> The model is dynamically to changes in input results in changes in the model's output.
> All aspects of life cost calculation is integrated into one coherent model.
The model provides full traceability in the economic evaluation. It has established a database
environment around the model, enabling storage of data used with references and version control of
data values.
4.2.6 TASK COMPLEX AND DIMENSIONING OF STRUCTURE
The economic evaluation has been based on the same task complex (described in Section 1.1) for all
three candidates, assuming the fighter structure for each candidate in the structural analysis is
designed to solve these tasks. The New Fighter Programs approach to the calculation of the estimated
lifetime costs following task complex is illustrated in Figure 4.2.
At the top left corner defines a task complex that designs the operational structure (number of pilots)
that are needed to solve the task complex. The fixed number of pilots has influenced the number of
flying hours during the period of application, as each pilot must complete an annual training program
containing a certain number of flying hours to maintain the operating status. Furthermore, flight hours
are used for training of pilots, both when they are trained the first time for the fighter and when doing
recurrent training.

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The flight hours are also determined by the task complex, including also the distribution during the
period, since for example more flying hours are flown in years with international operations. As the
airframes are designed to fly a certain number of flying hours over the lifetime, the total number of
flight hours determines the number of airframes, which can be calculated by dividing the total number
of flight hours by the number of flying hours in a airframes.
In addition there is provided an upper limit to the number of flight hours that the logistics structure can
produce per airframes per year. As every year in the period must run a certain number of flying hours
for assignments, training and education to solve the task complex, the capacity restriction in the
logistics structure will also be a determining factor for the number of airframes.
Both dimensioning conditions has been made part of the economic analysis model. The number of
airframes is calculated based on the conditions that demands the most airframes. The number of
airframes and the number of flight hours define the scope of the maintenance tasks. These
maintenance tasks then defines the size of the logistics organization (number of technicians) in the
fighter structure and the extent of external maintenance outside fighter structure.
Due to the candidate-specific characteristics, such as airframe life time or the training concept, the
dimensioning for the same task complex have led to a different fighter aircraft structure for each
candidate. This has ensured that the graduates' lifetime costs are calculated on a comparable basis.
4.3 DIMENSIONED STRUCTURE
The following sections describe the dimensional structure for each candidate.
4.3.1 OPERATIVE ORGANISATION
The operative organization's size describes the number of pilots and mission support personnel
necessary to solve the task complex and run the daily activities on the airfield. The dimensioning is
built on the assumption that the operative organization should be robust enough to handle complex
tasks throughout the period.
Because of the training period for fully operational pilots, the organization is sized to handle the
maximum load during the period. The maximum load occurs when the fighter is released for
international operations. In the meantime, training programs are completed in order to maintain
preparedness to be able to deploy at short notice. The flight hours for education and training
represents approximately 60 per cent of the total number of flight hours. Table 4.1 shows the three
candidates' needs for crews.

The Super Hornet is a two-seat aircraft, in addition to the pilot also staffed with a weapons system
operator, which is the primary reason that the operative organization has between 69 and 74 more
aircrew than either the Eurofighter and Joint Strike Fighter. The result is increased life cycle costs due
to higher labour costs and a need for more flight hours during the period of education and training. In
addition, the Super Hornet requires more instructors since the training includes both pilots and
weapons system operators.

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4.3.2 FLIGHT HOURS
The total number of flying hours during the period of application is shown in Figure 4.3.
As described in the previous section, the education and training of Super Hornets crews require more
flying hours than the other candidates, which is why the Super Hornet has the largest flight hour
requirements. The total number of hours to be flown during the period of use, is very important for a
new fighter aircraft life cycle costs. A large proportion of operating costs are thus flight hour specified,
including for example, maintenance costs and fuel costs. Furthermore, the number of flight hours
determine the number of airframes to be procured, as each airframe can fly a certain number of hours
per year and over its lifetime, see. Section 4.3.3. The flight hours are thus decisive for both the
acquisition and operational costs.

4.3.3 NUMBER OF AIRFRAMES


Two factors are dimensioning for the number of airframes:
1. The candidates airframes are designed to fly a certain number of hours during the lifetime. This
number of hours when compared with the overall demand for flying hours determines the number of
airframes.
2. The logistics structure for all candidates has been sized to produce 250 hours per aircraft in the
domestic structure, 260 hours per aircraft in a deployed quick reaction alert readiness, and 290 hours.
aircraft during international operations. The annual need of flight hours therefore also determines the
number of airframes.
To ensure that the task complex can be solved, the necessary number of aircraft for each candidate
has been set against what backdrop requires the largest number of aircraft.

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The estimated needs for airframes per candidate is shown in Table 4.2. In order to solve the task
complex there is a need for 34 Eurofighter airframes or 28 Joint Strike Fighter airframes or 38 Super
Hornet airframes. The table also compares the number of flying hours each candidate must fly to solve
the task complex and how many hours the oversized number of airframes totally can fly. Finally the
table shows the need for replacement investment of the airframes lost due to accidents (attrition)
during the period of use. In calculating the life cycle costs has a candidate specific loss rate per.
100,000 flight hours (22) has been used, resulting in a number of losses, and a corresponding number
of replacement investment. It is assumed that the airframes that are lost, at the time of the accident
have flown an average of half their frame lifetime.
The Joint Strike Fighter is designed for 8,000 flight hours or 33 per cent more than the Eurofighter and
the Super Hornet, both of which are designed to 6,000 flight hours. This results in a reduced need for
the Joint Strike Fighter airframes.
The calculated 28 Joint Strike Fighters do not reflect the full effect of the greater number of flying
hours in the period since the restriction in the number of hours that can be produced per. year requires
28 airframes, see. 2 above.
Both the Eurofighter and the Super Hornet is designed to fly 6,000 flying hours during the life, but as
the number of required flight hours is greater when selecting Super Hornet, this implies a need for 4
airframes more than the Eurofighter.

(22) Based on the existing user nations' loss rates for the Eurofighter and Super Hornet used a loss
rate of [BLACK] airframes per. 100,000 flight hours and [BLACK] airframes per. 100,000 flight hours.
For the Joint Strike Fighter, a loss rate of 1.25 per airframe. 100,000 flight hours. There has not yet
happened accidents with the Joint Strike Fighter, so instead has been used a calculated rate based on
the historical loss rate for the F-16 Air Force service in the past 20 years.

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4.3.4 LOGISTICS CONCEPT
The New Fighter Program has in the evaluation context optimized the candidates logistical concepts
and adapted to an adequate logistical structure. This will, among other things means that the logistic
concept that applies to the candidate reflects if the main workshop activities have been outsourced to
civilian contractors. The logistic concept will also have an impact on the size of organization that is
needed to support the operation of the candidate. These conditions has affected the calculations of
candidates' total life cycle costs.
The Eurofighter supplier has offered a logistics concept in which Denmark, like on the F-16
owns all components and spare parts for the combat aircraft. A possibility of pool cooperation
with the existing Eurofighter users has been mentioned, but this is not yet established. There
is also mentioned a possibility of entering into bonus based logistics contracts where the
supplier has responsibility for combat aircraft available. The solution must be currently
classified as being very immature and has not been applied by the other current Eurofighter
users.
The Joint Strike Fighter supplier has offered a globally based logistics solution that is characterized by
a close collaboration with other users, and where national ownership is limited to the aircraft.
Components and support equipment and more are part of a global pool solution, which is handled by
the Joint Strike Fighter program. The concept of a global pool solution is designed to minimize the cost
of that many users can share a relatively small number of components and relatively smaller number
of equipment. The lower capital tied up in inventories of spare parts and equipment, among
other things reflected in lower acquisition costs.
Additionally, the Joint Strike Fighter logistics concept is based on a bonus based logistics solution
where external providers are rewarded for low failure rates and high available degrees, which is
expected to reduce overall maintenance costs.
The Super Hornet supplier has offered a traditional logistics concept of national ownership of
components and a potential partial bonus based logistical solution with regard to certain supply
activities. The potential is uncertain and is therefore not taken into account for the calculation of
lifetime costs.
The evaluation of the candidates is determined by starting with the suppliers recommended logistics
solutions, as described here above.
4.3.5 APPROACH TO THE MAIN WORKSHOP ACTIVITIES
The current Danish F-16 structure is based on a logistics concept with two maintenance levels: a
major workshop level for major inspection and updating programs and an airbase level for the daily
operation and minor maintenance task. All three vendors have recommended a maintenance solution
to support the new fighter, which is different than the current Danish F-16 maintenance structure. The
maintenance concept with two maintenance levels are retained, but all three vendors have
recommended that the Defence only carry out the less complex tasks that can be performed on the
airfield level and not the major tasks in the main workshop. Instead, maintenance activities on major
workshop level will be handled externally.
The Defences capacity to respond flexibly to reprioritizing resources between maintenance tasks will
not be present to the same extent as in the case of the F-16 today. It is expected, however, that a welldesigned contract base and good customer-supplier cooperation will provide financial and operational
benefits and lead to the required availability of the combat aircraft.

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4.3.6 COMBAT AIRCRAFT CANDIDATES LOGISTICAL ORGANISATION
The number of personnel in the logistical organization is primarily related to flight hour production.
There will also be a need for personnel to be permanently posted for management, training,
administration and assignment to suppliers in Germany or the United States.
To quickly and efficiently deploy the fighter capacity, the logistics organization have the necessary
skills available at any given time during the usage period. The estimated lifetime costs have therefore
been designed for peak periods, which mainly occurs in connection with the deployment on
international operations.
The selected task complex and the resulting number of flying hours, airframe requirements and
training needs dimension the logistics organization for the three candidates as shown in Table 4.3.

The difference between the three structures is caused by the organization support to the candidate's
specific requirements for flight time production. In addition, the maintenance concepts have different
number of engineering specialties in the staffing structure.
4.3.7 INFRASTRUCTURE
The three suppliers have offered infrastructure solutions that support a centralized maintenance
concept where the operational and logistic resources is centralized around a single building.
The suppliers have stated a need for docks and washing and painting facilities for the fighter in scale
and design which can be compared with the current F-16 infrastructure. The existing infrastructure
must be adapted to the each candidate's specific needs.
The need for infrastructure to administrative facilities, training facilities, mission support- and operation
support facilities, workshops and storage facilities are relatively similar for the Eurofighter and the Joint
Strike Fighter with approximately 22,000 and 16,000 square meters, respectively. The Super Hornets
infrastructure needs of approximately 35,000 square meters is somewhat larger.
4.4 LIFE CYCLE COST CALCULATIONS
Based on the dimensional structure described in section 4.3 the lifetime cost have been calculated for
each of the three candidates. It is clear from Figure 4.1, that the Joint Strike Fighter has the lowest
estimated lifetime costs of 42.2 billion. kr. The Eurofighter and Super Hornets have estimated lifetime
costs of respectively 71.4 billion. Kr and 60.6 billion. kr. The Eurofighter and Joint Strike Fighter costs
differs by about 40 per cent for acquisition and approximately 60 per cent for operation exclusive risks,
while Super Hornets lifetime costs are the most cost intensive and differs by approximately 50 per cent
in procurement and 50 per cent for operation. The costs to address identified risks represent a smaller
share of the total life cycle cost, equal to 9 per cent for the Eurofighter, 4 per cent for the Joint Strike
Fighter and 5 per cent for the Super Hornet.

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4.4.1 ACQUISITION COSTS
While the Eurofighter's and the Super Hornet's acquisition costs amount to 28.1 billion. Kr and 30.9
billion. kr. respectively, the Joint Strike fighter costs amounts only to about the half, a total of 15.4
billion. kr. This is mainly due to four factors: [Number of Airframes/Airframe Price, Logistics Concept,
Initial Training of Pilots, Weapon Portfolio]
Number airframes and airframe price
As described in Section 4.3.3 the number of airframes vary between the three candidates, which is
reflected in the acquisition costs. For example, there is a need for 10 airframes more by purchasing
Super Hornet then when buying the Joint Strike Fighter, corresponding to an increase in the number of
frames at 36 per cent.
In addition, there are differences in price per airframes, expressed in the so-called Unit Recurring
Flyaway Cost (URF-price). URF-price indicates the price of one aircraft in basic configuration including
engines but without support equipment, mission specific equipment, spare parts and so on. The
submitted URF prices are shown in Table 4.4 (23) without real growth and use of present value.
(23) Although URF concept is a general term used for pricing fighter, there may be differences in the
definition of an aircraft's basic configuration. Prices are based on the candidates' RBI replying and
converted to the estimated average exchange rate of the acquisition period. When URF-price of Joint
Strike Fighter depends on the time of delivery, the displayed price averaged over the acquisition
period. URF prices are shown without no real growth and in present value.
[BLACK]

Measured in terms of the URF-unit price, the Super Hornet is cheaper than the Joint Strike Fighter.
The total cost of acquisition of airframe and engines is higher when purchasing Super Hornet to buy
than the Joint Strike Fighter as a result of the need for further 10 airframes. As can be seen from Table
4.4, the cost-per-URF. [BLACK]

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Logistics Concept
As described in Section 4.3.4., the Eurofighters and Super Hornets logistics concepts are based on
the traditional national ownership of support equipment and spare parts etc., while the Joint Strike
Fighters logistics concept is based on a pool solution in which all participants in the Joint Strike Fighter
program contributes to and are drawing from a common pool. This means that the cost of procurement
of support and mission specific equipment is lower for the Joint Strike Fighter than for the other two
candidates. The need for spare parts, support equipment and mission specific equipment also
depends on the number of airframes. The higher number of airframes with the purchase of Eurofighter
or Super Hornet therefore leads to higher acquisition costs for spare parts, support equipment and
mission specific equipment.
Initial Training of pilots (24)
When procuring the Super Hornet or Eurofighter the initial training of Danish pilots will be procured
either by the US Navy or one of the Eurofighter partner nations, Italy, Spain, Britain or Germany.
(24) The first pilot training, when the Defence will receive the plane.
Initial training is thus an acquired performance and included as part of the acquisition costs. Suppliers
of initial training provide aircraft and training facilities as part of the purchased service.
For the procurement of the Joint Strike Fighter the initial conversion training is provided in the US,
where Denmark as a partner nation is committed to contribute aircraft for the Pilot Training Center and
maintenance personnel. Consumption of resources for initial training are therefore not recognized
separately in the purchase cost, but rather as operating expenses and consumption of flying hours .
The aircraft stationed at the Pilot Training Center is part of the stated needs for 28 airframes.
Weapons Portfolio
[BLACK]

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4.4.2 OPERATING COSTS
The Joint Strike Fighter and Super Hornet operating expenses are 24.9 billion kr. and 26.8 billion kr. in
the period, while the Eurofighters operating costs in the period is 36.5 billion. kr., according to Figure
4.1. The primary reasons for the difference found in the operations and in the support structure.
Operations
Costs for operations includes labour costs for crews and fuel costs. These are higher for Super Hornet
than for Eurofighter and Joint Strike Fighter, primarily due to the use of weapons system operators in
the two-seated Super Hornet. This has a direct effect on the life cycle costs due to higher labour costs
and an indirect effect in terms of increased flight hours, resulting in higher fuel costs and maintenance
costs.
Support Structure
The costs for the support structure includes maintenance costs on the airbase- and main workshop,
including labour costs for the logistics organization at the air base and payments for maintenance of
components and other external suppliers.
The operational costs of the support structure is higher for the Eurofighter than for the Joint Strike
Fighter and Super Hornet, which is the primary reason for the Eurofighter as a whole has the highest
life cycle costs. The primary explanation for the difference relates to the flight hour costs related to the
maintenance provided by external suppliers, which is higher for the Eurofighter, see. supplier RBI
answer. (25)
(25) The stated maintenance costs are significantly higher for Eurofighter than the other two
candidates. The New Fighter Program has been focusing on the validation of the cost of
external maintenance of the Eurofighter, including prompting the candidate to deepen and
detail the figures and examined the available information from open official sources. The
German National Audit Office in the spring of 2014 published an analysis based on figures
from the German Ministry of Defence (Bemerkungen des Bundesrechnungshofes 2013 zur
Haushalts- und Wirtschafsfhrung des Bundes - Weitere Prfungsergebnisse of 29 April 2014),
which indicates that the Eurofighter is associated with comparatively high maintenance costs.
The analysis shows that the German costs for maintenance of the Eurofighter is about two to
three times higher than the German maintenance costs of the Tornado fighter aircraft.
The operational costs of the support structure for the Joint Strike Fighter and Super Hornet is overall at
the same level. Super Hornet requires a larger logistical organization than the Joint Strike Fighter,
resulting in higher labour costs, while the costs for external maintenance of the Super Hornet is lower
than for Joint Strike Fighter.
4.4.3 RISKS
As described in Section 3.6, the New Fighter Program has as part of the military evaluation identified
and quantified a number of risks for each candidate, which could potentially increase the life cycle
costs. Likewise, for each candidate a need to implement a number mitigating actions have been
identified to reduce the impact of risks.
The overall effect of risks on the lifetime cost is recognized as the sum of the individual risks
economic consequences weighted by the probability that the individual risk occurs. (26) This reflects
the fact that in the life cycle costs calculations the average cost to manage risks have been taken into
account, since some risks occur, while others do not. On average adequate resources have been
assigned to meet the overall economic impact of the risks that might occur.
The distribution of risks and mitigating measures are shown in Table 4.5.

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The primary reason for the Eurofighter having a higher risk-related lifetime cost than the other
candidates is that a risk has been identified that the software for the simulators is not updated at the
same rate as the plane's software. This reduces the usefulness of the simulator for training and will
result in an increased need for live flight hours resulting in higher life cycle costs. It is for all candidates
assessed that the consequence of the risk taking place, it will cause the number of live flying hours to
be increased by 20 per cent.
The risk is recorded for all three candidates, but most important for the Eurofighter. This is due to two
factors:
> The cost per flight hour for external maintenance is greater for Eurofighter than for the other two
candidates. Increasing the number of live flying hours has the greatest impact on Eurofighters life
cycle costs. The economic impact of the risk is 5.1 billion. kr. for the Eurofighter 2.5 billion. kr. for the
Joint Strike Fighter and 2.4 billion. kr. for the Super Hornet.
> The likelihood of the risk occurring, is rated 70 per cent. for the Eurofighter, 10 per cent. for the Joint
Strike Fighter and 50 per cent for the Super Hornet. The probabilities were established at a quality
seminar as part of the New Fighter Programs evaluation of candidate risk. Emphasis was placed on
that the user interviews had made clear that the updates of Eurofighters Full Mission Simulator is
generally one to two years behind the plane. Divergence between the aircraft and the simulator is
already a reality today, why risk probability is estimated to be 'great' equivalent to 70 per cent
according to the evaluation of candidate risk.
For the Joint Strike Fighter, the connection between aircraft and simulator is a fundamental part of the
development of new software, so the likelihood of discrepancies between the aircraft and the simulator
is rated 'low' equivalent to 10 per cent. Updates of simulators for the Super Hornets will be negotiated
from time to time, so the probability of the risk occurring in relation to the Super Hornet, is rated
'medium' equivalent to 50 per cent.

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In relation to the Joint Strike Fighter a potential opportunity has been identified for a reduction in
operating costs resulting from the bonus-based logistics solutions that are not recognized in the
operating and maintenance costs. This reduces potential Joint Strike Fighters risk-related costs by 0.7
billion. kr.
4.5 UNCERTAINTY ANALYSIS
As described in Section 4.2.2, the New Fighter Program analyzed the uncertainty for the estimated
lifetime cost for each candidate. The uncertainty regarding the estimated lifetime costs can be divided
into uncertainty of supplier information and other uncertainty, particularly uncertainty attached to
macroeconomic conditions.
4.5.1 UNCERTAINTY WITH THE COMPANY INFORMATION
There is still uncertainty about the following supplier submitted prices and consumption:
> Price on aircraft frame and engine
> Operating and maintenance costs
> Consumption of fuel per. flying hour
As far as the price per. airframes and price per engine the following potential deviations from the
prices are estimated:
> Eurofighter: increase / decrease of 5 per cent.
> Joint Strike Fighter: increase of 25 per cent. / Reduction of 10 per cent.
> Super Hornet: increase / decrease of 5 per cent.
The asymmetric uncertainty band for the Joint Strike Fighter is because the production line is
maturing, and that the manufacturer must achieve cost reductions to allow the plane to be produced at
the price offered in RBI reply from the supplier of the Joint Strike Fighter.
For the given operating and maintenance costs, including flight hour rate for external maintenance,
costs for modifications and updates, and costs for technical support, the following uncertainties are
assumed:
> Eurofighter: increase / decrease of 10 per cent.
> Joint Strike Fighter: increase of 20-24 per cent. / Reduction of 10 per cent.
> Super Hornet: increase / decrease of 10 per cent.
For the Joint Strike Fighter no empirical estimates exists of the costs of purchasing and operating the
aircraft to the same extent as the other two candidates, which is reflected in the above assumed
deviations from the stated costs. Finally, regarding the supplier information with regard to the
consumption of fuel per. flight hour, uncertainties have been incorporated, with a greater uncertainty
about the Super Hornets consumption.
4.5.2 UNCERTAINTY WITH THE MACRO-ECONOMIC CONDITIONS
In addition to the above candidate-specific conditions, uncertainty remains regarding the following
macroeconomic conditions:
> The exchange rate between the British pound and the Danish krone
> The exchange rate between the US dollar and the Danish krone
> Real growth in wages and prices
> Pay
> Fuel Price
> Uncertainty about the economic impact of candidate risks
The continued uncertainty regarding the exchange rate of US dollars is the same for the Super Hornet
and the Joint Strike Fighter, while uncertainty regarding the sterling rate concerns only the Eurofighter.
The continued uncertainty as to the real growth in wages and prices and the fuel price is the same for
all candidates.

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4.5.3 THE ECONOMIC CONSEQUENCES OF THE INCORPORATED UNCERTAINTIES
The uncertainty in the estimated lifetime costs of the three candidates is illustrated in Figure 4.4, which
shows the outcomes for each candidates estimated lifetime costs.
There is greater uncertainty about the lifetime cost of the Super Hornet and the least uncertainty as to
the lifetime costs of the Eurofighter.
There is less uncertainty about the Eurofighters life cycle costs as the majority of the costs not paid in
Danish kroner, are payable in euros and thus not affected by currency uncertainty. This is not the case
for the Joint Strike Fighter and Super Hornet, where all payments not falling in Danish kroner, will be
made in US dollars.
It also appears that Super Hornets lifecycle cost is more uncertain than the Joint Strike Fighters, which
is also attributable to currency uncertainty. As previously described the Super Hornet costs
approximately 14 billion. kr. more to buy than the Joint Strike Fighter (27). These 14 billion. kr.
represents a currency uncertainty that is not replicated by the Joint Strike Fighter.
(27) Excluding infrastructure investments
In addition, there is greater uncertainty associated with fuel costs for the Super Hornet compared with
the Joint Strike Fighter as the Super Hornets fuel consumption per. flight hour is more uncertain than
the Joint Strike Fighters fuel consumption. At the same time the total number of flight hours required
are about 16 per cent. higher for the Super Hornet than for the Joint Strike Fighter. The higher number
of flight hours combined with a higher fuel consumption per flight hour contributes to a higher total cost
of fuel, which makes Super Hornet more sensitive to uncertainty as to the price of fuel.
The uncertainty related to supplier information constitutes a small part of the displayed error ranges
corresponding to 3.2 billion. kr. for Eurofighter, 3.9 billion. kr. for the Joint Strike Fighter and 1.8 billion.
kr. for the Super Hornet.

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4.6 SENSITIVITY ANALYSIS
In connection with the economic evaluation carried out a number of sensitivity analysis of key
parameters see. Section 4.2.2. The intention has been to analyze the life-cycle cost sensitivity to
variations in key assumptions or data input. The result of the evaluation is robust when tested to the
described sensitivity analyzes.
4.6.1 AIRFRAME LIFETIME
The Dutch Nationaal Lucht- en Ruimtevaartlaboratorium (NLR) have examined the validity of
suppliers submitted airframe lifetimes to the New Fighter Program. NLR has analysed information
from suppliers and concluded that the candidates' stated airframe lifetime (measured in flight hours) is
determined by the manufacturer based on design, test and application. The airframe lifetimes provided
are for Eurofighter 6,000 hours, for the Joint Strike Fighter 8,000 hours and the Super Hornet 6,000
hours.
Because of the importance of this factor the New Fighter Program also analysed the life-cycle cost
sensitivity to changes in the candidates assumed airframe lifetime. Specifically, it examined whether it
has an impact on the ranking if the Joint Strike Fighter is assumed to have a life of 6,000 flight hours,
corresponding to Eurofighter and Super Hornet. Similarly, the effect of increasing the Eurofighter's and
the Super Hornet's airframe lifetime to 8,000 hours, corresponding to the Joint Strike Fighter frame
service life were examined.
A change in the frame lifetime will result in a changed need for airframes and will also have a number
of operational economic consequences, including for modifications and updates, change in logistical
structure, infrastructure and so on. The results are shown in Table 4.6.

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4.6.2 ANNUAL PRODUCTION OF FLIGHT HOURS
It has been investigated how sensitive the calculation of Joint Strike Fighters life costs are facing a 10
per cent reduction. in the number of hours that can be produced per frames per year. (28) The effect
of the changed flight hour per production. frames per. years is shown in Table 4.7.
(28) This sensitivity analysis is only relevant for the Joint Strike Fighter as the average number of flight
hours of the airframes for Eurofighters and Super Hornets do not exceed the reduced thresholds. The
reduction means a possible flight hour production of 225 flight hours per. planes for years without
deployments, 234 flight hours per. fly this year with deployed defense readiness as well as 261 hours
per. fly this year with international operations

4.6.3 SINGLE-SEAT CONTRA TWO-SEAT SUPER HORNET


The Super Hornet is produced in a one-seat (F / A-18E) version and a two-seat version (F / A-18F). As
the evaluation requires the purchase of the Super Hornet in two-seat version, it has been examined
what the effect of a choice of single-seat configuration would have on life cycle costs.
The primary difference is that WSO function disappears, reducing the crew requirements and the need
for education and training and thus the need for flight hours and airframes. The effect of acquiring
Super Hornet in single-seat configuration is shown in Table 4.8.
4.6.4 IMPACT OF CHANGES IN THE RELATIONSHIP BETWEEN SIMULATOR AND LIVE FLIGHT
HOURS
The following describes the sensitivity of the results to changes in the relationship between simulator
and live-flight hours. The analysis is based on a reduction in the annual simulator hour training per
operational status level by 20 per cent. The number of live-flying hours increase by a corresponding
number of hours. The opposite analysis, where the number of simulator hours increases are not
implemented, as it is estimated that the evaluation is based on the maximum use of the simulator. It
will, therefore, due to flight safety reasons, not be possible to increase the number of simulator hours
and reduce the number of flight hours live accordingly.
The increase in live flight hours lead to a need for more airframes, which contributes to an increase in
lifetime costs. The result is shown in Table 4.9. Eurofighters life costs are more sensitive to changes in
the relationship between simulator and live-flight hours due to higher costs for the remote maintenance
per. flight hour.

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4.7 SENSITIVITY SCENARIOS


To further examine the evaluation results robustness, an analysis has been conducted in which
several sensitivity analyzes are combined in common scenarios.
In the first analysis, the Joint Strike Fighters life cycle costs calculated assuming an airframe life of
6,000 flight hours. At the same time the number of flight hours per year per airframe have been
reduced by 10 per cent. In relation to external maintenance finally a rate per. flight hour, which
corresponds to the one used for Eurofighter. The result is an increase of Joint Strike Fighters life costs
by 12.4 billion. kr., corresponding to a total of 54.6 billion. kr. These changes will not lead to that the
ranking of the candidates will change.
In the second analysis, the Eurofighters airframe lifetime is assumed to be 8,000 flying hours, and the
price per. flight hour for remote maintenance are provided identical to the rate used for the Super
Hornet (which has the lowest flight hour rate for remote maintenance of the three candidates). The
result is a reduced lifetime cost of 56.2 billion. kr., which is still higher than the lifetime costs of the
Joint Strike Fighter.
The estimated lifetime cost of 56.2 billion. kr. can be compared to the Super Hornets lifetime
cost of 57.7 billion. kr., assuming a ground service life of 8,000 hours (see section 4.6.1), and
where the cost per. flight hour for external maintenance is the same for the two candidates.
The Eurofighters lifetime cost is now lower than the Super Hornet, and thereby change the
ranking of the Eurofighter and the Super Hornet.

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5. INDUSTRIAL ASPECTS
5.1 SUMMARY AND CONCLUSIONS
The industrial evaluation has focused on the extent to the combat aircraft manufacturers' suggestions
for possible industrial cooperation initiatives with the Danish defense industry supports the
performance of major Danish security interests linked to the fighter procurement. This covers among
others the retention and development of industrial skills, capabilities and knowledge and the
development of long-term strategic partnerships.
The manufacturers initiatives are evaluated by a panel of experts from the Ministry of Foreign Affairs,
Defence, Commerce and Growth Ministry, the Ministry of Defences Defence Acquisition and Logistic
Organisation and the Danish Business Authority.
The industrial cooperation initiatives proposed by Lockheed Martin (Joint Strike Fighter) is rated to
better support the sustainment of major Danish security interests than the other two candidates.
Lockheed Martin is assigned the rating B on a scale from A to E. (29)
(29) The assessment is based on a scale from A to E, where the character indicates the degree of
support for the provision of essential Danish security interests: A = very much; B = large extent; C =
somewhat; D = slightly; and E = not at all.
The initiatives from Boeing (Super Hornet) and Airbus (Eurofighter) are rated in the same way to
support the conduct of major Danish security interests. Both candidates are thus assigned grade C on
scale from A to E. The overall package from Boeing is generally considered to rank slightly higher than
the package from Airbus due to a higher degree of realisation and maturity of the initiatives.
Therefore, the Joint Strike Fighter is ranked as number one, Super Hornet ranked as number two, and
Eurofighter number three in terms of industrial relations.
The evaluation of industrial relations is associated with a number of significant uncertainties. These
arise, among others, that the combat aircraft manufacturers are asked to provide proposals for
initiatives with a 30-year time horizon. In such a long perspective, the nature and relevance of
cooperation initiatives associated with considerable uncertainties. The Joint Strike Fighter has a
particular uncertainty associated with the fact that Lockheed Martin is not covered by the requirement
of industrial cooperation. The realization of the industrial cooperation initiatives that Lockheed Martin
has proposed, is depending on that the Danish defense companies can provide for 'best-value'
principle. Thus, there is no guarantee the implementation of these initiatives.
5.2 SCOPE AND METHODOLOGY
It is a major Danish security interest that the acquired combat aircraft can always be kept operational.
To ensure this, however, the Danish side on this project reserved the right, to the extent necessary, to
require industrial cooperation between the producers of the selected fighter and the Danish defense in
accordance with the applicable Danish administrative guidelines for industrial cooperation and the
national defense industrial strategy.

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The guidelines and the national defense industrial strategy reflects Article 346 of the Treaty on the
Functioning of the EU, which stipulates that the national discriminatory measures, such as a
requirement for industrial cooperation, can only be made in cases where all the following exceptions
apply:
> The measure must relate to military equipment of the kind which is described in the European
Council's list of 1958, and are intended for specifically military purposes.
> The measure must happen for the sake of the protection of national security interests
> It must be necessary to implement this particular measure
> The measure shall not adversely affect competition in the EU for goods or services not intended for
specifically military purposes
There must therefore not be a requirement for industrial cooperation solely by economic
considerations. Moreover, the EU Court will verify whether the four conditions are met. There is thus a
risk that the court overrules a requirement for industrial cooperation.
In connection with the fighter procurement, the requirement of industrial cooperation support the
fulfilment of the essential Danish security interests linked to combat aircraft operations, exercises and
utilities in the following ways:
> By maintaining and / or developing industrial skills, capabilities and knowledge in the areas of
technology in the Danish defense industry, which is necessary for the development, production,
maintenance, operations and tasks related to the fighter jets or equivalent.
> By supporting the development of long-term strategic cooperation that promote interdependence
between producers of the selected fighter and Danish companies in order to support the supply and /
or access to the necessary industrial skills and capabilities related to the fighter jets or equivalent.
Out of the eight technology areas from the national defense industrial strategy, the following five areas
have been evaluated as required for fighter aircraft acquisition:
> Advanced software, including cyber
> Communication and command control systems
> Surveillance and radar technology
> Protection
> Advanced materials technology and processing
The Combat Aircraft manufacturers have therefore made proposals for industrial cooperation initiatives
in the 30 years period after the possible contracting within these five technology areas in order to
support the essential Danish security interests.
5.2.1 SPECIAL FOR JOINT STRIKE FIGHTER AND EQUAL TREATMENT CANDIDATES
The Joint Strike Fighter and the main manufacturer Lockheed Martin is differs from the other
candidates by not being subject to the requirement of industrial cooperation. The background is
Denmark's participation in combat aircraft development and manufacturing collaboration with eight
other countries since 2007. In the framework of cooperation it is required that countries should not
impose requirements on industrial cooperation in the procurement of the Joint Strike Fighter.
Denmark's participation in the cooperation involved for that reason an exemption from the former
Economic and Business Affairs from the then Danish practice of always making demands on industrial
cooperation in connection with acquisitions defense. This practice has since changed with the current
Danish administrative guidelines for industrial cooperation.
As for the Joint Strike Fighters development and manufacturing collaboration, the participating
countries' national industries are awarded orders according to the so-called' best value' principle,
where price and quality are part of several criteria. In the cooperation the partner countries' industries
compete to win Lockheed Martins and the subcontractors contracts offered in order to promote the
best service or product at the best price.
The best value' principle will be applied throughout the combat aircraft production as well as in relation
to the development of operation and maintenance concept for the Joint Strike Fighter. Order bookings
for the Danish defense industry are followed by the Danish Business Authority. (30)
(30) The principle has so far resulted in the Danish defense industry being awarded orders of a value
in excess of Denmark's contribution to the financing of the cooperation. Danish companies have
signed contracts for approximately 309 million US dollars, while Denmark per 23 November 2014 had
paid about 256.2 million. US dollars in connection with participation in the cooperation.
In spite of this special relationship for the Joint Strike Fighter, the initiatives from Lockheed Martin
were considered in the evaluation on an equal footing with initiatives from Boeing and Airbus, among

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others to ensure equal treatment of candidates. The special relationship has, however, been included
in the expert evaluation of the initiatives, including with respect to the initiative packages character,
realize, volume and maturity.

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5.2.2 UNCERTAINTIES
A number of significant uncertainties should be emphasized in relation to the industrial evaluation. The
uncertainties arise, among others, to that the fighter aircraft manufacturers are asked to provide
proposals for initiatives with a 30-year time horizon. In such a long perspective, the nature and
relevance of cooperation initiatives to be subject to considerable uncertainty. the various uncertainties
are discussed in the expert assessments. Furthermore, it is uncertain about the level of industrial
cooperation, if the type of choice is favourable for the Eurofighter or Super Hornet, will correspond to
the value of the proposals from Airbus and Boeing, the size of demand for industrial cooperation will
depend on an individual assessment and the final purchase price. It is also uncertain whether just the
proposed initiatives will be phased out, since it will be Airbus and Boeing are free to settle a claim on
industrial cooperation with other than the proposed initiatives, if these are linked to the combat aircraft
procurement or equivalent. For Joint Strike Fighter a particular uncertainty is associated with the fact
that Lockheed Martin is not covered by the requirement of industrial cooperation. Realising the
industrial cooperation initiatives, Lockheed Martin has proposed, is subject to the Danish companies
can provide for 'best-value' principle. Thus, there are no guarantees for the implementation of the
initiatives.
5.2.3 APPLIED METHOD
The industrial evaluation is carried out in four stages.
These steps are illustrated in Figure 5.1

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Step 1: Checking the settlement area
First the manufacturers' industrial cooperation initiatives were reviewed by an expert panel with
participants from the New Fighter Program and Danish Business Authority in order to provide an initial
assessment of whether the initiatives are within the settlement area where there could be
requirements on industrial cooperation in accordance with EU law and the Danish administrative
guidelines. None of the 30 proposals for industrial cooperation initiatives from Airbus is rated as being
outside the settlement area.
Out of 76 proposals for industrial cooperation initiatives from Lockheed Martin, 11 is judged to be
outside the settlement area. Out of 85 proposals for industrial cooperation initiatives from Boeing, 17
are rated as being outside the settlement area. A further 39 initiatives from Lockheed Martin was not
included in the evaluation as the initiatives are or will be completed before the anticipated contract
conclusion with the selected candidate in 2016. (31)
(31) The value of the culled initiatives were for Lockheed Martin about 6 billion. kr. and Boeing about 3
billion. kr.

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Table 5.1 shows how the remaining initiatives have spread within the five technology areas such as
percentages of the Initiative's total volume. (32)
(32) For Eurofighter, the value of the total volume converted from euros to kr. at the rate 7.44. For the
Joint Strike Fighter and Super Hornet is the value of the total volume converted from US dollars to kr.
at the rate 5.89. these courses were determined on 7 October 2014. The information on the values in
the original currency were supplied by the candidate aircraft itself.
Step 2: Statement of the Initiative's strength
In step 2, the New Fighter Program calculated the value of the remaining 30 initiatives from Airbus, 26
initiatives from Lockheed Martin and 68 initiatives from Boeing on the basis of the fighter
manufacturers' own assessments of the Initiative's relevance to the performance of the major Danish
security interests. These statements are shown in Table 5.2, which shows how the initiatives from the
combat manufacturers' own assessments are distributed in the categories of significant relevant',
'relevant' and 'less relevant' as percentages of the Initiative's total volume.
Step 3: Re-evaluation of the Initiative's strength and overall marks
A panel of experts from the Ministry of Foreign Affairs, Defence, Commerce and Growth Ministry, the
Ministry of Defence Acquisition and Logistics Organisation and the Danish Business Authority has
subsequently reassessed the aircraft manufacturers' initiatives based on a number of specified criteria.
The experts were selected based on their knowledge of or experience with security issues and
defense policy, procurement of military equipment, the relevant strategic technological areas and
industrial and business cooperation. Table 5.3 indicates the expert reassessments expressed in
percentages of the initial packages total volume.

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The expert panel also assessed the overall initiative packages based on the same criteria set for
reaching an overall assessment of the extent to the combat aircraft manufacturers' proposals for
industrial cooperation initiatives supporting the fulfilment of the essential Danish security interests
linked to fighter aircraft acquisition. There has been used the following criteria:

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For each criterion, the experts used a scale of A to E. (33) The result of the character assignment is
shown in Table 5.5.
(33) The scale from A to E indicates the degree of support for the provision of essential Danish
security interests: A = very much; B = large extent; C = somewhat; D = slightly; and E = not at all.

In addition to having the combat aircraft manufacturers' own information about the initiatives available,
the expert panel got handed a business survey conducted by the New Fighter Program in cooperation
with the consulting company Struensee & Co. during the expert meeting. The purpose of the survey
was to get an impression of the Danish defense firms information and expectations of cooperative
effects of the fighter type selection and analyzing the maturity and the feasibility of these expectations.
The study focused on 44 of the Danish companies, which battle aircraft manufacturers have indicated
as potential partners for type selection. Out of the 44 companies selected, 32 participated in the study,
which consisted of a questionnaire and a detailed interview with the companies themselves. There is
used a study design in which the questionnaire and interview reflected the eight criteria that the expert
panel used in their assessments. It should be noted that neither Struensee & Co. or the participating
Danish companies were given access to RBI-answers.
The investigation has shown that the Danish defense companies have different expectations of
cooperative effects, depending on which fighter will be selected. The companies expect all to come to
cooperate with combat aircraft manufacturers about production and operation and maintenance of the
fighter jets and thus contribute to the direct supply related to the acquisition. The expectation is that
most of the cooperation would take place in technology areas of advanced materials technology,
advanced software and command control systems. Additionally, it is expected that first and foremost
would be no transfer of technology and research and development.

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The total volume of collaborations with the manufacturers are expected to be greatest at an election of
the Joint Strike Fighter (about 23 billion. Kr.), Whereas the expectation is less of a choice of Boeing
(about 14 billion. Kr.) And by at least by the choice of the Eurofighter (about 13 billion. kr.). This
corresponded to an expected increase in value differential of 25-50 per cent. depending on the
selected fighter. In the case of the Joint Strike Fighter relatively few companies will get up to 80 per
cent. of value expectations, while the same number of companies accounted for only about 45-50 per
cent. of value expectations for the other candidates.
Most companies expect to enter into partnerships with Boeing. These companies have higher
expectations that cooperation will develop their skills and lead to deliveries to other defense areas
than for actual combat aircraft and thereby support the indirect supply related to the acquisition. Thus,
65 per cent of the companies expected a high degree of competence development by a choice of
Super Hornet against about 45 per cent. for the other two candidates.
The analysis of the maturity and the feasibility of business expectations has shown that
maturity and the feasibility and realisation is greatest for collaborations related to the Joint
Strike Fighter, less for the outlook on collaborations related to the Super Hornet, and that they
are least expected to cooperation related to the Eurofighter. This conclusion has, among other
things been based on to the extent to which the Danish companies have been in contact with and
have prior agreements or contracts with the combat aircraft manufacturers, and the extent to which
each company would have to adapt to meet the expectation value for cooperation.

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5.3 OVERALL ASSESSMENT
During the industrial evaluation step 4, the expert panel estimated that the total package of possible
industrial cooperation initiatives proposed by Lockheed Martin, would better support the fulfilment of
the essential Danish security interests than the other two candidates. This belief is based in the
package's large volume and initiative, the duration and the relatively high degree of realizability and
maturity. It was further justified by the potential that is linked to the future operation and maintenance
phase.
Regarding the total package of possible industrial cooperation initiatives proposed by Boeing and
Airbus, the expert panel rated equally to support the performance of the Danish security interests. The
package from Boeing is considered to rank slightly higher than the package from Airbus, partly as a
result of the package from Boeing to be estimated to have a relatively higher degree of realizability
and maturity. Therefore, the Joint Strike Fighter is ranked as number one, Super Hornet as number
two and Eurofighter as number three in terms of industrial relations.
The Expert Panel ratings and votes on the scale from A to E for each candidate has been looking for
this final ranking of the candidates. Voting during shown in Table 5.6.
The reasons for the results will now be discussed candidate for the candidate.
5.3.1 EUROFIGHTER (AIRBUS)
The expert panel has concluded that the initiative package from Eurofighter include industrial
cooperation initiatives that have a strategic aim with great future prospects. Among other things, it
highlighted that the initiatives measures related to assignments in the Arctic represents a relevant
contribution to the support of the major Danish security interest, while the capacity for intervention
should apply to assignments throughout the Kingdom of Denmark. Furthermore, the package is
broadly based in terms of the relevant technology areas from the national defense industrial strategy.
This width may be contributing to the maintenance and further development of skills and knowledge in
the Danish defense industry in relevant technology areas. The total packed spread over time is also a
positive aspect, as the initiatives overall are distributed throughout the 30-year period. This is seen as
an expression of that the fighter manufacturer will be tied to the Danish defense industry during the
whole period, thereby contributing to the generation of long-term relationships between the producer
and Denmark that use of combat aircraft. It is also highlighted as positive that initiatives include both
co-production and development as operation and maintenance of the Eurofighter, which will lead to
the development and retention of the fighter relevant skills in Danish defense industry throughout the
period. This is also highlighted as contributing to support the direct supply related to fighter aircraft
acquisition.
There has also been identified a number of weaknesses in the initiative package proposed by Airbus.
The expert panel has questioned the maturity and the feasibility of the initiative package among other
on the grounds that Airbus does not seem to have paid special attention over what the Danish defense
capabilities could absorb. Many of the initiatives must also carry the mark of being at an early stage of
development based on preliminary dialogue between Airbus and Danish defense companies or intent,
according to the expert panel. In addition, many of the initiatives are subject to that the identified
potential Danish defense companies must be re-qualified or certified further. In addition, Airbus may
not to a high enough degree have ensured consistency between the skills required to implement the
initiatives and the existing expertise in the Danish defense industry.
The results of the company survey supported several of the above assessments. These included the
presumption that the initiatives are characterized by relatively limited maturity and realizability.
Especially the apparent relatively limited degree of contact between Airbus and the Danish defense
industry suggest that Airbus has not exercised its great potential and engaged enough in the Danish
defense industry. Several of the initiatives, therefore, are considered so nebulous that there may be a
question mark to Airbus' real commitment to the companies that Airbus has highlighted as potential
partners. It should be noted that the company study the influence of the expert assessments cannot be
directly traced to the development of the panel votes cast.

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5.3.2 JOINT STRIKE FIGHTER (LOCKHEED MARTIN)
In general, the initiative package provide realizable initiatives, according to the expert panel. This is
derived from that some of the initiatives has already been contracted, and thus already established
ties with Danish companies. Initiatives are also practical, as they bear the mark of being very targeted
against Danish companies. This general realizability and its maturity is confirmed by the many
initiatives of already available agreements. The packages large volume is as an expression of
Lockheed Martins degree of attachment to Denmark rated positively. This should be seen in light of
the fact that from Lockheed Martin's side currently do not include initiatives of cooperation regarding
the operating and maintenance phase. Despite the omission the package is still at a substantial
volume with a further potential when the operating and the maintenance phase is initiated.
Furthermore, it is considered positive for the direct supply, that the Danish defense industry through
initiatives become subcontractors for production of the Joint Strike Fighter in the whole combat aircraft
production phase. The package duration is also attached a great importance, as a large part of the
initiatives, even without operation and maintenance phase, will be covering the entire 30-year period.
This will help ensure that Lockheed Martin will be tied to the Danish defense industry in a long term
partnership.
The Expert Panel has also identified a number of weaknesses in the initiative package proposed by
Lockheed Martin. Despite the packets significant volume, Lockheed Martins waiver for industrial
cooperation gives rise to uncertainty as to the implementation of the package is not secured through
an industrial cooperation agreement, but in instead, through the cooperations 'best value' principle. It
is estimated that this implies a weakness since many initiatives realizability therefore is subject to the
Danish defense companies can provide the best solutions in accordance with the principle.
Furthermore, the expert panel agreed that the packet have a narrow focus in the sense that the
initiatives are concentrated in relatively few of the five strategic areas of technology. In addition, the
package is too narrow in terms of how few Danish defense companies that would be involved in the
initiatives. Together, it is estimated that it can potentially mean that an implementation of the package
will result in only a limited competence and knowledge boost in the broadness of the Danish defense
industry.
The results of the company survey supported many of these reviews. What particularly strengthened
the studys perception was that the package shows signs of great maturity, while the feasibility is more
questionable to the initiatives in which the Danish defense industry is not already involved and the
Danish defense companies' participation would depend on that they can provide the best solution for
'best value' principle in competition with others. This despite the fact that the company survey has
shown that the feasibility of the Danish companies' expectations are highest for cooperating with
Lockheed Martin. It should be noted, the company study the influence of the expert assessments
cannot be directly traced to the development of the panel votes casted.
5.3.3 SUPER HORNET (BOEING)
According to the expert panel the package contains a broad spectrum of initiatives spread over both
the five strategic areas of technology and industrial cooperation types. This is considered positive, as
the variation involves a proper balance between technology transfer, purchase of goods and services
and research and development for the benefit of the conduct of security interests. The width in
technology areas can contribute positively to the development of new skills and the retention of
existing skills in the Danish defense industry. It is also positively assessed that the broad involvement
of both large and small defense companies are helping to ensure that competencies are not
concentrated in a few companies. Several of the initiative's broad focus means that the potential of
cooperation with Boeing in areas other than the Super Hornet can result in a significant bond between
Boeing and Denmark and thereby ensure an indirect security of supply independent of the fighter
procurement. This is estimated to be significant. Conversely, it is also estimated that it could lead to
the direct security of supply is compromised because of the relatively large amount of industrial
cooperation initiatives that do not have the fighter aircraft as its real focal point.

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The expert panel also identified a number of weaknesses in the initiative package from Boeing. In
particular, the duration of the package of initiatives highlighted as a significant weakness, since many
of the initiatives lies primarily in the first 15 years after the possible conclusion. This is rated as an
indication that one is not guaranteed the long-term bond between Boeing and Denmark in the period.
Both the direct and indirect supply will for that reason not be sufficiently guaranteed through industrial
cooperation initiatives. It is also assessed as problematic that many of the initiatives contain significant
civilian elements. This can help to ensure that the conduct of security interests will be impaired. There
is also questioned the maturity and the feasibility of Boeing initiatives. Several of the initiatives are just
at the concept and dialog level, and further steps such as upgrading is necessary, although the
package's composition indicates significant insight into the Danish companies that are relevant to
implementation of the initiatives.
The company survey contributed to the overall assessment of the initiative's maturity and realizability
assume a more positive nature. Underlying this is the expert panels impression that Boeing through
its significant commitment and substantial dialogue with the Danish defense companies have carried
out preliminary work with great thoroughness. This despite the assessment that the Danish
companies' good impression of dialogue with Boeing on the possibilities of future cooperation cannot
be equated with the guarantee of implementation. It should be noted that the company surveys
influence of the expert assessments cannot be directly traced to the development of the panel votes
cast.
5.4 PROCESS RISK
As part of the industrial evaluation, the Attorney General has been asked to evaluate the litigation risk
for infringement before the EU Court related to the deployment of combat aircraft manufacturers'
proposals for industrial cooperation initiatives independently of the final evaluation results. To make
this assessment, the Attorney General was asked to assess the risk associated with the
implementation of the initiatives was respectively discarded and included in the evaluation initial step.
The Attorney General estimates that there are different degrees of litigation risk associated with the
implementation of the industrial cooperation initiatives, total packets from combat aircraft
manufacturers.
For two of the total of 30 initiatives proposed by Airbus, the Attorney General assessed that there is
some risk that these will be misjudged as industrial cooperation at a later deployment. There is no
identified risk factors associated to the implementation of the initiatives proposed by Lockheed Martin.
According to the Attorney General there is a high risk associated with the implementation of 4 out of
the 68 initiatives of the overall package from Boeing.
As regards to the initiatives which have been culled from respectively Boeing and Lockheed Martin's
initiative packages under the evaluations first step, the Attorney stated that they rightly were
discarded.
Depending on the type selection outcome, the relevant assessments will be made available to the
Danish Business Authority, so that assessments can be part of the Agency's on going, specific
treatment with regard to implementation of the initiatives for a contract award.

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