The financial aspects of the purchase of the JSF

As a purchaser of the JSF, the Netherlands pays the purchase price, both for the aircraft itself and for all the various parts, training materials, tools, etc. that go with it. And the aircraft also costs money to keep in the air.

Different types of cost

There are three different types of cost associated with the JSF:

• The act of acquiring the JSF means that the Netherlands buys the aircraft and all the related parts and equipment. Because both the aircraft and the equipment have long useful lives, the costs associated with their acquisition are referred to as investment costs.
• Once the Netherlands has acquired the JSF, it needs to maintain and sustain the aircraft. The Ministry of Defence refers to the costs involved as operating costs.
• The government incurs various additional costs during the transition from the F-16 to the JSF. These are known as transition costs. 

Financial framework

When the government decided to buy the JSF, a strict ceiling was imposed on the investment costs and operating costs. These arrangements were set out in a policy document entitled In the Interests of the Netherlands and are referred to as the financial framework for the JSF. 

Ministry of Defence estimates

The Dutch Ministry of Defence has made estimates for each type of cost referred to above. These depend greatly on the exchange rate of the dollar. 

The financial processes relating to the JSF programme: payments made as a purchaser of the JSF

The payments made by the Netherlands as a purchaser of the JSF are remitted to the JSF Program Office (JPO), which is part of the US Department of Defense. The JPO runs the JSF programme, which includes managing sales and processing payments.

Our audit of the financial processes relating to the JSF programme also examined the financial processes surrounding these payments.