A sign at the new Lockheed Martin Manufacturing Centre of Excellence is seen at the company’s headquarters in Ampthill near Bedford, Britain June 9, 2016. REUTERS/Peter Nicholls/File Photo

March 28, 2022

OTTAWA (Reuters) -Canada will announce on Monday that Lockheed Martin Corp is the preferred bidder in a multibillion-dollar competition to supply 88 new fighter jets, said an industry source close to the file.

The announcement means Ottawa will only hold detailed talks with the U.S. company, said the source, who requested anonymity given the sensitivity of the situation. If those negotiations for some reason fail, the government will turn to Sweden’s Saab, the other contender.

Canada belongs to the consortium that developed Lockheed Martin’s F-35 jet, which defense sources say is the military’s first choice. Ottawa says the contract could be worth up to C$19 billion ($15.10 billion).

The move marks a reversal for Prime Minister Justin Trudeau, who came to power in late November 2015 vowing not to buy the F-35 on the grounds it was too expensive.

This appeared to favor Boeing Co, but the U.S. company fell out of favor with Ottawa after taking trade action against Canadian rival Bombardier Inc and was excluded from the competition last December.

A spokesman for federal Procurement Minister Anita Anand, in overall charge of the process, declined to comment. Lockheed Martin and Saab were not immediately available for comment.

($1 = 1.2586 Canadian dollars)

(Reporting by David Ljunggren; editing by John Stonestreet and Jonathan Oatis)

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