In Switzerland misunderstandings are daily occurrence due to linguistic diversity. Viola Amherd took advantage of this when purchasing US fighter jets.
The people of Valais are a resourceful bunch, who have been known to sell Spanish wine as their own or come up with a fixed price where there clearly was none.
Triangular deal agreed
Former Defense Minister Viola Amherd, from Brig-Glis in Upper Valais, defended her negotiating skills tooth and nail, claiming that Switzerland had agreed to a fixed price with the Americans for the purchase of 36 F-35 fighter jets.
When the bluff became increasingly obvious, she announced her resignation at the end of March 2025 in mid-January.
The clever politician probably noticed that the Americans always spoke of a “fixed price”.
But the US government always said that it would purchase the F-35 fighter jets from US manufacturer Lockheed Martin and resell them to Switzerland at exactly their ‘cost price’ (see chart).
Making it palatable to the people
In this respect, the price was and is indeed fixed. However, Amherd and the Department of Defense (VBS) wanted to interpret the “fixed price” differently, namely that Switzerland would not incur any additional costs beyond the agreed amount.
This allowed Amherd to present herself as a clever negotiator and make the deal palatable to the people.
The purchase was not a bottomless pit, according to the good news in the financial framework of the voting booklet.
Prices are estimates
Even Amherd must have realized that it was legally difficult to agree on something like this with the Americans.
She therefore brought in the renowned lawyers from Homburger to give more weight to the “premise” of a fixed price.
However, in their expert opinion, which is now available to the public in draft form, the star lawyers clearly stated that the purchase agreement did not contain a clause with a fixed price commitment.
Therefore, there was a risk that the prices would be considered estimates, they said.
Diplomatic support
Under certain circumstances, the Swiss Confederation could face a risk of increased costs.
“However, a price reduction would also be possible,” the Homburg lawyers explained.
It is a fixed price, and Switzerland is billed 1:1 for everything the US government has to pay. It is “fixed.”
Therefore, the US Embassy in Bern did not mind mentioning this in a communiqué.
“As Switzerland continues its F-35 procurement, which includes fixed-price contracts, the United States remains committed to the transparency we have demonstrated throughout this process” is therefore also correct.
US law prohibits loss-making
However, the US government only concludes contracts with Lockheed Martin around two years before a batch delivery for the respective batch. This had Armasuisse even explained to the lawyers.
Switzerland is logically allowed to inspect this agreement so that it can ensure that the Americans have indeed charged it the “fixed” price that the US government itself has to pay.
The Bernese officials are also aware that, according to the law, the US government is not allowed to suffer any losses in such contracts.
This means that if manufacturing costs rise, these are passed on to Switzerland at a fixed rate.
No judicial review possible
The agreement on inflation is only mentioned in the appendix.
The Homburg lawyers explain that they can only be consulted for the interpretation of the original contract.
“Furthermore, it should be noted that, due to the intergovernmental nature of this procurement contract, the dispute resolution mechanism refers to diplomatic channels,” they added.
According to the Zurich lawyers, judicial review or legal enforcement is unlikely to be possible.
This was later confirmed by US lawyers from Arnold & Porter.
In its investigation into the purchase of fighter jets, the National Council’s Control Committee (GPK-NR) smugly notes several times that Homburger had only been commissioned verbally by the DDPS.
Without documentation, the Amherd department was able to effectively dictate the direction of the report.
Financial auditors warned
However, based on these agreements with the Americans, the Swiss Federal Audit Office (EFK) also doubted that Switzerland had agreed on a fixed price for the F-35 fighter jets.
Armasuisse responded angrily to the EFK report in a statement.
“As the EFK itself notes, Armasuisse negotiated a contract clause with the US government whereby the US government purchases the F-35A from the manufacturer under a fixed-price contract and resells it to Switzerland at the same fixed price,” the Federal Office for Armament explained at the time.
Additional maintenance costs
Armasuisse’s more than 40 years of experience in handling such transactions has shown that none of the many contracts has resulted in cost overruns, it was even stated.
Inflation and everything else are therefore included, even though the federal financial auditors saw “no legal certainty for a fixed price in the sense of a lump sum according to Swiss case law.”
The EFK warned that there was even additional uncertainty regarding maintenance costs over the entire service life. Switzerland could therefore be facing an even greater fixed-price bombshell.
The day of reckoning arrives
Ultimately, it appears that the ‘fixed price’ is a linguistic problem in which all sides are essentially correct.
Everyone is talking about the same thing, but they all mean something different.
For Federal Councilor Amherd, this was of course convenient until the Valais ruse could no longer be maintained.
18.08.2025/kut./ena.
