By: David Pugliese, Defence Watch
Feb. 9 was the deadline for companies to apply to the Canadian government to be on the supplier’s list for the new program to provide a fleet of fighter jets.
Being on that list is a requirement to be able to enter the competition to provide Canada with 88 new fighter aircraft.
Public Services and Procurement Canada was looking at having the list formalized by Feb. 12, at which time they would make it public. The reason for the fast turnaround is because it is relatively easy to be included on the list – essentially a manufacturer has to have a fighter jet currently in production.
But the list has yet to be formalized. Procurement Canada said they are still working on the list but offered no explanation about the delay.
But expect the major aircraft manufacturers who have indicated previous interest in the competition. They are:
Lockheed Martin with the F-35, Eurofighter Typhoon, the Dassault Rafale, and Saab’s Gripen.
Sources are also indicating that Boeing will join the competition with Super Hornet….perhaps an Advanced Super Hornet?
Showing posts with label Procurement Canada. Show all posts
Showing posts with label Procurement Canada. Show all posts
Friday, February 16, 2018
Tuesday, May 31, 2016
CAF Mack Truck Contact will Happen; Oshkosh to Receive Some form of Compensation
By: David Pugliese, Defence Watch
Public Services and Procurement Canada has yet to figure out how to proceed on the troubled purchase of Standard Military Pattern trucks for the Canadian Army.
In July the Conservative government announced that Mack Defense had won the $834 million contract to provide 1,500 trucks.
But the Canadian International Trade Tribunal recently upheld a complaint from Oshkosh that the procurement was flawed. In its ruling the CITT is calling on PSPC to re-evaluate Oshkosh’s truck design. The Ottawa Citizen has reported that if that re-evaluation shows the company’s truck should have won the contract, then the CITT recommends the government compensate Oshkosh “for the profits it would have received had it been properly awarded the contract.”
There are also a number of other ways to deal with the situation, according to the CITT. But they all involve Oshkosh walking away with some cash to compensate the company for their involvement in this problem procurement.
Whatever the amount, the Department of National Defence is still proceeding on the purchase. “The Canadian International Trade Tribunal will not recommend that the contract awarded to Mack Defense LLC be cancelled,” the CITT ruling noted.
DND spokeswoman Ashley Lemire told Defence Watch that, “The Canadian International Trade Tribunal ruling is not influencing timelines on the MSVS Standard Military Pattern contract with Mack Defense. With respect to progress, National Defence has completed the first portion of the test programme, which was performed in France. We will be pursuing testing in Canada over the summer and fall of this year. In February, the Crown and Mack Defense agreed to postpone vehicle deliveries to the fall of 2017 to better align requirements verification with production. Other deliverables, such as trailers and Armoured Protection Systems, are scheduled to start delivery in the summer of 2017.”
Public Services and Procurement Canada has yet to figure out how to proceed on the troubled purchase of Standard Military Pattern trucks for the Canadian Army.
In July the Conservative government announced that Mack Defense had won the $834 million contract to provide 1,500 trucks.
But the Canadian International Trade Tribunal recently upheld a complaint from Oshkosh that the procurement was flawed. In its ruling the CITT is calling on PSPC to re-evaluate Oshkosh’s truck design. The Ottawa Citizen has reported that if that re-evaluation shows the company’s truck should have won the contract, then the CITT recommends the government compensate Oshkosh “for the profits it would have received had it been properly awarded the contract.”
There are also a number of other ways to deal with the situation, according to the CITT. But they all involve Oshkosh walking away with some cash to compensate the company for their involvement in this problem procurement.
Whatever the amount, the Department of National Defence is still proceeding on the purchase. “The Canadian International Trade Tribunal will not recommend that the contract awarded to Mack Defense LLC be cancelled,” the CITT ruling noted.
DND spokeswoman Ashley Lemire told Defence Watch that, “The Canadian International Trade Tribunal ruling is not influencing timelines on the MSVS Standard Military Pattern contract with Mack Defense. With respect to progress, National Defence has completed the first portion of the test programme, which was performed in France. We will be pursuing testing in Canada over the summer and fall of this year. In February, the Crown and Mack Defense agreed to postpone vehicle deliveries to the fall of 2017 to better align requirements verification with production. Other deliverables, such as trailers and Armoured Protection Systems, are scheduled to start delivery in the summer of 2017.”
Thursday, April 21, 2016
Conservative and Liberal MPs trade blame for failed Military Procurement
By: David Pugliese, The Ottawa Citizen
OTTAWA — The Conservatives and Liberals traded barbs in the Commons Wednesday, arguing about who was to blame for failed military equipment purchases after an Ottawa Citizen article revealed some of the Canadian Forces key acquisitions will see their funding delayed.
The Liberal government’s budget, released in late March, calls for $3.7 billion in spending on equipment to be delayed until 2021 or later.
But the Citizen revealed that some of the military’s top equipment programs — including projects to buy new Cyclone maritime helicopters and Arctic patrol vessels — will be among the projects to see their funding delayed.
Citing the Citizen article, a trio of Conservative MPs launched attacks on the government, accusing the Liberals of cutting the defence budget.
“Unfortunately, here in Ottawa our military is entering another era of darkness,” said Tory defence critic James Bezan.
But John McKay, parliamentary secretary to Defence Minister Harjit Sajjan, said it was the Conservative government that left military procurement and funding in a mess.
McKay said no money is being cut from the defence budget. Instead of fixing procurement and financial problems, he said the Conservatives were “climbing in and out of fake airplanes,” a reference to former defence minister Peter MacKay’s $40,000 press conference during which he posed in a model F-35 jet.
OTTAWA — The Conservatives and Liberals traded barbs in the Commons Wednesday, arguing about who was to blame for failed military equipment purchases after an Ottawa Citizen article revealed some of the Canadian Forces key acquisitions will see their funding delayed.
The Liberal government’s budget, released in late March, calls for $3.7 billion in spending on equipment to be delayed until 2021 or later.
But the Citizen revealed that some of the military’s top equipment programs — including projects to buy new Cyclone maritime helicopters and Arctic patrol vessels — will be among the projects to see their funding delayed.
Citing the Citizen article, a trio of Conservative MPs launched attacks on the government, accusing the Liberals of cutting the defence budget.
“Unfortunately, here in Ottawa our military is entering another era of darkness,” said Tory defence critic James Bezan.
But John McKay, parliamentary secretary to Defence Minister Harjit Sajjan, said it was the Conservative government that left military procurement and funding in a mess.
McKay said no money is being cut from the defence budget. Instead of fixing procurement and financial problems, he said the Conservatives were “climbing in and out of fake airplanes,” a reference to former defence minister Peter MacKay’s $40,000 press conference during which he posed in a model F-35 jet.
 |
| THE CANADIAN PRESS/Adrian Wyld/File - Then-defence minister Peter MacKay checks out the cockpit of a mock F-35 Joint Strike Fighter following an announcement in July 2010 that the federal government would be purchasing a number of the jets. The purchase never went through. |
“Had the former government actually done its work, then the procurement cycle would have matched the fiscal cycle and accordingly we possibly would have had some procurements met,” McKay said.
Besides delays in funding for the Arctic patrol ships and Cyclone helicopters, the budget plan would affect the CF-18 replacement, the modernization of the Halifax-class frigates and a program to provide new communications equipment to soldiers. Another $2.6 billion in equipment funding – not yet earmarked for specific gear — will also be withheld until 2021 or beyond.
It is unclear how some of the programs, such as the Cyclone helicopters, which are now being delivered, might be affected by the decision.
Conservative MP Cheryl Gallant said the plan to delay funding for the Cyclones is similar to then Liberal prime minister Jean Chéetien’s decision in the 1990s to cancel the EH-101 maritime helicopters.
Some analysts have voiced concern the $3.7 billion won’t be returned to the DND.
But Ashley Lemire, a DND spokeswoman, noted in an email, “some major projects experienced delays in their original timelines, which resulted in funds needing to be moved forward to future years.”
Besides delays in funding for the Arctic patrol ships and Cyclone helicopters, the budget plan would affect the CF-18 replacement, the modernization of the Halifax-class frigates and a program to provide new communications equipment to soldiers. Another $2.6 billion in equipment funding – not yet earmarked for specific gear — will also be withheld until 2021 or beyond.
It is unclear how some of the programs, such as the Cyclone helicopters, which are now being delivered, might be affected by the decision.
Conservative MP Cheryl Gallant said the plan to delay funding for the Cyclones is similar to then Liberal prime minister Jean Chéetien’s decision in the 1990s to cancel the EH-101 maritime helicopters.
Some analysts have voiced concern the $3.7 billion won’t be returned to the DND.
But Ashley Lemire, a DND spokeswoman, noted in an email, “some major projects experienced delays in their original timelines, which resulted in funds needing to be moved forward to future years.”
Military Procurement can help break Canada’s innovation logjam
By: Christyn Cianfarani, Globe and Mail
Christyn Cianfarani is president of the Canadian Association of Defence and Security Industries
Stimulating innovation in the Canadian economy has proven to be one of the hardest things for governments to achieve. For a generation, most attempts have barely moved the needle.
Christyn Cianfarani is president of the Canadian Association of Defence and Security Industries
Stimulating innovation in the Canadian economy has proven to be one of the hardest things for governments to achieve. For a generation, most attempts have barely moved the needle.
 |
| A worker heads past CCGS Corporal Teather C.V., a Hero-class patrol vessel, at the Irving shipyard in Halifax, on Friday, Oct. 19, 2012. Christyn Cianfarani argues military procurement can help break Canada’s innovation logjam. (Andrew Vaughan/The Canadian Press) |
But a recent idea floated by Navdeep Bains, the Minister of Innovation, Science and Economic Development – namely, using government procurement as a tool to promote innovation – suggests that new thinking is in the air in Ottawa.
For nearly a generation, Canada has followed the standard policy menu to stimulate innovation. Governments have reduced marginal tax rates on business and workers; invested in university-based research, postsecondary education, training/skills development and infrastructure; opened Canada’s markets to international trade and investment; and provided generous research and development tax incentives.
The results have been disappointing. Canada’s productivity growth, which is highly dependent on innovation, remains stagnant, at about 1 per cent a year. New approaches and new policy tools are needed to break this logjam. One such tool is government buying power: procurement. And defence procurement is particularly well suited in this connection.
The defence industry operates in a managed global marketplace in which governments are the main if not sole customers. In the defence market, governments also have policy levers at their disposal and wider discretion to achieve their objectives than in other markets. Defence procurement, for example, is not nearly as constrained by trade agreements as other economic sectors.
For this and other reasons, many of our allies have for decades used military procurement to drive innovation in their economies. The British, U.S., French and Swedish economies, for example, would not be nearly as innovative today had they not approached military procurement with a focus on developing key defence technologies and innovations at home that often to lead to wider commercial applications and then exporting them abroad. Canada has not traditionally been in that game.
But since the 2014 introduction of the federal Defence Procurement Strategy, we have had a new tool in the policy tool box: “Industrial and technological benefits” (ITBs) and, in particular, the “value proposition” part of that program. The value proposition principle can require bidders on defence projects to make commitments to R&D and intellectual property transfer to Canada, both of which are key drivers of innovation. This principle, still in its infancy, needs to be embraced and used systematically and strategically going forward to enhance innovation in Canada’s defence industrial base.
This would not mean creating an innovative domestic defence industry out of nothing. Rather, it is a case of building upon a solid foundation.
A recently completed Innovation, Science and Economic Development/Statistics Canada survey concludes that the Canadian-based defence industry generates 60 per cent of its revenue from exports, which is 20 per cent higher than the overall Canadian manufacturing industry. An export intensity of that magnitude is an indicator of an innovative industry, especially given the highly regulated and protected international marketplace where defence companies operate.
The survey also reported that more than 30 per cent of employment in the Canadian defence industry is concentrated among highly skilled engineers, scientists, researchers, technicians and technologists, and the sector outpaced the overall Canadian manufacturing average in employee compensation, all of which are innovation indicators.
But to really achieve the result the government is looking for, an effort should be made to marry the innovation agenda with the recently announced defence review. Together, these provide the opportunity to make practical changes to improve the process of defence procurement while enhancing innovation.
Canada should take a page from the playbooks of its allies, which have addressed the industrial dimensions of military procurement in their defence reviews. The Australians, for example, have just published a defence white paper accompanied by a defence industrial policy focused on innovation in that sector.
The notion of using government procurement to move beyond the textbook innovation policy menu would be a welcome innovation in and of itself. The test case for this new approach should be the defence sector, in which Ottawa already possesses innovation policy instruments and is less constrained by trade agreements.
Canada’s defence industrial base can be a real source of innovation-led growth over the next few years. All it takes is government and industry working co-operatively and strategically toward that goal.
For nearly a generation, Canada has followed the standard policy menu to stimulate innovation. Governments have reduced marginal tax rates on business and workers; invested in university-based research, postsecondary education, training/skills development and infrastructure; opened Canada’s markets to international trade and investment; and provided generous research and development tax incentives.
The results have been disappointing. Canada’s productivity growth, which is highly dependent on innovation, remains stagnant, at about 1 per cent a year. New approaches and new policy tools are needed to break this logjam. One such tool is government buying power: procurement. And defence procurement is particularly well suited in this connection.
The defence industry operates in a managed global marketplace in which governments are the main if not sole customers. In the defence market, governments also have policy levers at their disposal and wider discretion to achieve their objectives than in other markets. Defence procurement, for example, is not nearly as constrained by trade agreements as other economic sectors.
For this and other reasons, many of our allies have for decades used military procurement to drive innovation in their economies. The British, U.S., French and Swedish economies, for example, would not be nearly as innovative today had they not approached military procurement with a focus on developing key defence technologies and innovations at home that often to lead to wider commercial applications and then exporting them abroad. Canada has not traditionally been in that game.
But since the 2014 introduction of the federal Defence Procurement Strategy, we have had a new tool in the policy tool box: “Industrial and technological benefits” (ITBs) and, in particular, the “value proposition” part of that program. The value proposition principle can require bidders on defence projects to make commitments to R&D and intellectual property transfer to Canada, both of which are key drivers of innovation. This principle, still in its infancy, needs to be embraced and used systematically and strategically going forward to enhance innovation in Canada’s defence industrial base.
This would not mean creating an innovative domestic defence industry out of nothing. Rather, it is a case of building upon a solid foundation.
A recently completed Innovation, Science and Economic Development/Statistics Canada survey concludes that the Canadian-based defence industry generates 60 per cent of its revenue from exports, which is 20 per cent higher than the overall Canadian manufacturing industry. An export intensity of that magnitude is an indicator of an innovative industry, especially given the highly regulated and protected international marketplace where defence companies operate.
The survey also reported that more than 30 per cent of employment in the Canadian defence industry is concentrated among highly skilled engineers, scientists, researchers, technicians and technologists, and the sector outpaced the overall Canadian manufacturing average in employee compensation, all of which are innovation indicators.
But to really achieve the result the government is looking for, an effort should be made to marry the innovation agenda with the recently announced defence review. Together, these provide the opportunity to make practical changes to improve the process of defence procurement while enhancing innovation.
Canada should take a page from the playbooks of its allies, which have addressed the industrial dimensions of military procurement in their defence reviews. The Australians, for example, have just published a defence white paper accompanied by a defence industrial policy focused on innovation in that sector.
The notion of using government procurement to move beyond the textbook innovation policy menu would be a welcome innovation in and of itself. The test case for this new approach should be the defence sector, in which Ottawa already possesses innovation policy instruments and is less constrained by trade agreements.
Canada’s defence industrial base can be a real source of innovation-led growth over the next few years. All it takes is government and industry working co-operatively and strategically toward that goal.
Friday, April 1, 2016
Perry: Our broken military procurement system
Written by David Perry, The National Post
Every two years, apparently, the Department of Finance announces that Canada’s system for procuring military equipment is under-performing.
The 2016 budget had little to say about defence, but what it did say was depressing. A total of $3.716 billion in funding that was set aside for capital projects is being removed from the fiscal framework over the next five years, and reallocated out into the future. The funding, intended to buy ships, aircraft and vehicles for the military in the short term, has been shoved out into the distant future, to be used between 2021 and 2045.
Sadly, this is a reoccurring theme. The same thing happened in 2012 and again in 2014. In those years, the Harper government similarly pushed that exact same pot of funding into the future. In total, the Tories deferred $6.7 billion in funding pledged for major defence purchases. At the time, there was significant speculation then-prime minister Stephen Harper had done so as part of the effort to balance the budget.
Since Prime Minister Justin Trudeau’s “modest” deficits will total $113 billion over five years, this shifting of procurement funds is certainly not part of an effort to curb spending. Rather, it reflects a system of procuring defence equipment that simply cannot deliver on schedule. The funds can be moved largely because they “cannot be spent due to unforeseen delays in planned projects.” In essence, no matter how badly the equipment is needed, the government just isn’t able to get this money out the door on schedule.
he Budget Plan contains at least a partial explanation why this is. The cumulative military recapitalization plans outlined by the Martin and Harper governments were extremely aggressive. They were intended to procure tens of billions worth of new equipment in a few years. But adhering to that schedule would have required a major expansion of the procurement system’s capacity.
Instead, a procurement workforce that lost a huge amount of capacity during the 1990s grew only marginally during the 2000s, and was then hammered by Harper’s attempts to balance the books. At the same time, longstanding problems defining and communicating military requirements and costing projects persisted, and new, more onerous policies regarding investment planning and managing major projects were introduced, which meant that procuring military equipment took more time and effort. Major problems with the procurement of military helicopters and fighter jets flagged by the auditor general contributed to a loss of trust in the bureaucracy, resulting in new governance regimes that added further steps to the procurement process. As a result, the aggressive schedules proved increasingly unrealistic.
This all drives home the importance of the commitment the budget makes to improving the process for making major defence purchases over the coming year. No matter what form the revised defence policy takes, it will require further, significant spending on military re-capitalization. Turning the available funding into actual military equipment requires sustained attention from the government.
The creation of an ad hoc cabinet committee for major procurement files is a positive indication of a commitment to improve the system. This needs to be matched by increasing the capacity of the system by growing the workforce and increasing its level of expertise. As part of the defence policy review, our true priorities need to be identified and have resources concentrated on moving them forward.
Finally, few areas of government stand to benefit more than defence procurement from the government’s pledge to reorient toward actual outcomes. Inordinate focus is placed at present on complying perfectly with policies interpreted to demand zero risk to the government, rather than the actual acquisition of military equipment.
If this situation doesn’t change, the 2018 budget will be telling the exact same story of a defence procurement system unable to deliver what Canada needs.
National Post
Dave Perry is a senior analyst at the Canadian Global Affairs Institute.
Every two years, apparently, the Department of Finance announces that Canada’s system for procuring military equipment is under-performing.
The 2016 budget had little to say about defence, but what it did say was depressing. A total of $3.716 billion in funding that was set aside for capital projects is being removed from the fiscal framework over the next five years, and reallocated out into the future. The funding, intended to buy ships, aircraft and vehicles for the military in the short term, has been shoved out into the distant future, to be used between 2021 and 2045.
Sadly, this is a reoccurring theme. The same thing happened in 2012 and again in 2014. In those years, the Harper government similarly pushed that exact same pot of funding into the future. In total, the Tories deferred $6.7 billion in funding pledged for major defence purchases. At the time, there was significant speculation then-prime minister Stephen Harper had done so as part of the effort to balance the budget.
Since Prime Minister Justin Trudeau’s “modest” deficits will total $113 billion over five years, this shifting of procurement funds is certainly not part of an effort to curb spending. Rather, it reflects a system of procuring defence equipment that simply cannot deliver on schedule. The funds can be moved largely because they “cannot be spent due to unforeseen delays in planned projects.” In essence, no matter how badly the equipment is needed, the government just isn’t able to get this money out the door on schedule.
he Budget Plan contains at least a partial explanation why this is. The cumulative military recapitalization plans outlined by the Martin and Harper governments were extremely aggressive. They were intended to procure tens of billions worth of new equipment in a few years. But adhering to that schedule would have required a major expansion of the procurement system’s capacity.
Instead, a procurement workforce that lost a huge amount of capacity during the 1990s grew only marginally during the 2000s, and was then hammered by Harper’s attempts to balance the books. At the same time, longstanding problems defining and communicating military requirements and costing projects persisted, and new, more onerous policies regarding investment planning and managing major projects were introduced, which meant that procuring military equipment took more time and effort. Major problems with the procurement of military helicopters and fighter jets flagged by the auditor general contributed to a loss of trust in the bureaucracy, resulting in new governance regimes that added further steps to the procurement process. As a result, the aggressive schedules proved increasingly unrealistic.
This all drives home the importance of the commitment the budget makes to improving the process for making major defence purchases over the coming year. No matter what form the revised defence policy takes, it will require further, significant spending on military re-capitalization. Turning the available funding into actual military equipment requires sustained attention from the government.
The creation of an ad hoc cabinet committee for major procurement files is a positive indication of a commitment to improve the system. This needs to be matched by increasing the capacity of the system by growing the workforce and increasing its level of expertise. As part of the defence policy review, our true priorities need to be identified and have resources concentrated on moving them forward.
Finally, few areas of government stand to benefit more than defence procurement from the government’s pledge to reorient toward actual outcomes. Inordinate focus is placed at present on complying perfectly with policies interpreted to demand zero risk to the government, rather than the actual acquisition of military equipment.
If this situation doesn’t change, the 2018 budget will be telling the exact same story of a defence procurement system unable to deliver what Canada needs.
National Post
Dave Perry is a senior analyst at the Canadian Global Affairs Institute.
Sunday, February 21, 2016
Canadian Panel To Guide Major Military Procurements
By: David Pugliese, Defense News
VICTORIA, British Columbia — The Canadian government has formed a Cabinet committee to shepherd high-profile defense purchases, including those of fighter aircraft, through the country’s notoriously problem-plagued procurement system.
The committee will oversee billions of dollars in new purchases and ensure they do not get stalled in a federal bureaucracy that has seen other defense acquisitions derailed or delayed for years.
The committee, which has the political clout to liaison directly with Prime Minister Justin Trudeau, will keep tabs on the Canadian Surface Combatant project, which will see the building of new warships to replace Canada’s destroyers and frigates; the fixed-wing search-and-rescue aircraft program; the logistics vehicle modernization program, which will provide trucks for the Canadian Army; the replacement for the CF-18 fighter jets; and the acquisition of an Offshore Oceanographic Science Vessel.
The Liberal government has promised to overhaul Canada’s procurement system and cut through the red tape that has created delays of up to a decade on some large acquisitions.
“Procurement has become paralyzed,” Trudeau complained in September, a month before he won the federal election and became prime minister.
During the campaign, Trudeau noted his government would ensure all equipment acquisitions operate with “vastly improved timelines and vigorous parliamentary oversight," while “providing the necessary, decisive, involved, and accountable Cabinet leadership to drive major programs to a timely and successful conclusion.”
The committee is made up of Procurement Minister Judy Foote, Defence Minister Harjit Sajjan, Navdeep Bains, minister of Innovation, Science and Economic Development, and Scott Brison, the president of the Treasury Board.
The Liberal government declined to discuss details about the committee.
But Alan Williams, the Department of National Defence’s former procurement chief, said the list represents some of the key equipment purchases over the next five to 10 years. Williams said that while government efforts to try and fix procurement system problems is welcome, he questioned whether the committee would make matters worse.
“You have four ministers each bringing their own views to the table and each representing federal departments with their own agendas,” said Williams. “They’re going to want studies. They’re going to want reviews. I can see this actually slowing down the process.
Williams said if the government wants to ensure a smoother procurement system, it should place one minister in charge of military acquisitions.
“Put one minister in charge, hold him or her accountable, get people in place who understand the process and get it right for all projects, not just four or five,” he explained.
Of the projects to be monitored by the committee, only the acquisition of fixed-wing search-and-rescue aircraft has made any progress. Bids for that CAN $3.1 billion (US $2.3 billion) acquisition were submitted Jan. 11.
“It is estimated that the evaluation period for the selection of the successful bidder, which includes aircraft testing, may take up to six months,” said Pierre-Alain Bujold, spokesman for Public Services and Procurement Canada.
The government provided no details on when the winning company would be announced, but aerospace firms are expecting that to happen in late 2016 or early 2017.
Canada’s previous Conservative Party government tried to overhaul the procurement system in February 2014 but little was accomplished. The Conservative government had to deal with a series of high-profile failed or controversial military procurements over the last several years, sparking criticism in both the House of Commons and news media.
The $2 billion project to purchase new close combat armored vehicles for the Army was canceled. Canada’s purchase of F-35 fighter aircraft was thrown into turmoil several years ago after a report by the government’s auditor found Defence Department officials withheld key information from Parliament about the jet, under-estimated costs and didn’t follow proper procurement rules.
In 2008 the procurement of a fleet of supply ships for the Royal Canadian Navy was scuttled. It has been restarted but the ships aren’t expected until 2021.
New Arctic offshore patrol ships, which were to be in the water in 2012, have yet to be built. The first is expected to be ready in 2018.
VICTORIA, British Columbia — The Canadian government has formed a Cabinet committee to shepherd high-profile defense purchases, including those of fighter aircraft, through the country’s notoriously problem-plagued procurement system.
The committee will oversee billions of dollars in new purchases and ensure they do not get stalled in a federal bureaucracy that has seen other defense acquisitions derailed or delayed for years.
The committee, which has the political clout to liaison directly with Prime Minister Justin Trudeau, will keep tabs on the Canadian Surface Combatant project, which will see the building of new warships to replace Canada’s destroyers and frigates; the fixed-wing search-and-rescue aircraft program; the logistics vehicle modernization program, which will provide trucks for the Canadian Army; the replacement for the CF-18 fighter jets; and the acquisition of an Offshore Oceanographic Science Vessel.
The Liberal government has promised to overhaul Canada’s procurement system and cut through the red tape that has created delays of up to a decade on some large acquisitions.
“Procurement has become paralyzed,” Trudeau complained in September, a month before he won the federal election and became prime minister.
During the campaign, Trudeau noted his government would ensure all equipment acquisitions operate with “vastly improved timelines and vigorous parliamentary oversight," while “providing the necessary, decisive, involved, and accountable Cabinet leadership to drive major programs to a timely and successful conclusion.”
The committee is made up of Procurement Minister Judy Foote, Defence Minister Harjit Sajjan, Navdeep Bains, minister of Innovation, Science and Economic Development, and Scott Brison, the president of the Treasury Board.
The Liberal government declined to discuss details about the committee.
But Alan Williams, the Department of National Defence’s former procurement chief, said the list represents some of the key equipment purchases over the next five to 10 years. Williams said that while government efforts to try and fix procurement system problems is welcome, he questioned whether the committee would make matters worse.
“You have four ministers each bringing their own views to the table and each representing federal departments with their own agendas,” said Williams. “They’re going to want studies. They’re going to want reviews. I can see this actually slowing down the process.
Williams said if the government wants to ensure a smoother procurement system, it should place one minister in charge of military acquisitions.
“Put one minister in charge, hold him or her accountable, get people in place who understand the process and get it right for all projects, not just four or five,” he explained.
Of the projects to be monitored by the committee, only the acquisition of fixed-wing search-and-rescue aircraft has made any progress. Bids for that CAN $3.1 billion (US $2.3 billion) acquisition were submitted Jan. 11.
“It is estimated that the evaluation period for the selection of the successful bidder, which includes aircraft testing, may take up to six months,” said Pierre-Alain Bujold, spokesman for Public Services and Procurement Canada.
The government provided no details on when the winning company would be announced, but aerospace firms are expecting that to happen in late 2016 or early 2017.
Canada’s previous Conservative Party government tried to overhaul the procurement system in February 2014 but little was accomplished. The Conservative government had to deal with a series of high-profile failed or controversial military procurements over the last several years, sparking criticism in both the House of Commons and news media.
The $2 billion project to purchase new close combat armored vehicles for the Army was canceled. Canada’s purchase of F-35 fighter aircraft was thrown into turmoil several years ago after a report by the government’s auditor found Defence Department officials withheld key information from Parliament about the jet, under-estimated costs and didn’t follow proper procurement rules.
In 2008 the procurement of a fleet of supply ships for the Royal Canadian Navy was scuttled. It has been restarted but the ships aren’t expected until 2021.
New Arctic offshore patrol ships, which were to be in the water in 2012, have yet to be built. The first is expected to be ready in 2018.
Friday, February 12, 2016
$26B Canadian Surface Combatant Program Under Review
Written by: JOHN IVISON, Ottawa Citizen
Published in the Friday February 12, 2016 Edition
The multibillion-dollar solesource deal to build a fleet of warships for the Royal Canadian Navy is being reviewed by a newly formed Cabinet committee set up to take a closer look at controversial defence procurement contracts.
Irving Shipbuilding in Halifax was awarded the build contract as part of Canada’s largest-ever defence procurement project, the $26-billion Canadian Surface Combatant (CSC) program.
Irving was also named as the prime contractor on the design phase. That role allows Irving a say in designating subcontractors for the project, and awards Irving a cut of their payment — which could be even more lucrative than building the ship hulls, since up to 70 per cent of the cost of the vessels derives from the complex combat systems that will be installed on them.
That role as prime contractor is now “under active discussion,” said a senior industry source.
Irving’s appointment as prime contractor was greeted with shock in the industry. Since the contract was awarded without being put out to tender, accusations followed that the taxpayer might have received a better deal had competing bids been received.
The Conservatives justified handing Irving the work without a tender on the basis that it would save money having one contractor instead of two (one for the build, one for design), each charging a percentage fee on every dollar spent.
Government and industry sources say Irving put out calls last fall for information and data from pre-qualified defence companies interested in bidding on the design and combat systems integration phase of the project.
However, that process stopped “dead in its tracks” after the new Liberal government indicated its plans for a new ad hoc Cabinet committee, chaired by Environment Minister Catherine McKenna, to review key projects including the warship program and the plan to replace the CF-18 fighter jets.
Sources said the choice of Irving’s Halifax yard as the construction site for the combat vessels is not in question. Justin Trudeau promised as much during the election. “We will be able to guarantee the delivery of current procurements for the navy, we will keep those promises for the Halifax shipyards,” he said in September.
As Postmedia reported last month, Public Services and Procurement Canada has confirmed that no contract has been signed between the government and Irving, even though Irving has been designated prime contractor for the “definition and implementation” phase. “While three preliminary services contracts have been awarded to (Irving) for work relating to the CSC project the definition contract for CSC has not yet been awarded.”
A spokeswoman for new Public Services minister Judy Foote said Thursday: “Discussions on the process of selecting a warship designer and combat systems integrator are ongoing.”
However, sources said there are concerns in government circles about the risk of cost overruns, not to mention the challenges caused by asking U.S. defence companies to hand classified information related to their weapons systems over to Irving, a third party, instead of directly to the government.
“There is a degree of nervousness” on the Irving side, said one industry source.
A spokeswoman for Irving said the company had no comment.
The commitment to tighten up defence procurement rules was included in the Liberal election campaign. The Liberals said they would ensure “all equipment acquisitions operate with vastly improved timelines and vigorous Parliamentary oversight.”
The Conservatives had originally planned to build 15 warships but federal officials acknowledged last year inflation and currency pressures could see that number reduced. In December, Vice Admiral Mark Norman, commander of the Royal Canadian Navy, said the cost of the surface combatant ships could reach $30 billion.
During the election, Trudeau promised to set aside any savings from the CF-18 replacement program and invest them in the navy.
Published in the Friday February 12, 2016 Edition
The multibillion-dollar solesource deal to build a fleet of warships for the Royal Canadian Navy is being reviewed by a newly formed Cabinet committee set up to take a closer look at controversial defence procurement contracts.
Irving Shipbuilding in Halifax was awarded the build contract as part of Canada’s largest-ever defence procurement project, the $26-billion Canadian Surface Combatant (CSC) program.
 |
| A concept design of the Canadian Surface Combatant from BMT Fleet Technology |
That role as prime contractor is now “under active discussion,” said a senior industry source.
Irving’s appointment as prime contractor was greeted with shock in the industry. Since the contract was awarded without being put out to tender, accusations followed that the taxpayer might have received a better deal had competing bids been received.
The Conservatives justified handing Irving the work without a tender on the basis that it would save money having one contractor instead of two (one for the build, one for design), each charging a percentage fee on every dollar spent.
Government and industry sources say Irving put out calls last fall for information and data from pre-qualified defence companies interested in bidding on the design and combat systems integration phase of the project.
However, that process stopped “dead in its tracks” after the new Liberal government indicated its plans for a new ad hoc Cabinet committee, chaired by Environment Minister Catherine McKenna, to review key projects including the warship program and the plan to replace the CF-18 fighter jets.
Sources said the choice of Irving’s Halifax yard as the construction site for the combat vessels is not in question. Justin Trudeau promised as much during the election. “We will be able to guarantee the delivery of current procurements for the navy, we will keep those promises for the Halifax shipyards,” he said in September.
As Postmedia reported last month, Public Services and Procurement Canada has confirmed that no contract has been signed between the government and Irving, even though Irving has been designated prime contractor for the “definition and implementation” phase. “While three preliminary services contracts have been awarded to (Irving) for work relating to the CSC project the definition contract for CSC has not yet been awarded.”
A spokeswoman for new Public Services minister Judy Foote said Thursday: “Discussions on the process of selecting a warship designer and combat systems integrator are ongoing.”
However, sources said there are concerns in government circles about the risk of cost overruns, not to mention the challenges caused by asking U.S. defence companies to hand classified information related to their weapons systems over to Irving, a third party, instead of directly to the government.
“There is a degree of nervousness” on the Irving side, said one industry source.
A spokeswoman for Irving said the company had no comment.
The commitment to tighten up defence procurement rules was included in the Liberal election campaign. The Liberals said they would ensure “all equipment acquisitions operate with vastly improved timelines and vigorous Parliamentary oversight.”
 |
| A concept design of the Canadian Surface Combatant from the CASR |
The Conservatives had originally planned to build 15 warships but federal officials acknowledged last year inflation and currency pressures could see that number reduced. In December, Vice Admiral Mark Norman, commander of the Royal Canadian Navy, said the cost of the surface combatant ships could reach $30 billion.
During the election, Trudeau promised to set aside any savings from the CF-18 replacement program and invest them in the navy.
Tuesday, February 2, 2016
CAF Equipment Funding Billions Short
Written by Murray Brewster, The Canadian Press
OTTAWA — A Senate committee has been told there is a shortfall of tens of billions of dollars between funding that's been set aside for military equipment and the actual price tag for what the military says it needs.
Defence analyst Dave Perry of the Canadian Global Affairs Institute testified that the "mismatch" is one of the biggest problems facing the new Liberal government as it seeks to overhaul the country's defence policy.
"At present, the defence procurement system is trying to buy more equipment that DND can afford," said Perry. "There is roughly three times more demand for project funding than there are available funds, leaving the capital acquisition budget short by several tens of billions of dollars, even with the planned increase to the defence budget that the government has promised to honour."
There are at least 100 pieces of equipment that Defence has deemed essential to fulfil its mandate in the coming years and only a portion of that list is funded, he said.
The dysfunctional military procurement system was a bane to the former Harper government, but despite reforms implemented two year ago, roughly 63 per cent the projects listed in the federal government's defence acquisition guide are late and only 34 per cent are on time.
Perry says since 2007 a total of nearly $9 billion in allocated capital funding for military hardware was not spent and much of that went back to the federal treasury.
He noted the figure rose significantly in the last budget year, which concluded in March 2015 and saw $1.5 billion in funds earmarked for purchasing capital equipment go unspent.
The Harper government introduced its much-heralded Defence Procurement Strategy in February 2014, an initiative meant to streamline the process and leverage the participation of Canadian industry.
But Perry told the Senate defence committee that the effort has not yet produced results.
"To be blunt, I hope the new government finds that lack of progress unacceptable," he said.
The Liberals promised a comprehensive defence policy review to replace the former Conservative government's 2007-era Canada First Defence Strategy. That document had a list of planned equipment purchases, but within 18 months of its publication National Defence privately deemed some of the projects unaffordable.
The new review — the first comprehensive analysis since the Chretien government's 1994 defence white paper — is key for tough decisions the Trudeau government will have to make, including how to replace the Air Force's aging CF-18 jet fighters.
Defence Minister Harjit Sajjan has said he wants the policy review completed by the end of the year — a commitment he reinforced last week in a speech to the Canada 2020 think-tank.
Murray Brewster, The Canadian Press
OTTAWA — A Senate committee has been told there is a shortfall of tens of billions of dollars between funding that's been set aside for military equipment and the actual price tag for what the military says it needs.
Defence analyst Dave Perry of the Canadian Global Affairs Institute testified that the "mismatch" is one of the biggest problems facing the new Liberal government as it seeks to overhaul the country's defence policy.
"At present, the defence procurement system is trying to buy more equipment that DND can afford," said Perry. "There is roughly three times more demand for project funding than there are available funds, leaving the capital acquisition budget short by several tens of billions of dollars, even with the planned increase to the defence budget that the government has promised to honour."
There are at least 100 pieces of equipment that Defence has deemed essential to fulfil its mandate in the coming years and only a portion of that list is funded, he said.
The dysfunctional military procurement system was a bane to the former Harper government, but despite reforms implemented two year ago, roughly 63 per cent the projects listed in the federal government's defence acquisition guide are late and only 34 per cent are on time.
Perry says since 2007 a total of nearly $9 billion in allocated capital funding for military hardware was not spent and much of that went back to the federal treasury.
He noted the figure rose significantly in the last budget year, which concluded in March 2015 and saw $1.5 billion in funds earmarked for purchasing capital equipment go unspent.
The Harper government introduced its much-heralded Defence Procurement Strategy in February 2014, an initiative meant to streamline the process and leverage the participation of Canadian industry.
But Perry told the Senate defence committee that the effort has not yet produced results.
"To be blunt, I hope the new government finds that lack of progress unacceptable," he said.
The Liberals promised a comprehensive defence policy review to replace the former Conservative government's 2007-era Canada First Defence Strategy. That document had a list of planned equipment purchases, but within 18 months of its publication National Defence privately deemed some of the projects unaffordable.
The new review — the first comprehensive analysis since the Chretien government's 1994 defence white paper — is key for tough decisions the Trudeau government will have to make, including how to replace the Air Force's aging CF-18 jet fighters.
Defence Minister Harjit Sajjan has said he wants the policy review completed by the end of the year — a commitment he reinforced last week in a speech to the Canada 2020 think-tank.
Murray Brewster, The Canadian Press
Friday, January 15, 2016
Defence Review to be completed in 2016
Written by: Marie-Danielle Smith
Published: Wednesday, 01/13/2016 12:00 am EST
Defence Minister Harjit Sajjan says he plans to complete a thorough defence policy review by the end of 2016—and the public will be asked to participate.
In an interview with Embassy Jan. 12, Mr. Sajjan confirmed that Department of National Defence officials are already identifying how the review, or Defence White Paper, will be conducted.
Public consultation will be involved and foreign allies will be consulted, he said. The review is expected to set a road map for the next 10 to 20 years.
“I want to make sure that we get the 'How' part. It’s so important,” he said. “If we don’t get that right then the quality’s not going to be there at the end.”
Arctic sovereignty, NORAD prioritized
As the raison d’être for the Canadian Armed Forces is debated once again, Mr. Sajjan said there are elements of Canadian defence policy that he assumes will be prioritized. The safety of Canadians will always be the “number one priority,” he said, while continental defence, Arctic sovereignty and Canada’s responsibilities within the North American Aerospace Defense Command and the North Atlantic Treaty Organization will stay constant.
Even so, he said defence policy needs to be placed “in a wider context that suits the needs of the vision that our government is setting." The Liberal government, in its early days, has talked up a return to multilateralism and a greater focus on diplomacy.
Working with foreign allies is “critical,” Mr. Sajjan said. The minister has connected with his counterparts from the United States, the United Kingdom, Australia, New Zealand and France, as well as other NATO allies.
British, Australian lessons
“The British just did a defence review," he said, referring to the Strategic Defence and Security Review 2015 released by the Cameron government on Nov. 23. "Australia is about to release theirs, and especially it’s important for us to be able to learn from those lessons."
He said he recently spoke with UK Defence Secretary Michael Fallon in London. “It is helping me to shape how Canada can look at doing [the defence review],” he said, noting the UK had used an interactive website to get public input.
“I’ve got some really key ideas that Fallon provided, and I’m looking forward to reading the Australian review when it comes out as well,” Mr. Sajjan said.
The minister said the credibility and relevancy of the review was important. “We can do a white paper of everything on the wishlist, but if you don’t have the budget to support it it really doesn’t matter.”
Defence officials declared the previous Harper government's military wishlist, the Canada First Defence Strategy, unaffordable in 2011, but no updated document was ever released.
'Very focused' on procurement
Sitting in his office at National Defence headquarters—where staffers said reporters hadn't been seen in the past few years under the previous government—Mr. Sajjan told Embassy that procurement is being looked at in “extreme detail."
“Does it have the right number of people, the right type of expertise to be able to make it more efficient,” he posited.
A recent report from the Canadian Global Affairs Institute’s David Perry had warned that cutbacks to DND’s materiel department were causing major slowdowns to the process.
“To have an agile force we need to support it as well. Certain areas we do need to increase,” Mr. Sajjan said. Procurement is "definitely one of them."
Though hesitant to look back at the previous government’s record, he acknowledged a belaboured procurement process.
He is “dismayed” at the capability gap in the Canadian Navy, he said, “because we didn’t get the procurement process right.” So he is “very focused” on making sure that procurement becomes more efficient.
“We’re going through a process that’s going to be more transparent, so that it’s done in a manner that gives confidence to the Canadian public,” Mr. Sajjan said.
He would not confirm, however, whether the Statement of Requirements for new defence procurements would be released publicly. In 2013, DND quietly decided to no longer post these key technical documents on its website, which allowed the public to see the military’s requirements for crucial new planes, ships, and vehicles.
With the ubiquitous F-35 fighter jet program, shafted by the Liberals to replace the CF-18s in favour of an open competition, Mr. Sajjan said “the last thing I want to see with our fighters is what we have with our Navy right now: the gap in our capabilities.”
When it comes to figuring out how Canada's National Shipbuilding Procurement Strategy should move forward—including narrowing down exactly which ships are needed and how many—the defence policy review will help to provide “a lot more clarity.”
'Consistent and predictable' funding
Asked about the transformation recommendations of fellow MP and retired general Andrew Leslie, whose controversial report recommended ways to improve the department’s efficiency, Mr. Sajjan noted there could be redundancies in some areas within the department. The defence review will identify these, he said.
Another thing the review will determine, he said, is the future for Canada’s reserve force. The previous government had committed to an accelerated expansion from 24,000 to 30,000 members.
“With the defence review it will allow us to look at what the capability and the role of the reserves will be for the future,” Mr. Sajjan said. “In some areas, as much as we want to grow, the population can’t support that growth.”
Ultimately, funding will play a big role in how the department will evolve. The Liberals committed to maintaining the current defence budget escalator—a three per cent increase to the budget annually, as of the 2015 federal budget.
The minister wouldn’t specify whether the government is thinking of increasing funding any more than that, but he said it’s his goal to make sure funding is “consistent and predictable” to better plan for the future.
“And as the economy improves, we can look at adjusting things as well,” he added.
Published: Wednesday, 01/13/2016 12:00 am EST
Defence Minister Harjit Sajjan says he plans to complete a thorough defence policy review by the end of 2016—and the public will be asked to participate.
In an interview with Embassy Jan. 12, Mr. Sajjan confirmed that Department of National Defence officials are already identifying how the review, or Defence White Paper, will be conducted.
Public consultation will be involved and foreign allies will be consulted, he said. The review is expected to set a road map for the next 10 to 20 years.
“I want to make sure that we get the 'How' part. It’s so important,” he said. “If we don’t get that right then the quality’s not going to be there at the end.”
Arctic sovereignty, NORAD prioritized
As the raison d’être for the Canadian Armed Forces is debated once again, Mr. Sajjan said there are elements of Canadian defence policy that he assumes will be prioritized. The safety of Canadians will always be the “number one priority,” he said, while continental defence, Arctic sovereignty and Canada’s responsibilities within the North American Aerospace Defense Command and the North Atlantic Treaty Organization will stay constant.
Even so, he said defence policy needs to be placed “in a wider context that suits the needs of the vision that our government is setting." The Liberal government, in its early days, has talked up a return to multilateralism and a greater focus on diplomacy.
Working with foreign allies is “critical,” Mr. Sajjan said. The minister has connected with his counterparts from the United States, the United Kingdom, Australia, New Zealand and France, as well as other NATO allies.
British, Australian lessons
“The British just did a defence review," he said, referring to the Strategic Defence and Security Review 2015 released by the Cameron government on Nov. 23. "Australia is about to release theirs, and especially it’s important for us to be able to learn from those lessons."
He said he recently spoke with UK Defence Secretary Michael Fallon in London. “It is helping me to shape how Canada can look at doing [the defence review],” he said, noting the UK had used an interactive website to get public input.
“I’ve got some really key ideas that Fallon provided, and I’m looking forward to reading the Australian review when it comes out as well,” Mr. Sajjan said.
The minister said the credibility and relevancy of the review was important. “We can do a white paper of everything on the wishlist, but if you don’t have the budget to support it it really doesn’t matter.”
Defence officials declared the previous Harper government's military wishlist, the Canada First Defence Strategy, unaffordable in 2011, but no updated document was ever released.
'Very focused' on procurement
Sitting in his office at National Defence headquarters—where staffers said reporters hadn't been seen in the past few years under the previous government—Mr. Sajjan told Embassy that procurement is being looked at in “extreme detail."
“Does it have the right number of people, the right type of expertise to be able to make it more efficient,” he posited.
A recent report from the Canadian Global Affairs Institute’s David Perry had warned that cutbacks to DND’s materiel department were causing major slowdowns to the process.
“To have an agile force we need to support it as well. Certain areas we do need to increase,” Mr. Sajjan said. Procurement is "definitely one of them."
Though hesitant to look back at the previous government’s record, he acknowledged a belaboured procurement process.
He is “dismayed” at the capability gap in the Canadian Navy, he said, “because we didn’t get the procurement process right.” So he is “very focused” on making sure that procurement becomes more efficient.
“We’re going through a process that’s going to be more transparent, so that it’s done in a manner that gives confidence to the Canadian public,” Mr. Sajjan said.
He would not confirm, however, whether the Statement of Requirements for new defence procurements would be released publicly. In 2013, DND quietly decided to no longer post these key technical documents on its website, which allowed the public to see the military’s requirements for crucial new planes, ships, and vehicles.
With the ubiquitous F-35 fighter jet program, shafted by the Liberals to replace the CF-18s in favour of an open competition, Mr. Sajjan said “the last thing I want to see with our fighters is what we have with our Navy right now: the gap in our capabilities.”
When it comes to figuring out how Canada's National Shipbuilding Procurement Strategy should move forward—including narrowing down exactly which ships are needed and how many—the defence policy review will help to provide “a lot more clarity.”
'Consistent and predictable' funding
Asked about the transformation recommendations of fellow MP and retired general Andrew Leslie, whose controversial report recommended ways to improve the department’s efficiency, Mr. Sajjan noted there could be redundancies in some areas within the department. The defence review will identify these, he said.
Another thing the review will determine, he said, is the future for Canada’s reserve force. The previous government had committed to an accelerated expansion from 24,000 to 30,000 members.
“With the defence review it will allow us to look at what the capability and the role of the reserves will be for the future,” Mr. Sajjan said. “In some areas, as much as we want to grow, the population can’t support that growth.”
Ultimately, funding will play a big role in how the department will evolve. The Liberals committed to maintaining the current defence budget escalator—a three per cent increase to the budget annually, as of the 2015 federal budget.
The minister wouldn’t specify whether the government is thinking of increasing funding any more than that, but he said it’s his goal to make sure funding is “consistent and predictable” to better plan for the future.
“And as the economy improves, we can look at adjusting things as well,” he added.
Subscribe to:
Posts (Atom)