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Canada Eyes Defense Procurement Overhaul

Oct. 11, 2013 - 03:20PM   |  
By DAVID PUGLIESE   |   Comments
Slow Process: The program to replace 40-year-old Royal Canadian Air Force Buffalo aircraft (left) has been going on since 2004, yet the government is still not ready to accept bids from industry.
Slow Process: The program to replace 40-year-old Royal Canadian Air Force Buffalo aircraft (left) has been going on since 2004, yet the government is still not ready to accept bids from industry. (Sgt. Matthew McGregor)
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VICTORIA, BRITISH COLUMBIA — Canada’s government, dealing with a series of multibillion-dollar defense acquisitions that have gone off the rails, will launch an overhaul of its procurement system in the coming months.

Efforts are underway to reduce the amount of time the Canadian military takes to determine its requirements for equipment, government officials said. The ruling Conservative Party government also is considering creating a separate defense procurement agency or a secretariat that will oversee an acquisition process now run by three federal government departments, according to government sources.

Canada has dealt with a series of high-profile failed or controversial military procurements over the past several years:

■ The acquisition of F-35 joint strike fighters has been restarted after allegations were raised in Parliament that the ruling Conservative Party government misled Canadians on the combat jet’s cost.

■ The purchase of new close combat armored vehicles for the Army had to be restarted twice because of various problems with the procurement process.

■ The acquisition of new Army trucks has been ongoing since 2004; it, too, has had to have been restarted a number of times because of procurement problems. A contract award date has yet to be determined, but the vehicles aren’t expected until at least 2017.

■ The purchase of a new fleet of search-and-rescue aircraft has taken more than nine years, and the government is still not ready to accept bids from industry.

There have also been complaints from politicians and some in industry that requirements have been designed to favor one particular piece of equipment, or that the military has changed equipment specifications after a contract has been issued.

“They have to do something since the procurement system is broken,” said Alan Williams, a former assistant deputy minister responsible for procurement at the Department of National Defence.

The Canadian government has acknowledged changes must be made. In late May and again in July, then-Associate Minister of Defence Kerry-Lynne Findlay told industry representatives that the department was intent on streamlining the process.

Defence Department spokeswoman Jessie Chauhan also noted in an email that various options are being tested inside the department, and pilot projects could be in place sometime by the fall.

“It is anticipated that time savings will be substantial and found throughout the process,” she added.

Neither the department nor the rest of the government is releasing further details on what specific initiatives will be launched. Julie Di Mambro, a spokeswoman for Defence Minister Rob Nicholson, referred questions to Public Works and Government Services Canada, which did not respond.

The Defence Department is a key player in the military procurement system, as is Public Works, which oversees the contracting portion of proposed purchases. Another federal department, Industry Canada, ensures that benefits for domestic firms are considered in defense procurements.

Williams said he believes that the government will unveil a new secretariat to oversee acquisitions. Similar secretariats have been established on a limited basis by the Conservative Party government to oversee the F/A-18 fighter jet replacement project and the acquisition of new ships.

“The problem with establishing a secretariat is that it doesn’t really change the current system, where you have three ministers still responsible for procurement,” Williams said.

Those three ministers bring with them three separate levels of bureaucracy, which can stall or slow equipment acquisition, he added.

Williams said the government should instead create a separate defense procurement agency or put only one minister in charge of acquisitions.

Until one minister is deemed accountable, defense procurement will always be burdened with inefficiencies and unnecessary delays and costs, Williams argues.

A report from the Canadian Association of Defence and Security Industries (CADSI), released in 2010, also recommended a single point of accountability for procurement. The government could create a separate defense procurement agency, or it could assign the responsibility for all procurement to one minister from an existing federal department, noted the CADSI report, produced at the behest of the federal government.

“The absence of a single ministerial point of accountability within government slows and adds costs to the procurement process and weakens the government’s ability to defend Canada’s national interest and achieve a strong economic return on investment,” the CADSI study pointed out.

It’s not the first time, however, that the Conservative government has promised to overhaul defense procurement. On Nov. 19, 2008, then-Governor General Michaelle Jean announced that fixing the procurement system would be a top priority for the Conservatives.

“Simpler and streamlined processes will make it easier for businesses to provide products and services to the government, and will deliver better results for Canadians,” she said in the 2008 Speech from the Throne, read to Parliament.

Little came of that promise, opposition politicians point out.

Jack Harris, the defense critic for the New Democratic Party, the official opposition in the House of Commons, said there are ongoing issues with a lack of competition on procurements, as well as what he called “requirement creep,” which drives up the cost of procurement programs.

He noted the example of the Army continuing to change the requirements for the medium-sized trucks it wants to buy. Harris said the truck purchase should have been relatively straightforward, yet has been going on for more than nine years.

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