DND denies misjudging supply ship cost even though price tag jumped to $4.1 billion

On the same subject

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  October 11, 2018 | Local, Aerospace

  Purchase of three spy planes from the U.S. could cost Canada $140 million more than planned

  DAVID PUGLIESE, OTTAWA CITIZEN Canadian companies had wanted to provide the aircraft, but the Canadian military decided it needed the planes quicker than they believed Canadian firms could deliver The cost of three small surveillance aircraft Canada is buying from the U.S. could be $140 million more than the Canadian military had originally estimated. The three Beechcraft King Air planes, to be based at CFB Trenton in Ontario, will be outfitted with sensors and equipment to intercept cell phone and other electronic transmissions. Canadian special forces and, potentially, other government departments will use them for missions overseas and in Canada. On Oct. 1 the Canadian Forces told Postmedia the three outfitted planes and initial in-service support would cost between $100 million and $249 million, as outlined in the Liberal government's defence policy documents. However, on Oct. 4 the U.S. Defense Security Cooperation Agency revealed the final tally, informing Congress that the deal was underway with an estimated cost of US $300 million — around $389 million. Canadian companies had wanted to provide the aircraft and on-board equipment, and several have formed alliances with U.S. firms who supply the Pentagon with the same or similar aircraft. But the Canadian military decided it needed the planes more quickly than they believed Canadian companies could deliver, and that U.S. security regulations governing the on-board sensor equipment might cause delays. As a result, it determined the U.S. government was the only supplier capable of providing the planes. The Canadian Forces says it hopes to get a better deal. The cost the U.S. government agency presented to Congress is not the final tally and the “final cost is anticipated to be much lower,” the Canadian Forces claimed in an email. “Over the coming months, we will work to more clearly define our interests and requirements for the purchase, and negotiate an acceptable price with the U.S.,” the email said. Department of National Defence spokeswoman Ashley Lemire said in an email to Postmedia that the delivery of the first plane would take place sometime between 2020 and 2021. The final delivery of the three aircraft would be wrapped up by 2022. The main contractor is Beechcraft in Wichita, Kan. The Canadian government will run a separate program to allow companies to compete to provide in-service support for the planes. The government expects to ask for bids for that 20-year contract sometime in the spring of 2019, said Lemire. DND declined to provide an estimate of what that long-term support would cost taxpayers. Industry representatives have complained over the years that the Canadian Forces cut domestic firms out of the project and reduced the role they could play. Lemire rejected that claim, saying Canadian firms would have a role in servicing the planes. https://calgaryherald.com/news/purchase-of-three-spy-planes-from-the-u-s-will-cost-canada-140-million-more-than-planned

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  January 18, 2019 | Local, Naval

  Overcoming ‘Boom and Bust’? Analyzing National Shipbuilding Plans in Canada and Australia

  by Jeffrey F. Collins CGAI Fellow Executive Summary While both Canada and Australia share similar constitutional frameworks and imperial histories, they are also no stranger to procurement challenges. Cost overruns, delays, regionalism, and protracted intellectual property disputes have all been part of major defence acquisition projects in recent decades. This Policy Paper analyzes the largest and most expensive procurement projects undertaken by either country, Canada's $73 billion (estimated) National Shipbuilding Strategy (NSS), launched in 2010, and Australia's A$90 billion Naval Shipbuilding Plan (NSP), launched in 2017. Each project represents an attempt to implement a rational, multi-decade approach to naval acquisition. Driven by a desire to overcome previous boom-and-bust cycles, the NSS and NSP aim to create a sustainable shipbuilding sector capable of meeting the immediate and future naval demands of Ottawa and Canberra. Neither country has attempted a shipbuilding plan on this scale before. The NSS and NSP are still in their early stages but some common themes have emerged. On implementation challenges, old problems persist. For one, the rational approach to naval shipbuilding is not devoid of procurement politics and regionalism. Determining which province or state will be home to billions in contracts over many years remains a zero-sum game no matter how arms-length the process of yard selection. Cost increases also remain a reality. Building domestically can carry a 30 per cent to 40 per cent premium. Project delays increase this premium, something Canada has already experienced when initial NSS acquisition costs, pegged at $37.7 billion nearly a decade ago, jumped to an estimated $73 billion today. Australia's delays in securing an agreement with France's Naval Group on its $A50 billion future submarine project could mean additional cost increases. In this context, schedule is king and avoiding cost increases requires keeping to planned shipbuilding schedules. Failure to do so opens production gaps and necessitates going with alternative options including building overseas (Australia) or converting commercial vessels for naval and coast guard use (Canada). Prolonged cost sensitivities raise the consideration of trade-offs on committing more money to continuous shipbuilding at the expense of acquiring other military capabilities. Canada, for instance, will need to make decisions at some point on whether to spend billions on replacing the North Warning System in the country's North. Australia will have to grapple with an Indo-Pacific region proliferating with relatively cheaper but lethal anti-ship missiles. In this context, money spent on surface combatants may be perhaps better spent on other capabilities. None of this is to say that progress has not occurred in either the NSS or NSP. Ships are getting built, including Arctic Offshore Patrol Ships in Canada, and Offshore Patrol Vessels in Australia. In 2018, both countries selected the British Type-26 as their preferred design for a new generation of surface combatants. It is very possible that these respective strategies will achieve their goals of bypassing the boom-and-bust eras, but ongoing challenges serve as a reminder that even with the best-laid plans, naval shipbuilding is a complicated affair. 1 https://www.cgai.ca/overcoming_boom_and_bust_analyzing_national_shipbuilding_plans_in_canada_and_australia

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  April 17, 2020 | Local, Aerospace, Naval, Land, C4ISR, Security

  Les pays de l’OTAN doivent protéger leurs entreprises stratégiques

  Bruxelles) Les adversaires potentiels des pays de l'OTAN vont tenter de profiter de la crise économique provoquée par la COVID-19 pour essayer de prendre le contrôle d'entreprises ou d'infrastructures stratégiques et de saper l'unité de l'Alliance, a averti mercredi son secrétaire général Jens Stoltenberg. Publié le 15 avril 2020 à 14h41 AGENCE FRANCE-PRESSE « Cette crise pourrait avoir des effets géopolitiques majeurs », a-t-il affirmé au cours d'un point de presse à l'issue d'une réunion en vidéoconférence avec les ministres de la Défense de l'Alliance. « La crise économique pourrait permettre des investissements dans des industries et des infrastructures stratégiques », a-t-il expliqué. « Il est important de protéger ces entreprises », a-t-il insisté. Jens Stoltenberg n'a pas cité les États ou les groupes impliqués dans ces prises de contrôle, mais la mise en garde vise surtout les importants investissements réalisés par la Chine dans les infrastructures portuaires et les télécommunications en Europe. « La vente d'infrastructures stratégiques par les pays les plus vulnérables pourrait saper la capacité de résistance des pays de l'Alliance en cas de nouvelle crise », a estimé le secrétaire général de l'OTAN. Les pays de l'OTAN ont « besoin d'infrastructures et de télécommunications fiables en temps de crise », a souligné le Norvégien. Jens Stoltenberg a également insisté sur la nécessité de combattre la désinformation sur les actions menées par les alliés et leur unité. « Nous devons contrer les campagnes de désinformation menées par des acteurs étatiques et non étatiques sur les réseaux sociaux qui visent à nous diviser et à nous fragiliser avec de fausses informations sur l'aide mutuelle que nous nous apportons », a-t-il dit. « La meilleure réponse passe par une presse libre qui vérifie les faits et pose des questions parfois difficiles », a-t-il soutenu. « Il est encore trop tôt pour tirer les enseignements de cette crise, mais nous devons être préparés pour la prochaine », a-t-il affirmé. « La croissance est touchée et les dépenses publiques également », a-t-il reconnu. Les membres de l'Alliance se sont engagés à consacrer 2 % de leur PIB national à leurs dépenses de défense en 2024. Jens Stoltenberg a toutefois expliqué l'importance des investissements dans les capacités militaires, car elles viennent « comme une capacité d'appoint ». « L'OTAN n'est pas le principal intervenant en cas de crise sanitaire, mais elle peut soutenir les efforts du secteur civil », a-t-il soutenu. « La principale leçon de cette crise est le lien étroit entre les efforts civils et la capacité de soutien des forces militaires. Il faudra voir comment l'améliorer avant la prochaine crise », a déclaré Jens Stoltenberg. Il s'est refusé à tout commentaire sur la suspension de la contribution américaine à l'Organisation mondiale de la santé. https://www.lapresse.ca/affaires/entreprises/202004/15/01-5269469-les-pays-de-lotan-doivent-proteger-leurs-entreprises-strategiques.php