March 30, 2021 | Local, Naval
Williams: Under this plan, Canada's new warships will never be built
DND’s position is unequivocal – and deeply flawed. The department will neither entertain a new design nor undertake a new procurement process.
May 10, 2019 | Local, Aerospace
Feds look to ease requirements for fighter-jet makers after U.S. complaints
By Lee Berthiaume, The Canadian Press
OTTAWA — The federal government is planning to loosen its industrial requirements for fighter-jet makers in the $19-billion competition to replace Canada's aging CF-18s.
The planned modification follows recent U.S. complaints that the previous criteria violated Canada's obligations as one of nine partner countries in the development of the F-35, one of the small handful of planes expected in the competition.
Yet the proposed change has sparked complaints from some of the companies whose planes will be competing against the F-35, who say the new approach goes too far in the other direction.
Canada has long required companies bidding on major defence contracts to commit to re-investing back into the country, with those unable to make such a contractual commitment seeing their bids tossed out.
But in a presentation to companies on Thursday, the government said it plans to allow bids missing such a commitment in the fighter-jet competition — they will be just docked points in the assessment.
The plan is intended to maximize the number of bids in the competition to buy 88 new jets while still aiming for the largest-possible economic spinoffs, a senior government official told The Canadian Press.
The U.S. had threatened not to enter the F-35 into the competition if the requirement wasn't changed, noting that under the partnership agreement signed in 2006, companies in each member country instead compete for work.
The threat was contained in a letter sent to the government from the head of the Pentagon's F-35 office in December and published in a report from the Macdonald-Laurier Institute think tank on Monday.
Canada has contributed roughly $500 million over the past 20 years toward developing the F-35, while Canadian companies have won nearly $1.5 billion in contracts associated with the stealth fighter. Canada will also be able to buy the plane for less than non-members.
The proposed new process will see the government evaluate bids on a scale, with 60 per cent of the points based on the plane's capability, 20 per cent on its full lifetime costs and the remaining 20 per cent on industrial benefits to Canada.
Bidders can still guarantee that they will re-invest back into Canada if their jet wins the competition and get all 20 points - which is the likely approach for Boeing's Super Hornet, Eurofighter's Typhoon and Saab's Gripen.
But those that can't make such a commitment will be asked to establish "industrial targets," lay out a plan for achieving those targets and sign a non-binding agreement promising to make all efforts to achieve them.
The government will study those plans and assign points based on risk. This is the likely approach for Lockheed Martin and the F-35, which the U.S. has said could provide Canadian companies with billions in work over the next 50 years.
The planned new approach has already stirred complaints from some of Lockheed Martin's competitors, who question why the F-35 should get points if the company can't guarantee re-investment back into Canada.
There are also concerns about how the government will decide how risky plans to achieve "industrial targets" actually are, with one industry source saying that question is entirely subjective.
Bidders were also told Thursday that the actual launch of the competition has been delayed until mid-July. Government officials had previously said they hoped the starting gun would be fired by the end of the month.
Lee Berthiaume, The Canadian Press
On the same subject
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December 20, 2019 | Local, Aerospace, Naval, Land, C4ISR, Security
Three ministers to work on options for creation of the new Defence Procurement Canada
DAVID PUGLIESE, OTTAWA CITIZEN Procurement minister Anita Anand has been told by Prime Minister Justin Trudeau that she will lead the push to create a new defence procurement organization. That will be done with the support of Harjit Sajjan, the Minister of National Defence and Bernadette Jordan, the Minister of Fisheries, Oceans and the Canadian Coast Guard. They will work together “in bringing forward analyses and options for the creation of Defence Procurement Canada, to ensure that Canada's biggest and most complex National Defence and Canadian Coast Guard procurement projects are delivered on time and with greater transparency to Parliament,” according to the mandate letter issued by Trudeau to Anand. “This priority is to be developed concurrently with ongoing procurement projects and existing timelines.” No timelines were provided for when the options for the new organization are needed. In addition, there are no details on when Defence Procurement Canada would be expected to be up and running. The organization is being created to deal with ongoing problems Canada faces in purchasing equipment for the Canadian Forces and the Canadian Coast Guard. https://ottawacitizen.com/news/national/defence-watch/three-ministers-to-work-on-options-for-creation-of-the-new-defence-procurement-canada
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November 3, 2017 | Local, Aerospace, Naval, Land, C4ISR
OEMs will invest in Canadian content if they have procurement program stability
If the Canadian government is to inject billions of dollars into military procurement over the next decade and successfully deliver on dozens of major capital projects, the defence industry must play a critical role. When the new defence policy was released in June 2017, the Liberal government committed to increase the Department of National Defence (DND) budget from $18.9 billion to $32.7 billion by 2026-27 and provide up to $62 billion for the military over the next 20 years. Experience has shown, however, that increased spending can strain government and industry capacity to meet the requirements and schedules for multiple projects. Industry is up for the challenge providing it has predictability in the programs and the process, said Mike Greenley, president of Burlington, Ont.-based L3 WESCAM and a former chair of the board for the Canadian Association of Defence and Security Industries (CADSI). “Industry capacity to respond and surge is obviously greater the more horizon you can give it,” Greenley said at a recent Ottawa conference, hosted by the Canadian Global Affairs Institute, examining the implications of Canada's Defence Policy: Strong, Secure, Engaged. Greenley–a former executive with General Dynamics and CAE and a veteran of many procurement programs–said large foreign and Canadian manufacturers would make the necessary investments in smaller Canadian companies and production capacity if they have confidence in the opportunity. “If we talk about these things far enough ahead of time, I think people will invest and have Canadian content ready,” he added. MGen Jean-Marc Lanthier, chief of program, said the new policy had generated almost four dozen projects, but he cautioned that the government and military could not succeed if “we don't tap into innovation.” One way to encourage early industry engagement might be to run competitions at the research and development (R&D) phase of certain projects, rather than waiting until after the statement of requirements (SOR) has been fully defined. “If [you wait] for the SOR and everyone fights to the death for that thing, then your ability to respond and scale up is obviously diminished because you are not going to believe in it until, for sure, you absolutely have [it],” Greenley stated. “Industry can do a lot more if they are engaged earlier.” As an example, he pointed to the process to replace the current fleet of CP-140 Aurora aircraft, which is undergoing a series of block upgrades to extend service life into the 2030s. If, as the commander of the Royal Canadian Air Force (RCAF) has suggested, the goal is a Canadian-built maritime patrol platform with Canadian-developed anti-submarine warfare and other capabilities, “while we modernize the CP-140s today, we could run a competition tomorrow [to get] an industrial team together for next generation maritime patrol.” That would “allow things to happen easier and quicker, engage the whole base sooner, in addition to giving them stability” to survive a change in government or government priorities, he said. “We wouldn't normally do that in Canada. But to [earlier] points about how do you connect industrial capacity with innovation, with trying to get more done with less people with more money, we could [do it].” Defence policies rarely survive as economic blueprints beyond their first few years. In a panel on framing the government's challenge, several former senior public executives noted how quickly a shift in the domestic financial picture or international circumstances forced previous governments to change course. Still, current government officials were optimistic about the policy, noting it is still early days. Andre Fillion–chief of staff, Materiel, and a former RCAF officer who led the acquisition programs for the CC-177 Globemaster, CC-130J Hercules, CH-147F Chinook and CH-148 Cyclone–acknowledged that more certified project managers are needed, as are improvements to streamline the procurement process. An increase in contracting authority to $5 million would allow the Army, Navy, Air Force and special operations forces to directly manage about 80 per cent of DND's procurement projects, freeing up resources and staff for the larger, more challenging and riskier programs. The department will look more holistically at projects, factoring in infrastructure requirements, like hangars, when it acquires an aircraft, and it will place greater reliance on analytics using data to drive decisions on complex programs, said Jody Thomas, deputy minister of National Defence. The department also added two new associate deputy ministers with extensive experience in government and procurement. “We are restructuring the department to deliver,” concluded Thomas. https://www.skiesmag.com/news/oems-will-invest-canadian-content-procurement-program-stability/