January 18, 2019 | Local, Naval

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

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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February 5, 2019 | Local, Aerospace

Griffon life extension program to include upgraded sims
The Royal Canadian Air Force (RCAF) will be seeking an upgrade to its CH-146 Griffon maintenance and flight training simulators as part of a life extension project for the multi-role utility helicopters. The first phase of the project, which is intended to keep the fleet of 85 Griffons flying until at least 2031, took off on Jan. 26 with the award of a $90 million contract to Bell Helicopter Textron Canada to develop and design options for the avionics systems, engines, integrated sensors and cockpit displays. A follow-on contract to install new systems and upgrade others is expected in 2022. Around the same time, the federal government will be inviting industry to respond to a request for proposals to modernize the Griffon simulators, according to a Department of National Defence spokesperson. “The upgrade to the flight simulation devices will be procured under a separate contract,” she said in an emailed response. The CH-146 simulators were built by CAE and delivered to the RCAF in the mid-1990s, shortly before the helicopters entered service between 1995 and 1997. CAE continues to provide in-service support. As part of what is being called the Griffon Limited Life Extension (GLLE) project, the RCAF wants to replace a number of the helicopter's avionics systems, including communications radios and cryptographic equipment, cockpit voice and flight recorders, the navigation systems, the automatic flight control systems, and the control display units. Obsolescence of critical components has been a problem for maintenance technicians for several years now. The design phase will also look at upgrades to the engines and to the sensor suite. The CH-146, which is based on the Bell 412, performs a variety of transport, close fire support and armed escort missions for tactical aviation and special operations forces. However, it has a top speed of around 260 kilometres per hour, well below that of the Boeing CH-147F Chinook that it escorts during missions such as Operation Presence in Mali. “These helicopters have performed extremely well over the years and with these new upgrades, they will continue to be a valuable asset that will allow our personnel to carry out missions and operations successfully well into the future,” RCAF commander LGen Al Meinzinger said in a statement. While aircrews would like more speed, more lift and bigger guns as part of any upgrade program, the current platform meets most of their needs, Col Travis Morehen, commanding officer of 1 Wing, the RCAF's tactical aviation headquarters in Kingston, Ont., told Skies in a recent interview. “I think we have done a really good job of exploiting what we can do with the Griffon,” said Morehen, who is currently serving as commander of the Canadian Armed Forces task force in Mali. “I don't think there are many nations that have been as agile and flexible with that type of platform as we have, whether it is the combat service support role for search and rescue, or precision insertion for special operations . . . or what we are doing in terms of utility lift, or providing, with the GAU-21 (.50 Cal machine gun), stand off fires.” Whatever the changes that are ultimately accepted as part of the initial design phase now being conducted by Bell, the helicopters will require upgraded flight training and maintenance simulators to match. The GLLE project, including modernized simulators, is expected to reach initial operational capability by 2024 and be fully operational by 2026. https://www.skiesmag.com/news/griffon-life-extension-program-to-include-upgraded-sims/
December 7, 2018 | Local, Aerospace

First nine new RCAF fighter jets to be operating in 2026 but Conservative MP has his doubts
DAVID PUGLIESE, OTTAWA CITIZEN The Royal Canadian Air Force will be operating the first nine aircraft from its new fleet of fighter jets starting in 2026, Department of National Defence officials say. But at least one member of parliament questions whether the federal government will be able to meet its timetable to replace the CF-18 fighter fleet with advanced aircraft. MPs on the Standing Committee on Public Accounts received more details on Monday about the Liberal government's plan to buy 88 new fighter jets. Aircraft expected in the competition include Lockheed Martin's F-35, the Eurofighter Typhoon, Saab's Gripen and the Boeing Super Hornet. Pat Finn, assistant deputy minister for materiel at the DND, told MPS that the formal request for proposals will go out in the spring of 2019. Negotiations would be held in 2021 and a contract awarded in 2022. “We have tried to be very judicious and not have too risky a schedule to try to achieve some of that,” Finn explained to MPs. “But from the bids until the signing of the contract is where we've given ourselves two years for the competitive dialogue, the final negotiations and the various approvals we need to get, signing the contract in 2022.” The first aircraft would be delivered in 2025. Finn said this schedule has been shared with all the potential bidders and “they're comfortable with that approach.” Jody Thomas, the DND deputy minister, told MPs that the plan is to “achieve initial operating capability by 2026 with nine advanced fighters ready to fulfill the NORAD mission.” But one committee member, Conservative MP Pat Kelly, was wary of whether the aircraft acquisition would proceed as scheduled. The plan, he told Finn, doesn't leave a lot of margin for error. Everything would have to run like clockwork to meet the timetable and Kelly questioned if that would even be possible given the track record of defence procurement over the years. “We just don't have time in this for the kinds of delays and the kinds of failures of procurement that we have seen in other programs,” Kelly said. “I shudder to think of what many Canadians listening to this hearing might think about. What has the potential to go wrong to get to 2025? I'm going to leave it at that.” https://ottawacitizen.com/news/national/defence-watch/first-nine-new-rcaf-fighter-jets-to-be-operating-in-2026-but-conservative-mp-has-his-doubts
December 11, 2019 | Local, Naval

Defence Department Assistant Deputy Minister Chris Henderson to return to Canadian Coast Guard
DAVID PUGLIESE, OTTAWA CITIZEN Chris Henderson, who is Assistant Deputy Minister for Public Affairs at the Department of National Defence, is heading back to the Canadian Coast Guard. Henderson came from the Coast Guard in October 2017 to fill the ADM PA job at DND. Henderson had been serving as Director General, National Strategies at the coast guard. Sources said Henderson has informed senior DND and Canadian Forces leadership that he will take over as ADM for Operations at the coast guard on Jan. 6. Henderson is a former Royal Canadian Navy officer who had served as a public affairs officer for around 20 years. In 2007, Henderson was appointed as DG, Public Affairs and Strategic Planning, a post he occupied for two years. After leaving DND public affairs Henderson was off to Canada Border Services Agency. Then in 2014 he was named Director General, Strategic Communications in the Privy Council Office during the government of Prime Minister Stephen Harper. In that role, he oversaw a team of strategic communications specialists responsible for the coordination of all Government of Canada public communications. Henderson came into the ADM PA branch at a pivotal time. Many of the old guard public affairs officers were in the process of leaving the military, somewhat discouraged, because of being restrained by the Harper government in communicating with the public and journalists. Much of the communication with journalists was done via email statements. That, however, has not changed much. https://ottawacitizen.com/news/national/defence-watch/defence-department-adm-chris-henderson-to-return-to-canadian-coast-guard

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