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February 13, 2019 | Local, Aerospace

Senator critiques defence procurement process

by Chris Thatcher

An Ontario Senator says defence procurement needs better oversight and an improved process if it is to avoid the problems affecting the government's efforts to replace the Royal Canadian Air Force (RCAF) CF-188 fighter jet fleet.

“The fiasco of fighter jet replacement is the best example of a procurement system that is cumbersome, bureaucratic and beset by political interference,” Senator Nicole Eaton wrote in an article originally published in The Hill Times.

“Unless ministers start to devote close attention to the management of major projects, or until the process is overhauled, Canadians can continue to expect poor outcomes and wasted taxpayer dollars.”

Eaton is a member of the Senate National Finance Committee, which launched a study last fall into the processes and financial aspects of defence procurement. It held its first hearing on Oct. 30 and expects to conclude later this year.

In her article, the senator critiqued the process by which Conservative and Liberal governments have struggled to replace the aging CF-188 Hornets, noting that while both Canada and Australia are members of the U.S.-led Joint Strike Fighter program to develop the F-35, Australia received its first two operational F-35s in December while Canada, as part of an interim measure, is poised to take delivery of the first of 25 “well-used” Australian F-18s.

“As we take possession of Australia's scrap, Canada is in the early stages of a minimum five-year-long process to pick a replacement for the F-18, which will be more than 50 years old before it is retired in the 2030s,” she wrote.

The current government bears blame for creating some of the problems with the fighter file, she wrote, but “military procurement has bedeviled successive governments, Liberal and Conservative alike.”

She attributed part of the problem to political interference for both partisan advantage and regional turf protection, but said the main reason for “paralysis in military procurement in Canada is it is too cumbersome and bureaucratic. Process is paramount and results are secondary.

“There are layers of committees, depending on the size of the project, with membership from Public Services and Procurement Canada, National Defence, and Innovation, Science and Economic Development,” she wrote.

“The consensus-based decision-making process on which these committees operate is supposed to avoid a big mistake — no doubt an appealing quality for a risk-averse bureaucracy, but the downside is the system is not conducive to fast action. Simply put, the buck stops nowhere.”

Eaton suggested that bureaucratic morass has resulted in an inability to spend allotted project budgets, an indication the government could struggle to fulfil the commitments laid out in its 2017 defence policy, Strong, Secure, Engaged (SSE).

“In the last fiscal year, the policy projected capital spending of $6.1 billion, yet only $3.7 billion was spent. This year, $6.55 billion is called for under SSE, but total appropriations to date amount to $4 billion,” she noted. “Given this poor track record, the idea that military spending can be cranked up by 70 per cent over 10 years, as envisioned in Strong, Secure, Engaged, looks increasingly fanciful.

At the Finance committee's first hearing on the procurement system, Patrick Finn, assistant deputy minister, Materiel at the Department of National Defence, and André Fillion, assistant deputy minister for defence and marine procurement at Public Services and Procurement Canada, faced a barrage of questions on ongoing participation in the F-35 program, the authorities and mandates of interdepartmental committees involved in military procurement, and about the challenge of balancing military requirements with equipment costs and opportunities for Canadian industry.

“Buying a fighter plane isn't like buying a compact car, and the role of the government is very important. We had to adapt our method of supply to the context of fighter jets,” Fillion told the senators.

He said a draft RFP released in late October “was the result of many months of consultation on all five potential options (to replace the CF-188s).

“There has been a lot of back and forth over the last several months to make sure that what we are asking meets the requirements of the Air Force and ensures that we do not inadvertently limit the competition. I feel very confident that what we've put together is fair, open and transparent to all the potential suppliers.”

Finn said the government had met with and learned lessons from allies who had conducted similar fighter replacement programs. He also dismissed some of the concerns about acquiring used Australian aircraft to fill a gap while the government proceeds with the replacement project.

“In our opinion, Canada has the best expertise related to this type of aircraft. Some companies in Montreal do maintenance for the United States and other countries because they have the necessary knowledge,” he said.

“This aircraft will really increase our fleet, and it is not the number of aircraft that counts; it is rather the hours of use in the future. We are looking for an aircraft that will remain in service for another 14 years. What is needed is enough hours on the structural side. We will be able to use these aircraft until the entire fleet is no longer in service.”

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