Trudeau told NATO that Canada will never meet spending goal, Discord leak shows

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  February 17, 2021 | Local, Naval

  DND unable to say exactly when delays in $70-billion warship program began

  David Pugliese, Ottawa Citizen, Postmedia News (dpugliese@ottawacitizen.com) Published: a day ago Updated: a day ago National defence says it doesn't know when it determined that a $70-billion project to buy new warships had fallen five years behind schedule, adding billions of dollars to the cost. That lack of knowledge about a massive mega-project is unprecedented, according to the department's former top procurement official, and is further proof the Canadian Surface Combatant project has gone off the rails. The Department of National Defence revealed Feb. 1 that the delivery of the first surface combatant ship would be delayed until 2030 or 2031. The first ship was to have been delivered in 2025, according to DND documents. The five-year delay will cost taxpayers billions of dollars, but the specific amount has yet to be determined. DND now acknowledges that while there were indications in early 2020 the project schedule was slipping, it doesn't actually know when it was determined the Canadian Surface Combatant program was facing significant delays. “There was no specific month/year,” DND spokesperson Jessica Lamirande wrote in an email to this newspaper. “It was an evolving schedule that continued to shift.” But Alan Williams, the former assistant deputy minister in charge of procurement at DND, said that lack of insight by DND staff is dangerous. On major equipment procurements, every step should be documented, as bureaucrats could be called on to justify future spending decisions and overall management of a project, he said. “It's totally absurd they can't even say when they first determined this project would be delayed by five years,” said Williams. “Is that not the definition of a total loss of accountability and control?” The Canadian Surface Combatant (CSC) project would see the construction of 15 warships for the Royal Canadian Navy at Irving Shipbuilding on the east coast. The vessels will replace the current Halifax-class frigate fleet. However, the project has already faced delays and significant increases in cost, as the price tag climbed from an original $14-billion estimate to $26 billion and then to $70 billion. The parliamentary budget officer is working on a new report on the CSC cost, to be finished by the end of February. Each year of delay could cost taxpayers more than $2 billion, the PBO warned previously. Although the DND has a new delivery date for the initial ship in the fleet, that doesn't mean that the vessel will be ready for operations at that time. “We expect delivery of the first ship in 2030/2031, followed by an extensive sea trials period that will include weapons certification and the corresponding training of RCN sailors, leading to final acceptance,” Lamirande said. No dates, however, were provided on when that final acceptance of the first ship would happen. Troy Crosby, the assistant deputy minister of materiel at the DND, denied the CSC project is in trouble. “I wouldn't call it trouble,” he said in an interview with this newspaper in November. “Is it hard? Is it challenging work? Absolutely. But I wouldn't say we're in trouble.” Other defence analysts are arguing the CSC program is salvageable with better governance and oversight. But Williams said the CSC is like a train rolling down a hill without brakes. “You're heading for disaster and people are talking about improving governance,” he said. “That won't save this project.” Canada has yet to sign a contract to build the Type 26 ship proposed by the consortium of Lockheed Martin and BAE for the CSC. So far, taxpayers have spent $739 million preparing for the eventual construction, according to figures tabled with parliament. Australia and the United Kingdom also plan to purchase the Type 26. But the first ship, destined for the U.K., has yet to be completed. The Canadian government originally said it would only accept a winning bid based on a mature existing ship design or a ship already in service with other navies. That would eliminate technical risk, as the design would be a known and tested commodity. The Type 26 carries extra risk as its design has not yet been proven. Williams said Canada could build an initial three Type 26 ships and then purchase other warships based on a proven design at a much reduced cost. Copyright Postmedia Network Inc., 2021 https://www.thechronicleherald.ca/news/canada/dnd-unable-to-say-exactly-when-delays-in-70-billion-warship-program-began-552869/

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  October 10, 2019 | Local, Aerospace, Naval, Land, C4ISR, Security

  Opinion: How To Assess Defense Prospects For The Future

  Byron Callan During upcoming earnings conference calls, expect some defense contractors to again state that they are well-positioned in high-priority programs and markets that fully align with customer priorities. In addition, planners and analysts are going to be asking a lot more questions about contractor positioning and the outcome of the 2020 U.S. election. Who will be best positioned if President Donald Trump is reelected or if there is a Democrat in the White House in 2021? On the first assertion of “well-positioned,” to a degree it is axiomatic. Defense requirements are validated, so by that very process, they take priority over emerging and yet-to-be-funded requirements. However, if one accepts the premises that Defense Department budgets may be flat for a multi-year period and that demand signals for security are going to rise, the sector will be entering a far more dynamic period in the 2020s than the past 4-5 years. Instead of being “well-positioned,” a broader set of filters may need to be applied. Posture may be a better way to assess contractor outlooks. There are five attributes on which this may be assessed. 1. The priority and relative safety of programs matters both in U.S. and international markets. But that needs to be assessed and reassessed against changed defense needs. Today's major programs of record are likely to change. If there is doubt on that issue, a reading of the U.S. Marine Corps Commandant's Planning Guidance released last July may dispel notions that the next 10 years are going to be stable and predictable. 2. One contractor can disrupt others through new product and service offerings or even a new business model. Examples of the former include Boeing's T-X/T-7 aircraft, which, if evolved into a fighter/attack aircraft, may be good enough for some missions. Kratos' Valkyrie is another example, which could affect demand for manned combat aircraft. On the latter, the Pentagon now intends to purchase launch services instead of expendable launch vehicles. Where else might these sorts of “as a service” models be applied? 3. The pipeline of bid opportunities: There are some large programs that are in competition and for which decisions are pending. The Ground-Based Strategic Deterrent, Long-Range Standoff, Army aviation and ground-vehicle modernization and Navy FFG(X) programs are some of the larger ones that could be decided, but there also are classified ones and swaths of opportunity in unmanned systems, hypersonics, software for data and artificial intelligence, and cybersecurity. International opportunity also clearly matters in assessing how a contractor is postured. 4. The ability to execute within cost and schedule is essential. Human capital, technology application and risk, contracting and supply chain management are critical attributes. This also will tie into the bid pipeline and the degree to which a contractor is postured to pursue new opportunities or if the contractor will have challenges managing its current portfolio of products and services. From the outside looking in at contractors, this attribute may be difficult to measure. Open job position data can be sketchy, but it is one metric to consider. Performance on current programs is another. 5. Contractor culture will be critical in the 2020s. One aspect of culture is how well a contractor anticipates potential changes in defense and security needs. Another is how receptive company leaders are to positioning or repositioning to capitalize on those changes. There will not be solid metrics here, although there are plenty of good questions to ask. In order to anticipate change, contractors are going to have to be wired to understand when and where change is occurring. This has to allow perspectives that may differ from the consensus view to reach leaders so they can assess whether ideas are worth pursuing or if there is a threat to be addressed. Part of this posture entails a willingness to create top cover and breathing space for conflicting views. There will be a natural tendency of company leaders to continue to exploit current business models and protect major products and services. There will likely be very strong pressure from shareholders to sustain or increase operational margins and cash flow and stay within current business lanes. Posture, however, may also include a willingness to take some short-term or even intermediate-term pain and risk in order to better position for the future. Innovation is an overused term these days, and it may be like former Supreme Court Justice Potter Stewart's assertion on obscenity: “I know it when I see it.” Be that as it may, contractors must dedicate time to innovation every week in order to achieve it. https://aviationweek.com/defense/opinion-how-assess-defense-prospects-future

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  December 3, 2020 | Local, Aerospace, Naval, Land, C4ISR, Security

  After agreeing to $2B in deals with U.S.-based defence companies, Liberals ask DND for list of Canadian firms to quickly buy from

  David Pugliese • Ottawa Citizen Dec 03, 2020 Companies must be based in Canada and the work has to be completed relatively quickly, creating or maintaining domestic jobs. After committing to spend more than $2 billion with American companies, the Liberal government wants to give a major boost to homegrown defence firms by moving ahead on projects that can purchase equipment for the Canadian military quickly from domestic companies to either create or shore up jobs. Department of National Defence officials began looking in late April at options to provide support to the defence industry as the new coronavirus pandemic rocked the economy. DND and the government hoped the fast-tracked purchases would help Canada's economic recovery. But so far, the four major purchases over the last several months for the Canadian military saw the Liberal government make major commitments with U.S.-based companies for work that will be done almost entirely in America and create or support hundreds of U.S. jobs. That includes the acquisition of new surveillance aircraft for Canadian special forces, the purchase of new systems and missiles for the air force's CF-18s, missiles for the navy and parts and equipment for C-17 transport planes. The particular equipment ordered isn't built in Canada. In some cases, the U.S. firms receiving the work are exempt from the government's requirement to match the value of the contracts with the reciprocal purchasing of services or supplies from Canadian companies. Now, the government has ordered DND officials to draw up lists of equipment that can be bought from Canadian firms. Companies must be based in Canada and the work has to be completed relatively quickly, creating or maintaining domestic jobs. DND spokesman Dan Le Bouthillier confirmed options are being examined to help minimize the impact of COVID-19 on the defence industry. “We are looking at ongoing procurement projects to determine what we may be able to prioritize in order to ensure our defence industry partners are supported,” he said. “This is ongoing at this time, though no decisions have been made at this point.” But Tamara Lorincz, a peace activist and PhD candidate in Global Governance at the Balsillie School for International Affairs, says many more jobs could be created in Canada if the money was directed into non-defence sectors of the economy. She pointed to the 2009 U.S. study by University of Massachusetts, which examined the impact of spending $1 billion on both military and non-military areas. The non-military areas included clean energy, health care, and education, as well as for tax cuts which produce increased levels of personal consumption. The study concluded substantially more jobs were created by non-military sectors. Lorincz noted that there were no comparable independent studies which have looked at the Canadian situation. Lorincz and various peace groups are also questioning the Liberal government's plans to spend $19 billion on new fighter jets in the coming years. The money should instead go towards programs like national pharmacare or child care, she added. Lorincz noted it costs $40,000 an hour to operate a F-35, one of the fighter jets being considered by the Liberals. That amount is close to the yearly salary of a long-term care facility employee, she added. Christyn Cianfarani, president of the Canadian Association of Defence and Security Industries, said the country's defence industry can play an important role in the federal government's COVID-19 economic recovery plan. The association has recommended to government that it accelerate military equipment project approvals, favour domestic firms as much as possible for future work, as well as focus on Canadian-based cyber firms for associated purchases as the government moves its employees to more remote work. Construction projects on bases could also provide local contractors with work, she added. Canada's defence industry actually fared better than other economic sectors during the pandemic, Cianfarani noted. There were no significant layoffs and most firms have been able to continue operations and production. In addition, some companies switched to producing medical equipment or protective gear for use by hospital staff during the pandemic. The Liberal government announced Monday it wants to spend up to $100 billion between 2021 and 2024 to help the economy recover from COVID-19. https://ottawacitizen.com/news/national/defence-watch/after-agreeing-to-2b-in-deals-with-u-s-based-defence-companies-liberals-ask-dnd-for-list-of-canadian-firms-to-quickly-buy-from