August 16, 2021 | Local, Aerospace
Modernization of military surveillance aircraft fleet delayed as $52 million more needed for project
DND spokesman Dan Le Bouthillier said $52 million will be provided to companies so the project can be completed.
January 6, 2020 | Local, Aerospace, Naval, Land, C4ISR, Security
What AIAC’s Vision 2025 could mean for smaller sized enterprises
by Chris Thatcher; Skies Magazine
Posted on December 24, 2019
When the Aerospace Industries Association of Canada in June released its blueprint for the next five years, Vision 2025: Charting a New Course, support for small- and medium-sized enterprises (SMEs) was one of its core themes.
Small companies make up over 90 per cent of the sector and the report argued for greater government support to help them scale up, generate more jobs, and enhance their global competitiveness. That could include new funding to pursue digital business transformation, a reduction in the complexity of government contracting, and greater priority in the value propositions of prime contractors chasing defence procurements.
“If our small- and mid-sized companies are left at risk, the negative impacts will be felt across Canada's aerospace industry as a whole,” according to the report, prepared by Jean Charest, a former premier of Quebec and deputy prime minister of Canada.
Small companies are viewed as the prime creators of aerospace jobs and, in a sector buffeted by changing technology and new players, many may be more agile and better able to adapt than larger counterparts that must answer to corporate headquarters outside of Canada. But support from original equipment manufacturers (OEMs) and governments is essential to their survival, according to a panel of SMEs at the Canadian Aerospace Summit in November.
There is no one-size-fits-all to helping SMEs scale up. Companies at different stages of growth require different types of support, they noted. But help with skilled labour shortages and easier access to government programs are common challenges for all.
A solid position on a major platform is critical to initial success, but long-term growth requires diversification, observed Barney Bangs, chief executive officer of Tulmar Safety Systems.
Located between Ottawa and Montreal in the small community of Hawkesbury, Ont., the company manufactures protective and safety equipment, associated components and in-flight training products. Traditionally, its focus has been 80 per cent defence — Tulmar has been a supplier to a military platform for over 25 years and benefitted from a strong aftermarket. In recent years, though, the company has sought a better balance between military and commercial customers.
“As of last year, we were 65 per cent defence and 35 per cent (civilian) aerospace,” he said.
Tulmar has also become more of what he called “a solution provider,” integrating components from other suppliers to provide an OEM with a final, certified piece of equipment such as an aircraft seat rather than just the safety harness or seatbelt. “We are doing more in-house and saving customer-costs for the OEM,” said Bangs.
Diversification has also been a priority for Apex Industries, a machining, components, subassembly and structures manufacturer in Moncton, N.B. Twelve years ago, its aerospace business was five per cent defence and 95 per cent civil, much of it geared to Bell Helicopter and Bombardier.
“We made a conscious effort to diversify into the military side a lot more,” said vice-president Keith Donaldson. “We are very conscious of not allowing our sales to go too high on one platform or with one customer.”
Challenged by cost-savings pressures in commercial aviation contracts, military platforms offer a company like APEX “good visibility,” he said.
However, militaries have long been trading quantity for technological superiority, meaning fewer platforms and a relatively short production cycle.
And ramping up quickly with people and equipment to meet tight delivery schedules is a challenge for small businesses that need other options to justify and sustain the investment when the contract ends. “It is very tough for a SME like ourselves to invest.”
However, defence procurement and government programs can go a long way to supporting the scale-up of SMEs, said Patrick Mann, president of Patlon Aircraft & Industries, a technical sales force for global manufacturers of custom components and systems. The scale-up program must be run by single entity within government committed to the Canadian SME community that would be “funded, independent and have the authority to make decisions.”
Mann suggested coping what has worked well in other jurisdictions, noting the success of the United States Small Business Administration's set-aside program. “Within that, there is a small business innovation research program which has been highly successful in scaling up SMEs,” he said.
The Vision 2025 report called for a federal scale-up program to “provide advice, coaching, networking, value proposition development and consortium-building support to incentivize growth and build capacity–helping firms expand their global footprints and giving them the means and maturity to support OEMs effectively.”
The report recommended the Office of Small and Medium Enterprises (OSME) within Public Services and Procurement Canada shoulder that responsibility. “Having OSME at the table as a contributor to the development of government procurement strategies and as a champion of small and medium-sized business interests will help ensure government policies and programs recognize the unique characteristics of small firms,” it stated.
“We are a pretty good example of a scale-up of an SME using competitive bid government procurement as a mechanism,” said Mann. However, developments over the past 10 years such as single point of accountability and bundling, where multiple small contracts are combined in one larger procurement that is awarded to one contractor, have been “devasting” to smaller suppliers. “It has been a real issue for us. Again, it is an issue where (OSME) can play a role.”
OEMs can bolster government programs by mentoring small companies within their supplier base on management and production processes, especially around digitization, added Donaldson. “OEMs have a lot of that knowledge ... [but] I don't think [they] do enough of that.”
He and Bangs both cautioned that the ability to scale up will be contingent on resolving talent shortages. Developing and attracting skilled labour is a chronic problem affecting the entire sector, but it is particularly acute for SMEs in more remote locations that don't have the resources to recruit as widely or navigate the immigration system. “Before we launch a scale-up program with support for financing and working capital, we have to make sure we have our skills done first,” said Donaldson.
However the Liberal government opts to respond to the Vision 2025 report, the value of investing in SMEs should be clear. Viking Air, KF Aerospace or IMP Aerospace & Defence were once small companies and are “now thriving global participants,” said Mann. “That is the reason why todays SMEs are an important part of our industry.”
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December 7, 2018 | Local, Naval
Sole-sourced contracts can be 'raw deal', top officials said in navy ship case
Lee Berthiaume / The Canadian Press OTTAWA — New court documents show public servants discussing the risk to taxpayers as successive federal governments have turned to sole-source contracts to buy desperately needed equipment for the Canadian Forces and others. The documents were filed on behalf of suspended Vice-Admiral Mark Norman, who is charged with breach of trust in connection with one such contract. They land amid frustrations with Canada's military procurement system — including because of political mismanagement — that have led to the need for quick fixes. Prime Minister Justin Trudeau's government has chosen to sign several sole-source contracts to bolster the coast guard's aging icebreaking fleet and the country's fighter-jet force, buying time to find permanent replacements. Sole-sourcing does make sense in many cases, said defence analyst David Perry of the Canadian Global Affairs Institute, particularly where there is an emergency or it's clear that only one company can meet the government's needs. "But if you're sole-sourcing to fill a capability gap, that's the result of mismanaging a procurement to the point where you are out of options and have no alternative," Perry said. "That's not really a good reason to be sole-sourcing." The Tories under Stephen Harper once intended to buy a fleet of F-35 fighter jets on an untendered contract, but aborted that plan in 2012 once the full price became known. Then the Trudeau government planned to spend about $6 billion on 18 sole-sourced "interim" Super Hornets from Boeing because it said Canada needed more fighter jets to support its aging CF-18s until replacements could be purchased through a competition. The Super Hornets deal eventually fell apart because of a trade dispute with Boeing. So the government is buying 25 second-hand Australian fighter jets, also without a competition. Canada isn't expected to get new fighter jets until at least 2025. The Liberals also recently bought three second-hand icebreakers from Quebec-based Davie Shipbuilding for the coast guard, whose existing fleet is on average 35 years old — with no immediate plan to replace it on the horizon. Suspended as the military's second-in-command in January 2017, Norman was charged in March 2018 with one count of breach of trust for allegedly leaking cabinet secrets to Davie over a different contract. He has denied any wrongdoing and vowed to fight the charge. The case against Norman centres on a sole-sourced deal negotiated between Davie and the previous Conservative government in 2015, in which the Quebec shipyard proposed converting a civilian cargo ship into a temporary support vessel for the navy. The $700-million contract with Davie was not finalized before that year's federal election. Although the newly elected Liberals at first wanted to delay it for a closer review, they signed off on the deal a short time later. Before Liberal ministers agreed to buy the converted ship, bureaucrats from the Privy Council Office, the government's top department, wrote a secret briefing note in November 2015 that discussed the problems with not holding a competition. "The risk inherent with a sole-source contract is that much of the leverage in the contract negotiation resides with the company," the bureaucrats wrote, even as they noted that the Conservatives had exempted the deal from the usual oversight for such projects. Despite these concerns, the officials recommended the government approve the deal. Partly because they had assessed that "risk mitigation measures" were in place, but mostly because the navy urgently needed a support ship for faraway operations. The court documents, none of which have been filed as exhibits or tested in court, include RCMP interviews with civil servants that suggest politicians' desire for votes in Quebec also played a role in the decisions about the ship. But the navy's need for the vessel was real. The navy at the time had just retired its 50-year-old support ships and while replacements are being built in Vancouver through the government's national shipbuilding plan, numerous delays and problems mean they won't be ready until the 2020s. The navy had originally expected to get new support ships in 2012. The briefing note said a competition could have been held to find another, perhaps cheaper, solution, but "a competitive process would take longer to deliver a solution — likely 10-14 months for a contract award, and then more time for the service to be ready." RCMP interviews with several senior civil servants raise similar concerns about awarding a contract to Davie without a competition while also alluding to the sense of urgency in getting new support ships. The Defence Department's head of procurement, Patrick Finn, told the Mounties that other companies were clamouring to compete to supply a temporary support ship in late 2014, and that "the information existed to say that this could be done competitively." But Finn noted that Davie had already found a ship that it could convert for the navy, which "at that point had no replenishment ships." Melissa Burke, an analyst with the Privy Council Office who attended various cabinet meetings about Davie's proposal in 2015, told the RCMP that federal procurement officials were unhappy because "they felt the taxpayers were getting a raw deal." https://www.timescolonist.com/sole-sourced-contracts-can-be-raw-deal-top-officials-said-in-navy-ship-case-1.23516431
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October 10, 2017 | Local, Aerospace, Naval, Land, C4ISR, Security
THALES SELECTS CANADA AS NEW GLOBAL HUB TO BOOST ARTIFICIAL INTELLIGENCE EXPERTISE
oday, Thales announced the creation of the Centre of Research and Technology in Artificial Intelligence eXpertise (cortAIx). Led by Thales, cortAIx, in collaboration with the MILA (Artificial Intelligence Institute of Quebec), the IVADO (Institute of Data Valorization) and the Vector Institute of Toronto, will be located in Montreal, one of the world's leading Artificial Intelligence (AI) ecosystems. This investment supports Thales' global strategy of technology leadership. Key Points The creation of cortAIx is another building block of our digital strategy, one of the key initiatives for company-wide growth Investment of 50 new world class experts in AI who will work together to strengthen the use of artificial intelligence in Thales products With the support of our partners, we will empower our customers with better decision making capabilities This new centre supports the creation of approximately 50 new world class jobs of AI researchers and developers. Their mission will be to advance the safe and ethical applications of artificial intelligence across Thales' vast product portfolio. cortAIx will focus on creating solutions to help airlines, satellite operators, air traffic controllers, mainline and light rail operators, armed forces and critical infrastructure managers, make the best decisions in decisive moments – from the bottom of oceans to the depths of space and cyberspace. cortAIx supports Thales' goal of being a world leader in AI while delivering future economic benefits to Canada. Leveraging the combined expertise of MILA, IVADO and the rich ecosystem of AI universities and laboratories, make Montreal and Canada the perfect place to develop cortAIx. With Thales' leadership and the support of our partners, we will leverage Montreal's unique ecosystem of world class talent and creativity to advance the applications of ethical artificial intelligence world-wide. Patrice Caine, Chairman and Chief Executive Officer, Thales The biggest challenge faced by AI experts today is to perfect the understanding of the mechanisms behind AI developments, while simultaneously evaluating human behaviors as people interact with these new systems. The key mission of Thales' cortAIx is to build “AI inside” solutions that are safe and ethical while granting full authority to the human decision makers. Building on Thales' recent acquisition of Guavus earlier this year and Vormetric last year, the creation of cortAIx is yet another example of how Thales is strengthening its positioning in one of the key technologies at the heart of global digital transformation. In the last three years, Thales has invested over €1 billion in key digital technologies and recently announced the launch of its high-tech Digital Factory in Paris. This activity brings together leading technology experts who support the injection of big data and artificial intelligence into Thales solutions, while also ensuring data security – a fundamental requirement of the modern digital economy. https://www.thalesgroup.com/en/worldwide/group/press-release/thales-selects-canada-new-global-hub-boost-artificial-intelligence