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David Pugliese, Ottawa Citizen An Italian aerospace firm dropped a lawsuit against Canada over what it claimed was a rigged aircraft purchase shortly before the federal government awarded it a new sole-source deal potentially worth billions of dollars. But the Canadian Forces and officials with Italian defence company, Leonardo, say the ending of the legal action in May had nothing to do with the company being picked for a new project the same month. Leonardo has been selected by the Royal Canadian Air Force to upgrade its Cormorant search-and-rescue helicopters and provide seven additional aircraft. It is estimated the project will cost taxpayers between $1 billion and $5 billion, a price tag that includes the purchase of simulators and support equipment. Leonardo had been fighting the Canadian government in Federal Court over its 2016 decision to award its rival, Airbus, a contract to build fixed-wing search-and-rescue planes as part of a $4.7-billion program. The company was asking the court to overturn the contract to Airbus and instead award the lucrative deal to Leonardo and its Canadian partners. It alleged the Airbus aircraft failed to meet the government's basic criteria. But that legal action was stopped in May just as the Canadian government was awarding Leonardo the new helicopter deal. The Department of National Defence suggested the decision to drop the lawsuit was not related to its decision to select Leonardo for the sole-source deal. “The Government of Canada's priority is to select a best-value package for the Cormorant Mid-Life Upgrade,” the DND noted in an email. “Decisions related to this procurement were made based on consultations with industry and our subject matter experts and follow standard procurement reviews.” But the sole-source deal to Leonardo caught the aerospace industry by surprise. The RCAF had asked companies just last year for informal proposals on how Canada's future search and rescue helicopter needs could be met. One firm, Sikorsky, went as far as launching a campaign to promote its civilian S-92 helicopter as a cost-effective solution. It proposed that it was cheaper to buy new helicopters than to upgrade the older Cormorants. The federal government acknowledged that it has now received correspondence from aerospace firms raising issues about the sole-source deal with Leonardo. “We have received some responses,” Pierre-Alain Bujold, a spokesman for Public Services and Procurement Canada, stated in an email. “PSPC officials are currently reviewing the responses, in collaboration with the Department of National Defence and Innovation, Science and Economic Development Canada.” “Once this review is complete, officials will determine appropriate next steps and inform respondents accordingly,” Bujold added. But defence industry insiders say the review is simply for the sake of appearances and it is expected the deal with Leonardo will proceed. Leonardo officials said their decision to drop the lawsuit was made in April but it took until the next month before that process could be completed. The Cormorant fleet entered service in the year 2000 and the modernization would allow the helicopters to operate for another 25 years at least. One of Leonardo's subsidiaries was the original manufacturer of the Cormorants. The decision to sole-source the deal moved through the federal system quickly. On April 20, RCAF spokesman Maj. Scott Spurr stated the air force was still examining options on how to proceed and that the next phase of the project wouldn't come until 2019. But on May 24 the Canadian government announced it had decided to go with Leonardo on the exclusive deal. Department of National Defence officials say it was determined that it was more cost effective to stay with the Cormorant fleet as it is a proven aircraft the RCAF knows well. The upgrade program is expected to include the latest avionic and mission systems, advanced radars and sensors, vision enhancement and tracking systems. http://nationalpost.com/news/politics/aerospace-firm-drops-lawsuit-against-dnd-as-defence-officials-award-it-multibillion-dollar-contract

David Ljunggren OTTAWA (Reuters) - Canada is discussing changes to a multibillion-dollar fighter jet procurement process that could make it harder for a U.S. company to win the order as trade relations between the neighbors sour, two sources with direct knowledge of the discussions said. Canada is considering whether to penalize companies from countries that have caused it economic damage, the sources said on Wednesday. While a final decision is not expected before next year and the threat could be posturing, the move shows how the Trump administration's trade disputes are spilling over into other areas. A spokeswoman for federal Procurement Minister Carla Qualtrough - who has overall responsibility for major purchases of military equipment - declined to comment. Sources declined to be identified as the discussions are confidential. Boeing Co's (BA.N) F-18 Super Hornet and Lockheed Martin Corp's (LMT.N) F-35 fighter were among the favorites to capture the contract to supply 88 planes, worth between C$15 billion ($11.3 billion) and C$19 billion. Defense sources have long said the Canadian air force would prefer an American-built jet, citing the importance of operating easily with U.S. armed forces. But a change in procurement terms would give more of a chance to European suppliers: Airbus SE (AIR.PA), which makes the Eurofighter; Saab AB (SAABb.ST), which makes the Gripen; and Dassault Aviation (AVMD.PA), which makes the Rafale. Defense sources, however, say the European jets are likely to become obsolete by around 2040, at which point they could no longer incorporate the latest technologies. Canada has been trying unsuccessfully for almost a decade to buy replacements for its aging F-18 fighters, some of which are 40 years old. The former Conservative administration said in 2010 it would buy 65 F-35 jets but later scrapped the decision, triggering years of delays and reviews. Ottawa has already said bids will be evaluated in part by examining whether firms competing for the order have caused any past economic damage to Canada. Officials said at the time this was aimed at Boeing, which last year launched a trade challenge against Canadian planemaker Bombardier Inc (BBDb.TO). Government officials are now discussing whether Canada should also consider economic damage caused by governments, a clear reference to worsening relations with Washington, said the sources. “Politically it's hard to spend billions of dollars on contracts with a country that's hurting you,” said one of the sources, who asked to remain anonymous given the extreme sensitivity of the situation. However, the sources emphasized that the discussions are at an early stage and Ottawa could eventually decide to drop the proposed language. Canada - which is due to release the exact specifications for the jets next year - has not yet finished work on the clause referring to economic damage caused by a single firm. U.S. President Donald Trump last month slapped tariffs on Canadian steel and aluminum, prompting Canada to announce its own retaliatory measures. Trump has also threatened tariffs on Canadian autos, which could badly hurt the economy. Ottawa froze talks with Boeing about the fighter jet contest but after the company's trade challenge against Bombardier failed, Canadian officials made clear the firm would not be discriminated against if it chose to bid. https://ca.reuters.com/article/businessNews/idCAKBN1JH2IA-OCABS

• Canada has awarded Thales Canada Phase II of the MEOSAR (Medium Earth Orbit Search and Rescue) Ground Segment contract. • The contract includes the procurement of two MEOLUTs and maintenance services for five years with options for an additional five years. • Using Thales Alenia Space's powerful and compact MEOLUT Next phased array solution, Canada will benefit from the world's first space borne search and rescue system of this type. Canada has awarded Thales Canada Phase II of the MEOSAR (Medium Earth Orbit Search and Rescue) Ground Segment contract. It will support Canada's ability to respond quickly and effectively to distress signals from land, air and sea from coast-to-coast-to-coast; enabling Canada to meet its obligations under the International COSPAS-SARSAT Programme Agreement. The contract includes the procurement of two MEOLUTs and maintenance services for five years with options for an additional five years. Using Thales Alenia Space's powerful and compact MEOLUT Next phased array solution, Canada will benefit from the world's first space borne search and rescue system of this type. Thales Alenia Space designs, operates and delivers satellite-based systems for governments and institutions, helping them position and connect anyone or anything, everywhere. Since its commissioning in 2016, MEOLUT Next has delivered unrivalled performance, detecting distress signals more than 5,000km away. This new capability saves lives. On July 2, 2017 at 6:30 a.m., 70 kilometres off the coast of Sardinia, a 12-meter sailboat with three people aboard triggered its COSPAS/SARSAT beacon when its rudder broke and its engine failed. Its VHF radio out of range, the sailors quickly realized they were in a critical situation with waves over four meters high and the wind blowing at 40 knots. MEOLUT Next was able to receive and process their distress signals in less than five minutes, providing accurate positioning to authorities. An airplane identified the boat less than two hours after the beacon was triggered and a helicopter airlifted the crew to safety, saving all three lives. “Thales Canada is proud to deliver world class solutions that will make life better and keep us safer,” said Jerry McLean, Managing Director and Vice President, Thales Canada. “From complex C4ISR systems to integrated maritime C3 and diverse aerospace solutions, this contract further reflects Thales' continued commitment to Canadian innovation.” “We are confident that our solution will meet and exceed Canada's MEOSAR expectations, offering Canada a decisive technology for its decisive moments,” said Philippe Blatt, VP Navigation France at Thales Alenia Space. “Today, MEOLUT Next is the only solution in the world capable of processing second-generation beacons in real time. Its operational efficiency was recently recognized by Space & Satellite Professionals International (SSPI) for its humanitarian contributions”. Notes to Editor COSPAS/SARSAT COSPAS/SARSAT is an intergovernmental organization founded by Canada, the United States, Russia and France. In operation in 43 countries around the world, this satellite-based search and rescue distress alert detection and information distribution system is best known for detecting and locating emergency beacons activated by aircraft, ships and backcountry hikers in distress. Today, some 500,000 ships and 150,000 aircraft are equipped with COSPAS/SARSAT distress beacons. To date, the COSPAS-SARSAT service has saved more than 37,000 lives. MEOLUT Next Conventional MEOLUT (Medium Earth Orbit Local User Terminal) systems use large parabolic antennas and are limited by how many satellite signals they can receive. Thales Alenia Space's MEOLUT Next solution is compact, measuring less than six square meters, with the ability to track up to 30 satellites, significantly enhancing the distress beacon detection rate while expanding the coverage zone. Since there are no mechanical components, hardware maintenance costs are the lowest on the market. About Thales The people we all rely on to make the world go round – they rely on Thales. Our customers come to us with big ambitions: to make life better, to keep us safer. Combining a unique diversity of expertise, talents and cultures, our architects design and deliver extraordinary high technology solutions. Solutions that make tomorrow possible, today. From the bottom of the oceans to the depth of space and cyberspace, we help our customers think smarter and act faster - mastering ever greater complexity and every decisive moment along the way. With 65,000 employees in 56 countries, Thales reported sales of €15.8 billion in 2017. About Thales Canada A national leader in research and technology, Thales Canada combines its more than 50 years of experience with the talent of 1,800 skilled people located coast-to-coast. With revenues of $500 million, Thales Canada offers leading capabilities in the urban rail, civil aviation and defence and security sectors that meet the needs of customers' most complex requirements across every operating environment. About Thales Alenia Space Combining 40 years of experience and a unique diversity of expertise, talents and cultures, Thales Alenia Space engineers design and deliver high technology solutions for telecommunications, navigation, Earth observation, environmental management, exploration, science and orbital infrastructures. Governments, institutions and companies rely on Thales Alenia Space to design, operate and deliver satellite-based systems that help them position and connect anyone or anything, everywhere, help observe our planet, help optimize the use of our planet's – and our solar system's – resources. Thales Alenia Space believes in space as humankind's new horizon, which will enable to build a better, more sustainable life on Earth. A joint venture between Thales (67%) and Leonardo (33%), Thales Alenia Space also teams up with Telespazio to form the parent companies' Space Alliance, which offers a complete range of services and solutions. Thales Alenia Space posted consolidated revenues of about 2.4 billion euros in 2016 and has 7,980 employees in nine countries. www.thalesaleniaspace.com PRESS CONTACTS Cara Salci National Director, Public Affairs & Communications Thales Canada Tel.: 613-404-9413 cara.salci@ca.thalesgroup.com THALES ALENIA SPACE Sandrine Bielecki Tel: +33 (0)4 92 92 70 94 sandrine.bielecki@thalesaleniaspace.com Chrystelle Dugimont Tel: +33 (0)4 92 92 74 06 chrystelle.dugimont@thalesaleniaspace.com Cinzia Marcanio Tel: +39 06 41512685 cinzia.marcanio@thalesaleniaspace.com https://www.thalesgroup.com/en/worldwide/space/press-release/canada-acquire-thales-advanced-ground-segment-technology-respond

David Pugliese, Ottawa Citizen The Liberals had originally announced they would buy 18 used Australian jets to augment Canada's CF-18s. The extra aircraft will likely be stripped down for parts Canada has boosted the number of used Australian fighter jets it is purchasing to 25, but the deal still hinges on approval from the U.S. government. The Liberal government originally announced it would buy 18 used Australian F-18 jets to augment the Royal Canadian Air Force's CF-18s until new aircraft can be purchased in the coming years. It has added seven more aircraft to the deal, Dan Blouin, a spokesman for the Department of National Defence, confirmed Friday. Those extra aircraft will likely be stripped down for parts. It is not known yet if the seven aircraft will be flown to Canada or shipped, Blouin added. The exact cost of the aircraft, along with weapons and other equipment, is not yet known as negotiations are still underway, Procurement Minister Carla Qualtrough recently told journalists. The Liberal government has set aside up to $500 million for the project and that would cover the seven added jets. An Australian Senate hearing was recently told that Canada was presented with a cost proposal last year. “They accepted our offer in December, but they have also put in a further request for some seven aircraft for system testing, training and spares,” Australian Air Vice Marshal Cath Roberts told the hearing. The U.S. government is examining the deal and will have to give its approval before Australia can sell the F-18s to Canada, because the F-18s were built in the U.S. with American technology. Canada is hoping for the U.S. approval sometime in the summer. Although U.S.-Canada relations have hit a slump, with President Donald Trump vowing to punish Canadians over economic disputes, the DND does not expect that to affect approval of the fighter jet deal. Pat Finn, DND's assistant deputy minister of materiel, has said he expects a deal by the end of the year with deliveries of the Australian planes to begin in the summer of 2019. The government originally planned for the arrival of the first used aircraft next January. The government had originally planned to buy 18 new Super Hornet fighter jets from U.S. aerospace giant Boeing. But, last year, Boeing complained to the U.S. Commerce Department that Canadian subsidies for Quebec-based Bombardier allowed it to sell its C-series civilian passenger aircraft in the U.S. at cut-rate prices. As a result, the Trump administration brought in a tariff of almost 300 per cent against the Bombardier aircraft sold in the U.S. In retaliation, Canada cancelled the deal to buy the 18 Super Hornets. That project would have cost more than US$5 billion. In the meantime, the federal government expects to issue next year a request for proposals from aerospace firms who want to take part in the competition to provide Canada with 88 new fighter jets. That project, with a $19 billion price-tag, would see the purchase of a new fleet of planes that would replace both the CF-18s and the used Australian jets.A winning bidder is expected to be selected in spring 2021 and the first of the new aircraft would be delivered four years later. The last CF-18 will be retired in 2032. http://nationalpost.com/news/politics/canada-to-purchase-25-used-australian-fighter-jets-if-states-says-yes

TRULY CANADIAN TRAINING SkyAlyne Canada is a truly Canadian entity with unmatched capability in pilot and aircrew training CAE and KF Aerospace join forces in SkyAlyne Canada joint venture Companies partner to cement leadership in military pilot and aircrew training in Canada. CAE and KF Aerospace, two Canadian military pilot and aircrew training leaders, today announced that they have aligned to form SkyAlyne Canada Inc., a 50/50 joint venture that will focus on developing and delivering world-class military pilot and aircrew training in Canada. http://skyalyne.ca/

DAVID PUGLIESE, OTTAWA CITIZEN The companies bidding on the Canadian Surface Combatant program will provide Irving Shipbuilding with their “cured” bids by July 21. Earlier this year, Postmedia reported that all three bidders in the competition failed to meet some of the federal government's requirements. The problems centre around technical issues. Some are minor but in other cases there is a view among defence industry officials that Canada is asking for too much in some areas such as radar, which may be causing problems with meeting requirements. Public Services and Procurement Canada spokeswoman Michèle LaRose earlier said the bids received for the Canadian Surface Combatant project have not been disqualified. Three bids have been received. The federal government and Irving Shipbuilding are still evaluating the proposals, she added. LaRose pointed out that the evaluation is at the second stage in the process. Government officials say that involves what is known as “the cure process” in which bidders will be given details of how their proposals have failed to meet the stated criteria. They will then be given only one opportunity to fix issues with their bids. So those fixes are to be submitted by July 21, according to industry representatives. If the bids are still considered “non-compliant” after the cure period they “will be eliminated from the competition,” according to the federal government. The budget for the Canadian Surface Combatant project is estimated by the federal government to be between $55 billion and $60 billion. That is a range but specific costs won't be known until contacts are signed and more details worked out. Fifteen warships will be built. Pat Finn, assistant deputy minister for materiel at the Department of National Defence, told Defence Watch he expects a winning bid to be selected by the end of this year. http://calgaryherald.com/news/national/defence-watch/it-is-make-or-break-time-for-canadian-surface-combatant-bidders/wcm/49777bbd-d1e9-44df-88f8-603850e12ae3

Le Commandement des opérations interarmées du Canada (COIC) a officiellement changé de mains au cours d'une cérémonie tenue aujourd'hui à Ottawa. Le lieutenant-général Michael Rouleau a pris le commandement du lieutenant-général Stephen Bowes au Manège militaire de la place Cartier, en présence des membres des Forces armées canadiennes de l'organisation et d'invités d'honneur. Présidée par le général Jonathan Vance, chef d'état-major de la défense, la cérémonie d'aujourd'hui marquait la fin du mandat de trois ans du lieutenant-général Bowes à titre de commandant de l'organisation des opérations interarmées du Canada. Plus tôt aujourd'hui, une cérémonie de passation des fonctions a eu lieu, au cours de laquelle le COIC a salué le départ de l'adjudant-chef du Commandement Denis Gaudreault et accueilli le premier maître de 1re classe Gilles Grégoire. Citations « Une cérémonie de passation de commandement est plus qu'un simple changement de leadership. C'est une déclaration publique par laquelle je confie la t'che et la responsabilité d'un haut commandement à certains officiers généraux. En choisissant et en promouvant le Lgén Rouleau au commandement du COIC, j'affirme à la population canadienne qu'un officier général hautement compétent est à la tête des opérations des FAC. Il remplace un leader tout aussi accompli, le Lgén Bowes, dont la nouvelle mission sera de venir en aide à nos anciens combattants. Aux lieutenants généraux Rouleau et Bowes, je vous souhaite la meilleure des chances dans toutes vos entreprises futures. » Général Jonathan Vance, chef d'état-major de la défense « Je suis reconnaissant de la confiance que le général Vance me porte, et d'avoir le privilège de commander et de diriger les prochaines opérations interarmées du Canada. Je remercie le général Bowes de son travail acharné et je compte bien faire tout mon possible, avec l'aide de mon partenaire le premier maître de 1re classe Gilles Grégoire, pour m'assurer que les hommes et femmes des FAC continuent de fournir un rendement exceptionnel au nom des Canadiens dans le cadre des opérations au pays et à l'étranger. » Lieutenant-général Michael Rouleau, commandant, Commandement des opérations interarmées du Canada « Commander les membres des Forces armées canadiennes dans le cadre d'opérations partout dans le monde a été extrêmement valorisant. Surtout, le professionnalisme et le dévouement dont font preuve tous les jours nos militaires, hommes et femmes, ne cessent de m'étonner et de me rendre fier. Ils sont la raison pour laquelle les Forces armées canadiennes sont très respectées par nos alliés. Je suis impatient de commencer mon prochain travail, qui consistera à mieux servir nos vétérans. » Lieutenant-général Stephen Bowes Faits en bref · Le lieutenant-général Rouleau commence sa carrière militaire en 1985 à titre d'officier d'artillerie. Son parcours est divisé à peu près également entre l'Armée canadienne, les Forces spéciales et le Quartier général de la Défense, où il gère les portfolios de l'État‑major stratégique. Son service au sein des Forces d'opérations spéciales commence en 1994, au sein de la Force opérationnelle interarmées 2. En 1999, il prend sa retraite des Forces armées canadiennes pour faire partie du Service de police régional d'Ottawa‑Carleton, comme agent d'intervention d'urgence. À la suite des évènements du 11 Septembre, il s'enrôle à nouveau en 2002. Depuis, il met continuellement à profit ses diverses compétences et expériences, en commandant des troupes à différents niveaux au Canada et à l'étranger. Il a dirigé le Commandement des Forces d'opérations spéciales du Canada depuis 2014. · Le lieutenant-général Bowes se prépare à être détaché auprès d'Anciens combattants Canada à Charlottetown, à compter de juillet 2018. Durant son mandat au COIC, il commande des forces déployées au pays et ailleurs dans le monde. Voici quelques exemples des opérations auxquelles l'organisation participe : recherche et sauvetage, et soutien en cas de catastrophe naturelle dans l'ensemble du Canada; lutte contre le commerce illicite dans les Caraïbes; programmes de renforcement des capacités dans différentes parties du monde; soutien des mesures de dissuasion et d'assurance de l'OTAN en Europe; et lutte contre Daech au Moyen‑Orient. · Le commandant du COIC dirige la plupart des opérations des Forces armées canadiennes (FAC) au Canada, en Amérique du Nord et ailleurs dans le monde. Il dirige également les missions des FAC, de leur planification à leur clôture, afin d'atteindre les objectifs stratégiques nationaux et internationaux. · Le COIC, dont le quartier général se trouve à Ottawa, comprend des forces opérationnelles et des éléments employés dans le cadre d'opérations; les quartiers généraux des forces opérationnelles interarmées régionales permanentes à Yellowknife, Victoria, Edmonton, Toronto, Montréal et Halifax; le Groupe de soutien opérationnel interarmées, qui dispose d'un quartier général à Kingston et d'unités dispersées dans l'ensemble du Canada; et un réseau mondial d'officiers de liaison et de points de commandement et contrôle. Le COIC exerce le contrôle opérationnel sur le commandement de composante aérienne ou maritime de forces interarmées, le Quartier général de la 1re Division du Canada et l'Élément de coordination des opérations spéciales. http://www.45enord.ca/2018/06/un-nouveau-commandant-pour-le-commandement-des-operations-interarmees-du-canada/

U.S. President Donald Trump's tirade against Canada and threats to punish the country could undermine efforts by American firms trying to sell fighter jets and other military equipment to the Canadian Forces, warn defence and industry analysts. One European firm, Airbus, has already been talking with Canadian officials to pitch its plan to build fighter jets in Quebec as it positions itself to win the $16-billion deal to replace CF-18 aircraft. An Italian aerospace firm, Leonardo, is looking at building helicopters in Nova Scotia as it moves towards negotiations for a search-and-rescue aircraft modernization project the Department of National Defence says will be worth between $1 billion and $5 billion. Trump has hit Canadian aluminum and steel with tariffs, claiming their import is a threat to national security. After the weekend G7 meeting and Prime Minister Justin Trudeau's reaffirming that Canada would reciprocate with tariffs on specific U.S. products, Trump vowed more economic grief that will “cost a lot of money for the people of Canada.” Trump's move comes at a time when European firms are courting the Canadian government, particularly on big-ticket defence items such as aircraft and warships. Billions of dollars in new purchases are potentially at stake and European firms had a strong presence at the recent CANSEC military equipment trade show in Ottawa. “Trump certainly isn't helping U.S. defence companies who want to sell to Canada,” said Martin Shadwick, a defence analyst in Toronto. “It would be very difficult at this point from a political optics point of view for the government to announce awarding contracts to any American firm.” Shadwick said whether that situation will continue for the next several years, when for instance the decision on new fighter jets is supposed to be made, would depend on any further actions by the president. Two U.S. aircraft, the Boeing Super Hornet and the Lockheed Martin F-35, are among the top contenders in that jet competition. The other three aircraft are from European companies. An earlier trade dispute with Canada has already backfired on Boeing and the Trump administration, costing the U.S. billions in fighter jet sales. Last year Boeing complained to the U.S. Commerce Department that Canadian subsidies for Quebec-based Bombardier allowed it to sell its civilian passenger aircraft in the U.S. at cut-rate prices. As a result, the Trump administration brought in a tariff of almost 300 per cent against Bombardier aircraft sold in the U.S. In retaliation, Canada decided against buying 18 new Super Hornet fighter jets from Boeing. That deal would have been worth more than US$5 billion. Christyn Cianfarani, president of the Canadian Association of Defence and Security Industries, said it is too early to determine the impact of the U.S. tariffs on the domestic defence industry. “Tariffs are never good for trade or business,” she added. “CADSI is monitoring the issue and consulting our members to better understand the potential impact to Canadian firms, both in terms of the direct impact of any tariffs and the more indirect, long term impact on supply chains and market access,” she said. There is growing concern that Canadian aviation firms could be hurt by Trump's aluminum tariffs. The Aerospace Industries Association of Canada did not respond to a request for comment. But its counterpart in the U.S. has voiced concern that American aerospace companies could feel pain. In March, the U.S. Aerospace Industries Association noted it was deeply concerned about Trump's tariffs on steel and aluminum as it “will raise costs and disrupt the supply chain, putting U.S. global competitiveness at risk.” “There is also a significant threat for retaliation from other countries towards American made products,” the association noted in a statement. Canada is the largest exporter of aluminum and steel to the U.S. http://nationalpost.com/news/politics/trade-dispute-could-leave-u-s-firms-out-of-the-running-to-sell-military-equipment-to-canada

By EMILY HAWS Department of National Defence deputy minister Jody Thomas says she'll work through the summer to review how the Canadian government buys defence equipment, with a view to paring down the procurement process to get projects out the door quicker. That could even mean more use of sole-source contracts, when it doesn't make sense to hold a competition. She says the department wants to ensure the money outlined in Strong, Secure, Engaged—the government's 20-year defence policy unveiled last year—is spent. The department took flak earlier earlier this year for not having the capacity to push procurement projects outlined in the plan through the system at the expected pace. Speaking at a June 7 conference organized by the Canadian Global Affairs Institute think-tank in Ottawa on the first anniversary of the defence policy, Ms. Thomas suggested switching up the rules around sole-source contracting. She discussed the idea on a panel with other top DND executives Gordon Venner and Bill Matthews, moderated by CGAI defence procurement expert David Perry. “I think what we want to do and what is expected of us is to have an honest conversation,” Ms. Thomas told the audience. “Where we know there's one supplier in the world that is compliant, Five Eyes-compliant, NORAD-compliant, whatever compliancy we need—to run a competition [in that case] where there is no hope of multiple bidders wastes [everyone's] time; it's kind of disingenuous and dishonest,” she said, referring to security alliances of which Canada is a member. “We have to talk to ministers about that, and ministers are open to that conversation.” Mr. Perry said in a separate interview that the change in process would be a big deal, but it would only happen if the government decides its priority is to spend money. The department is trying to determine a better balance between spending and oversight, he said, but it needs to keep in mind that the “objective is to spend money, not follow a thousand steps and do multiple dozens of reviews.” Sometimes government officials try overly hard to make the bid process competitive, said Mr. Perry, so they end up sending to Treasury Board for review some bids that clearly don't meet requirements. This leaves Treasury Board officials with only one compliant bidder, which in turn leads these keepers of the public purse to ask more questions and perhaps conduct reviews. For example, the government is looking at buying one or more tanker aircraft, and is narrowing down the list of eligible companies, said Mr. Perry. There are basically only two companies that sell tankers, Airbus and Boeing, he said. “You set it up so that everyone has a chance, but that doesn't actually mean that you can actually have a really competitive environment that have at least two bids that actually meet all of the mandatory things you need to meet to submit a bid,” he said. Depending on the extent the rules shift, they may require approval from not just Defence Minister Harjit Sajjan (Vancouver South, B.C.), but Treasury Board and the larger cabinet, he added. Conservative MP James Bezan (Selkirk-Interlake-Eastman, Man.) and NDP MP Randall Garrison (Esquimalt-Saanich-Sooke, B.C.), defence critics for their respective parties, said they support streamlining the procurement process, but Mr. Bezan said the Liberals just need to be more decisive. Industry representatives are also supportive, with the Canadian Association of Defence and Security Industries (CADSI) calling the move “refreshing” in an emailed statement. DND is trying to increase its procurement workforce, said Ms. Thomas, adding that the procurement process is the same regardless of whether the contract is worth $1-million or $1-billion. Ms. Thomas, who has been in her role since October, said the rules were put in place after the department received criticism from the auditor general. “We've been risk-averse and we've been criticized, so a deputy's normal reaction to criticism or recommendations from the auditor general is to put process in place,” she said. “I absolutely understand that; we need to make sure it's appropriate to the complexity of the project.” She said she's going to work through the summer to analyze the number of steps in the procurement process to determine the value they serve and where they can be reduced. Ms. Thomas said she will create “sort of a lean methodology of the number of hands something has to touch, how long do we spend in project definition, [and] how long we spend in options analysis.” Byrne Furlong, a spokesperson for the defence minister, said in an emailed statement the review will accelerate approvals and delivery. “Ensuring our Canadian Armed Forces [are] well-equipped to deliver on what Canada requires of them is a significant undertaking,” she said, adding the government is committed to doing so. New defence policy ups procurement spending Earlier this year, Mr. Perry authored a report suggesting the procurement plans laid out in Strong, Secure, Engaged could be threatened by long-standing process problems. The new policy would see procurement ramp up from about $3.5-billion to $4-billion annually, in 2018-19 dollars, to $12-billion. Defence procurement budgets were cut from about 1990 until the mid-2000s, he said. Now Prime Minister Justin Trudeau (Papineau, Que.) is trying to play catch-up, but there's a bottlenecking of purchases. The government both doesn't have enough people to approve the projects, nor the quality of experience to work the larger, more technical jobs, Mr. Perry said in a previous interview. There are five critical steps to procuring defence equipment which spans from identification to close-out. Most work is done by DND to determine what it needs, said Mr. Perry, but the actual competition is run by Public Services and Procurement Canada (PSPC). The change in rules Ms. Thomas is contemplating would only apply to DND, she said, as that's her jurisdiction. CADSI president Christyn Cianfarani said, to her knowledge, a review in such a systematic way hasn't been done for some time. She said she sees the move as positive, allowing the government to properly balance risk and acquisition. “With the launch of SSE and the Investment Plan, the deputy minister's call to review the system is timely,” she said. “In this critical period of recapitalization, we simply cannot expect to move four times the volume of procurement through the same old procurement system.” When asked about the sole-sourcing of contracts, Ms. Cianfarani said competition is just one tool to meet policy objectives. She wants more sole-sourcing to Canadian firms and more Canadian-only competitions between companies with similar capabilities, price, and proven roots in Canada. Liberals just need to decide, says Conservative critic Mr. Bezan said sole-source contracting is almost impossible to do when the country isn't at war because one must argue it's in the best interest of national security and the taxpayer. The Liberals need to be more decisive on what equipment they want to buy, he added, saying they are risk-averse. “Fighter jets is a good example. They have punted the close of the competition—making the decision—until 2021,” he said. “Most countries run these competitions in around a year, and this was launched three to four months ago ... they should be able to close this off and make a decision within six to nine months.” The Conservative government before it tried and failed to procure fighter jets for several years too, incurring political controversy along the way, with accusations of conducting a flawed process of the purchase of billions of dollars. Mr. Garrison said the NDP welcomes efficiencies in the procurement process that benefit the armed forces and support Canadian industry, as well as meet DND targets. https://www.hilltimes.com/2018/06/13/defence-deputy-minister-begin-reviewing-procurement-rules-summer/147489