14 août 2023 | Local, Aérospatial, Naval, Terrestre, C4ISR, Sécurité
Peter MacKay: The urgent need to fix Canada's military — and how to do it
Advice from a former defence minister to one just starting
5 novembre 2019 | Local, Aérospatial, Naval, Terrestre, C4ISR, Sécurité
A new Defence Procurement Agency – Would it solve anything?
By Brian Mersereau
Defence Watch Guest Writer
During the recent federal election, the issue of considering a new Defence Procurement Agency or DPA surfaced again.
The Liberals made such an organization part of their defence platform this time around as part of their plan to improve military procurement.
While positive outcomes could result from a new organizational structure, simply installing one will not in and of itself create an efficient procurement model. It most certainly will not address in any substantive manner why taxpayers pay far too much to acquire the defence capabilities Canada needs to protect our sovereign interests in a world that has become increasingly unstable in recent years.
It appears that, in many cases, Canada pays more per unit of capability to satisfy its defence needs than most of its allies. Unfortunately, though quite logically, this phenomenon has effectively shrunk the size of our armed forces as the number of platforms we can afford to acquire continues to dwindle due to high costs.
While this approach can create short-term jobs, they are ultimately unsustainable since there is no international market for our higher-priced solutions. This is not the direction in which Canada should be headed.
Before Canada decides to move ahead with a new procurement agency, it should assemble a “smart persons” panel or forum to thoroughly review the existing system and establish the mandate and objectives of whatever type of organization results from said review. Such a review group must be composed of people from the public and private sector with significant experience, not skewed with staff whose procurement experience primarily consists of exposure to the Canadian “way”.
During this review, the panel must examine various issues which are currently perceived to be an impediment to the efficiency of Canada's procurement system. Based on my own years of experience on both the buy and sell sides of the procurement equation, the following areas merit some serious thought:
Organizational Structure
The fewer individuals, departments and oversight committees with their fingers in the “procurement pie”, the quicker and more coherently things will get done. Even at today's interest rates, time really is money for all involved in the process. Adding more time to a schedule for another management review quite often has a negative impact.
While I understand governance and oversight committees have their place, their overinvolvement can produce negative outcomes if mandates are not absolutely clear and if individuals on these committees have limited experience with respect to the issue at hand.
Risk
Canada's ongoing method for defence procurement is that it will not assume any risk on their side of a contract. If Canada insists the private sector must accept all risk, the private sector will so oblige – but at a significant price and to the detriment of schedules and timelines. As contract prices necessarily increase, so do governments costs to manage the contract.
In reality, the most efficient procurement solution for Canada would see some elements of risk managed by the buyer, rather than entirely borne by the seller. More consideration needs to go into balanced risk-sharing formulas.
Process
Canada has an extremely hands-on procurement process for major systems during the competitive phase, as well as during the implementation of the contract. Even in this digital age, Canada hamstrings its own progress with the sheer degree of detail and bureaucracy it requires; unbelievably, freight trucks are still required to deliver proposals.
It seems as though, on occasion, the buyer thinks it knows more about designing and engineering the defence systems Canada needs than the actual designers and engineers for whom it is a primary occupation. Requirements of little or no consequence are painstakingly spelled out in the greatest of detail. Such an approach has a tremendous impact on the amount of time consumed by both the buyer and seller, again driving up costs and extending schedules. Less “hand holding” by the customer must be seriously considered.
Sole Source
In the procurement world, “sole source” is often viewed as a dirty phrase. Frequently, Canada attempts to run competitions in scenarios where the chances of achieving any meaningful savings or benefits related to competition are low at best. This takes years and drives costs higher at no measurable gain for the buyer. The parameters of when and under what circumstances Canada should move directly to a sole source should be thoroughly reviewed. Significant resources are being wasted managing nearly meaningless processes.
Skills
Canada's internal skill set for managing large, complex defence procurements does not appear to be adequate. As a result, it turns more and more often to the expertise of external third parties in order to keep up with large private sector firms at the negotiation table from a knowledge and experience standpoint. While there will always be a need for some third-party expertise, project managing many external suppliers in the negotiation phase – each of whom have their own agendas – only further complicates the already convoluted procurement process. Canada would be much better off with an enhanced internal core staff.
If Canada takes the time to review the appropriateness of some form of DPA model, it must cast the net wider and review other critical aspects of the procurement process – or else any organizational changes will inevitably succumb to the systematic inertia of the overall process. A failure to do so means Canada will continue struggling mightily to stand-up the level of defence and security necessary to secure its citizens in an increasingly turbulent world.
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1 avril 2019 | Local, Naval
Two federal ministers offer lifeline for Quebec’s Chantier Davie shipyard
By Kevin Dougherty QUEBEC—Finance Minister Bill Morneau and Families, Children and Social Development Minister Jean-Yves Duclos offered hope on Friday that the Chantier Davie shipyard in Lévis, across the St. Lawrence from the provincial capital, would soon be busy working on federal shipbuilding contracts. Chantier Davie is well-placed to be awarded contracts to build three new federal ferries and is also a contender to win contracts to refit Canada's 12 naval frigates, noted Duclos, who is also MP for Québec riding, taking in the city's core. Morneau has been using a pause this week in Parliament to travel across Canada touting the benefits of the budget he presented March 19. He was asked after his chamber of commerce speech about specific commitments for the Quebec City region, such as Mayor Régis Labeaume's proposed tramway and the repainting of the rust-marred Quebec Bridge. “The money is there for the tramway,” Morneau said. There is also federal money to repaint the bridge, the finance minister added. But negotiations are continuing with the province. Asked about a proposal for more rapid, more frequent passenger rail service between Montreal and Quebec City, Morneau said, “We need to have more information.” Then he added, with a smile, “If we had more Liberals MPs (from the region), that would make it easier.” Last January, Liberal leader Justin Trudeau left his chamber of commerce audience in Quebec City cold, rejecting appeals to grant Davie a contract to build a new supply ship for the Royal Canadian Navy. “The navy doesn't need a second supply ship now,” Trudeau said, in reply to representatives of Davie's union and representatives of nearly 900 companies in Davie's supply chain. Chantier Davie, as Canada's oldest and largest shipyard has been known since a 2012 ownership change, is dependent on the boom-bust cycles of stop-and-go government contracts. In 2011, when the Conservative government was awarding billions of dollars in shipbuilding contracts, Davie, then bankrupt, was excluded, with all future navy and coast guard ships to be built by smaller shipyards, Irving Shipbuilding in Halifax and Seaspan in Vancouver. In 2015, before the federal election, Davie proposed to the Conservative government of Stephan Harper that it convert a German container ship into a supply ship for the navy. Ottawa was in a jam then after Canada's two outdated supply ships had been scrapped and the navy was relying on the Spanish and Chilean navy supply ships. Davie delivered the Asterix supply ship on time and on budget in 2017. Since that time, the company has been calling on Ottawa to order the Obelix, a twin supply ship to the Asterix for the navy. On Thursday, visiting Conservative leader Andrew Scheer said if he was prime minister, the Obelix would go ahead, winning applause from his chamber of commerce audience. Scheer also endorsed the “third link,” Premier François Legault's pet project, the plan, which is yet to reach the planning stage, to build a third bridge or tunnel across the St. Lawrence. Joël Lightbound, who with Duclos makes up the two-MP Liberal caucus in Quebec City, where the Conservatives dominate, deadpanned to reporters, “One more step and Mr. Scheer would have promised world peace and the return of the Nordiques.” On Friday, it was the turn of the two Liberal ministers. Asked by a reporter what commitments the Trudeau government was prepared to make for Davie, a major employer in the region, Morneau called Davie “important for our industry in Canada.” Morneau suggested that if reporters spoke to Davie representatives at the luncheon, “You will see the smiles on their faces.” Duclos added that Davie was “wrongfully harmed” by being excluded from the Harper government's National Shipbuilding Procurement Strategy. “There are things that the previous government did that our government cannot undo,” he added. In helping Davie, the federal government agreed to its offer to convert three icebreakers, built for cancelled offshore oil-drilling projects, for the Canadian Coast Guard. “You saw the three icebreakers we acquired a few months ago,” Duclos said. “The first icebreakers the government has acquired in 25 years.” Frédérik Boisvert, vice-president of Davie and one of the Davie representatives at the chamber of commerce luncheon, said the ferry and frigate refit contracts have not been awarded yet. But Davie is confident. “We're extremely well-positioned,” he said. “You can quote me on that, given that the other two shipyards are at full capacity.” The Morneau budget called for replacing the MV Madeleine, linking Quebec's Îles de la Madeleine with Prince Edward Island; the MV Holiday Island, running between P.E.I. and Nova Scotia; and building a new ferry for Marine Atlantic, linking Newfoundland to the continent. “They have to be built in Canada,” Boisvert said. “The two other shipyards are at full capacity so, logically, it's coming to us,” he said. “Maybe (there will be) an announcement before the end of June.” On the frigate refits, Davie is hoping to get contracts to refit at least four of the warships. “Negotiations are underway, and they should be wrapped up soon.” https://ipolitics.ca/2019/03/29/two-federal-ministers-offer-lifeline-for-quebecs-chantier-davie-shipyard/