Feds award over $1 billion in contracts to shipyards to repair aging frigates

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  31 mai 2019 | Local, Aérospatial

  Fighter RFP delayed again pending official review of industrial benefits policy

  by Ken Pole Shortly before Defence Minister Harjit Sajjan announced on May 29 that a formal request for proposals (RFP) to supply 88 new Canadian fighter jets would be delayed again — this time to mid-July — two potential contenders said that a proposal to scrap the customary industrial benefits element of the procurement is problematic. Jim Barnes, director of Business Development in Canada for Boeing Defense, Space & Security and Roger Schallom, the company's St. Louis-based vice-president of International Business Development, along with Patrick Palmer, vice-president and head of Sales at Saab Canada Inc., expressed their common concern during briefings at CANSEC, the annual Ottawa trade show organized by the Canadian Association of Defence and Security Industries (CADSI). Boeing's contender to replace the RCAF's legacy fleet of CF-188 Hornets is the F/A-18 Super Hornet, while Saab's is the JAS 39 Gripen (the company had a full-scale replica parked front-and-centre outside CANSEC's main entrance). The other contenders are Lockheed Martin's F-35 Lightning II Joint Strike Fighter (JSF) and Airbus Military's Eurofighter Typhoon. Barring any further hiccups in a program fraught with political indecision and already years behind the original schedule, the RFP process overseen by Public Services and Procurement Canada (PSPC) is expected to lead to two finalists being chosen next year with a view to making a final selection in 2022. The government had been expected to issue its RFP by May 31 after years of indecision, but that latest deadline in the troubled procurement was postponed as officials at DND, PSPC and Innovation, Science and Economic Development Canada review the industrial benefits element. “This is proof that your feedback is heard and acted upon,” Sajjan told the CANSEC audience. The proposed industrial benefits change was disclosed earlier this month by Richard Shimooka, a senior fellow at the Macdonald-Laurier Institute (MLI), an Ottawa-based think tank. He said in a report published by the MLI (May 6) that the Canadian government was yielding to pressure from the United States by changing the long-established requirement that companies bidding for contracts agree to investing an equivalent amount in Canada. The fighter procurement, including in-service support, is expected to cost at least $18 billion. Shimooka cited letters from U.S. officials that indicate “resentment and distrust towards the government of Canada had grown, particularly within the U.S. Air Force.” The letters evidently focused on the “significant strategic and economic benefits that have already been accrued from being part of the JSF program.” However, he added, the letters also contained “an implicit (but clear) threat that Canada could be kicked out of the program if Ottawa continues with its current policy of trying to obtain guaranteed industrial benefits that, by their very nature, are not allowed under the JSF Program. . . . There was a complete lack of logic of Canada's policy, which seemed to ignore basic facts about membership in the JSF program, including clear advantages in cost and capability that the F-35 provided.” In his CANSEC briefing, Barnes admitted to having been “surprised by the recommended changes” in the shift in the long-standing requirement. “That policy's been in place for decades and it's been very successful for Canadian industry,” he replied, questioning what he called the government's decision to “accommodate a competitor.” Schallom added that adhering to the historic requirement for direct industrial offsets, rather than simply offering “non-binding” bidding opportunities on future contracts, would be better for Canada's economy over the expected 30 years or more of the new fighter program. “You're probably missing out on $30 billion-plus in guaranteed work.” Saab's Palmer echoed that position 30 minutes later, saying that he is concerned that the “non-binding requirement may not necessarily give Canadians the best value over the long term,” but, “until we see the final RFP (request for proposals), I'll reserve final judgment.” However, when asked how Saab had responded formally to the proposed change on industrial benefits, he said, “We've asked them for some more information as it relates to the specifics of how items are going to be measured,” but had “definitely indicated that it doesn't necessarily encourage the best solution for Canada at the end of the day.” https://www.skiesmag.com/news/fighter-rfp-delayed-again-pending-official-review-of-industrial-benefits-policy

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  29 septembre 2020 | Local, Aérospatial, Naval, Terrestre, C4ISR, Sécurité, Autre défense

  COVID-19 further delaying some overdue military procurements

  Lee Berthiaume OTTAWA — While the federal government is pressing ahead with plans to buy billions of dollars worth of much-needed equipment for the Canadian Armed Forces, the Department of National Defence's top procurement official says COVID-19 is further slowing down some already delayed purchases. The past six months have seen a number of major milestones for Canada's beleaguered military procurement system, including last week's unveiling of the first of 16 new military search-and-rescue planes after 16 years of delays and controversy. Procurement officials are also now reviewing three bids that were received from fighter-jet makers at the end of July as Canada inches closer to selecting a replacement for the aging CF-18s following more than a decade of political mismanagement. The list of recent successes also includes Halifax-based Irving Shipbuilding having delivered the first of six new Arctic offshore patrol vessels in late July, while progress has been made on a number of other files, such as the long-overdue purchase of new engineering vehicles for the Army. Yet some of those milestones would have been achieved earlier had it not been for COVID-19. And Troy Crosby, the Defence Department's assistant deputy minister of materiel, acknowledges many other projects are being affected as well. That includes the more than 100 military procurements — roughly half of them dealing with new equipment and the rest focused on building new infrastructure on Canadian Forces bases across the country — that were listed as already delayed before the pandemic hit. "COVID didn't speed anything up," Crosby said in an interview with The Canadian Press. "I think everybody would understand that that's going to have some impact. And exactly what that impact is difficult to tell right now." Delays in military procurements can have several impacts. In some cases such the CF-18s, the Canadian Armed Forces is being forced to keep using equipment that was supposed to have been retired years ago. In others, delays drive up the cost of the new purchases due to inflation. The projects most likely to be delayed due to COVID-19 are those in production, Crosby said. Examples include the construction of new naval ships by Irving and Seaspan ULC in Vancouver, which have had to adopt physical distancing and other COVID-19 measures at their shipyards. "For the projects that are at a stage where the work is office-based ... once we got over that initial hump as everybody had to as we moved toward a remote-work posture, the work continued," said Crosby. "If you're in a shipyard and you're trying to advance the production of a ship given all of the physical distancing requirements and the health and safety considerations, that's challenging." Crosby has previously argued much of the frustration around military procurement is the result of unrealistic expectations born of a lack of understanding and appreciation for how the system — which is dealing with more projects than at any time in recent history — actually works. COVID-19 has also prompted speculation the Liberal government could start cutting back on its promise, unveiled in 2017, to spend $553 billion on the military over the next 20 years. Defence Minister Harjit Sajjan told The Canadian Press earlier this month that the funding is "secure." Asked about the spending plan — which is contained in the Liberals' defence policy and known as Strong, Secure, Engaged — Crosby said: "Strong Secure Engaged continues to be our focus and it laid out a program of work and we're trying to get that program of work delivered. "It's been that way right through this whole COVID situation. That hasn't changed anything. ... The people in the materiel group, the people we're working with across government, we're all seized with the program forward." This report by The Canadian Press was first published Sept. 28, 2020. https://www.kamloopsthisweek.com/news/covid-19-further-delaying-some-overdue-military-procurements-1.24211049

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  15 août 2018 | Local, Aérospatial

  Flight simulator's CEO says bigger U.S. armed forces budgets are a boon

  MONTREAL – The head of flight simulator company CAE Inc. said Tuesday U.S. President Donald Trump's appetite for defence spending is a boon to the Montreal-based company, as newfound access to contracts tied to top-secret missions pave the runway for more revenue. “On the defence side, budgets continue to be on the rise worldwide, and in the U.S. they are at historical highs,” president and CEO Marc Parent told shareholders at an annual general meeting Tuesday. On Monday, Trump signed a $716-billion defence spending bill for 2019, an $82-billion increase from 2017 and a dramatic upswing from most Obama-era military budgets. CAE's acquisition of Virginia-based Alpha-Omega Change Engineering earlier this month opens the hatch to “top-secret missions,” mainly out of the U.S., Parent told reporters. An agreement between the U.S. government and a CAE subsidiary allows a proxy board made up of two American generals and a military contractor executive to oversee the high-security contracts, he said. “That opens up an extra $3 billion of potential market for us. So that brings our total addressable market in the world to $17 billion,” Parent said. As to what the classified missions involve, he said only, “You can speculate all day long.” Parent defended how CAE potentially stands to benefit amidst heightened military spending south of the border, more combative language from the White House and the creation of a new armed services branch focused on fighting wars in space. Full Article: https://www.680news.com/2018/08/14/flight-simulators-ceo-says-bigger-u-s-armed-forces-budgets-are-a-boon/