17 décembre 2020 | Local, Aérospatial, Naval, Terrestre, C4ISR, Sécurité

Matt Gurney: Supporting local industry shouldn't be the first consideration in military procurement

Rather than worrying about where things are built, a better question is: will Canadian soldiers be properly equipped? That's all that matters

Matt Gurney

Dec 16, 2020 • Last Updated 22 hours ago • 5 minute read

It is almost a truism in Canadian public policy: We are terrible at military procurement.

You hear that often. I've said it often. But it really isn't true. We only think we're terrible at military procurement because we are confused about what we're trying to do. Our military procurements are not about actually procuring equipment for the military. They're about creating jobs and catapulting huge sums of money into key ridings across the country.

Once you shift your perspective and look at it that way, you realize very quickly that our military procurement system is amazing. It bats a thousand. The problem isn't with the system. We've just labelled it badly. If it were called the Domestic Defence Industry Subsidy Program instead of our military procurement system, we'd all be hailing it as a shining example of a Canadian public policy triumph.

This is terrible. It has cost us the lives of our soldiers, and probably will again. But it's undeniable. Canadian politicians, Liberals and Conservatives alike, have long had the luxury of seeing defence as a cash pool, not a solemn obligation. And they sure have enjoyed that pleasure.

Two recent stories by my colleague David Pugliese for the Ottawa Citizen have explored this theme: Our efforts to replace our fleet of frigates with 15 newer, more powerful ships is turning predictably complicated. The 15 new combat ships are part of a major overhaul of the Canadian fleet, which was neglected for many years and now must be modernized all at once. In February of 2019, the government chose American defence giant Lockheed Martin to produce the ships in Canada, using a British design. (How Anglosphere of us.) Companies that weren't selected to be part of the construction or fitting out of the ships are unhappy, Pugliese noted, and aren't bothering to hide it, even though they've abandoned their legal challenges.

The sniping has continued, though, with spurned industry figures talking to the media about problems with the program. Jody Thomas, deputy minister of the Department of National Defence, reportedly told industry leaders to knock it off. “There's too much noise,” she reportedly said, adding that it was making the job of getting the new fleet built “very difficult.”

Some of Thomas's irritation is undoubtedly the automatic hostility to scrutiny, transparency and accountability that's far too common for Canadian officials — our bureaucrats are notoriously prone to trying to keep stuff tucked neatly out of public view. But some of what Thomas said is absolutely bang-on accurate: Defence industry companies know full well that the government mainly views military procurement as a jobs-creation program, so are understandably put out to not get what they think is their fair share.

Some Canadian companies have designed and developed critical communication and sensor gear for modern warships, Pugliese noted. This gear was developed with taxpayer assistance and has proven successful in service with allied fleets, but was not chosen for the new Canadian ships. And this is, the companies believe, a problem. Why aren't Canadian ships using Canadian-made gear?

It's a good question, until you think about it for a moment. Then you realize that the better question is this: will the Canadian ships be properly equipped?

That's it. That's all that matters.

Will the new ships be capable of doing the things we need them to do? If yes, then who cares where we got the gear? And if no, well, again — then who cares where we got the gear? The important thing isn't where the comm equipment and sensors were designed and built. It's that the systems work when our ships are heading into harm's way. Assuming we have many viable options to choose from, then there are plenty of good ways of making the choice — cost, proven reliability, familiarity to Canadian crews, and, sure, even whether it was made in Canada.

But supporting the local industry needs to be the last thing on the list. This stuff is essential. The lives of our sailors may depend on it working when needed. Cost matters, too, of course, because if the gear is too pricey, we won't have enough of it, but effectiveness and reliability are first.

Treating military procurement as just another federal jobs-creation program is engrained in our national thinking

But we talk about them last. Because we value it least. There probably is some value in preserving our ability to produce some essential military equipment here in Canada. The scramble earlier this year to equip our frontline medical workers with personal protective equipment is instructive. In a war, whether against a virus or a human enemy, you can't count on just buying your N-95 masks, or your torpedoes and missiles, from your normal suppliers. Unless Canada somehow gets itself into a shooting war without any of our allies in our corner, any time we are suddenly scrambling to arm up, our much larger allies are probably also scrambling to arm up, and they'll simply outbid us. (See again our current efforts to procure vaccines for an example of this unfolding in real time.)

But we aren't at war now, and we can buy the damn ships from anyone. To the government's credit, it seems to be doing this; the pushback against the program seems mostly rooted in the government's decision to let the U.S.-British consortium chosen to build the new ships equip them as they see fit. The program may well derail at some point — this is always a safe bet with Canadian shipbuilding — but insofar as at least this part of the process goes, we're doing it partially right. Yes, we're insisting on building the ships here, but we aren't getting picky about the equipment that goes into them. That's probably wise.

But that's about as far as the wisdom goes. Treating military procurement as just another federal jobs-creation program is engrained in our national thinking. It would have been good if COVID had knocked a bit of sense into us and forced us to, at long last, grow up a bit. But no dice. Oh well. Maybe next time.

https://nationalpost.com/opinion/matt-gurney-supporting-local-industry-shouldnt-be-the-first-consideration-in-military-procurement

Sur le même sujet

  • Feds give Lockheed Martin first shot at $60-billion warship contract

    21 octobre 2018 | Local, Naval

    Feds give Lockheed Martin first shot at $60-billion warship contract

    By Canadian Press OTTAWA — The federal government is giving U.S. defence giant Lockheed Martin the first crack at inking a contract to design Canada's $60-billion fleet of new warships. Government officials say Lockheed's proposed design beat out two rival submissions in what has been a long and extremely sensitive competition to design replacements for the navy's entire frigate and destroyer fleets. While the announcement marked the start of an important new phase in the largest and most expensive military purchase in Canadian history, it could also prove to be extremely controversial as some had questioned why the bid was allowed in the first place. Still, Lockheed executives may not be popping the champagne just yet. Negotiators for both sides as well as Halifax-based Irving Shipbuilding, which will actually build the vessels, must now work out details — including the final cost — before an actual contract is awarded. The stakes will be high for both sides, with hundreds of millions of dollars in play as well as pressure to make up for lost time as numerous delays — including in the design competition — have pushed the schedule for construction. Irving has warned that it could be forced to lay off hundreds of employees if work on the warships is not ready to start by the time it finishes building the navy's new Arctic patrol ships in 2021 or 2022. The Defence Department's head of military procurement, Patrick Finn, acknowledged the need for urgency. But he also noted the need for care as whatever decisions are taken during the negotiations could have ramifications on the navy and taxpayers for decades. “So it behooves us to stop and make sure we do the final checks in all of the areas,” Finn said this week in an interview. Lockheed's victory is likely to be contentious as the federal government had originally said it wanted a “mature design,” which was widely interpreted as meaning a vessel that has already been built and used by another navy. But the Type 26 frigate, upon which Lockheed's proposal is based, is only now being built by the British government and has not been used on operations. The federal government has reserved the right to walk away from the talks — if Lockheed drives too hard a bargain — and negotiate with the second-place bidder, which was not identified. However, officials hope that won't be necessary and a contract will be signed this winter. “We have notional time frames allocated,” said Andre Fillion, who oversees military and naval projects with Public Services and Procurement Canada. “And should everything go according to plan, we're looking at winter 2019 for the award of the contract. If it doesn't go according to plan, then we go to Plan B — and obviously that would take longer.” Lockheed's design was up against a pitch by U.S.-based defence company Alion, which proposed a design based on a Dutch frigate, and Spanish firm Navantia's proposal, which was modelled on a frigate used by the Spanish navy. One of the big questions heading into the negotiations will be how much of Lockheed's design will need to be changed to reflect the navy's needs and how much the navy will have to shift its requirements because changing the design will take more time and money. Government negotiators are also facing a potential battle over the amount of intellectual property that Lockheed will be required to hand over, which Ottawa wants so it can operate and maintain the vessels on its own after they are built. Companies had originally been told that the winner would be required to turn over the full blueprints, but after significant resistance the two sides agreed the matter would be negotiated before a contract is awarded. Officials remain focused on getting “the intellectual property access and rights that we need to not only build the ship but also to operate and maintain it for its entire life cycle,” Fillion said. — Follow @leeberthiaume on Twitter https://ipolitics.ca/2018/10/19/feds-give-lockheed-martin-first-shot-at-60-billion-warship-contract/

  • Updated: Eurofighter drops out of Canadian fighter jet program

    5 septembre 2019 | Local, Aérospatial

    Updated: Eurofighter drops out of Canadian fighter jet program

    By DAVID PUGLIESE, OTTAWA CITIZEN Another company has pulled out of Canada's competition to buy new fighter jets. The United Kingdom's Ministry of Defence and Airbus Defence and Space informed the Canadian government Friday of their decision to withdraw from Canada's future fighter competition. Airbus had been offering Canada the Eurofighter. Last year the European firm Dassault informed the Canadian government it would not be competing in the competition. It had been planning to offer Canada the Rafale fighter jet. The $19 billion competition has been dogged by allegations it is designed to favour Lockheed Martin's F-35 stealth fighter. Postmedia reported earlier this year that the requirements for the new jets put emphasis on strategic attack and striking at ground targets during foreign missions. That criteria is seen to benefit the F-35. In addition, the federal government changed criteria on how it would assess industrial benefits after the U.S. government threatened to pull the F-35 from the competition. Industry representatives have said they will carefully review the Canadian requirements before making their decision to bid. The work needed to prepare a bid will cost the firms around $15 million each. The decision to pull the Eurofighter from the competition leaves the F-35, the Boeing Super Hornet, and Saab's Gripen. It is unclear whether Boeing or Saab will continue in the competition. Airbus and the UK Defence Ministry noted that its decision to withdraw was the result of a detailed review of Canada's request for proposals which was released to industry on July 23. It pointed to the changes Canada made to the industrial benefits package to appease Lockheed Martin as well as the excessive security costs that U.S.-Canadian security requirements placed on a company based outside North America. “A detailed review has led the parties to conclude that NORAD security requirements continue to place too significant of a cost on platforms whose manufacture and repair chains sit outside the United States-Canada 2-EYES community,” the statement from Airbus and the UK Defence Ministry noted. “Second, both parties concluded that the significant recent revision of industrial technological benefits obligations does not sufficiently value the binding commitments the Typhoon Canada package was willing to make, and which were one of its major points of focus.” Bids must be submitted by the spring of 2020. Public Services and Procurement Canada, which is running the competition, did not provide comment. A winning bid is expected to be determined by early 2022. The first aircraft would be delivered by 2025. Technical merit will make up the bulk of the assessment at 60 per cent. Cost and economic benefits companies can provide to Canada will each be worth 20 per cent. The Conservative government had previously selected the F-35 as the air force's new jet but backed away from that plan after concerns about the technology and growing cost. During the 2015 election campaign, Justin Trudeau vowed that his government would not purchase the F-35. But at the same time, Trudeau stated his government would hold an open competition for the fighter purchase. The Liberal government backed away from its promise to freeze out the F-35 and the aircraft is now seen as a front-runner in the competition as it has many supporters in the Royal Canadian Air Force. Many of Canada's allies plan to operate the plane. Canada is a partner in the F-35 program and has contributed funding for the aircraft's development. Canada already changed some of the industrial benefits criteria of its fighter jet competition in May to satisfy concerns from the U.S. government that the F-35 would be penalized or couldn't be considered because of how that program was set up. U.S. officials had warned that the F-35 development agreement Canada signed years ago prohibits partners from imposing requirements for industrial benefits. Under the F-35 agreement, partner nations such as Canada are prohibited from demanding domestic companies receive specific work on the fighter jet. Instead, Canadian firms compete and if they are good enough they receive contracts. Over the last 12 years, Canadian firms have earned more than $1.3 billion in contracts to build F-35 parts. The changes made in May would now allow some of those F-35 contracts to be considered when looking at industrial benefits for the new planes. https://ottawacitizen.com/news/national/defence-watch/eurofighter-drops-out-of-canadian-fighter-jet-program

  • Pandemic equipment snarls will rewrite Canada's definition of national security needs, say experts

    9 avril 2020 | Local, Sécurité

    Pandemic equipment snarls will rewrite Canada's definition of national security needs, say experts

    When every country needs the same stuff to keep people safe, cost arguments seem less convincing The mad scramble to secure protective medical equipment and ventilators in the midst of a global pandemic has given some of the people who work in the usually tedious world of government procurement an unwelcome excuse to say, "I told you so." For years, there have been quiet but persistent demands coming out of the defence and acquisition sectors for successive federal governments to develop a list of "strategic industries" that do not have to rely on foreign supply chains — as insurance against the kind of procurement panic in play right now. Those calls were largely ignored. Now, defence experts are saying the COVID-19 crisis is a costly wake-up call. Canada needs — and has needed for almost two decades — a 21st century national security industrial plan that focuses on critical equipment and materials that should be produced at home, not abroad. 'Totally negligent' "We've been totally negligent on that and it is something I have articulated over and over again," said Alan Williams, the former head of the procurement branch at the Department of National Defence. "It's absolutely critical and if this doesn't wake us to that reality, I don't know what would." Williams devoted a substantial portion of one of his books, Reinventing Canadian Defence Procurement: A View from the Inside, to the absence of a national security vision of Canadian industry. "It frankly pisses me off because there's no reason for us not to have done that," he said. "That should be the kind of thing ministers, the leaders of the country desperately want to do. And why we seem to have avoided that kind of strategic thinking ... It just boggles my mind. It's inexcusable." 'Key' industries geared toward trade, not tragedies There was a faint glimmer of hope in the initial debate over the National Shipbuilding Strategy a decade ago, when the former Conservative government made a conscious decision to build future warships, Canadian Coast Guard and fisheries vessels in Canada, instead of outsourcing the work to other countries. At least in the context of defence procurement, Canada does have what are known as "key industrial capabilities", including shipbuilding, the production of certain types of ammunition and the construction of a range of aerospace and maritime electronic systems. Much of the work of those "key" domestic industries is, however, geared toward making high-end components for global supply chains. Critics have often said the policy focuses on high-tech innovation and business priorities, rather than hard-headed national security interests. Other countries, Williams said, have carved out a space for national security interests in industrial policy by not allowing other countries to build certain pieces of equipment. The Japanese, for example, have retained the capability to assemble their own warplanes. A shift in thinking The COVID-19 crisis, which has uncovered a potentially deadly shortage of ventilators and protective equipment for medical professionals, will push the federal government into a radical re-evaluation of what we need to be able to build at home to protect the country. In some respects, that work has already started. Earlier this week, reflecting on the Trump administration's moves to restrict exports of protective equipment, Ontario Premier Doug Ford expressed dismay over how the fate of so many Canadians had been taken out of the hands of the federal and provincial governments. Doctors, nurses demand government fill 'unacceptable' gaps in protective gear on front lines Canada working to produce up to 30,000 ventilators domestically: Trudeau "I am just so, so disappointed right now," he said. "We have a great relationship with the U.S. and all of a sudden they pull these shenanigans. But as I said yesterday, we will never rely on any other country going forward." Over the past two weeks, the federal government has announced plans to pour more than $2 billion into sourcing and acquiring protective medical equipment — masks, gowns, face shields, hand sanitizer — at home. On Tuesday, Ottawa unveiled a plan to get three Canadian companies to build 30,000 ventilators. Health equipment may have been outside the normal definition of national security needs until just a few weeks ago — but the shifting geopolitical landscape offered another warning sign that was ignored, said procurement expert Dave Perry. Leaning on China "This is pointing out the flip side of our globalized world and globalized supply chains," said Perry, an analyst and vice president at the Canadian Global Affairs Institute. "The cold, hard truth is that we're going to be relying on China for critical supplies." When the coronavirus outbreak ramped up, federal officials should have been aware of the potential peril involved in relying on Chinese factories for so many critical items. But in the absence of homegrown capability, Canada is at the mercy of panicked nations in the midst of panicked buying. "The entire world is trying to put through orders from the same sets of factories we're trying to source from," Perry said. "It might be accurate to criticize the Chinese for their response, but in the current context the government has to be cognizant of the impact on our potential ability to source stuff we really, really need right now from China — when there's not a lot of other options available in the short term and when the rest of the world is making the same phone calls." One of the critical arguments against a homegrown national security industrial strategy has been the cost. It's an argument familiar from the shipbuilding context: taxpayers pay a premium when we task Canadian industry with delivering solutions, instead of turning to cheaper foreign manufacturers. Elinor Sloan, a defence policy expert at Carleton University, said she believes the crisis will focus the public's attention on securing the critical industries and supplies the country needs in a global crisis. "The trade-off, as we know, is that it can be more costly to build or produce at home," she said. "This crisis may engender a perspective among the public that the extra cost is worth it." https://www.cbc.ca/news/politics/pandemic-covid-coronavirus-procurement-masks-ventilators-1.5525373

Toutes les nouvelles