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Canadian Military/Defence procurement process (Mega Thread)

sdimock

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I wasn't completely sure where this should go as it applies to all arms of the armed forces.
( moderator feel free to move it)

Here is the link to the article

http://www.canada.com/trail/story.html?id=40daf4f3-f771-46e6-966b-72798ef9feed


Politics contributed to poor shape of sub
 
Stephen Thorne
Canadian Press

Thursday, February 10, 2005

OTTAWA (CP) -- The ill-fated Chicoutimi and three sister submarines might have been in better shape if Canada's protracted and politicized procurement process had not left them rotting for years at British docks, a Commons committee heard Thursday.

"We're all fed up with how long it takes to buy major equipment around here,'' Pat O'Brien, chairman of the Commons defence committee, said after witnesses suggested politics contributed to the deterioration of the subs.

"It is ridiculously slow to get military equipment purchased in this country.''

The all-party committee is studying acquisition of the used diesel-electric submarines from Britain after a sailor died as a result of a fire aboard Chicoutimi during her first transatlantic voyage under Canadian command last fall.

Politicization of the procurement process is emerging as the major issue surrounding the $800-million lease-to-purchase plan cabinet first approved in 1995.

MPs have been told the boats were in bad shape when Canada finally bought them in 1998. Witnesses have described leaks, electrical problems and equipment malfunctions, largely, they said, attributable to years of neglect.

In December, former defence minister David Collenette said the subs corroded for three years after the purchase was approved because then-prime minister Jean Chretien considered the idea politically unpalatable.

Prof. Martin Shadwick, an expert in military procurement from York University, told the panel Thursday the British might have better cared for the vessels if they had known how long it would take Canada to take possession of them.

He also said the lag time between decommissioning Canada's old subs and bringing the new ones into service eroded the navy's undersea expertise and training regimen.

If Canada had begun looking for a new army jeep in September 1939 at the rate it moves today, Shadwick said it would not have taken delivery of the vehicles before the war ended in May 1945.

"Sadly, it seems in many cases we've concluded that the quickest way to speed up procurement in this country is not to buy anything at all,'' said Shadwick.

During the tender process for the 1980s purchase of CF-18 fighter jets, only 25 per cent of the specifications focused on the military's technical and operational requirements for the aircraft, Shadwick said.

The other three-quarters of the data the government released to bidders related to industrial benefits, offsets, job creation and technology transfer, he said.

"Right there in a nutshell is the problem,'' Shadwick said. "We've overly politicized this.''

While constitutionally the country can never take politics completely out of defence procurement, Canada has "pushed this further than, perhaps, most countries,'' he said.

"At a time when our defence dollars are even more tightly rationed, the fact that we take a decade, a decade-and-a-half to purchase very simple equipment is cause for sheer disbelief, if nothing else.''

Alberta Conservative MP Rick Casson said all agree the procurement process is "unbelievably long'' and the submarine procurement took too much time.

New Democrat Bill Blaikie, who called for the hearings in the first place, described Canada's military procurement practices as "embarrassing.'' He asked Shadwick for advice on how the country could depoliticize the process.

Shadwick said it's tough to fix because the issue goes to the very core of Canadian values and principles.

Canadians tend not to think about the military's strategic requirements and the need to make "prompt, efficient decisions'' on purchases.

"Instead we turn them into job-creation projects of one sort or another.

"The underlying problem is the strategic culture of the country, we don't have a strategic culture of the country,'' he said.

Shadwick said military procurement is not hampered only by politics: It could be speeded by cutting paperwork, "interminable'' meetings and other bureaucratic processes.

"I would aim for a multi-layered attack on the problem dealing within DND and the Forces, the other government departments, and the political level.''

© Canadian Press 2005
 

Scoobie Newbie

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Well its about time and I hope this article gets the widest publication.  Not that it will make a lick of difference.
 

Cloud Cover

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sdimock said:
While constitutionally the country can never take politics completely out of defence procurement, Canada has "pushed this further than, perhaps, most countries,'' he said.
"

WTF? The c-doc doesn't say anything about that. What the heck is he talking about?
 

GENOMS Soilder

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This article, like the ones before it on different issues, shows that we need somebody in Ottawa to slap them in the face and tell them to wake up. Our newly appionted  Chief of the Defence Staff, General Rick Hillier, did a good job laying it to them in his appiontment speech............Now all we need is some to listen..........
 

RCD

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The Treasury board is the biggest culprit. if it's not made in Canada, or to be made from scratch in Canada at astronomically prices. An yes politics plays a big part of it
 

Kirkhill

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Quote from: sdimock on Yesterday at 14:59:51
While constitutionally the country can never take politics completely out of defence procurement, Canada has "pushed this further than, perhaps, most countries,'' he said.
"

WTF? The c-doc doesn't say anything about that. What the heck is he talking about?

Whiskey 601:  Clarify please.  What is a c-doc and what is your concern? You've got me beat here.  It seems like a reasonable statement to me.  ???
 

Cloud Cover

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c-doc: Constitution.

It does not say a single word about defence procurement. It just says that defence militia's etc. are within the jurisdiction of Parliament. There is absolutely no constitutional imperative operating within the sphere of defence procurement. 
 

Island Ryhno

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Canada - Canadian Press


Minister wants to speed up military's unwieldy procurement process

1 hour, 13 minutes ago  

STEPHEN THORNE

OTTAWA (CP) - Defence Minister Bill Graham says he wants to speed up and slim down the military's unwieldy purchasing process, just as a Commons committee finishes a report slamming procurement as inefficient and politicized.
"Speeding up and improving the overall efficiency of the procurement process needs to be a top priority," Graham told a defence industry conference Wednesday. "It is a priority I plan to devote a lot of my time to in the coming months."
The Commons defence committee is to review its draft report next week in which it makes sweeping recommendations aimed at taking politics out of military procurement.
The report, the panel's second focusing on military procurement in five years, comes after hearings on the 1990s acquisition of ill-fated HMCS Chicoutimi and her three sister submarines. One man died after a fire aboard Chicoutimi in the North Atlantic.
"There's no doubt about it - it was a very political process," the committee chairman, Liberal Pat O'Brien, said in a recent interview.
"We're going to have specific recommendations in the report on how we think things can be improved in terms of major procurements in general."
Graham acknowledged procurement headaches don't end with submarines. One recent study concluded the average time for the acquisition of major military systems exceeds 15 years.
He referred specifically to the "12-year quest" to acquire the right military backpack.
"While unusual, it certainly was not one of our finer moments," he told a Queen's University conference on transforming defence administration.
"With the rapid pace of technological change in military equipment, and our need to try to keep abreast of that change, we simply cannot accept that as the standard."
The issue is of particular concern as the government sets out to restock the military with billions of dollars in new helicopters, airplanes, vehicles and ships over the next 20 years.
Graham said the government has to balance the need for speed with the oversight of multibillion-dollar spending projects.
"Some see the existing procurement system, involving both DND and Public Works, as duplicative and inefficient, but others recognize there may be legitimate reasons for this degree of oversight," he said.
"After all, this system was set up deliberately by previous governments to provide that degree of oversight. I believe that we must take a broad and balanced view that recognizes that procurement must accommodate government priorities wider than the purchase of equipment in and of itself."
He said the government has already identified some areas where it can achieve savings.
For one, he suggested strictly military procurements, as opposed to those of desktop computers or office furniture, should be managed exclusively by Defence, with larger projects subject to Treasury Board approval.
In hearings spanning months, the Commons defence committee heard former prime minister Jean Chretien delayed the $800-million lease-to-purchase of used British subs for four years after cabinet approved it because he thought it politically unpalatable amid government cost-cutting.
MPs were told the boats were in bad shape when Canada finally bought them in 1998. Witnesses described leaks, electrical problems and equipment malfunctions - largely, they said, attributable to years of neglect.
It was also told military purchasing is perpetually tied up in requirements for industrial benefits, offsets, job creation and technology transfers.
The same panel filed a report on procurement in 2000, saying the process must be reformed. It said Defence needed a management overhaul and "a stable and predictable budget" in order to effectively plan equipment purchasing.


OOH, maybe now there will be some shiny new gear on the way and fast hmmm?
 

crazyleggs

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Kind of hard to take politics out of the procurement process when the final stamp of approval currently comes from the Prime Minister's office.
 
E

ex royal now flyer

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Politics will never be taken out of procurement practices.  It is impossible when it is the government conducting the procurement.  Military procurement has always been problematic simply due to the type of procurements and generally how quickly things are needed.  Look at the Ross Rifle in 1902, or the Inglis washing machine - oops I mean machine gun in the 1930's.  Nothing has changed, just different people doing it. 
 

jmacleod

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Agreed, there will always be a political connection to military equipment purchases - nature of the
beast, but the system (DND PW&GS IC etc., etc.,) would never be tolerated in a profit driven
private sector company. We wonder how the MHP is going - what is the current status? who
is getting what from whom? and when? Has funding been actually approved for the purchase?
Normally we would consult our resident fortune teller, but she took a day job with Fox News.
MacLeod
 

Glorified Ape

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But such lengthy procurment processes give you something to look forward to and a reason to stay in the CF!! Wouldn't want to quit before you got to try out that new system/vehicle/rucksack/etc, would you? ;D
 

a_majoor

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What is really amazing is how long it takes even when contracts are steered towards Liberal Friendly contractors...
 

Infanteer

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Is that another thing we can blame on the Treasury Board?
 

TCBF

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You know all of that election, census, commercial and Govt polling, and Stats Can data that has been building up for decades?

That makes a big, thick, file for each Riding in Canada. 

Tom

 
E

ex royal now flyer

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a_majoor said:
What is really amazing is how long it takes even when contracts are steered towards Liberal Friendly contractors...

Why do you find it amazing?  The longer the contract takes the more time and money there is to milk out of the taxpayer.  Do you really think contractors care about the end product?  Perhaps, but I have a feeling it is the money that drives the motivation.  One word comes to mind "Sponsorship".

It doesn't matter what party is governing, our tax dollars are wasted on lining the pocekts of the patronage monster.

In medevil times the peasantry owed the King 30 days tax per year.  Usually in the form of military service (if the King chose to campaign that year) or harvesting the fields.  Today, we owe the "King" 6 months.  The peasantry would have revolted by now.
 

Edward Campbell

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I think this should be combined with the EH-101 court case thread in Politics.

As others have said it is, practically, impossible to remove politics from defence procurement.  The Americans gave up trying about 75 years ago.  The British underwent a major depoliticizing exercise in the '70s which resulted in the consolidation of defence procurement activities in a single, so-called arms length Procurement Executive.  That helped to reduce (not eliminate) the internal bureaucratic politics and to reduce (not eliminate) some of the barely legal 'back scratching' and 'favouritism' between bureaucrats and marketers but it did nothing to reduce real, elected, partisan political interference.

A couple of points:

"¢ The responsibility for the defence of the realm* rests, exclusively, on elected politicians so they are, surely, entitled to some say in how it gets done; and

"¢ Defence procurement spends billions of taxpayers' dollars.  As Auditor General Sheila Fraser keeps reminding us, ministers are responsible so, surely again, they must have some say.

The government began to muck up a fairly good defence procurement infrastructure in the '50s when common procurement was centralized in an amalgam of the Department of Defence Supply and  the Department of Public Buildings and Works (a.k.a. Department of Public Blunders and Wonders).  Public Works was, traditionally - from the '30s, a pork barrel portfolio, equally traditionally managed and staffed by Québecers.  Québecers are neither more nor less corruptible than anyone else but nepotism is bound to take hold in such an organization and its effects are corrosive.

There is no doubt that we do not need a separate defence procurement agency to buy stationary, general purpose computer software, and commercial vehicles.  A common services agency should make good sense in many circumstances.  There are good and valid reasons why we should have a separate agency to buy e.g. warships, fighter/bombers, mortars and NBC suits.

One of the major failures in Canadian defence procurement has been offsets and regional industrial benefits.  Canada pioneered this nonsense in the early '70s - when we negotiated the CP-140 Aurora contract.  It looked fine, in theory, Lockheed agreed to buy $___ million in Canada in exchange for the work.  Lockheed, probably, would have procured $__ million in Canada anyway, the other $___ million got added to/hidden in the annexes to the contract.  I will say, without fear of contradiction, that we have paid at least 100% of every dollar in offsets and benefits through each contract.  Sometimes other government departments - Industry Canada, now, through an alphabet soup of regional development 'agencies' - reimburses DND for some (but never all) of the costs but, normally, Canadian equipment costs too much, usually 10-35% too much.

Defence production is a mugs' game.  No one ever got rich by investing in e.g. Grumman or Plessey.  As a general rule companies know that they will get costs + profits + bonuses from defence procurement agencies, no matter how poor a product they deliver, late.  But companies know that iPods make real money for shareholders, unlike ISTARS.

We do need to reform the entire government procurement system.  We need to create separate, competing procurement agencies for, especially, defence, including, maybe all ship and aircraft procurement.  More important, we need to wring the nepotism and corruption out of the entire procurement system.

----------

* As opposed to the administration and discipline of the armed forces and the conduct of operations which are. Essentially the responsibility of the CDS and his uniformed minions.
 

Edward Campbell

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The article below, from the Globe and Mail (at: http://www.theglobeandmail.com/servlet/story/RTGAM.20050415.wairc0415/BNStory/National/ ) is interesting.

First readers should remember that the Conference of Defence Associations (see: http://www.cda-cdai.ca/english-frame.htm  )is a lobby group - a government (DND) supported lobby group, but a lobby group, all the same, so its conclusions are hardly unbiased.

Military report raps inefficient purchasing, lack of expertise

Friday, April 15, 2005 Updated at 3:17 PM EST
Canadian Press

Ottawa - Two-thirds of the Canadian military's Hercules aircraft are effectively grounded and the expanding reserve force cannot fly aboard the rest because of soaring liability costs, a defence think-tank says.

Yet replacing the Hercules, the backbone of the air transport fleet, and other badly needed equipment is years off because the military lacks expertise and efficient procurement practices, the Conference of Defence Associations says.

"At present, the department has inadequate numbers and expertise ... to execute the existing capital acquisition plan," the association said in a report to the Commons defence committee.

"Existing approaches to military acquisitions and a dearth of project expertise lead to the troubling conclusion that transformation of the Canadian Forces ... would not be possible before the year 2020."

The conclusions come as the all-party committee prepares to release a report on military procurement Monday. The panel is expected to say defence purchasing is weighed down in politics and inefficiency.

On Tuesday, the government is to release its international policy review, including a major defence policy statement that says Ottawa must "assure" access to long- and mid-range air transport.

The Hercules is the military's workhorse, its primary means of heavy air transport, but 19 of 32 were built in the 1960s, the defence association notes.

"For all intents and purposes, DND has grounded two-thirds of the Hercules tactical airlift fleet," the report says. "The remaining aircraft are not allowed to transport reservists, given that the dangers and liability costs are unacceptably high."

Air Canada has decided to sell its passenger- and freight-configured 747B Combi aircraft, the association says, so "the government has virtually no credible air transport capability at its disposal."

The report alludes to "the pressures a politician would endure during a national disaster as the armed forces tender a contract for airlift or wait for allied assistance."

February's federal budget set aside money for trucks, medium-lift helicopters and Arctic airplanes, while new mobile-gun systems are also on the way.

But the bulk of military purchasing for ships, transport aircraft and other equipment is yet to come. The policy statement to be released on Tuesday promises a document in coming months detailing a major spending program.

The conference report says the Defence Department has to pull up its socks if it is going to see the program to its effective conclusion.

"In the last six months, those responsible for advancing capital acquisition projects have missed 90 per cent of their milestones," the report says.

"When that staff was twice its current size, it took 15 years to process major acquisitions."


The Commons panel is expected to conclude that four years of political delays imposed by ex-prime minister Jean Chrétien contributed to deterioration of the used submarine fleet Canada acquired from Britain in the 1990s.

An October fire aboard one of those boats, HMCS Chicoutimi, claimed the life of a navy lieutenant.

Many of the purchasing problems lie in government procurement rules.

During the tender process for the 1980s purchase of CF-18 fighter jets, only 25 per cent of the specifications focused on the military's technical and operational requirements for the aircraft.

Three-quarters of the data the government released to bidders related to industrial benefits, offsets, job creation and technology transfer.

The conference warns that if existing public administration practices at DND do not change, "a long period of dormancy awaits many military capabilities.


"As a consequence, some of these capabilities may be lost."

In a recent speech, Defence Minister Bill Graham agreed on the need to streamline military purchasing, saying it must be made a priority.

I have highlighted a few points:

"¢ Those (and there are several here in army.ca) who are most adamant about cutting the headquarters need to understand that before any meaningful expansion can occur we need to expand the headquarters - the parts (military) responsible for recruiting and training people and (civilian) for force structure and equipment procurement.  (That is not to say that there is not plenty of room for cuts in e.g. affirmative action and official languages but they will not, indeed cannot be cut because they have regulatory fiat and politically powerful (much, much more powerful than the minister and CDS) cheering sections on their sides);

"¢ There are incredible wastes of time, effort and money spent in the industrial benefits domain.  I, personally, am not surprised  at the notion that ¾ of defence procurement efforts are directed at these wastes of time/money.  As I mentioned I am 100% certain, no shadow iof a doubt, that we, Canadian taxpayers, paid, at a bare minimum, 110% for each and every benefit received after the CP-140 contract back in the '70s.  (That one, when Canada pioneered this rubbish, may have had some freebies); and

"¢ We also spend huge amount on Canadianization.  We insist of jobs! Jobs! JOBS! in Canada even when it is clear that the marginal costs of creating those jobs is, as it usually is, substantially (maybe 50% in some cases) greater than the benefits in salaries, taxes, etc (including saved EI, etc, too).  Another form of expensive Canadianization are locally designed modifications (improvements, sometimes, if you insist) which cost real money and, worse, render a system non-standard which means that we cannot take full advantage of economies of scale with allies.  This adds, substantially, to the life cycle costs of a system which are, always, much greater than the simple, up front, procurement costs.

 
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