Monday, February 10, 2014

Canada's new defense procurement strategy...

Canada's previous procurement strategy wasn't always popular.

Canada's post war defense purchases haven't exactly gone smoothly.  I've written about it before.  There appears to be no long term strategy, no set process, and no realistic expectations.  Recent military purchases seem to be:

  1. Way over budget.
  2. Delivered late.
  3. Not produced the promised economic benefits.
  4. Been wrought with controversy.
  5. All the above.
Why all the trouble?  There seems to be no set way of doing things.

Sometimes, military officials seem to arbitrarily come up with mandatory requirements that are either impossible to meet using any available equipment.  This leads to custom "Canadianized" variants that require additional time and money to develop.  Such was the case with Canada's most recent Chinook helicopters.  It also explains part of the delay behind the Cyclone.

In some cases, requirements are written that all but rule out any contender except for one.  This was the case with the fixed wing search and rescue (FWSAR) project, which heavily favored the C-27J Spartan.

Other projects, like the shipbuilding strategy and the CF-18 replacement, seem to come from higher up.  In the end, most military procurements end up as a pissing match between several government departments:  The DND (who will use the equipment), the Ministry of Finance (who pays for it with our tax dollar), and the Public Works Department (who want to create as many jobs as possible).  Needless to say, one group's desires don't always coincide with the other two.  The DND will want the best, fanciest, new equipment, while the Finance department wants it to be cheap, while the Public Works Department just wants good job numbers.

But all that is going to change!  In theory, anyway.

Funding for the Lumberjack Commandos will remain at current levels because nobody wants to be the one to tell them their budget has been cut.

In a hasty meeting, Diane Finley, Canadian Minister of Public Works unveiled Canada's new procurement strategy.  Finley also called out defense contractors for not delivering on promised offset deals.  Here are some of the more interesting points.

  • Starting in June, an annual Defense Acquisition Guide will be published identifying procurement projects to be held within a 20 year time frame.  This will give vendors a clear idea of what will be going out to tender in the near future.
  • A third party challenge function will allow an independent review of "High Level Mandatory Requirements" on all military procurements over $100 million.  This will help safeguard certain high dollar procurements from being custom written with one platform in mind.
  • Purchases will be considered based not only on their performance, but their cost and their long term economic benefit to Canada.  This gives a slight advantage to firms offering higher offsets and technology transfer.
  • The process will be streamlined.  A permanent procurement secretariat will be put in place and the the DND will be given the authority to purchase more expensive goods independently.
Will this process apply to the CF-18 replacement?

Maybe.

If the fighter secretariat decides that a full competition should be declared to determine Canada's new jet fighter, then Canada's new Defense Procurement Strategy (DPS) will likely see its first major test. If the secretariat determines that Canada should go ahead with the F-35 purchase, then expect to see a great deal of criticism thrown at the government for not including the most expensive Canadian military purchase in history in its new and improved procurement procedure.

1 comment:

  1. That's very interesting. Setting up an unbiased military procurement process isn't an easy task! I wish Canada the best of luck in pionneering these procurement good practices.

    And I love lumberjack commandos! In France, beard is allowed in only one unit : the pionneers of the Foreign Legion, who are combat engineers.

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