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Canadian Forces

Another day, another botched procurement for the Canadian government

Interest article in CBC that highlights the problems the Canadian Forces has with procurement and that is we don’t build enough naval vessels (or buy enough military hardware) to have the needed expertise to do it well (which even countries like the United States find complicated enough)

IMC’s report was overseen by its president, Tom Ward, a veteran of the industry who was in charge of building the Canadian Coast Guard icebreaker Henry Larsen. Ward declined to comment on his report or to say why it had so little impact. But shipbuilding experts say that the moribund state of the industry in Canada means that government officials know little about shipbuilding — so expert, third-party reviews of such massive contracts are essential.

“There’s no expertise in government,” said business professor Michael Whalen of Mount Saint Vincent University in Halifax.

“Who’s going to look at those issues and the proposals from the Irvings and their subcontractors? We don’t have anybody, because they haven’t worked in that area for 30 or 35 years. So we’re going to go out to third-party consultants who do have that kind of expertise and can advise us. Are we getting value for money? Are we getting the right ship for the money?”

 

How Harper has lost control of military procurement

Sobering read from the Toronto Star

Military procurements usually begin with the drawing up of a “statement of operational requirements,” which manufacturers then use to prepare bids. But more often than not, the generals and admirals have already made their decision and “fix the specs” to secure the equipment they want.

Defence officials decided the CF-18 replacements needed stealth technology, thus excluding all aircraft other than the F-35. They narrowed the field for the fixed-wing search and rescue project by specifying a minimum cabin length just 15 centimetres greater — and a cruising speed just 12 knots faster — than the Spanish-made EADS C-295. They set a minimum size for Canada’s maritime helicopter replacement that excluded the Sikorsky Seahawk, the workhorse of the U.S. navy’s rotary wing fleet.

Officials like to buy so-called “paper planes” that are only in the design phase, since this offers the possibility of having the very latest and flashiest kit. But there are risks involved with unbuilt, unproven designs. The F-35 design proved grossly optimistic, leading to long delays, much-increased costs, and less than expected performance. The U.S. Department of Defense has already downgraded its specifications for the plane.

In the case of the planned Sikorsky Cyclone helicopters chosen to replace the Sea Kings, the generals and admirals added new electronics and weapons systems onto the design after the procurement was approved and a contract signed. All the additional equipment proved too heavy for the engines, which meant that more powerful engines had to be designed and fitted, which in turn required a lengthy and expensive full re-engineering of the aircraft.

Defence officials secure approval for these “paper planes” by telling ministers that Canadian companies involved in the initial production of cutting-edge military equipment will reap significant rewards when other countries purchase the same equipment later. The problem is that new designs fail more often than they succeed, and other countries shy away from equipment that underperforms or is overly delayed. No country apart from Canada has selected the Cyclone. Sales of the F-35 are far below the projected level, diminishing any economic benefits and driving up the per-unit cost.

Officials also lowball costs, or fail to inform ministers about maintenance, infrastructure and other “life-cycle” expenses related to the purchase. For the F-35s, defence officials said the cost would be $9.7 billion. The parliamentary budget officer said $29.3 billion. The auditor general said $25.1 billion. When the government brought in the accounting firm KPMG to provide some clarity, it said $45.8 billion.

If the numbers were not so very large, the audacity of the officials might be funny.