Can Defence Procurement be Fixed?

15 January 2006

Canada is not immune to terror, warfare, or natural disasters. The safety of our people and the stability of our economy are directly related to our ability to respond appropriately to threats to Canada’s interests at home and abroad. Further, Canadian governments have made security and defence commitments to NATO, the UN and others. The capabilities of the Canadian Forces provide the major instrument with which governments meet these obligations.

Defence procurement is critical to defence capability. It provides the means for national defence and the instruments for foreign policy. In the Claxton Papers 6, Doug Bland makes the strong and convincing argument for transforming national defence administration. I am in complete agreement. Nevertheless, it would be a mistake to view this subject only as an administrative issue. Defence procurement should be seen as a national security priority of government, demanding a government-wide approach.

The government of Canada is in the process of implementing new national security, foreign and defence polices. The Canadian Forces is responding to these policies by undertaking significant transformations of its structures, capabilities, and culture. This transformation, however, cannot succeed without a commensurate rethinking of defence procurement. Our military must have the right goods and services operationally available at the right place and at the right time. Otherwise, their missions will be jeopardized and the lives of our men and women put at risk.

Canadian business also has a vital stake in reforming defence procurement. Billions of dollars are spent each year on defence goods and services. The amount spent in Canada will have a profound impact on jobs and on the Canadian economy.

Over the past years many reports and studies have been written, and numerous recommendations made, to address the issues and concerns connected with defence procurement. These include 38 recommendations from a major procurement study in 2000 by the Standing Committee on National Defence and Veterans Affairs (SCONDVA); another 49 recommendations appeared in the 2003 report to the Minister of National Defence by the Advisory Committee on Administrative Efficiency; and 55 suggestions were put forward in the January 2005 Government-Wide Review of Procurement Final Report by Walt Lastewka, the Parliament Secretary for  Public Works and Government Services Canada (PWGSC). While many of the recommendations have been acted upon, the process continues to be criticized as being too lengthy, too costly, and fraught with political interference.

I recently had the pleasure of being a guest lecturer at a seminar at Queen’s University entitled Topics in Defence Manage­ment. I asked them whether they agreed or disagreed with the following statements:

  • the bureaucratic defence procurement process is too long;
  • there is too much political interference in the defence procurement process;
  • major defence funding pressures are to pay the salaries and benefits for military personnel and to acquire capital;
  • it costs less to maintain new equipment than it does to maintain the old equipment being replaced; and
  • Canada is dependent upon others, especially the U.S., in conducting international operations.

On the surface, the results were not surprising – most of the students agreed with each statement. Yet, I believe all of the statements are more false than true.

The bureaucratic procurement process can work quickly. The challenge is often in dealing with the lengthy delays in obtaining approvals from Government. Advocates of sole sourcing as a means to expedite the process should note that, as a percentage of the total acquisition time, the bureaucratic process time is relatively short. Whatever time savings that could theoretically be achieved are often wiped out by the internal debates surrounding the issue. Sole sourcing can carry high legal and political risks.

In the 10 years that I have been closely involved with defence procurement, not once has a Minister influenced the outcome. They are quite aware of the consequences.

The funding pressures to sustain existing equipment are at least as great as those to pay salaries and buy new equipment. It is noteworthy that this pressure was recognized and began to be addressed in the last federal budget.

Costs to maintain new equipment are generally much higher – for example, the support costs for the new maritime helicopters will be approximately twice that of the Sea King helicopters.

In typical coalition warfare, each country brings its own contribution to a theatre of operation and each supports and comple­ments the other. In OP APOLLO (Afghanistan) for example, Canadian assets were used to move three times the amount of freight and five times the number of passengers for U.S./coalition forces than vice-versa.

Are there shortcomings in the defence procurement process? Yes. Can they be streamlined and can the associated costs be reduced? Absolutely. But we must separate fact from fiction and not merely echo the commonly voiced allegations if we are to truly make improvements. To do so requires an understanding of the legislative framework and the procurement process as well as what motivates the participants to behave the way they do. In addition, it would be beneficial to be able to compare our approach here in Canada with those of our major allies. This research is now being conducted with Doug Bland in the Defence Management Studies Program at Queen’s University. Observations and recommendations will be brought forward in the areas of governance, human resources, planning and performance reporting. The purpose is to help make our defence procurement process the best it can be. The men and women in the forces deserve nothing less.

Recently retired from his DND position as ADM (Mat), Alan Williams is currently a Senior Research Fellow of the Defence Manage­ment Studies Program at Queen’s University in Kingston.
© FrontLine Defence 2006