February 2014 Commentary

The new defence procurement mess

by J. L. Granatstein

Defence procurement in Canada is a mess. We watched Prime Minister Jean Chretien kill a Navy helicopter purchase at his first Cabinet meeting in 1993—and two decades later no helicopters are ready to fly. We see delays in buying trucks for the Army. The F35 fighter contract is caught in a political storm and may never get off the ground for the RCAF. The horror stories are endless.

Now Public Works Minister Diane Finley and her colleague, Defence Minister Rob Nicholson, have changed the game. Hitherto, their two departments collaborated on defence procurement. Now the Industry portfolio will be represented on a permanent procurement secretariat to reside at Public Works. But there will be more faces at the table—Treasury Board, Privy Council Office, and the Department of Finance. And defence industry representatives will be brought into the discussions earlier.  No more rigged specifications; no more political fooling around; no more cost overruns or delays; more economic benefits for Canadians.  It all sounds too good to be true.

And it is. Something similar, if slightly less formal, was used to get the government’s naval shipbuilding strategy through, and while that result was hailed, it is only fair to say that the winners were two shipyards that at the time were completely incapable of actually building the ships assigned to them. No steel has been cut, and it is highly improbable that any ship will be delivered on time—and certainly not on budget.

Minister Finley had no qualms about blaming National Defence for the procurement problems. “What we found was that requirements are too complex,” Finley told an audience of business executives at the Chateau Laurier, in the shadow of Parliament Hill. “Too often they appear to be pre-determined outcomes. And industry is not engaged early enough.” Minister Nicholson, happy in the knowledge that his predecessor, Peter MacKay, took the rap, didn’t even squirm.

But let us forecast how this new process might work. Say the Army needs a new rifle. The military procurement staff know that the rifle must fire NATO standard ammunition, not weigh too much, be easy to fire, and easy to fix in action. The best available weapon, at $3100 a rifle, is made in Belgium and is used by six NATO armies. The rifle slings, $22 each for an order of 40,000, could be made in Belleville.

The proposal goes off to the new procurement secretariat at Public Works where it joins the queue of projects. Two months later, the rifle request makes it onto the agenda of the deputy ministers’ meeting. The Defence representative makes the case for the Belgian rifle. Finance instantly says it’s too expensive and there’s no money. The Treasury Board rep insists that any contract be closely monitored to be in compliance with government guidelines. The PCO official reminds everyone an election is coming soon. The Industry rep notes that there’s a plant in Moosonee that makes replica Ross rifles—and it’s in his minister’s constituency.

Matters are shelved until the next meeting when the Moosonee manufacturer is invited to make a presentation. Yes, she says, her basement shop can produce thirty rifles a year now, but with a big contract and subsidies she could increase this a hundred-fold and employ 62 additional local residents, 31 of whom will be visible minorities or partially disabled and will be paid the minimum wage.  Once her plant is constructed three years from now, she will be ready to roll.

But, the Defence deputy argues, the Army doesn’t  want Great War-era rifles. No matter, the other departmental representatives conclude: jobs trump defence, especially when a minister’s own desperately poor riding is involved. Think of the photo opportunities when the announcement is made.  Outside independent experts, knowing the result is foreordained and desperate for more lucrative contracts for themselves, second the secretariat decision. And the ministerial committee, certain they have resolved a problem to everyone’s satisfaction, agree. Only the soldiers in the field, throwing away their rifles because they are ineffective, just as their great-grandfathers did in 1915, could object—if they survive to return home at all.

Far fetched? Of course. The reality, however, is not all that different. The present system was flawed, rigged, and bureaucratic. The new system will get its chance, but the odds are very good that it will be flawed, rigged, bureaucratic, and even more political than the present one. Economic benefits are important in government contracts. But for defence purchases what is truly important is putting the best equipment into the hands of our soldiers, sailors and airmen and women. Cost matters, but their lives matter more. The new procurement secretariat must never be allowed to forget this.

J.L. Granatstein is a Fellow of the Canadian Defence and Foreign Affairs Institute.

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