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Court documents lift curtain on cutthroat world of military procurement

by Lee Berthiaume (feat. David Perry)

The Canadian Press
April 28, 2017

OTTAWA — If there's one thing that stands out in court documents outlining the RCMP's case against Vice-Admiral Mark Norman, it's the extremely cutthroat nature of military procurement.

It's a secret world in which companies and high-priced lobbyists go to great lengths to win whatever multibillion-dollar contract is up for grabs.

That includes bringing pressure to bear on federal ministers and other government officials and trying to undermine competitors — and even the procurement system itself — through whatever means necessary.

"Industry is always going to do whatever they can to win a contract," says Alan Williams, former head of military procurement at National Defence.

"That's why they hire lobbyists. That's why they do all this kind of stuff."

Many of those backroom tactics were on full display in the court documents released Wednesday, in which the RCMP accuses Norman of leaking cabinet secrets to a shipbuilding executive.

The allegations involve a $700-million contract that the previous Conservative government awarded to Quebec shipyard Chantier Davie to convert a civilian ship into an interim navy supply vessel.

Following the October 2015 federal election, Halifax-based Irving Shipbuilding and Vancouver-based Seaspan wrote to the new Liberal government complaining about the deal and pitching their own plans.

Documents obtained by the RCMP and submitted to the court indicate Davie responded by pulling out all the stops to keep the Liberals from cancelling the deal, which was still being finalized.

That included plans to, in the words of one Davie official, "put pressure" on Treasury Board President Scott Brison, leaking information to the media and getting Quebec Premier Philippe Couillard on side.

"(Meeting) with Couillard today," reads an email from Nov. 20, 2015 that the RCMP says is from Davie official Spencer Fraser to Norman.

"Message is that the yard will be closed, 1,200 lay offs before (Christmas), we will sue the Crown."

One of Davie's lobbyists, Brian Mersereau of Hill+Knowlton, also suggests in an email that they "sic the media or the union" on Social Development Minister Jean-Yves Duclos, the senior minister from Quebec City.

The RCMP alleges Norman tried to help Davie by providing a regular stream of updates and advice on how to pressure the Liberals into approving the deal, which included giving the company secret documents.

No charges have been laid against Norman, who was appointed vice-chief of the defence staff in August 2016, then abruptly suspended without explanation on Jan. 16 by defence chief Gen. Jonathan Vance.

Norman's lawyer, Marie Henein, said in a statement in February that the admiral, a 36-year-veteran of the military, "unequivocally denies any wrongdoing."

The Liberals ultimately decided to leave the shipbuilding project with Davie after it was revealed that the government would have to pay the Quebec City shipyard $89 million if it was cancelled.

The interim resupply ship is expected to be delivered this fall.

Successive governments have gone to great lengths in recent years to accommodate industry in part to ensure a level playing field for all players and protect against court challenges — another favourite tactic.

That includes consulting with companies before a request for bids is released, and establishing clear rules around how proposals will be evaluated to determine which company wins.

The government has also adopted more aggressive tactics, such as trying to prevent companies from attacking each other or otherwise talking publicly about the competition to choose a design for Canada's next warship.

But that hasn't prevented complaints about that competition, which is being run by Irving in consultation with the navy, or stopped aerospace firm Leonardo from taking legal action after it lost a competition for search-and-rescue planes.

Defence analyst David Perry of the Canadian Global Affairs Institute said the court documents represent "an airing of the industry's dirty laundry" by pulling back the curtain on their tactics.

"It's a hugely competitive environment," he said. "There's lot of very strong personalities and there's obviously big bucks."

What makes shipbuilding unique, Perry said, is that companies like Davie in Quebec and Irving in Halifax have regional importance, meaning extra pressure on politicians and parties to give them work.

Norman himself appealed to industry back in May 2012 to set aside their differences and work together to ensure the federal government's $35-billion shipbuilding strategy would be a success.

"We have to trust each other and we have to move forward together as one team," Norman, then-deputy commander of the navy, said at the time.

"If not, this unprecedented opportunity will fail."


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