Procurement

by **Falcon** Wed 05 Feb 2020, 9:28 am

More than 100 military procurement projects facing delays

LEE BERTHIAUME
OTTAWA
THE CANADIAN PRESS
PUBLISHED Feb 05. 2020

https://www.ctvnews.ca/politics/more-than-100-military-procurements-facing-delays-defence-department-1.4797871

by **Spider** Tue 10 Mar 2020, 8:22 am

Government doesn’t know when a defence procurement agency might be created

DAVID PUGLIESE, OTTAWA CITIZEN - March 10, 2020

Procurement Anita-anand-screen-shot-2020-03-09-at-11.01.02-am

https://ottawacitizen.com/news/national/defence-watch/government-doesnt-know-when-a-defence-procurement-agency-will-be-created

by **Stargunner** Mon 01 Feb 2021, 4:09 pm

Top defence procurement official to retire

David Pugliese • Ottawa Citizen
Publishing date: Feb 01, 2021

https://ottawacitizen.com/news/national/defence-watch/top-defence-procurement-official-to-retire

by **RazzorSharp))** Thu 01 Apr 2021, 9:34 pm

Airbus deemed only qualified supplier for new RCAF refueling and VIP aircraft

David Pugliese • Ottawa Citizen
Publishing date: Apr 01, 2021

https://ottawacitizen.com/news/national/defence-watch/airbus-deemed-only-qualified-supplier-for-new-rcaf-refueling-and-vip-aircraft

by Leopard Mon 05 Apr 2021, 9:21 pm

Military procurement a success, says DND — MP questions whether the department has lost touch with reality

David Pugliese • Ottawa Citizen
Publishing date: Apr 05, 2021

https://ottawacitizen.com/news/national/defence-watch/military-procurement-a-success-says-dnd-mp-questions-whether-the-department-has-lost-touch-with-reality

by Covert Mon 05 Jul 2021, 8:29 am

Government awards military radar contract to firm that failed to complete the same project six years earlier

David Pugliese • Ottawa Citizen
Publishing date: Jul 05, 2021

Defence Watch

by Covert Tue 10 Aug 2021, 7:29 am

Modernization of military surveillance aircraft fleet delayed as $52 million more needed for project

David Pugliese • Ottawa Citizen
Publishing date: Aug 10, 2021

Defence Watch

by Looper Thu 06 Jan 2022, 9:22 pm

Controversial equipment projects await new deputy minister at DND

David Pugliese • Ottawa Citizen
Publishing date: Jan 06, 2022

Defence Watch

by **Warrior** Mon 28 Mar 2022, 7:47 pm

Will billions of dollars in new funding for the Canadian military be wasted?

David Pugliese • Ottawa Citizen
Publishing date: Mar 28, 2022

Russia’s invasion of Ukraine has given the Canadian military and its supporters an unprecedented opportunity to push for more funding.

And the Liberal government has responded with promises of what could be a massive cash injection.

DND’s figures list its budget for 2020-2021 as $23.3 billion. In 2016 -2017, that figure was $18.9 billion.

Over the course of a few weeks, Defence Minister Anita Anand has transformed into a military hawk, calling for what she says are “aggressive options” that could see the Liberals spending more than two per cent of the country’s gross domestic product on defence. Anand’s plan, if approved, would cost taxpayers $20 billion to $25 billion per year.

But an injection of billions of dollars more for the military doesn’t mean the country will be more secure.

National Defence has a reputation in official Ottawa for wasting tax dollars.

Its critics point to years of bungled military procurements as a warning that new funding could simply go down the drain.

Exhibit A for such an argument is the Canadian Surface Combatant project; that plan to buy 15 new warships started out with an estimated cost of $14 billion. In a report issued last year, Parliamentary Budget Officer Yves Giroux estimated the price tag was now around $77 billion. (DND estimates the cost at between $56 billion and $60 billion.)

In addition, National Defence can’t even spend the money it has already been given. In the last fiscal year, it failed to spend $1.2 billion, with most of that resulting from delays in buying new equipment.

Anand, previously the minister in charge of federal procurement, did nothing to try to fix the ongoing problem.

Still, the equipment shopping lists are already circulating. First priority for the Liberals is upgrading the joint U.S.-Canadian early warning radars in the Arctic. Cost estimates range from $4 billion to $10 billion. Some defence analysts are calling for the purchase of a new submarine fleet, which could cost upwards of $60 billion.

The Russian invasion also gives the Liberals the public-relations cover they need to proceed with the $19-billion purchase of the F-35 U.S. stealth fighter, an aircraft Prime Minister Justin Trudeau previously stated Canadians would not buy.

Anand’s push for more money has also been accompanied by an unprecedented amount of hype from retired officers and defence analysts, who claim the military is teetering on collapse because of a lack of money.

Writing in the National Post, retired general Rick Hillier claimed Canada’s navy was confined to port because it couldn’t afford fuel. During TV appearances, the former defence chief also warned the Canadian army’s Carl Gustaf anti-tank weapons were so dangerous that they might explode in soldiers’ faces because of “stress cracks” in the equipment.

Such claims aren’t true.

The navy says it has fuel and money to put its ships to sea, including two frigates now assigned to support NATO missions. Two other ships are in the Caribbean on operations.

The army says it has no record of stress cracks on the Carl Gustaf weapons.

In another article, the National Post pointed out the military was so destitute that its soldiers had to buy their own boots. Soldiers do indeed have the option of purchasing their own boots in one of the most popular programs the army has instituted in recent years. They are reimbursed for their purchases.

Military officers, both retired and serving, have lamented the Canadian army’s lack of anti-tank weapons, in particular the U.S.-made Javelin. That weapon has been used in Ukraine to destroy hundreds of Russian tanks.

But what these officers neglect to mention was that, in 2005, the Liberal government approved $194 million for the purchase of either the Javelin or the Israeli-made Spike missile system. Companies put their bids in to provide 840 missiles and more than 100 firing systems. Test firings of both weapons were conducted. But a year later the bids were rejected as the army determined it didn’t have enough information to figure out whether the weapons would be effective on the battlefield. The project then went by the wayside. The head of the Canadian Forces was then Rick Hillier, who is now complaining that Canada doesn’t have Javelins.

NATO is pushing its member countries to spend at least two per cent of their GDP on defence and expects Trudeau to have a plan ready by June to do that.

But that two per cent yardstick is deceiving. Canada currently spends 1.39 per cent of its GDP. Estonia spends 2.28 per cent of its GDP. By the NATO guidelines, Estonia, which has one of the smallest navies in the world, is a military powerhouse.

When it comes to actual dollars spent on defence, Canada ranks 14th in the world.

NDP Leader Jagmeet Singh has pushed back against the Liberal initiative to raise defence spending to the full two per cent of GDP, adding that NATO’s target is arbitrary. But he has thrown his support to some increased military spending, claiming extra money is needed for new equipment.

Defence Watch

by Phantom Sat 02 Apr 2022, 7:40 pm

Canadian Forces in desperate need of new spending, procurement follow-through, experts say

Christian Paas-Lang · CBC News · Posted: Apr 02, 2022

CBC Radio

by Logan Mon 18 Jul 2022, 7:35 pm

It’s time to get serious about fixing defence procurement: opinion

David Pugliese • Ottawa Citizen
Publishing date: Jul 18, 2022

By Alan Williams

Defence Watch Guest Writer

In the recent debate over Canada’s troubled defence procurement system some have advocated for the need for more flexible rules to expedite delivery of military equipment.

For example, the suggestion has been made that there is a requirement to provide Treasury Board Ministers with the ability to recommend waiving or amending policies to allow military equipment to be purchased to meet urgent requirements. Such action is unnecessary as the government currently has this capability. Under section 513 1 (d) of the Canadian Free Trade Agreement (CFTA), the government can bypass competition and sole source acquisitions when, “if strictly necessary, and for reasons of urgency brought about by events unforeseeable by the procuring entity, the goods or services could not be obtained in time using open tendering.” This clause is often used to provide the military with the goods and services it needs during wartime.

In a recent paper for the Canadian Global Affairs Institute, retired Rear Admiral Ian Mack, who shaped and launched the National Shipbuilding Strategy, suggested Public Services and Procurement Canada “needs to swallow hard and replace its default position of competition in favour of sole-source contracting for speed of acquisition.”

There are two problems with this recommendation. First, to do so would necessitate ignoring the aforementioned CFTA which essentially requires competition except in clearly delineated circumstances.

I would remind readers that this is the exact approach advocated by then-defence minister Peter MacKay in 2010 when he recommended sole-sourcing for the F-35A. MacKay’s actions resulted in a decade of angst, mistrust, squandering of funds and overall chaos with regard to Canada’s future jets. When spending billions of Canadian taxpayers’ money, we do not select a winner because a prime minister, minister or any other individual or group of individuals think it is best. Rather, we conduct an open, fair and transparent competition so that all Canadians can be certain we have acquired the best equipment to meet our needs at the right price for Canadians.

Second, it is a fallacy to presume that sole-sourcing saves time. The fact is that when sole-sourcing, the chosen supplier has not agreed to the myriad terms and conditions that are included in a competition.

By negotiating these after publicly announcing a winner, the government has forfeited all leverage and reaching agreement with the supplier can be very time consuming. For example, it took less than three months to sign the contract for the CH-149 Cormorants following it being selected via a competition and about four months with respect to the CH-148 Cyclones. Conversely, it took over three years to sign a contract for Canada’s CH-147 Chinooks and over one year for Canada’s C-130 Hercules — both selected without a competitive request for proposal.

Mack also recommended that, “Government should also consider offshore ship design/build to expedite the delivery of government vessels under the National Shipbuilding Strategy (NSS).” I find this recommendation ironic since Mack was an architect of the NSS. The eventual delays should have easily been foreseen. As an advocate for the military, I too would like to be able to acquire ships wherever Canada can obtain the best value. Nevertheless, to arbitrarily allow foreign yards to build our ships would be politically disastrous.

I believe there are a number of pragmatic changes to the defence procurement process that can yield immediate and dramatic improvements. These include, putting one minister in charge of defence procurement, instituting performance measures, demanding life-cycle costing, preparing a 30-year fully costed capital plan and increasing oversight.

Amongst our close allies, Canada stands alone with its system of “dispersed accountability.” In the United States, the secretary of defense is accountable for military procurement. In the United Kingdom, this responsibility falls to the UK secretary of state for defence. In Australia, defence procurement is under the authority of its Defence Materiel Organization, accountable to the minister of defence.

In December 2019, I was encouraged that the government was finally going to act on this recommendation. The mandate letters at that time for the ministers of National Defence and Public Service and Procurement Canada included a directive to bring forward options for the creation of a new single entity, Defence Procurement Canada. Sadly, my hopes were dashed when the December 2021 mandate letters to these two ministers no longer referenced this matter.

I recognize that addressing this governance issue will not solve all the procurement problems, but it is a necessary first step. The benefits of creating a single procurement organization go beyond strengthening accountability. First, the process would also be streamlined. At the present time, the process only moves as fast as the slower of the two organizations permit. The result is that many months can be lost due to briefings and approvals through multiple organizations.

Second, savings will emerge from the elimination of overhead and duplication of functions through the merging of the PSPC and DND resources. These savings can help mitigate the impact of the significant staff cutbacks over the past two decades.

Third, until one minister is vested with overall accountability for defence procurement, it will be difficult, if not impossible, to introduce system-wide performance measures.

With respect to performance measures, famed management guru Peter Drucker once stated, “Any government, whether that of a company or of a nation, degenerates into mediocrity and malperformance if it is not clearly accountable for results”. Without performance measures open to public scrutiny, performance suffers. We need indicators that, at a minimum, measure cost and timeliness. If costs are rising, why are they rising? If delays are occurring, where in the process are the bottlenecks? It’s impossible to make improvements, if we don’t have a clear understanding as to where the problems lie.

With respect to the costs of large capital programs, two fundamental questions need to be answered. The first is what is the cost of the program? The second is can we afford it? Today both questions are inadequately addressed.

The cost of any capital program has three major components: the cost to acquire the good, the cost to maintain the good (e.g. software updates) and the cost to operate the good (e.g. fuel, salaries) throughout its lifetime. As we have seen with both the F-35 fighter jet and the Canadian Surface Combatant (CSC) costing debacle, the government focus is on only reporting on the acquisition costs. Equally troubling is that the available oversight structures such as the Office of the Parliamentary Budget Officer, the Office of the Auditor General and parliamentary committees such as the Standing Committee on National Defence and the Standing Committee on Government Operations and Estimates are complicit by not demanding full life cycle cost information. Instead they too focus only on the acquisition costs.

The fact is, acquisition costs only represent about 30 per cent of the life-cycle costs. As such, the life-cycle costs for the F-35 will likely be in the order of $40 billion dollars, not $19 billion and those for the CSC will be in excess of a quarter-trillion dollars, not $70 billion.

Providing full life-cycle costs will properly address the first question. The issue of affordability can only be answered with a publicly available, fully-costed, cabinet-approved capital plan.

The Department of National Defence’s Defence Investment Plan (DIP) is a weak and inadequate attempt to meet this need. It lacks sufficient granularity to be effective. The costing debacles of the F-35 and CSC proves this point. Unlike the DIP, the full life-cycle costs for each project should be displayed over a 30-year period and mapped against the projected available funds year by year. Cabinet approval makes it far more difficult for governments to change priorities for partisan political purposes. The benefits from such a public plan would be far reaching. From a public information standpoint, all Canadians would have a better understanding of what and how their money was being spent. Parliamentary committees could more readily provide rigorous oversight over these billions of dollars of expenditures. Lastly, knowing that this plan is less likely to be modified, potential suppliers will more readily take the necessary steps to position themselves in an optimum position to compete at the appropriate time.

Defence procurement is a business. Let’s begin to run it as such with one Minister accountable for results, with full disclosure of life-cycle costs, with appropriate plans and reports that measure performance and with rigorous and timely oversight. These recommendations may not be particularly innovative, but their implementation will lead to success.

(Alan Williams is a former ADM (MAT) at DND. He is now President of The Williams Group, providing companies with procurement expertise. Williams is the author of two books, “Reinventing Canadian Defence Procurement: A View From the Inside” published in 2006 and “Canada, Democracy and the F-35” published in 2012.)

Defence Watch

by **Rockarm** Mon 26 Sep 2022, 7:43 am

MPs doubt procurement department claim there are no documents on troubled $2.2-billion aircraft purchase

Records were to be turned over to Parliament by July 22, but Public Services and Procurement Canada has responded that it has no records on any of those issues.

David Pugliese • Ottawa Citizen
Publishing date: Sep 26, 2022

The federal government’s procurement department has told parliamentarians it doesn’t have a single document concerning efforts to fix problems dogging a $2.2-billion search-and-rescue aircraft purchase.

But some MPs on the House of Commons government operations committee aren’t buying such a claim considering the problems have caused a four-year delay in the project. They are vowing to dig deeper into how and why Public Services and Procurement Canada took a hands-off approach to numerous issues affecting such a critical purchase.

The Canadian government announced in December 2016 that it was purchasing 16 C-295 aircraft for fixed-wing search and rescue as part of the $2.2-billion project. The fleet was to start operating in mid-2021.

But the purchase has been hit by what defence insiders say are significant problems and the first planes won’t be operating until 2025 or 2026. The full operational capability of the search-and-rescue fleet has been delayed for six years. It will take until 2030 before the aircraft that were to provide search and rescue on the west coast are fully doing their jobs, the federal government acknowledges.

That prompted the government operations committee to request from Public Services and Procurement Canada information any records related to any fixes of technical and mechanical issues that have plagued the aircraft. The committee sought briefing notes, procurement schedules, deadlines for completing work and other related records.

The records were to be turned over to Parliament by July 22, but PSPC has responded to the committee that it has no records on any of those issues.

“There are no documents outlining ‘additional costs, briefing notes, procurement schedules and deadlines for completing the work to make the (the aircraft) operational,” stated the response sent by Lorenzo Ieraci, PSPC assistant deputy minister for policy, planning and communications.

In addition, PSPC suggested the committee direct questions about technical capabilities and other issues to the Department of National Defence.

Conservative MP Kelly McCauley, a member of the government operations committee, says he doesn’t believe PSPC’s claim there are no records. “This procurement has turned into a fricking nightmare, so it defies logic that there are no emails, no notes of any kind. It’s impossible there is not a single document on this at PSPC.”

Conservative MP Pierre Paul-Hus accused the federal government of trying to hide details about C-295 problems.

McCauley noted that, as the main organization purchasing military equipment for National Defence, PSPC would have been closely involved in the acquisition and would have monitored problems now affecting the project.

National Defence officials, who work with PSPC on military procurements, privately say it is highly unusual that PSPC would claim not to have records. At the very least there would be briefing notes for the minister and deputy minister about the delay and other problems affecting the purchase of the C-295 search-and-rescue aircraft, they added.

McCauley said MPs would have to start digging into what was really happening with the program and the more than $2 billion being spent by taxpayers.

Earlier this year, National Defence acknowledged to this newspaper there were technical concerns regarding a centre-of-gravity issue due to the cabin configuration of the CC-295, commonly referred to as C-295, as well as problems involving search-and-rescue technicians parachuting from the plane’s back ramp.

In addition, there are problems with the cockpit equipment that provides the crew with information on the status of the plane and its various systems. “There are software deficiencies in this system that have been identified and must be corrected through software updates,” National Defence spokesperson Dan Le Bouthillier recently noted. “Software development takes time and follows a rigorous testing and certification process which cannot be circumvented.”

A number of issues affecting the planes are linked to modifications made to the fixed wing search-and-rescue (FWSAR) planes for specific Canadian requirements.

Airbus, the firm building the planes, has noted it is fully committed to improving the situation affecting the aircraft. It previously told The Canadian Press that work was underway to ensure as little impact as possible on Canada’s search-and-rescue services.

The new C-295s were supposed to be based at Comox, B.C., to provide search and rescue capabilities for the west coast. But the four-year delay in the project has forced the Royal Canadian Air Force to re-position other aircraft to the west coast for those duties.

Last year, National Defence boasted to Parliament that military equipment procurement was not only well managed but also that all programs were within budget and on schedule.

In June, Defence Minister Anita Anand pushed back against what she said was a “narrative” that the military procurement process was plagued with problems, claiming there were numerous success stories.

Defence Watch

by Mojave Mon 17 Oct 2022, 12:23 pm

Canadian generals push for industry to go to 'war footing,' but hurdles remain

Defence insiders hope an Oct. 25 conference will highlight the need for the Liberal government to buy more weapons for both Ukraine and the Canadian military.

David Pugliese • Ottawa Citizen
Oct 17, 2022

Canada’s military leadership is pushing for industry and the federal government’s procurement system to go to a war-time footing so more weapons can be supplied to Ukraine.

National Defence and top firms that produce arms, such as Lockheed Martin, are financing a conference in Ottawa on Oct. 25 titled “Putting Canadian Defence Procurement on a War Footing.”

Top defence officials, including Chief of the Defence Staff Gen. Wayne Eyre and assistant deputy minister for procurement Troy Crosby, will be key speakers at the event.

Eyre has been pushing for companies to switch to what he is calling a “war footing” so weapons production can be ramped up both for Ukraine and to replenish Canadian military stocks.

Eyre has argued that the war between Ukraine and Russia should be the catalyst for such a major shift in defence industrial capacity. “I think what this has shown, though, is we need to increase the capacity of defence industry,” Eyre told CBC in May. “Given the deteriorating world situation, we need the defence industry to go into a wartime footing and increase their production lines to be able to support the requirements that are out there, whether it’s ammunition, artillery, rockets … you name it. There’s a huge demand out there.”

NATO nations, including Canada, have donated billions of dollars in weapons and equipment to Ukraine.

But Alan Williams, a former assistant deputy minister for procurement at National Defence, said industry wouldn’t ramp up production unless it received contracts from the federal government.

Defence firms, he noted, don’t build equipment out of the goodness of their hearts. “They are in it for profit,” Williams said. “They have shareholders to satisfy. They want contracts … Their attitude is, ‘If you want equipment, then sign those contracts.’”

That view was echoed by defence firm representatives at a major conference and trade show last week in Washington. “I think the first thing we need is orders,” Thomas Laliberty, a senior official with Raytheon Missiles and Defence, told the conference. “We need insight into the demand, and, once we understand the insight into the demand and we understand the willingness of the government to pay for additional capacity, that then helps us go plan for what it will take for us to actually increase production.”

Some defence industry officials have privately noted Eyre doesn’t seem to understand industry can’t ramp up its production without government contracts in hand since building sophisticated weaponry requires upfront purchasing of supplies and material.

But Eyre’s office responded to this newspaper that, “The CDS has both a sense of what is required to replenish the draw-down of CAF stocks, as well as our ability to continue supporting Ukraine with the items they are most in need of. The CDS advice was provided in the context of what those items are and the need for industry to surge for the level of support to Ukraine to remain sustainable.”

Williams pointed out there was already an existing process to purchase equipment on an urgent basis. That process was used during the Afghan war to acquire howitzers and drones as well as armoured vehicles. But using that process is a decision that has to be made by elected officials, not generals or bureaucrats, he noted. “Before one acts, one has to get the marching orders from government,” Williams said.

Using such a process will also require Canadian procurement staff to be rigorous in their oversight to ensure firms don’t rip off taxpayers, Williams added.

The Liberal government has not made any announcement that firms need to go onto a war footing or that military procurement process would use the urgent acquisition process.

National Defence has provided $50,000 to finance the Oct. 25 conference hosted by Canadian Global Affairs Institute, a think-tank closely aligned with the Canadian Forces and the defence industry. Other sponsors include Lockheed Martin, General Dynamics, Irving Shipbuilding, Davie Shipyard; ATCO Frontec, BAE Systems Canada and General Atomics. National Defence also confirmed there were no set costs for commands on what they could spend to send military personnel to the conference, including paying for travel to Ottawa.

Defence insiders have said they hope the conference will highlight the need for the Liberal government to buy more weapons for both Ukraine and the Canadian military.

Williams said there were limits on what Canadian firms could do. Canada does produce ammunition and small arms as well as armoured vehicles and drone cameras, but many other weapons are purchased from U.S. and European firms.

For instance, in May, Canada announced it was buying 20,000 artillery rounds to donate to Ukraine, but those had to come from the U.S..

Canada has provided Ukraine with armoured vehicles, small arms, anti-tank systems and drone cameras. The latest donation involves winter uniforms.

Ramping up defence production for more sophisticated weapons, however, could face hurdles. Many modern weapons are highly reliant on sophisticated electronics and other components now in high demand. The pandemic has also created issues with supply chains and the availability of workers. Lockheed Martin, for instance, has noted it will boost Javelin anti-tank missile production, but that could take as long as two years because of supply-chain problems.

A report earlier this year from the U.S. Department of Defense noted shortages of skilled labour in America’s defence industry. In addition, China has dominated the market for the production of microelectronics as well as castings and forgings, both critical for weapons production.

Eyre recently stated China was at war with western nations, including Canada.

Defence Watch

by Cypher Tue 30 May 2023, 7:55 pm

Time to make defence firms pay for their failures to deliver equipment

Industry representatives suggest that the amount of penalties companies have actually paid is close to zero.

David Pugliese • Ottawa Citizen
Published May 30, 2023

In April, the top procurement official at National Defence made a plea to companies supplying the Canadian Forces.

Provide the products you claimed you would be capable of delivering in the contracts that you signed, said Troy Crosby, Assistant Deputy Minister for Materiel, and provide that equipment on time as specified in those contracts.

Crosby’s comments to The Canadian Press news service were seen by some in the defence community, including those in industry, as an indication of just how screwed up military procurement had become.

The federal government commits to pay billions of dollars to a company for military equipment. Then that company can’t deliver what it promised to deliver, even though it signed a contract clearly outlining that it could, and the best the top procurement official can do is plead with the firms.

“If I could write to Santa Claus and look for some things that I would like to see happen … on an industry side, I would like to see probably less, or a shift in the balance away from, business development to delivery,” Crosby said.

Wish lists to Santa, however, aren’t good enough, says Conservative MP Kelly McCauley, who has been pushing for more accountability when it comes to defence contracts. How about some consequences for the firms who don’t deliver, he argues.

“The only consequences we actually see are those for the military personnel who have to do without the needed equipment and those for the taxpayers who often end up having to spend more to make up for the shortfalls,” McCauley said.

McCauley rhymes off a list of delinquent military equipment programs.

The delivery of Canada’s new search and rescue aircraft from Airbus, already four years behind schedule, is being hindered by software problems affecting the plane’s cockpit systems, among other issues. In an example of the lack of accountability and oversight, last summer Procurement Canada told parliamentarians it didn’t have a single document concerning efforts to fix problems dogging the $2.4-billion search-and-rescue aircraft purchase.

The cost of the yet to be built Canadian Surface Combatants has skyrocketed even before one warship has been built. The estimated price tag for constructing the ships has climbed from an original $26 billion to $84.5 billion, according to parliamentary budget officer Yves Giroux.

In March, The Canadian Press pointed out that, nearly three years after a glitch resulted in a Cyclone helicopter plunging into the Ionian Sea, killing six Canadian Forces members, it remained unclear when that issue would be fixed.

But it won’t be Sikorsky, the company that delivered the problem-plagued helicopters, footing the bill. Instead, that extra cost for what was already a $3-billion program will be borne by taxpayers.

Then there are the problems dogging the new Arctic and Offshore Patrol Ships being delivered by Irving Shipbuilding. The first patrol ship, HMCS Harry DeWolf, was out of service for months because of mechanical problems, including issues with diesel generators. In December 2022, this newspaper confirmed the repairs to HMCS Harry DeWolf wouldn’t be covered by Irving because the warranty for the company’s workmanship on the vessel, delivered in 2020, was only for one year.

National Defence insiders argue that holding companies to task for failure to deliver military equipment can be difficult. Since there is a tendency to hope problems can be worked out, the firms continue to receive second chances.

Government documents obtained by this newspaper show the previous Conservative government could have hit Sikorsky with up to $89 million in fines for missing its deadlines on the Cyclone helicopter, but waived those penalties. Instead, federal bureaucrats persuaded the politicians that the best course of action was to renegotiate with Sikorsky. Under that new deal, Canada paid the U.S. aerospace firm $117 million extra for improvements to be made to the Cyclone. Still, the problems persisted.

In 2021, this newspaper reported the Liberal government had awarded a contract for new military radars to Thales, a firm that couldn’t complete the same project six years ago, but the new contract for $186 million was worth more than three times the original amount.

Public Services and Procurement Canada said Tuesday it couldn’t provide details on the amount of penalties defence firms had faced over the past decade for failing to deliver. Specific details about individual firms needed to remain confidential, the department added.

Industry representatives suggest the amount of penalties the companies have actually paid is close to zero.

But McCauley says, given the pressure on Canada to spend billions of dollars more on defence, there needs to be some accountability about whether value is being received on military contracts. At the minimum, governments can think twice about dealing with a firm who failed on a previous project.

“You can’t keep awarding contracts to companies who have shown they can’t deliver,” McCauley said. “It will take more than just writing to Santa Claus with a wish list to fix this problem.”

David Pugliese is an award-winning journalist covering Canadian Forces and military issues in Canada. To support his work, including exclusive content for subscribers only, sign up here: ottawacitizen.com/subscribe

Brantford Expositor

by **Replica** Wed 28 Jun 2023, 6:55 am

How much for new Canadian military surveillance planes? U.S. offers price tag

By Sean Boynton . Global News
Posted June 27, 2023

The U.S. State Department is giving the go-ahead for a potential sale of military surveillance aircraft to Canada — at an estimated cost of US$5.9 billion.

That would translate to roughly $8 billion in Canadian dollars.

The potential sale, which has not yet been finalized, could see Canada purchase up to 16 Boeing P-8A Poseidon planes and related equipment to replace its aging fleet of CP-140 Auroras.

Canada submitted a letter to the U.S. government in March asking for more information about the aircraft, after the federal procurement department said consultations identified the Poseidon as the only aircraft that could meet Canada’s requirements for a new surveillance aircraft.

In particular, the consults pointed to the need for an aircraft capable of anti-submarine warfare and C4ISR — the acronym used for the battle management concept of command, control, communications, computers, intelligence, surveillance and reconnaissance.

On Tuesday, the Pentagon’s Defence Security Cooperation Agency said it had notified Congress about the potential sale, including the estimated cost and benefits to the U.S.

“This proposed sale will support the foreign policy and national security objectives of the United States by helping to improve the military capability of Canada,” the agency said in a statement.

“There will be no adverse impact on U.S. defense readiness as a result of this proposed sale.”

Congress has up to 15 days to intervene and reject the sale, but officials on both sides of the border say that’s unlikely given the close relationship between the two countries. No formal congressional approval is needed.

Once that 15-day deadline expires and Canada agrees to the purchase, a letter of acceptance would be sent by the U.S. and reviewed and signed by Canada, which would allow the Pentagon to begin facilitating the procurement of the planes and equipment.

Public Services and Procurement Canada said the Canadian government has not yet committed to purchasing the Poseidon aircraft from the U.S. and “continues to assess its options.”

“The final decision will be based on Canada’s assessment of the offered capability, availability, pricing and benefits to Canadian industry and communities,” a statement from the department said.

The Pentagon noted the US$5.9-billion price tag was the highest estimated dollar value for the request, and that the actual price would be lower depending on final requirements and other factors.

A spokesperson for Procurement Minister Helena Jaczek’s office told Global News the government’s decision must “ensure significant Canadian economic benefits,” but also stressed the importance of Canada’s current military surveillance aircraft.

“The CP-140 Aurora is a critical resource for the Canadian Armed Forces, which supports a wide variety of roles — from operations management, maritime and overland intelligence to search and rescue,” the office’s spokesperson said in an email.

Most recently, an Aurora plane was deployed to assist in last week’s international search for the doomed Titan submersible that went missing while searching for the wreckage of the Titanic. The aircraft provided sonar detection capabilities while also conducting searches of the ocean surface.

The surveillance planes have also taken part in Operation NEON, the United Nations-led mission that enforces sanctions against North Korea for its weapons program.

Last year, Global News learned that Chinese fighter jet pilots were repeatedly “buzzing” Canadian Aurora planes over international waters during Operation NEON, flying close enough to force the Auroras to take evasive maneuvers.

The government’s decision to seek replacement surveillance aircraft from Boeing, a U.S.-based company, without a competitive bidding process sparked criticism earlier this year from Montreal-based Bombardier.

The jet maker joined forces this year with U.S. rival General Dynamics on a surveillance aircraft with submarine hunting technology. The plane would be a modified version of the Global 6500 jet, equipped with tech and sensors from General Dynamics Mission Systems Canada — an Ottawa-based subsidiary of the Virginia defence contractor.

Bombardier Defense executive vice-president Jean-Christophe Gallagher told reporters in May that Boeing should be able to prove the superiority of the Poseidon in competition with his company.

“Our platform not only burns 30 per cent less fuel; it flies further, faster, higher, it delivers on all of Canada’s requirements and it does it better than the American aircraft,” he claimed.

In its March letter of request to the U.S. government, Canada’s procurement department said Boeing’s P-8A Poseidon is “the only currently available aircraft that meets all of the CMMA (Canadian Multi-Mission Aircraft) operational requirements” and noted the P-8’s prevalence among Canadian allies.

“This platform is a proven capability that is operated by several of Canada’s defence partners including all of its Five Eyes allies — the United States, United Kingdom, Australia, New Zealand — as well as Norway, and South Korea. Germany has also recently purchased this platform,” the March 27 statement said.

—with files from the Canadian Press

Global News

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