Canadian defence procurement a story of missed deadlines, broken promises

In the summer of 2012, then Defence Minister Peter MacKay declared the effort to update Canada’s maritime helicopter fleet with 28 new Cyclone aircraft as the worst procurement in Canadian history. Harsh criticism indeed, but the fact is that almost 30 years have passed since government decided to update its dying fleet.

Sadly, this example is but one on a long list of procurement failures concerning Canadian national defence. A report published today by The School of Public Policy (with the partnership of CDFAI and CMSS), breaks down this list of projects and offers recommendations on how to inject efficiency into defence procurement.

Author Elinor Sloan highlights some startling cases:

• There has been no contract award (or even Request for Proposals released) for Fixed-Wing Search and rescue Aircraft, originally anticipated for 2005
• There has been no design chosen for the Arctic Offshore Patrol Ship, originally promised for first delivery in 2013
• The Nanisivik Naval Facility, originally expected to be fully operational by 2015, has been scaled back significantly and given a completion date of at least 2017, probably later

While the causes for these drastic delays vary, “two related and overarching concerns about Canadian defence procurement are that there is no single point of accountability and little sharing of risk,” the author writes.

On accountability, Sloan argues that the interdepartmental nature of military procurement is causing problems, specifically that three departments (Industry Canada, the Department of National Defence, and Public Works and Government Services Canada) are involved but none have overriding authority. One potential solution is to appoint a single Minister to oversee procurement.

Related to risk sharing, Sloan argues that the current process places far greater risk on industry compared to government. A major procurement can go through the lengthy process mandated by Industry Canada and still be cancelled by the government because of some innocuous error. Meanwhile, there is no reimbursement to contenders who have spent millions of dollars responding to the RFP and building a prototype. A recently instituted pilot process of allowing defence firms to repair minor bid infractions may go some way towards addressing this concern.

The report can be found here.