Saturday, January 13, 2018

Canada's Broken Defence Procurment: Time to Blame the Industry

David Pugliese does an amazing job of documenting the VCDS Mark Norman story about the investigation into his leaking of cabinet confidences.  There is much to the story, and it says much about the state of Canadian politics.  I'd just like to focus on one element of it: the defence contractors.

Whatever Norman's relationship with Davie, a Quebec shipbuilding firm, the key actor here that really starts the controversy is Irving, the shipbuilding firm that has gotten the lion's share of recent defence dollars.  It is responsible for both the Arctic Offshore Patrol ships and the new frigates.  The Seaspan company, on the west coast, is building the rest--supply ships, icebreakers, etc.  Because the RCN's supply ships were falling apart, the idea was to have a ship leased, reconfigured and used until Seaspan could produce the supply ships it is supposed to build.

Ah, but Irving complained, saying that the process was unfair, sole-sourced.  This is kind of funny (and sad) that Irving was not satisfied with winning the big competition, but felt compelled to screw with the minor contract going to the company that had lost the big competitions.  Maybe Irving would be better at this?  Oh wait, Irving is behind schedule on its ships, and a key challenge is it does not (I seem to remember) have enough dry dock space to work on many ships at once.  So, this important immediate need would either be put at the end of the line or it would force the other stuff to be delayed further.  A key thing to keep in mind about defence procurement is that delays mean heaps of money as defence inflation is a thing.  So, Irving butts in, causes a kerfuffle.  Seaspan joins in because it only has the second most number of ships to be built and second most amount of money heading its way (even as its own shipbuilding schedule is, of course, delayed).

The politics are complex, but since Davie is in Quebec, its premier (governor) was able to put enough pressure on the Liberal government to keep the program going, so ... ta da!  The ship in question is almost ready. 

The ruthless competition by one or two contractors to screw the third has spilled over into the leadership of the Canadian Armed Forces with Mark Norman in limbo for more than a year now.  Perhaps it is appropriate that his case should be as delayed as the typical procurement project, but the government should make a damned decision--to charge him or not.  That is actually the easy part of this (which is being bungled).  The hard part is to get Irving to be satisfied with damn near most of the dollars and not seek all of them.

While we can blame successive governments for screwing defence procurement up in a big way, they have had much help from the defence industry.  I have heard multiple reps from defence firms complain about government, and they are right.  But much of the blood or red ink is on their hands.  Maybe they don't need to follow the Japanese example of taking turns (Mitsubishi builds a sub in year 1, Kawasaki in year 2, M in year 3, K in year 4, etc).  But they do need to figure out how to live with each other and perhaps come up with rules of engagement so that they don't imperial Canadian defence and they don't burn officers who are just trying to get their people decent kit.

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