Friday, November 2, 2018

Playing Politics with Defence Procurement? Oh Really?

This is probably not a good time for me to be trashing the defence industry in Canada as tonight I am attending an event which will have many reps from that aforementioned sector: the Vimy Gala.  Superstar Stéfanie Von Hlatky is receiving the Nichola Goddard Gamechanger Award from the Conference of Defence Associations Institute.  Woot for her, so I will be tuxed and attending. 

But this will not stop me from spewing about the latest news and its coverage: that the Liberal government has decided to split the latest pie--maintenance on the fleet of frigates--among the three major shipyards--Seaspan in Vancouver, Irving in Halifax and Davie in Quebec.  Folks are saying that giving some of it to Davie is political as the Liberals want to get votes in Quebec.  Ok, sure.  But this forgets the history of this government, which started with considering the cancellation of a Conservative plan to have work done at Davie to turn a commercial vessel into an interim naval supply ship.  That is the ship/decision that cost VCDS Norman his career because ... Irving was pushing the government to not give Davie any work. 

The larger pattern in Canadian shipbuilding is the effort by Irving to monopolize damn near all of the work--at least the work on the east coast.  They get to build the 15 ships that will replace the existing frigates and the scrapped destroyers AND they get to build a handful of Arctic Offshore Patrol vessels that the navy originally didn't want.  The Liberals claim that Irving couldn't get all of the maintenance work because it was too busy with all of this other work.  While I am skeptical of claims made about defence procurement by all sides, this kind of rings true since Irving does not seem to have the space to build and maintain heaps of ships at one time.  Indeed, the AOPS ships are going first, which means that the frigate-replacements will have to wait.  To be fair, they are also waiting because they had to have a competition for the design of the ships, and, yes, the decision was to go with one for ships that don't yet exist (the British type 26 by Lockheed) instead of the original decision to consider only ships that were already deployed and thus tested.

Anyhow, the media coverage of the maintenance decision makes it appear that the government is pandering to Quebec.  And I get that.  However, that coverage does not seem to reflect that by splitting the work, the government is not pandering to Halifax.  It is anti-pandering in a way since Halifax and Irving have an entitlement syndrome where they think that any piece of the pie that does not go to them is wrong.  Indeed, even though Irving wins in this decision, it does not win enough and since it always seems to motivated by a desire for relative gains (not how much do I get, but how much more do I get than you), it trashes the process.  This then weakens the legitimacy of this government to handle this stuff, and this happens with every government--sore losers trash decisions.

Again, to be fair, the Liberals might have been playing politics by giving Davie some work.  But not giving Davie some work would have also been political.  All procurement is political, and defence procurement is especially so.  The stakes are high, the number of firms are few, the issues are complex, and every Canadian government sucks at it.  I continue to believe that pretty much most, if not all, democracies are bad at defence procurement but in different ways.  The irony here is that the Harper government thought it solved this problem by having a pretty transparent process that was (I think) aimed to make long term commitments to Seaspan and Irving to win votes on both coasts.  What they didn't realize is that instead of getting to hold these ridings (districts) hostage--give us votes and you will get to have these ships/jobs, it turned out the other way: the companies and towns could say--give us the ships, and we will give you votes.  And they have made that promise to all of the parties, so all of the major parties are held hostage.  Ooops.

Thus, my annoyance with the coverage is that it does not consider the counter-factual--that if the Liberals had given all of the work to Irving, that would have been political and Davie would have screamed. 

What is the lesson here about the defence procurement game?

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