Monday, July 4, 2011

Government should create defence procurement agency: report

By David Pugliese, Postmedia News July 4, 2011

The Harper government should create a new defence procurement agency to oversee the estimated $240 billion worth of military equipment the Conservatives want to purchase, says a federal report obtained by the Ottawa Citizen.
The report, produced by a review team brought in to analyze recommendations from the country’s defence industry, points out that the current government system doesn’t allow for any one person or organization to be held accountable for how equipment purchases are handled.
It agrees with a recommendation put forward by the Ottawa-based Canadian Association of Defence and Security Industries, or CADSI, that there has to be “a single point of accountability for defence procurement.”
“The Team suggests that a Defence Procurement Agency is the most appropriate option, and offers a model agency for government/industry consideration,” concludes the analysis.
Currently, defence procurement is divided between the ministers responsible for Public Works, the Defence Department and Industry Canada.
The review team’s recommendations were obtained from the Defence Department under the Access to Information law. The team was put together to analyze a 2010 CADSI report on how to improve military procurement.
The review team noted that military procurement was secretive and that the government did not communicate with the public or industry on such matters.
“Defence procurement and defence trade are neither free, open, nor transparent,” the review team noted.
It concurred with many of the recommendations put forward by CADSI in its report.
Alan Williams, who oversaw Defence Department procurement before retiring from the bureaucracy in 2005, said both the review team and CADSI’s recommendations support his previous proposal to create one procurement agency.
Williams, however, is not optimistic that such a recommendation will be followed for a number of reasons. Various ministers and bureaucrats want to hold on to the power they have, he said.
“The only way there would be one organization responsible for procurement is if the prime minister steps in says ‘Do it,” said Williams, DND’s former assistant deputy minister for materiel. “Otherwise you’ll just have infighting among the departments and resistance to any change.”
The Defence Department referred the Citizen to Public Works for comment on what recommendations, if any, are being followed from the CADSI report. Public Works could not respond.
Prime Minister Stephen Harper recently named Julian Fantino as associate defence minister, giving him the job to deal with military procurement at DND.
An email from Fantino’s office stated that the Conservative government received a mandate in the last election “to continue to provide our troops the equipment necessary to do the jobs asked of them and we are committed to delivering on that promise.”
Fantino, the email noted, would be “liaising with other appropriate ministers, in addition to other duties assigned in support” of Defence Minister Peter MacKay.
The Conservatives have said they will be spending around $240 billion acquiring or maintaining military equipment and other materials over the next 20 years. That equipment includes new stealth fighters, warships, supply ships and armoured vehicles.
The CADSI study was commissioned after the Harper government faced widespread complaints from MPs and industry representatives that the military procurement system was broken. A number of high-profile multibillion-dollar defence equipment programs have fallen far behind schedule or have been derailed.
The review team was brought in to examine the CADSI report’s findings. According to the team, the CADSI study provided an accurate overview of the military procurement situation.
Defence Department, Public Works and Industry Canada officials have in the past praised the system and their own efforts, citing numerous achievements in purchasing equipment for the Canadian Forces.
But the CADSI report, which draws on interviews and submissions from company representatives and others across the country, described a heavily bureaucratic process run by inexperienced public servants who have little knowledge of the capabilities of Canadian firms.
“Urgent attention was deemed necessary to remedy a procurement process currently defined by frustration, confusion, inconsistency, layers of built-in redundancy, systemic risk avoidance and a perceived lack of transparency,” noted the report.
The defence industry employs around 70,000 Canadians, and generates $10 billion a year in sales, according to CADSI. Fifty per cent of that is exported, notes the association.

Ottawa Citizen