CANSEC 2015: Canada’s New Defence Procurement Strategy.

OTTAWA – Nominated Minister of National Defence on January, the 9^th, 2015, Honorable Jason Kenney attended for the first time CANSEC which is taking place on May the 27 and the 28^th at the EY Center nearby Ottawa International Airport.  Held every year in May in Ottawa, CANSEC,  Canada’s Premier Defense Trade Show is organized by CADSI, the Canadian Association of Defence and Security Industries.

Elected for the first time in 1997 at the age of 29, Jason Kenney held four ministers since October 2008 in the Conservative government of Prime Minister Stephen Harper

Being the guest speaker at the diner on the first of the two days of the convention, on May, the 27^th, Minister Kenney took the opportunity to introduce his Ministry new procurement process policy.

The Minister wished to start by reminding Canada’s recent successes in defense procurement : the acquisition of Boeing C-17 Globemaster III strategic airlifters, Lockheed Martin C-130J Super Hercules tactical airlifters, Boeing CH-147F Chinook medium lift helicopters and the modernisation of Lockheed Martin CP-140 Aurora maritime patrol aircraft and LAV III combat vehicles.

Facing the complexity of modern military technologies, the constant pace of change requires long life cycles of project management and in-service support as well as the management of complex acquisitions, the Canadian government introduced the Defence Procurement Strategy last year.  As Jason Kinney reminded it, this initiative has three key objectives.

First, to deliver the right equipment to the Canadian Armed Forces in a timely manner; then to leverage purchases to create jobs and economic growth; and to streamline the defence procurement process in order to avoid cost overruns and scheduling delays. 

One of the elements of the Defence Procurement Strategy is the creation of a third party review panel to independently review the requirements of major Defence projects at the beginning at the process, rather than at the end, to avoid problems sending back everyone to the drawing board.

The Independent Review Panel for Defence Acquisition that will include representatives from the defence industry will bring together the right combination of knowledge, experience and expertise to help validate the requirements for major military procurement projects and provide independent third party advice.  According to the Minister, it will bring clarity and certainty to the procurement process by evaluating and challenging the mandatory requirements for projects that meet specific criteria.

Lastly, the panel will provide formal advice regarding the project to the Deputy Minister and to the Minister before any important decisions related to the implementation of projects have been taken.  This will ensure that the Department of National Defence delivers clear and realistic requirements early in the procurement process. 

It will also assess how the project fits with other planned and current capabilities of the Canadian Armed Forces and those of its allies.  And it will weigh the risks and rationale associated with all of the various realistic options.  In short, the panel will play an important role in examining the requirements at the front end of the process.  This process will also create a stronger foundation for the initial decisions regarding projects and for related work under the Defence Procurement Strategy. 

In addition to the panel, a Defence Acquisition Guide has been published for the first time last summer providing to the industry greater transparency on Canada’s potential defence capability requirements, enabling companies to make better informed research and development investments and strategic partnering decisions based on projected needs.

Industry Canada has also reformed its industrial and regional benefits policy into the industrial and technology benefits policy, which requires all companies that are awarded Canadian Defence contracts to conduct business activity in Canada that is equal to the value of that contract.

According to the Minister, the policy also includes a value proposition requiring bidders to compete on the basis of economic benefit to Canada.  This way small and medium size Canadian businesses will derive significant benefit from this new approach as larger companies will seek out their expertise in key niche areas to contribute to fulfilling larger contracts.

The Minister made public the setting up of a Defence Procurement Strategy Secretariat to ensure a close coordination amongst key departments and a whole of government approach to Defence procurement. 

Jason Kinney concluded his presentation in front of more than 600 attendees by recalling that the Conservative government has increased the Defence expenditures from $14.5 billion in 2006 to $20.1 billion in the fiscal year just ended, a 38% increase. 

Moreover Budget 2015 raises the annual Defence escalator from 2% to 3% beginning in 2017, which represents a cumulative total of, increment of, of some $12 billion over the course of the subsequent decade, which is according to Mr. Kenney ‘a longstanding commitment to the Canadian Armed Forces’. 

 

 

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