Reform the Bidding Process
© 2008 FrontLine Defence (Vol 5, No 1)

Two months ago, the Standing Com­mittee on National Defence initiated a study on the defence bidding process. This study was occasioned by large-scale purchases of military equipment, including many projects that had no competitive bids. In my view, the process is not working very well. The lines of responsibility are not clear and there is a lack of stakeholder involvement, which should play a greater role in the process.

Defence Policy and Military Capacity Plan
My political party claims, with justification, that before proceeding to purchasing, it would be essential to first establish a defence policy, and afterwards develop a military capacity plan. The current Canadian policy dates from 2005, when the Liberals were in power. The Liberals had promised to release a capacity plan in the month following their defence policy. We never got it. Worse, on January 27, 2006, there was a change of government, and no new policy was delivered, and consequently no military capacity plan. Yet the Conservative government announced over $20 billion in military expenditures.

Submission to the Defence Committee
Several reports have revealed that, at a certain point in the process, information is submitted to the Standing Committee on National Defence. The Bloc Québécois advocates this procedure when the amount involved exceeds $100 million.

This is not suggesting a right to veto. We advocate the right to be informed, as elected representatives of the people.

Long-term investment
The problems with the current system are due to a lack of long-term planning.
Indeed, the current situation is dictated by the vagaries of electoral mandates. There are clearly several dangers with this approach. First, the government’s commitments cannot be renewed when a new government takes the reins of power. Moreover, this usually leads to the astronomical costs of broken contracts. A typical example is the cancellation by the Liberal Party in 1993 of the maritime helicopter contract. Seven hundred million dollars in costs had to be repaid by Canadian taxpayers following that cancellation.

The end of a mandate may require fancy footwork on the part of the government to avoid getting entangled in big expenditures. Moreover, in such cases, the opposition usually cancels the contract as soon as it comes to power.

The solution would be to bring all parties in the House together and try to reach a consensus on two mandates.

Responsibilities of the Department of Defence
We feel that the Department of Defence should have overall responsibility for the approach, overseeing the smooth functioning of all projects carried out by all the ministries involved: Public Works could continue to handle the bidding process; Industry Canada could handle the economic benefits; Treasury Board could ensure proper conduct and compliance with the project terms; however, National Defence would be the main contractor, and would be accountable for the progress of all projects. DND would also be responsible for the integrated project team drawn from the departments concerned.

The integrated team should be set up as early as possible for each project. Therefore, the Integrated Project Team (IPT) program should be reinstated.

Participation of the Auditor General
The 10 largest projects should be audited annually by the Auditor General. The Defence Committee has requested the Auditor General to investigate acquisition projects that have been announced.

The new administration would require a systematic review of the ten largest projects. In this case, it would involve ensuring the proper conduct of every project and demonstrating the transparency that is absent at present.

The acquisition process is complex. Many countries have worked out various procedures. We must continuously seek a balance between the needs of the armed forces, the materiel acquisition process, the delivery period and good value for the taxpayers. In addition, this process should be regularly reviewed.

We must not fear change. In this ever-changing world, our ways of doing things must constantly evolve.  

Claude Bachand, Defence
Critic for the Bloc Quebecois, is a member of the Standing Committee on National Defence.
© Frontline Defence 2008