Up for Debate
Jan 15, 2008

There are a few basic laws of human nature that need to be remembered by any leadership. One that rings true when considering Canada’s defence procurement situation, is the premise that one’s responsibility on the job should be supported and reflected equally by one’s “authority” to make the corresponding decision. Seems reasonable. For example, when Eisenhower directed Montgomery to begin the complicated North African campaign in WW2, he did not tell him how, when, or why, or even “get back to me” to discuss the plan, but the famous missive would live on forever in the history books. His order to Montgomery was simply: “Take Africa.” Period.

Montgomery’s authority to act certainly matched his responsibility to defeat his enemy, which he did, with dispatch and a little help from General Patton.

Many highly qualified serving Officers in National Defence Head­quarters (NDHQ) would love that same arrangement when it comes to the procurement of new capital equipment. Instead, even after the “transformation” exercise at DND and NDHQ, the number of approval levels for each procurement effort remains at the same nauseating state.

The trail goes something like this:  After a need is identified, the project documents must first go through a Senior Review Board (SRB), usually chaired by the environmental chief. If successful, presentations must then be made to the Program Management Board (PMB), chaired by the VCDS for Departmental approval. If the Department agrees in the merit of the project and affordability, it must then be presented to Treasury Board for government approval. Not to mention that within each level, are three approval stages: Preliminary, Definition and Project.

In addition to these three distinct levels of approval process, it must be noted that the decisions are made “in committee” versus any ONE person who might be held accountable. Each committee is bound to have representation from all aspects of NDHQ (Human Resources, finance, operations, engineering, public affairs, IM/IT are a few examples), each bringing to the table their own issues on the program. Each office is able to dismantle and kidnap the requirement with the resulting approval delays.  Don’t forget the PWGSC-chaired “Procurement Review Committee” that provides the young Project Director with direction on how the tendering process should commence.

If three approvals aren’t enough, simply make sure the Program is worth over $100 M, or include something that constitutes a “policy change” – you will then need to submit the plan to Cabinet via a “Memorandum to Cabinet” – a fourth layer of decision by committee. This is a convenient way for the government to make any Defence procurement program a political sword to fight a campaign with. A good example is the infamous CH101 Cormorant contract that was dismembered, leaving the Sea King to carry the SAR burden for another 15 years.

The Project Director’s sense of humour may be seriously tested when dealing with all of the associated staff and people willing to make needless comment on your documents knowing that they are not impacted by the outcome and have nothing to loose by doing so. This process alone is likely to take several years to achieve program approval at Treasury Board.  It is quite unlikely that the Project Director who initiated the requirement will still be in the job when approval is finally achieved. It is more likely that world events have occurred that alter the requirement entirely – and when the project fails, or the Auditor General comes knocking, ”its not my fault” resonates throughout Ottawa.

Attempts have been made to get the required equipment in a shorter period than the typical 15 years. One example is a process called a “sole-source award” or ACAN (Advanced Contract Award Notification). However, while attempting an ACAN, the project director and program manager will face criticism that a competition must be conducted to ensure taxpayer’s money has achieved best value – even though it has been determined that there is only one system that meets the military’s needs! We have seen this dilemma recently during the “Canada First” series of programs.

Critics of sole-source contracting argue that it is more expensive than a competitive contract. Opposition relies on the assumption that a competitive price is low because the contractor puts best price forward in the quest to win. It can be quite the opposite, however. In a sole-source award, all prices are visible to the Government, including profit margins. In a competitive contract, the profit is hidden in the price and reality has shown that the contractor is ‘more than aware’ of his competition and puts in a price so as to not leave “any cash on the table” when his bid is submitted.  Competition does NOT guarantee the tax payers the best deal. Far from it.

Can the system be fixed? We all seek efficiency, we all want it done better and faster – that’s what real transformation is all about. Re-organizing to suit the current situation or to suit a changing geo-political environment is a step forward, but it is NOT “transformation.” Transformation is a re-thinking of how to do the job, a reincarnation of methodology that results in a more economical process in both time and money.  Above all, the results must be measured so that you can verify the results and achieve your objectives.  A rule of the road is “if you can’t measure it, don’t do it.”

We need to examine these themes in more detail. Canada needs to define and measure a new procurement process. Every procurement Officer in NDHQ understands that the  one we have now is indeed “broken” and in need of attention. Streamlining the levels of approval that are impeding progress will go a long way towards enabling the Montgomerys and General Pattons of today to get the job done. After all, if our enemy – or the world market – becomes more efficient in advancing capabilities which affect his ability to fight or compete…we all lose.
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© Frontline Defence 2008