MSVS SMP Vehicles
Jul 15, 2012

Summer 2012 saw another failed procurement and, predictably, another round of ­criticism of defence acquisition. This time, it’s the Medium Support Vehicle System (MSVS) Standard Military Pattern (SMP) vehicles. Of course, a multitude of FrontLine articles have called for procurement reform over the years, but the feeling within the defence community is that “this time it’s different.” We seem to be at a tipping point, and something significant might actually happen. Unlike the struggling F-35 Joint Strike Fighter program or the Marine Helicopter debacle, where Liberal fingerprints can be found and readily blamed, this is fully a Tory procurement, launched under the Canada First Defence Strategy.

Details of the SMP failure are startling, to say the least. On CBC TV, Chris Alexander, parliamentary secretary to the Minister of National Defence, admitted the acquisition was cancelled because the approved money was insufficient to the estimated costs, a discrepancy in the order of $300 million. “The re-evaluated cost was well over $700 million, a 40 percent increase, and there wasn’t spending authorization for that larger amount,” he said.

Bidding companies literally had trucks on the road, headed to the test range in Nevada, when the news of the cancellation arrived, three minutes before bid closing on 11 July. Three deputy ministers – Public Works, Treasury Board, and National Defence – met the day before in an attempt to salvage the situation, but it is difficult to imagine what exactly their generals and colonels and associate and assistant deputy ministers expected them to do. One thing they could do is find out who authorized the issuing of the SMP Request for Proposal, and why. If there wasn’t enough approved money to pay the estimated cost of the trucks, the Request for Proposal should never have been released. If officials could not guarantee the project would be funded, bidders should have known that before they spent millions of dollars to prepare their tenders.

Snow Vehicle being secured on the back of a CF Medium Support Vehicle System (MSVS) for transportation near Moonbeam, Ontario, during Exercise Trillium Response 2012.

Taken together, the Public Works Supply Manual and the Financial Administration Act make it clear that officials cannot let an unfunded contract. Public Works wrote to journalists in the week the procurement collapsed, “As the deadline approached, concerns about the budgetary constraint relating to the Medium Support Vehicle Project were raised and attempts were made to resolve this funding issue,” it ambiguously stated, creating more questions than it answered.

One strain of this tangled story suggests that officials hoped or believed the money would somehow appear, either before the bids were opened, or afterwards. This kind of reasoning does not instill confidence among the taxpaying and voting public. Did someone think that ministers could somehow be bullied into accepting a ‘fait accompli’?

Somewhere in the procurement system, some individual rightly refused to sign off on the bid closing, either because the numbers no longer made sense or mandatory processes had been ignored. Canada might not need a completely revised procurement system if people followed the rules of the current one.

The SMP procurement, initially started way back in 2006 by the Harper Government, may never have caught up with the new realities of the battlefield environment. Iraq and Afghanistan have demonstrated clearly that trucks need to be bigger if they are to carry enough armour to allow soldiers to survive IED attacks of ever-increasing intensity and still carry cargo. How could government officials possibly have been surprised by the numbers? For years, newspaper and trade magazines have been publishing the figure of $800 million for the SMP truck. Some consider that high, but it is much closer to reality than the government’s initial estimated cost of $430 million. Add 300 load-handling trailers and 150 armour kits, as well as six years of price escalation, and it is difficult to see how anyone in the system thought $430 million could be correct.

Meanwhile, there is one bright light for the government in the failure to replace its medium trucks – DND has found a new spokesperson for botched procurements. Julian Fantino, the former associate defence minister has moved on to CIDA and ­his replacement, Conservative MP Andrew Saxton, Parliamentary Secretary to the Treasury Board President is proving a fiesty substitute. Speaking on CBC’s Power & ­Politics, Saxton explained that the program “no longer met the test of best value.” He put a unique spin on the ­situation when he said the ability to cancel a program three minutes before a bid deadline “shows that the system is in fact working.”

Richard Bray is the Senior Writer at FrontLine magazines.
© FrontLine Defence 2012