Procurement: 21st Century Challenges
ROBBIN LAIRD and RICHARD BRAY
© 2013 FrontLine Defence (Vol 10, No 5)

“Note to self, do not buy yesterday’s systems for yesterday’s challenges.”

A key point lost in many debates about defense procurement is its real purpose – to buy ­systems crucial to dealing with 21st century challenges. Equally significant is the need for those systems to be shaped by the professional military and security forces to fulfill requirements for 21st century concepts of operations which will deliver what is most needed to provide for the safety, security and defense of a modern democracy.

The procurement debate will often revolve around a key platform, but we must remember that while they are always part of an emerging context, “no platform fights alone.”
 
Without a comprehensive 21st century concept of operations to deal with emerging and likely challenges, procurement will likely fall short and ring hollow. The baseline priority is to meet the evolving needs of future forces, not memories of the past decade.
 
But this is rarely grasped. A recent example of the problem is reflected in the Jenkins Report, “Canada First: Leveraging Defence Procurement Through Key Industrial Capabilities”, which was delivered to the Minister of Public Works and Government Services in February, 2013.
 
Let’s start with the needs of defense and security forces, and then look ahead – in this case, to what 21st century forces are going to look like. What demands? What innovations? And what key players?
 
The Jenkins Report looks at weapons of the past two decades and assumes continuity. Under that assumption, a “modernization plus strategy” would work, and governments would be justified in committing industrial strategy to that path. But the reality is that defense change will be driven in the Pacific and the Middle East. That is where money is being spent and innovation is being driven.
 
The next 20 years will see some core global fleet products marketed worldwide – to mention three in the military aircraft domain, F-35, A400Ms and A330 Tankers – and forces will be networked and protected by a variety of systems, some transformational and some simply upgraded capabilities from extant systems.
 
And that really is the point. A global prime working with a Canadian team to drive a value proposition into the global market is a marker for the future.
 
Clearly, Canada needs a way to be in the 21st century fleets, but procuring 20th century systems will not set the stage for success. Global fleets are built by global consortia. The F-35, for instance, is largely a software-driven system within which several key players are involved (Lockheed Martin, the “prime” contractor only holds a 30% share of the project). This means that if Canada wants to play, it will have to sort out ways to join in software-driven programs like the F-35 or to become part of a global consortium like the A400M or even figure out what it would contribute to an A330 tanker. By the way, Canada is already part of the user group defining the further evolution of that tanker.
 
The authors of the Jenkins report base much of their conclusions on an assessment that U.S. decisions will define the 21st century trajectory. Page 8 of the report goes on to predict what the U.S. might do. However, not only do their projections seem based on the past 10 years rather than looking to the future, but the report ignores the many other drivers shaping 21st century systems. For example, Eurocopter will be a significant part of the Asian defense posture in the period ahead, and Airbus Military is providing global tankers in a way the U.S. is not.
 
Moving to another broad topic, the Jenkins Report does note the importance of the Arctic. This is a challenge that needs to be met for the strategic protection of Canada itself, not just to drive industrial opportunities. Having said that, business opportunities will be a focus of several key allied states working in the region. It is crucial for Canada to stake out a good industrial space, working with and selling capabilities in this domain.

The key procurement challenge is how Canada will fill out its systems to provide for Arctic defense and security over the next 30 years. Canada could progress from being part of a coalition, often as a follower, to assuming a leading role in shaping a coalition in a region that is emerging as crucial to a number of key global players.
 

The hardy Sea King is stillwaiting patiently for retirement. Will its successor be able to fulfill the future requirements it will be tasked to perform? (Photo: MCpl David Singleton-Browne, CAF Combat Camera)
 
A key requirement for Canada will be to shape a grid to cover the full geography, including her Arctic interests. If one conceptualizes that a core challenge facing Canadian sovereignty is to provide for security and defense in the context of the Arctic opening, then major acquisitions should be made over time, and built out to that direction.
 
In effect, the grid covering from Northern Europe to the Northern Pacific and over the Arctic – built with allied collaboration – is clearly a key challenge but also one which could focus Canadian force development and also defense and security investments. It could also guide a way to think about public-private partnerships in the region, and tapping into the ongoing development of various Canadian civilian capabilities that are relevant to the Arctic opening.
 
None of this is in the Jenkins Report. However, in trying to identify core capabilities – namely intellectual property – it does hint at a problem. In discussing ISS (In Service Support) contracts (page 12), the authors highlight that Canadian firms on the high end of the scale can perform “very sophisticated, high-value work dependent on Intellectual Property (IP) owned by the prime contractor.” A key trend for advanced defense and aerospace systems is that they are increasingly based in software development. The report never fully addresses the fact that constantly changing software upgrades means, basically, that integration has become an ongoing state, as the software is always in a process of development. In many respects, a Prime Contractor is the system integrator in these fields.
 
How will Canada, across the board, deal with this 21st century reality? Strategic thinking of a higher order would call for a National Software Procurement Strategy and take a hard look at developing and maintaining such high level capabilities.
 
A company can build parts for an armoured personnel carrier, a ship, or an aircraft, but to be part of the evolution of 21st century systems, one needs to be part of the global team that makes innovative modern systems.
 
How will Canada meet this challenge? In the months ahead, FrontLine’s Industry and Innovation section will highlight such efforts, research and success stories from companies in sectors that provide solutions to defence and aerospace requirements.
The question becomes, can Canada’s procurement process make the kinds of decisions that are necessary to provide relevant equipment to its frontline Forces?
 
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Robbin Laird is a U.S. defence analyst based in Virginia.
Richard Bray is FrontLine’s Senior Writer.
© FrontLine Defence 2013

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