Failing to Meet Deadlines
© 2014 FrontLine Defence (Vol 11, No 2)

In recent months there have been a number of articles and interviews focused on the inability of DND to staff projects and meet deadlines. Some have pointed to the rather long and arduous process that meticulously focuses on a wide variety of “mandatories” in many project requirements. Others consider the inability of senior public service officials and politicians to make timely, rational decisions within a reasonable period of time as the key hindrance. Whatever the cause, this impairment is a significant reason as to why DND is repeatedly forced to lapse funding at the end of each fiscal year, returning billions in budget dollars back to Treasury Board to pay down the national debt.

Few people, even within DND, truly understand Canada’s Military Project Management System, so a slight pause is warranted to get everyone on the same page. The current system for all government agencies is based on the Policy and Expenditure Management System (PEMS) that was introduced to all government agencies in the early 1970s. Its intent was to clear a path for projects that were having trouble navigating the annual budget process. This “envelope system” effectively ordered and prioritized projects that had been selected for the Approved Project List. This envelope set out the phases of the project, personnel requirements, funding, and also the level of urgency required to complete it.

Initially, when projects were in the “definition phase”, funding for personnel, materials and other costs were sourced against DND’s “Operations & Maintenance” Vote 1 (routine) funding. However, once the project had gone through the various steps required in the definition, it would receive authority to begin the acquisition phase and converted to DND Capital Budget (Vote 5) funds. Once transferred from O&M to Capital funding, managers could fill personnel vacancies and positions using the new funding base.

The inability of capitalized projects to achieve spending estimates within a given year has become a matter of some concern to the government and to frustrated defence companies when significant resources wasted bidding for contracts that get substantially delayed or even cancelled. Often the unused funds are then returned to “pay down the national debt”, and the money is lost to the department. The American system provides senior financial staff with a mechanism to “carousel” the funds until the project’s problems are solved. This option for protecting funds is not available to DND, so the Canadian government’s future military funding remains obstructed.

In order for the Canadian Forces to achieve their end goals, some flexibility needs to be given in government financial management that would allow DND to better manage its fiscal resources. Currently, project work that has been approved and is intended to be completed within a given fiscal year must be spent that year, or be returned to the centre.

Until these issues of protected funding are properly addressed, the failure to meet targets will always subject the government to derision.

In the early 1980s, when the absence of trained project staff created delays in the prosecution of all Capital projects, both DND and the CF leadership took action to correct deficiencies. There was a growing awareness at senior levels that you can’t really proceed with a project without adequate staff. They demanded, and got, action.

As the so-called “Capability Gap” problems were solved by the late 1970s and early 1980s, the Federal government once again opened its purse strings and approved increased Capital spending for equipment and facilities. Unfortunately, it was like starting from “ground zero” again, as many of the experienced projects staff members had long ago left the Forces.

At about this time, the Government introduced the Project Envelope Management System (PEMS). This involved the establishment of a “funding envelope” which guaranteed stable funding for the life of the project. This meant that the military was no longer faced with volatile fluctuations that could occur in annual budgets, and that, given this fixed amount, project staffs could efficiently allot project funds to meet identified milestones in the life of the project.

Based on my experience as a Logistics Officer, the movement of Major and Minor Crown projects from the initial identification of the required service or materiel to their “lay in” went a good deal faster in the 1990s than today. Even though the requirements for staffing these projects were identical to today’s projects, there was very little slippage of Capital funds back then. Moreover, project complexities were equally as daunting as they are today and, in some cases, were even more problematic because of the operational urgency. Yet, despite all this, the pace of Capital projects continued to be processed far more quickly and efficiently than they do today. There has to be a fundamental reason behind this.

One of the major factors behind the previous stability of the myriad of projects back then was a senior management decision to provide for project-trained personnel to fill the project positions that would arise once the new Capital Projects were approved and funded. This commitment was honoured, and Project Management positions were given priority over routine positions within regional headquarters, bases and stations.

In a companion action, the ADM(Mat) staff researched and developed two courses to meet projected project personnel requirement. The main was the “Project Management Course”, which was designed to prepare future project and headquarters staffs for initial phase project identification and requirements, and for the increase in personnel that would be required once projects had moved through the approval process towards implementation phase. The second course was the “Capital Procurement Officers Course” which prepared ADM(Mat) logistics and engineering officers in the NDHQ “matrix”, as well as the requirements staffs from the three services who would eventually provide ancillary technical support to the projects, on an “on request, part time basis” usually not to exceed more than 10% of a staff officer’s workload.

To meet the new project personnel requirements, ADM(Per) and ADM(Mat) gathered and sorted the various activities for project manning by matching the personnel requirements to scheduled project milestones. The following explanation gets a bit detailed, but centralizing the function and allocation of personnel to carry out all of the associated duties was really the only logically sound thing to do. Moreover, it provided the stability of having an experienced and trained staff that could ultimately speed up the various processes associated with all of the project requirements as necessary.

This pre-emptive staffing allowed the critical staff work to be addressed by these new agencies instead of languishing on the desks of Action Staff officers who were loaded down with incremental work. These two “centres of expertise” were able to identify other agencies within the Headquarters that were either directly or tangentially involved but would have to be consulted to avoid any future problems. Liaisons with these agencies further freed project staffs to do their jobs more effectively.

On the set up of the sub-section, there was an initial “allotment” given for the manning of Vote 1 positions that was based on existing positions from “the matrix”. This was drawn from the monies allocated to Canadian Forces personnel manning.

Various techniques were used to obtain the funds – from managing vacancies (not filling established positions at bases and stations) or the withholding of personnel that were to be assigned to increased or new establishments. To achieve this level of resources, ADM(Per) staff worked closely with both the Service Chiefs and the senior NDHQ staffs, both military and civilian.

Initially, any Vote 1 or Vote 5 personnel resources and Project Management Person Years were accounted for on the PMSL (Project Management Source List). However, once the Public Service went to the “envelope system” of funds for personnel, the term “Person Years” was no longer acceptable. While the Departmental side of NDHQ changed their accounting, we were required to report by each position on the PMSL, and the change was made to PMPR (Project Management Personnel Resources) and referred to as such when all of the resources of the PMSL were required to be accounted for on an annual basis.

By and large, the system worked well. The ratio of Vote 1 to Vote 5 was about 1:3. In the last year the PMSL and the subsection existed, there were 2300 personnel, of which only 600 were Vote 1 (permanent positions) and the remaining 1700 positions were Vote 5 (temporary). By all accounts, the Project Management staffs continued to make great strides in meeting project milestones.

When the MCCRT (Management Command and Control Re-engineering Team) was set up, it was apparent from the start that the Board representing each of the services had made up their minds to cut the PMSL. Attempts to explain that cutting Vote 1 positions would not gain the desired results, were met with replies that their mandate was to reduce all the PMPRs right across the board. When the briefing staff attempted to explain that the temporary positions would have no major effect on savings because they were not sourced out of the permanent allocation, they apparently did not understand the concept, thinking “a position was a position.” They decided to reduce the 2300 positions on the PMSL to about 1600. Subsequently, they further reduced it to about 630 positions, and now each of the services apparently has about 60 PMPRs each.

In short, they had gutted the personnel resources that had been set aside to prosecute the various required actions demanded at each level of the Project Management Process. This was a somewhat disappointing decision given that we had been forced to augment the Operation Matrix personnel resources because they were incapacitated by too few personnel. The “10%” allocated to projects had often mushroomed to 70 or 80% of their workload and they were drowning. In some Operational Directorates we had to place seven or eight additional augmentation personnel just to enable the desk officers to handle their regular assigned duties.

After the demise of the PMSL, some desk officers voiced concerns that they could not carry out their assigned duties since all they were doing was reacting to “red flags.” I sincerely doubt that it has gotten much better.

In later years, the members of the MCCRT Board complained bitterly that “their” projects were moving forward too slowly, and that the project management process placed excessive workloads on their staffs. They had cut the PMSL to “save the bayonets” and were now running out of bayonets. It was an interesting conundrum: They needed new equipment but the new equipment was slow in forthcoming since the workforce had been gutted. This symbiotic relationship is an important factor to understand.

One should now wonder why we cannot make the same progress as we did before MCCRT. The system’s requirements have not changed; there have been no new initiatives to fulfill; and the government seems willing enough to approve military projects. So what’s missing? The answer is obvious – the people are missing. No matter how you cut it, limited personnel resources means limited capacity. Without the essential resource of people power, the required work has diminished to the level of work that can be provided by the very modest allotment of staff. They all saved their operational staffs, but the new equipment that is required will continue to suffer delays and DND will continue to see project slippage and the return of substantial amounts of Capital funds back to Treasury Board because of it.

As the manager of the PMSL for its last four years, I was the one who closed it out and went on to other staff positions. I watched as a lack of vision allowed a critical resource needed for project prosecution to wither and die. How much money could we have saved? Instead we were “shot in the foot” by poorly thought out decisions made by senior staff who had little to no experience in this area of expertise.

What is the bottom line? Reintroducing the PMSL would be the first appropriate step in returning to project management efficiency.

Robert Day is a retired CF Logistics Officer with extensive experience in supporting Minor and Crown Projects. He resides in Ottawa and conducts strategic assessments of global conflicts and various issues that face Canada’s Government and Military.
© FrontLine Magazines 2014