Defence procurement … don’t hold your breath

Don’t hold your breath,” is what Patrick Finn, the Assistant Deputy Minister (Materiel) in the Department of National Defence ~ a very senior official with a $6 Billion budget, says in an article by Lee Berthiaume of the Canadian Press posted on Canada.com. Mr Finn is, in fact, quite optimistic, saying things like DND is “on the right path” and “after a decade of hard-earned lessons, the system has finally turned a corner.”

Mr Finn and Lee Berthiaume look back to the 1990s when, as Mr Berthiaume explains, “National Defence’s materiel section had only a handful of procurement specialists, DNDmany of whom were inexperienced, when the Harper Conservatives unveiled their own defence policy in 2008 … [but, because DND, including the Materiel Group was] … Gutted in the 1990s, the section struggled to produce accurate cost estimates and schedules for the billions of dollars in new military equipment the Tories promised … [and] … Finn said many of the problems can be traced back to that shortage of staff and experience, and he acknowledged that having enough skilled personnel remains his top risk.

Now, I have gone on and on and on and on about a bloated morbidly obese military command and control superstructure so you might well expect that I will decry the fact that Assistant Deputy Minister Finn “is in the process of adding 300 more staff [to his 4,000+ workforce] by the end of next summer,” but I do not. Project management is a highly skilled, mixed civil service and military field that is (was when I was very near the centre of the procurement business over 30 years ago) always understaffed ~ usually because of a lack of suitable and suitably qualified (engineering degrees with some specialized additional skills preferred) people.

It is important to bear in mind that, ultimately, the defence of the realm is a political responsibility … decisions are made by politicians and civil  servants on behalf of the people. We elect people to understand and meet(satisfy)  our priorities and 9184449we, implicitly, decide, every few years, what our priorities are … in 2015 we (almost 40% of the almost 70% who bothered to vote) told our politicians that we valued sunny ways, quite small and short term deficits, being green and feminist over, say, fiscal responsibility, fighting Da’esh/ISIL/ISIS terrorism and maintaining our (not anywhere near strong enough) national defences. But parsimony was Prime Minister Stephen Harper’s metaphorical middle name and as soon as the combat in Afghanistan was over he focused all of his attention on balancing the budget for the common good. By 2015 Canadians were, quite simply, tired of fiscal responsibility, low spending and of Stephen Harper, promises_promises_revival_logo-1himself. They may have attended “Red Friday” rallies to “support the troops,” but that support didn’t extend to spending more public money on defence. Promises to pull our CF-18s out of combat, to cancel the F-35 programme and do more (cheap, safe) UN peacekeeping were popular with many, many Canadians … and that’s the way things are supposed to work: we decide what we want (or think we want) and our elected governments do what we want; isn’t that right? Isn’t that how democracy is supposed to work? An, of course, we always make well informed choices, don’t we? We are not swayed by sneaky campaign advertizing, are we?

I have a personal view on how defence procurement should be organized, but Mr Finn 3995eeb1118ff2a3a15eadbac3a88e84says, “”Are we going to fundamentally change the authorities of ministers or are we going to smash it all together?” ” No, he answers “”Not at this point,”” anyway. So my preference is unlikely to happen … instead several government departments will be harnessed together and we will hope that they all want to go in roughly the same direction at roughly the same rate of speed.

Mr Finn identifies a key problem with defence procurement: accounting standards. The Conservatives, he reminds us, said that new warship would cost Canada $26 Billion; the Liberals, just a few years later, say the bill is more like $60 Billion. It is  question of both:

  1. What is being counted ~ is it just the ship building costs or is it the build costs plus full “life cycle’ costs of owning and operating the ship? and
  2. Did one side fail to take account of inflation over the years?

The answer to both questions explains the 130% price differential. The Conservatives were not being dishonest, they just wanted to “low-ball” the costs by using only the basic “build” or “sail away” costs and by using 2010 dollars to estimate the costs. The Liberals, who wanted to discredit the Conservatives in any and every way possible, used life cycle costs and dollars that reflected estimated annual inflation rates … no one lied; each party just used the numbers that supported its political campaign.

Perhaps Mr Finn’s cautious optimism is justified or, perhaps, he’s just “shilling” for his 34629E6E00000578-0-image-a-1_1463732395578political masters ~ that’s happened with senior civil servants before, time and time again, actually, in my lifetime, especially (but not always only) when the Liberals are in power. Canadians need to hope it is the former. For myself, I just wish I had seen some, concrete action, even just a few promises from Prime Minister Trudeau and Defence  Minister Sajjan on much needed defence procurement reform before big bucks are spent. But, so far: silence …

 

 

2 thoughts on “Defence procurement … don’t hold your breath”

  1. OK what we are paying both the Lib’s and Con’s for is to try. Not to give up, both parties and leaders have blown that in my estimation. We are paying the government to be effective and to lead in our stead, not dither and shag the dog.

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