Fun with numbers

For years Department of National Defence officials and senior military officers had “low balled” costs so as not to frighten off elected politicians and taxpayers who, only reluctantly, agree to reequip the Canadian Armed Forces on an ongoing basis. This was happening 30+ years ago when I was, personally, involved in the coordination, control and management of the projects that brought us new ships, tanks and fighter planes and I am 100% sure it continues today.

Now, Murray Brewster, reporting for CBC News, says that “The estimated cost of Wasserbild-Canada-JSS-800x289building two new supply ships for the Canadian navy has climbed to $3.4 billion, an official in the procurement minister’s office said Tuesday … [and] … That’s a $1.1 billion increase over the last projection for the Joint Support Ship program, which is years behind schedule.” As usual, officials in the procurement agency ~ under Public Services and Procurement Minister Carla Qualtrough ~ couldn’t say why and referred to the questions to the Defence Department where Pat Finn, the Assistant Deputy Minister for Materiel, acknowledged that the high costs ($4.1 Billion) projected some years ago by the Parliamentary Budget Officer and pooh-poohed by defence and procurement officials and admirals and generals are now well within range.

It’s not a scandal; it, low balling costs, is part of how Ottawa does business … not everyone (in fact hardly anyone), even inside the military, actually understands life cycle costing … almost no one in the media does and government (politicians and admirals) rely upon the media to communicate costs to taxpayers so people tend to remember the (relatively low) direct capital (fly-away or drive away or sail away) costs and ignore the costs of fuel and spare parts and maintenance and modification over, say, 30 years of service and the costs of new runways and docks and hangers and tools and test equipment and training that are, almost always much, much higher over the years. But maxresdefaultshipbuilding in Canada has been plagued by escalating costs and delays for generations and it is one of the reasons that Vice Admiral Mark Norman was so keen to get the MV Asterix built as an auxiliary vessel after all three of Canada’s former supply ships (Preserver, Protecteur, and Provider) were taken out of service in the late 20th and early 21st centuries.

“[Minister] Qualtrough was asked last week at a major defence industry trade show how much the vessels would cost … [and] … She and her officials said they were unable to provide an estimate at the time, but insisted the program had adequate oversight and it would not turn into a technical, bureaucratic and financial calamity similar to the federal government’s Phoenix payroll system.

The vessels are being built at Seaspan in Vancouver and likely won’t be in the water until 2022 or 2023,” Mr Brewster says.

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