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Speeding Up Procurement

Andrew Coyne weighs in with a column in the National Post today (URL is for the piece on his blog).

Harper's C-17 quagmire
http://andrewcoyne.com/columns/2007/01/harpers-c-17-quagmire.php

“Canada’s New Government” is creating a fine mess for itself out of the C-17 contract, a deepening imbroglio that more and more has the whiff of a very old-fashioned sort of scandal. The ingredients are familiar from past such messes, which seem to attach themselves to the procurement process like zebra mussels to a sewer pipe: questionable contract specs, possible bid-rigging, political interference by regionally-minded ministers, and at the bottom of it all, the usual stone dumb economics. It has raised some very dark memories, and it is not going to go away. If anything, it is going to get worse.

The military’s requirements were straightforward enough: some long-range transport planes, of a kind that might permit Canadian soldiers and equipment to be airlifted into faraway combat zones without, as in the recent past, having to hitch a ride with the Americans. But rather than follow the process that common sense, not to say government procurement rules, might suggest, that is of entertaining competing bids, then choosing the one that offered the most bang for the fewest bucks, the process has been shrowded in intrigue and politics.

In the first place, only one bid, Boeing’s, was allowed, at a cost of $3.4-billion -- just one of a number of sole-source contracts in the last year for expensive military hardware. Moreover, as the Ottawa Citizen has reported, the rules were changed at the last minute last spring to double the planes’ required payload, from 19.5 tonnes to 39 tonnes each. As it happened, only Boeing’s C-17 met the new requirement, leaving its arch-rival Airbus out in the cold.

So far, so dubious. But this is Canada, where an agreement to purchase military equipment merely serves as the signal to start the real negotiations, over the distribution of so-called “regional benefits.” Enter Senator Michael Fortier, the minister of Public Works, whose demands that Boeing allocate a greater share of the “benefits” to Quebec than it had planned have, as reported, threatened to stall delivery of the planes. Quite what business Sen. Fortier has monkeying around in Defence policy might seem as murky as his democratic mandate to hold even the office he has, until you remember that he is also the political minister for Montreal, where much of Quebec’s aerospace industry -- and Tory electoral hopes -- are located. As he told Le Devoir in a recent interview, “we must absolutely make inroads in Montreal [in the next election]. There's no 'maybe' about this. It's more than an objective -- it's a priority.”

The reaction to this crude exercise in regional bigfooting has been predictable. Premier Gary Doer of Manitoba, where the wounds from the CF-18 debacle of twenty years ago are still fresh, has denounced the minister’s meddling in colourful language. The premier has his own political agenda, of course: there’s a provincial election likely this year, and it never hurts to run against perfidious Ottawa. But it’s also possible the premier can sense when the fix is in.

Well. We can all agree the minister should butt out. But the process, as constituted, fairly invites such interference. The problem is not the inevitable regional beard-pulling over who gets what share of Boeing’s largesse, but the very policy that there must be such “benefits” to be distributed whenever the government enters into a contract of this kind.

The feds are not so demented as to insist that the aircraft in question be constructed entirely in this country. Rather, the winning bidder is obliged to spend precisely the amount of the contract in Canada, whether on the construction of that plane or any other, including passenger planes.

First question: Why the same amount? No reason, except that it looks good politically. It makes it look as if the governmentt had contracted with Canadian suppliers to build planes in Canada, rather than paid a foreign supplier to build planes elsewhere. But Boeing didn’t get to be the world’s largest aircraft manufacturer by doing things for free. If it wanted to spend billions of dollars constructing aircraft in Canada, it would. If it has to be forced to, chances are it doesn’t. But of course it can’t be forced to. The only way the government can make it do what it otherwise wouldn’t is to pay it, by inflating the value of the contract.

If Ottawa is, in effect, subsidizing the construction of passenger aircraft, why not do so directly, rather than burying it in military contracts? Ordinarily, it does. But where it’s always politically popular to subsidize a firm that’s competing with suppliers in other countries -- even if the rest of us have to pay for it -- it’s not such a political free kick if the subsidy clearly pits one part of the country against another. Hence the Senator’s backroom machinations.

But it’s still a subsidy. So add it up. First we overpay foreign suppliers for military aircraft. Then we use the proceeds to subsidize the construction of passenger aircraft here at home, to be sold at a discount overseas. This is, you might say, Canadian industrial policy in a nutshell: Buy high, sell low.

While I agree with him on industrial offsets, when seeing dirty work with the C-17 procurement (along with much of our hysterical media) he just shows that he too is severely ignorant of things military.  Pity.

Mark
Ottawa



 
Considering that we have contracts coming up for C17, CH47, CC130 & C27s..... plenty of time to do cartweels and acrobatics in the backrooms of gov't.

Let's get the C17 contract going now - talk about the plusses & minuses later.
 
First Air Force pilots certified on the C-17 Globemaster

http://www.airforce.forces.gc.ca/newsroom/news_e.asp?cat=114&id=3015

"It's like a CC-130 [Hercules] on steroids," says pilot Major Jean Maisonneuve. It carries four times the payload, flies 40 percent faster and can fly twice as far.

And Maj Maisonneuve and Maj Jeremy Reynolds are the first Canadian Air Force pilots certified on the C-17 Globemaster III.

Maj Maisonneuve, chief check pilot at 429 Transport Squadron at 8 Wing Trenton, says the aircraft offers much in the way of tactical and operational capabilities. First, it has phenomenal stopping power.

Traveling at 209 kilometres per hour, it can come to a full stop on a runway measuring between 609 and 914 metres-that's at a weight of 200 tons. To compare, Maj Maisonneuve says that's about one-third the size of a runway found at a major Canadian airport.

For both Majors Maisonneuve and Reynolds, their certification was a bit of déjà vu. In fact, both were on exchange with the US Air Force (USAF) in the early 2000s and flew the C-17 in Iraq and Afghanistan.

Maj Maisonneuve has about 2 000 hours on the C-17. He describes the aircraft as "tactically sound", meaning it can carry all that payload long distances and can still land in austere locations. He tells of landing safely in Afghanistan on a short field using night vision goggles and no lights. "It's good for me. It's comforting for my wife and anyone who has a friend or family member going into theatre," he says.

Of the certification, which took place at Altus Air Force Base located in Oklahoma, there were three weeks of intense computer-based systems training, coupled with four weeks in the simulator and a final three weeks' training on the flight line.

The computer training is critical because there are more than 20 computers onboard the C-17 and, consequently, a smaller crew. In fact, the degree and kind of automation has removed the need for a navigator and a flight engineer. That also means, explains Maj Maisonneuve, the pilots must be able to troubleshoot and re-set certain computers themselves.  "Sometimes you have to employ the Microsoft fix; control, alt, delete," he says wryly.

MORE ON LINK

 
geo said:
Pinch me!

(Ouch!)... OK, I'm not dreaming :)

For those of us that survived the "Long March" it really does seem like a dream! Don't you dare wake me until the equipment is the ground!!
 
http://news.nationalpost.com/2013/07/30/buying-canadian-services-equipment-will-short-change-military-defence-officials-warn/
Buying Canadian services, equipment will short-change military, defence officials warn
Lee Berthiaume, Postmedia News | 13/07/30 | Last Updated: 13/07/30 8:20 PM ET

OTTAWA — A struggle is raging behind the scenes as the needs of Canada’s military smack up against the Conservative government’s desire to turn billions of dollars in planned defence spending into jobs and economic benefits.

Then-defence minister Peter MacKay was warned in a briefing note last November that a policy of always buying military equipment and services from Canadian companies would likely short-change Canada’s men and women in uniform.

The warning came after Canada’s arms industry association released a report that found the sector generated $12.6-billion in economic activity, and every billion dollars invested by the government into the industry generated $710-million in GDP and created 18,000 jobs.

The Canadian Association of Defence and Security Industries has since used that report to lobby for more attention from the federal government, including advocating for a policy of buying more military equipment and services from domestic companies.

Related
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Military spending in the North ‘critical,’ despite budget overages: Harper
CADSI president Tim Page said Tuesday the report was a first attempt to get a handle on and draw attention to the importance of the defence industry to Canada’s economy.

“Hopefully as the government makes future decisions around defence procurement,” he said, “it will have one eye on the equipment needed by the men and women in uniform to do the jobs asked of them by the government, and one eye on the economic impact that that defence spending can have on the Canadian economy and value-added jobs.”

Those efforts appear to have paid off as the Conservative government has given strong indications it accepts the industry’s argument, with then-public works minister Rona Ambrose revealing in May that “value for Canada” will be a top consideration in military purchasing.

In their briefing to Mr. MacKay, officials noted the importance of using defence spending to both meet the military’s needs “while at the same time delivering maximum benefit to industry and the Canadian economy.”

Yet they also warned industry was trying to tilt the field too far to its advantage, and if military purchases were required to go to Canadian companies, “the Department (of National Defence) would, all things being equal, likely obtain less equipment and services.”

Former military procurement chief Dan Ross, who oversaw the writing of the briefing note, said the briefing highlights the Defence Department’s concerns that industry’s drive toward a “Buy Canadian” strategy will come at the military’s expense.

“Many of the CADSI members, they equate a defence industrial strategy with guaranteeing them business,” he said.

“But you will pay more. It’s not a myth or a maybe. You will pay more, and the cost of supporting will be more. You will lack that competitive edge to get the best possible stuff … at the best price and the lowest support costs.”

That echoes warnings from some defence analysts who have noted that budgets for many key projects such as new ships, armoured vehicles and aircraft were set in 2008 — before any thought of trying to support industry was envisioned.

The officials also poked holes in the assertion that Canada’s arms industry generates $12.6-billion in economic activity for the country, even though it has become a key rationale for the government’s decision to make the sector a focus of its economic action plan.

Numerous government ministers have cited the figure since the CADSI report was released, most recently Trade Minister Ed Fast during an event in London, Ont., on Tuesday.

The defence officials noted that only 90 companies out of 2,000 had responded to the study, which CADSI commissioned accounting firm KPMG to undertake.

“Despite this weak response rate, the results were nevertheless relied upon to estimate total industry revenues and generate other key figures presented in the study,” reads the briefing note.

They also questioned whether government investments in other sectors would generate a better bang for the buck than money sunk into the arms industry.

“There is no comparative analysis between the impact of government spending on the defence and security sector against other segments of the Canadian economy,” the briefing note reads, “some of which, such as the aerospace sector, may yield even greater benefit per dollar invested by the government.”
 
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