Is Canada’s military procurement approach “completely broken” or just “broken”? It depends on who’s speaking.
Kevin Page, the outgoing Parliamentary Budget Officer, says it’s “completely broken”; Dan Ross, once one of the Defence Department’s most senior officials, settles for “broken.” Either way, the history of military purchases has been spotty, even sad.
Yes, there have been some contracts that have come in on time and on budget. Too many, however, have been late and over budget, the F-35 fighter jet being the latest.
The trail of problems with procurement stretches a long way back through Conservative and Liberal governments. In a paper released last week by the Conference of Canadian Defence Associations Institute, Richard Shimooka concludes that “a cursory examination of the government’s major procurements over the past 20 years reveals a common set of problems … cost overruns, delays, suboptimal performance or some combination of all three.”
Although many papers have been written about procurement, and many analyses and suggestions offered, it’s time for a blue-ribbon panel to look at what’s gone wrong, and keeps going wrong, to see whether a better process can be found. Governments come and go, but clearly something more than political oversight, or lack thereof, plagues the process.
Canadians might think their procurement problems are unique, but they’re not. Governments abroad often struggle with equipment that is late and over budget.
Two countries – Australia and Britain – have tried to centralize purchasing into one agency or ministry. Many voices in the Canadian defence industry favour this approach, perhaps because it might work better, perhaps because it could hardly be worse. Mr. Ross, with his years of experience, told a recent conference: “You need to centralize the execution of it [purchasing] into a single minister with contracting authority.”
One problem common to military purchasing equipment is complexity itself. The more complex the equipment – and much military kit is complex – the greater the chances of problems. What compounds complexity is the habit of military planners to keep adding new and, they hope, better systems during the planning and execution stages of a project. Put another way, the specs keep changing.
In the F-35 case, the desire to incorporate ever-more sophisticated computer systems drove up the cost. By one estimate from the Rand Corp., there are 130 subsystems within the plane, and 90 per cent of its functions are managed by software. Said Mr. Shimooka in his study: “There seems to be no end in sight to avionics-related cost escalation, as electronic-enabled capabilities are viewed as essential for maintaining Western supremacy over the battlefield.” Equipment for the navy and army can fall victim to this same creep of complexity.
Then there’s the propensity of politicians to milk projects for their job-creation and photo-op possibilities. Very few ministers know much about military kit, but they do know about spreading contracts and jobs associated with military kit. Regional economic benefits have been known to dominate cabinet discussions about military procurement. Where the work is to be done, rather than whether the work should be done, often colours decisions.
Should kit be built exclusively in Canada? A recent report to the government said yes, and identified five kinds of technology that should be encouraged through directed military contracts. It sounds great in theory; in practice, local preferential purchasing can drive up costs and even make for late deliveries if local companies aren’t as proficient as foreign ones.
There are, too, the vagaries of fiscal cycles. For a while, a government might be tenderly inclined toward the military, as were the governments of Paul Martin and Stephen Harper. Surpluses were the order of the day, and the military budget ran up accordingly. Then comes an economic downturn (such as now) or a government not keen on the military (such as Jean Chrétien’s) and the budget sags.
Whether the equipment has been surface ships or submarines, helicopters or fixed-wing aircraft, or even something as ostensibly simple as trucks, procurement has remained a problem. Perhaps a blue-ribbon panel could help the country avoid pitfalls in the future.