Skip to main content

The Globe and Mail

Ottawa eyes plan to loosen DND’s grip on military procurement

Defence Minister Peter MacKay checks out the cockpit of the F-35 Joint Strike Fighter after the Conservative government announced its intention to purchase 65 of the next-generation planes at an Ottawa news conference on July 16, 2010.

Adrian Wyld/The Canadian Press

The Harper government, eager to fix Canada's chronically dysfunctional system for buying military equipment, is considering changes that would strip the Department of National Defence of significant responsibility in steering major purchases.

Stephen Harper and staff in the Prime Minister's Office are determined to reform the way Canada buys military equipment after a string of troubled purchases, from F-35 fighter jets to supply ships to combat vehicles, have left the impression the Conservatives are failing to effectively manage this spending.

One option under serious study is the creation of a permanent secretariat, reporting to the Department of Public Works, that would take responsibility for all major military procurements above a certain dollar value, a Department of National Defence source said.

Story continues below advertisement

Such a shift would signal the Harper government has lost faith in National Defence's ability to safeguard the public purse. It would also represent an important reduction in DND's traditional role in drawing up specifications for big expenditures: in effect, the designing and selecting of the options for purchase.

A big embarrassment for DND last week – when the Harper government shut down a project to buy new army trucks because National Defence was trying to spend as much as 86 per cent more than authorized on the vehicles – is being held up as the last straw by procurement reformers.

"In the end, something has to be done to fix [military purchasing] and the truck is the obvious symptom of that," one DND official said.

There's keen interest in replicating Ottawa's 2011 success in selecting winners to build $33-billion worth of combat and non-combat vessels without sparking a regional political backlash of the kind that plagued the Mulroney government in the late 1980s. The decision to pick shipyards in Halifax and British Columbia was largely managed by Public Works, not Defence.

Canada is hardly alone when it comes to headaches from military procurement gone awry, where costs soar past the amount authorized for spending or industry bitterly complains about an unfair competition.

The Australian government, for instance, created a "Projects of Concern" process in 2008 to rescue failing military procurements by focusing efforts on those purchases that required salvaging. Troubled projects are added to a critical list of procurements until the problems are remedied.

The Canadian government wants to avoid problems before they happen, of course, but the idea of applying special care and handling to major projects has intrigued officials who are studying options for revamping procurement.

Story continues below advertisement

Ottawa has considered the notion of a standalone central purchasing agency but judged it too onerous. There's no support among the Harper cabinet for creating an arm's-length entity, sources say.

Australia's experience with an semi-autonomous defence procurement agency has been mixed. The Australian Defence Materiel Organization found itself under attack last year after a series of procurement bungles including delays and cost overruns for artillery and warship acquisitions.

In military procurements, DND is responsible for taking a required purchase and developing the specifications for precisely what features are needed. This can be a lengthy process, partly because regular turnover among project managers at National Defence means the task of drawing up specifications ends up being restarted more than once.

National Defence's involvement more often than not results in the department picking the supplier before a competition has been held. That's because it draws up specifications that can be met by only one product – the one it likes best.

That's the heart of the criticism levelled by Auditor-General Michael Ferguson this spring over National Defence's handling of the F-35 jet procurement, where the department chose the plane without running a proper competition.

Under the proposed new system for major purchases, the Defence Department would tell the secretariat what its requirements are. But it would hand responsibility for generating the options and specifications to Public Works.

Story continues below advertisement

At the end of the process, the new procurement secretariat would return to the Minister of National Defence and unveil the options for purchasing before launching a competition for suppliers. The military would still have the final say on whether the options put forward meet its requirements, but National Defence would no longer be able to tailor the specifications to a particular supplier's vehicle, equipment, vessel or plane.

Report an error Licensing Options
About the Author
Parliamentary reporter

Steven Chase has covered federal politics in Ottawa for The Globe since mid-2001, arriving there a few months before 9/11. He previously worked in the paper's Vancouver and Calgary bureaus. Prior to that, he reported on Alberta politics for the Calgary Herald and the Calgary Sun, and on national issues for Alberta Report. More


The Globe invites you to share your views. Please stay on topic and be respectful to everyone. For more information on our commenting policies and how our community-based moderation works, please read our Community Guidelines and our Terms and Conditions.

Please note that our commenting partner Civil Comments is closing down. As such we will be implementing a new commenting partner in the coming weeks. As of December 20th, 2017 we will be shutting down commenting on all article pages across our site while we do the maintenance and updates. We understand that commenting is important to our audience and hope to have a technical solution in place January 2018.

Discussion loading… ✨