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. 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.The article is also interesting for some of its observations on similar approaches in Australia. And contrast that philosophy with the partial (?) privatisation of procurement contemplated in the UK.
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. 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.
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.
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.
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.
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.
Further reading on this subject:
Army trucks project cancelled after DND added $300 million to price tag without permission
The Defence Department had received government approval in 2009 to move forward with the $430 million purchase of 1,500 off-the-shelf medium-sized trucks. But in subsequent years department and military officials began adding more capabilities to what they wanted in the vehicles, bumping the estimated cost to between $730 million and $800 million.Army trucks project canned due to $300M cost overrun
The cancellation is not fair to contractors who invested time and money into the bid preparations, NDP defence critic Jack Harris argued. He said taxpayers are too often kept in the dark about the ballooning costs of military purchases.Read that last remark carefully. The contractors were not kept in the dark; the taxpayers were.
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