Procurement of Capabilities

Description

Procure advanced capabilities to maintain an advantage over potential adversaries and to keep pace with allies, while fully leveraging defence innovation and technology. Streamlined and flexible procurement arrangements ensure Defence is equipped to conduct missions.

Planning highlights

Through agile and innovative procurement, the department will procure a mix of advanced capabilities to manage today’s risk, regain the technical and military operational advantages and maintain interoperability with allies.

Effective defence procurement is vital to ensuring the Canadian Armed Forces (CAF) is equipped and ready to fulfill the important missions required to protect and defend Canada and Canadians.

The department will collaborate with the North American Aerospace Defense Command (NORAD) to advise on the requisite capabilities and areas of investments required to effectively execute the continental defence missions as it pertains to Strong, Secure, Engaged: Canada’s Defence Policy (SSE) initiatives 109 and 111, North Warning System renewal and NORAD Modernization.

Reforms will be introduced and implemented to both streamline and accelerate defence procurement and build on recent measures to improve procurement across the government, reducing complexity and redundancy, in order to ensure the timely delivery of projects and capabilities. Examples of these reforms includes the Risk Based Contracting Pilot and working with internal organizations to determine their need and capacity to implement enhanced contracting authority.

Experimentation

Public Service and Procurement Canada (PSPC), Treasury Board Secretariat and the Department of National Defence (DND) established a working group and developed options for a risk-based contract approval process for defence procurements where the financial value exceeds PSPC’s existing limits. As a result, the Risk Based Contracting Pilot was launched on 1 November 2018 for 18 months and is set to expire in April 2020.

Additional Defence related experimentation activities are outlined in this report under Core Responsibility 4 – Future Force Design.

Key Corporate Risk(s)

There are many risks associated with the Procurement of Capabilities Core Responsibility. Three of the Key Corporate Risks are articulated below:

Materiel Procurement – There is a risk that DND/CAF may have difficulty procuring materiel capabilities at the right level to support operations.

IT Procurement – There is a risk that DND/CAF may have difficulty procuring information technology capabilities at the right level to support operations.

Materiel Maintenance – There is a risk that DND/CAF may have difficulty maintaining its materiel capabilities at the right level to support operations.

The risks above can affect the department’s ability to achieve the Departmental Results of the Procurement of Capabilities Core Responsibility.

As the Defence Departmental Results Framework reflects a chain of delivery from conceiving of the required armed forces, to developing them and then executing operations, the activities to mitigate the risks to the Procurement of Capabilities Core Responsibility can also be found in other Core Responsibilities which deliver building blocks that enable the results of Procurement of Capabilities.

Departmental Result 5.1 – Defence procurement is streamlined

Streamlined and flexible procurement arrangements help ensure DND is ready and equipped to conduct missions. Assessing the project process time helps measure the success of newly introduced processes. Below are a couple of initiatives to ensure defence procurement is streamlined:

• Treasury Board approval will be sought in winter 2020 to fully implement the process of Risk Based Contracting approach to contract approvals, which is being piloted until April 2020; and
• Increase the transparency and timeliness of communication with defence industry associations, including meetings with Canadian industry through a Defence Industry Advisory Group and other boards. With the Chair for the Defence Industry Advisory Group transferring to the department’s materiel group for 2020, there are plans to hold four meetings over the 2020 calendar year (dates to be determined). The Director General International and Industry Programs will serve as the Group’s secretariat during this period and will work with the industry associations; Public Services and Procurement Canada; Innovation, Science and Industry; and Global Affairs Canada in setting agendas, preparing related meeting material and producing Records of Decisions for circulation to Group members and relevant stakeholders.

Planned results

Departmental Result 5.2 – Defence equipment acquisition is well-managed

• To manage the prolonged acquisition process required to develop and implement complex projects, the department will grow and professionalize the procurement workforce. This includes the ongoing efforts of the Professionalization Working Group, promoting access to specialized training and coordinating competency development.
• Key equipment acquisition projects in 2020-21 include:
  • Canadian Surface Combatant^{Footnote cii};
  • Arctic and Offshore Patrol Ships^{Footnote ciii};
  • Fixed Wing Search and Rescue Aircraft^{Footnote civ};
  • Joint Support Ship^{Footnote cv};
  • Future Fighter Capability Project^{Footnote cvi};
  • Remotely Piloted Aircraft System^{Footnote cvii};
  • Medium Support Vehicle System^{Footnote cviii};
  • Logistics Vehicle Modernization^{Footnote cix};
  • Armoured Combat Support Vehicle Project;
  • CP-140 Aurora Incremental Modernization Project^{Footnote cx} ; and
  • Cormorant Mid-Life Upgrade project^{Footnote cxi}.

For more details on these and other projects, refer to the following website(s):

• Investing in Equipment and Current Projects^{Footnote cxii}

Equipment for CAF

Medium Support Vehicle System Standard Military Pattern trucks with Armoured Protection System cabs and Load Handling System trailers were delivered between 2018 and 2020. These capabilities will facilitate transportation of personnel, cargo and equipment both at home and in support of combat services with necessary support elements. In 2019, twelve trucks equipped with armoured protection system and two trailers were deployed to Latvia as part of the Operation REASSURANCE to support NATO’s collective defence of Central and Eastern Europe. In 2020, it is anticipated that more trucks with trailers will deploy to Latvia.

Mack Defense LLC was awarded a contract in June 2015 to procure 1 537 Standard Military Pattern trucks, 157 Armoured Protection Systems and 300 and Load Handling System trailers designed to replace the 40+ year old Medium Logistic Vehicle Wheeled capability. The in-service support contract is projected for the 20 years lifespan of the capability.

Planned results

Departmental Result 5.3 – Defence information technology acquisition is well-managed

DND will continue to deliver on key information management and information technology capital projects as outlined in SSE. Key focus for 2020-21 will include:

Defence cryptology modernization efforts;

• Search and Rescue mission management application enhancement;
• Satellite communication capabilities;
• Design of Joint Electronic Warfare support capability;
• Design of Cyber Defence capabilities; and
• Delivery of maritime surveillance capability-building on RADARSAT Constellation Mission.

DND will continue to adopt project management practices to expedite delivery and to retain agility and flexibility in the fast evolving information technology capability delivery domain. This effort will include:

• Early engagement with industry and delivery partners;
• Close engagement with Public Services and Procurement Canada and Innovation, Science and Economic Development Canada to streamline our processes; and
• Close engagement with Treasury Board of Canada Secretariat/the Office of Chief Information Officer to ensure alignment with Government of Canada Digital policy, architecture and standards.

DND will deliver full operational capability for the following projects in FY 2020-21:

• Defence Cryptographic Modernization Project – Network Encryption Family;
• Defence Cryptographic Modernization Project – Identification Friend or Foe; and
• Mercury Global Project.

Planned results

Departmental Result 5.4 – Supplies are available and well-managed

In FY 2020-21 the department will enhance materiel accountability by implementing modern, effective inventory controls, supply chain management and inventory valuation, such as:

• Develop and implement a Defence Supply Chain performance management framework that informs decision-making around the areas of Materiel Readiness, Compliance and Optimized Cost; and
• Continue to modernize the business processes for substantive and enduring materiel management improvements, including modernizing the disposal process. The development of an information technology solution to conducting disposal business processes is being explored to increase Defence’s analytic ability to manage and monitor disposal activities and decrease the level of effort required by materiel managers and materiel custodians when identifying materiel disposal.

Planned results

Planned budgetary financial resources

Planned human resources