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
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. It begins with integrated, comprehensive and focused analyses that shape the development or refinement of CAF capabilities. The department will ensure subsequent procurement is set up for success through rigorous and timely consideration in the project approval process.
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 were previously 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 that timely delivery of projects and capabilities will continue in FY 2021-22. Examples of these reforms include the Risk Based Defence Procurement Pilot and working with internal organizations to determine their need and capacity to implement enhanced contracting authority.
Gender-based analysis plus (GBA+)
In order to ensure effective defence procurement, the department will also continue to build Defence
Team capacity to conduct a GBA+, to apply GBA+ findings and conclusions to decision-making for equipment acquisition and materiel support activities, and to integrate them into the requirements and/or evaluation criteria of Request for Proposals.
An example is the Canadian Army (CA)'s Soldier Operational Clothing & Equipment Modernization initiative, which is aimed at ensuring that any new clothing meets the needs of all wearers. GBA+ considerations will help inform the fit, form, and function of operational uniforms through a concerted effort to increase body measurement data on smaller stature soldiers, who are often, but not exclusively, female.
United Nations' 2030 Agenda for Sustainable Development and the United Nations Sustainable Development Goals (SDGs)
As directed by SSE initiative 100 and the Defence Energy and Environment Strategy, Defence procurement will continue to adhere to Canadian environmental standards and integrate energy and environmental considerations into procurement decision-making. In support of Government of Canada's net-zero emissions by 2050 objective, procurement of new defence capabilities will conform to the Greening Government Strategy by pursuing energy and operational efficiency. The environmental and energy considerations in defence procurement support the United Nations' 2030 Agenda for Sustainable Development and the United Nations Sustainable Development Goal #13 Climate Action; and the GBA+ in decision-making for equipment acquisition and materiel support activities supports the United Nations Sustainable Development Goal #5 Gender Equality.
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 procurement where the financial value exceeds PSPC's existing limits. The Risk Based Defence Procurement Pilot which was launched on 1 November 2018 for 18 months has been extended until March 2025 to provide PSPC and DND with additional opportunities in support of streamlining defence procurement.
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.
Information Technology 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 few of the initiatives that ensure defence procurement is streamlined:
- Extend the Risk Based Defence Procurement Pilot to the end of March 2025, as announced by Treasury Board in June 2020. This pilot establishes a risk-based contract approval process for low-risk defence procurement, where the financial value exceeds PSPC's existing limits. This extension will provide PSPC and DND with additional opportunities in support of streamlining defence procurement;
- Increase the transparency and timeliness of communication with defence industry associations, including meetings with Canadian industry through a Defence Industry Advisory Group and other forums to enhance public access to information on Defence procurement activities. While the Chair for the Defence Industry Advisory Group will be transferring from National Defence to Innovation, Science and Economic Development Canada for 2021, the Assistant Deputy Minister of the materiel group will continue to actively participate in the Group and bring forward important issues for discussion and dialogue with industry. In addition, DND officials will participate in several major industry events throughout FY 2021-22, such as CANSEC and the CAF Outlooks, to keep the industry informed of defence investment plans and the progress of defence projects, as well as to engage industry representatives on their concerns and challenges. Industry engagement activities will include in-person activities, where public health conditions permit, including leveraging virtual engagement platforms to ensure we are maintaining communications with Canadian defence industry as much as possible given the circumstances; and
- Continue to reduce project development and approval time in the department for low-risk and low-complexity projects through improved internal coordination, increased delegation and strengthened approval processes in support of SSE initiative 94. It is anticipated that this initiative will be completed in FY 2021-22.
Planned results
| Departmental Results | Departmental Result Indicators | Target | Date to achieve target | 2017–18 Actual results | 2018–19 Actual results | 2019–20 Actual results |
|---|---|---|---|---|---|---|
| 5.1 Defence procurement is streamlined | % of projects that meet the approved project development and approval timelines (low risk and low complexity projects) | 100% | 31 March 2022 | Not Available New indicator as of 2018-19 | Not Available New indicator as of 2018-19 | Results Not Available* |
| % of goods and services contracts that are awarded within established performance targets | 100% | 31 March 2022 | Not Available New indicator as of 2018-19 | 100% | 92% |
Notes:
- * Statistics cannot be provided until the closure of the initiative so that there is a larger data set. The Full Operating Capability date was delayed to July 2021.
- Financial, human resources and performance information for the Department of National Defence and the Canadian Armed Forces' Program Inventory is available in the GC InfoBase.
Departmental Result 5.2 – Defence equipment acquisition is well-managed
To manage the lengthy acquisition process required to develop and implement complex projects, the department will grow and professionalize the procurement workforce. Key focus for FY 2021-22 will include:
- Maintain the efforts of the Professionalization Working Group, promoting access to specialized training;
- Continue the development of a competency-based approach to project management organization seeking to align and right-fit competencies with the roles within a project management organization;
- Continue to qualify project managers for major crown projects and align the program with Treasury Board of Canada Secretariat (TBS) direction on project management through the Project Management Competency Development Program; and
- Enhance project performance by means of professionalizing project management teams through the roll-out of three-point estimating techniques, earned value management and negotiations training.
Key equipment acquisition projects in FY 2021-22 include:
- Manned airborne intelligence, surveillance and reconnaissance;
- Canadian Surface Combatant;
- Arctic and Offshore Patrol Ship;
- Joint Support Ship;
- Fixed-wing Search and Rescue Aircraft Replacement Project;
- Future Fighter Capability Project;
- Remotely Piloted Aircraft System;
- Strategic Tanker Transport Capability;
- Logistics Vehicle Modernization;
- Armoured Combat Support Vehicle;
- CP-140 Aurora Incremental Modernization Project;
- Interim Fighter Capability Project;
- Hornet Extension Project;
- CH-148 Cyclone Project; and
- Victoria-class Modernization.
For more information on these and other projects, consult the Investing in Equipment and Current Projects webpage.
Arctic and Offshore Patrol Ship
The first Arctic and Offshore Patrol Vessel, Her Majesty's Canadian Ship (HMCS) Harry DeWolf was formally accepted and delivered to Canada on 31 July 2020.
Planned results
| Departmental Results | Departmental Result Indicators | Target | Date to achieve target | 2017–18 Actual results | 2018–19 Actual results | 2019–20 Actual results |
|---|---|---|---|---|---|---|
| 5.2 Defence equipment acquisition is well-managed | % of capital equipment projects that remain in most recent approved scope | 100% | 31 March 2022 | 100% | 100% | 100% |
| % of capital equipment projects that remain on most recent approved schedule | 100% | 31 March 2022 | 56% | 81.25% | 100% | |
| % of capital equipment projects that remain within most recent approved expenditure authority | 100% | 31 March 2022 | 100% | 100% | 100% |
Financial, human resources and performance information for the Department of National Defence and the Canadian Armed Forces' Program Inventory is available in the GC InfoBase.
Departmental Result 5.3 – Defence information technology acquisition is well-managed
- DND will continue to deliver on key information management and information technology as outlined in SSE. Key focus for FY 2021-22 will include:
- Stabilize and optimize third line and support for critical Command and Control (C2) applications and systems;
- Act as the departmental representatives for a wide range of in-service strategic/non-tactical computer information systems and strategic communication services;
- Provide assured and timely in-service support to assigned critical/high-priority strategic and operational joint capabilities and services;
- Implement and integrate capability management approach with relevant capital projects and project-delivery activities in the domains of space, cyber and joint capabilities; and
- Collaborate with other capability delivery organizations, within and outside of DND to ensure maximized business and operational benefits.
- DND will deliver full operational capability or commence the following projects and initiatives in FY 2021-22:
- Defence Lessons Learned System;
- Secure Iridium Replacement Initiative;
- Search and Rescue Mission Management System Replacement;
- Design and produce a common Command and Control, Communications, Computers, Intelligence, Surveillance and Reconnaissance (C4ISR) backbone;
- Polar Epsilon 2 Project; and
- Delivery of the Ground Segment - Phase 2 of the Medium Earth Orbit Search and Rescue Project.
Planned results
| Departmental Results | Departmental Result Indicators | Target | Date to achieve target | 2017–18 Actual results | 2018–19 Actual results | 2019–20 Actual results |
|---|---|---|---|---|---|---|
| 5.3 Defence information technology acquisition is well-managed | % of information technology projects that remain in approved scope | 100% | 31 March 2022 | 100% | 94% | 100% |
| % of information technology projects that remain on approved schedule | 100% | 31 March 2022 | 95% | 88% | 94% | |
| % of information technology projects that remain within approved expenditure authority | 100% | 31 March 2022 | 100% | 100% | 100% |
Financial, human resources and performance information for the Department of National Defence and the Canadian Armed Forces' Program Inventory is available in the GC InfoBase.
Departmental Result 5.4 – Supplies are available and well-managed
In FY 2021-22 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 to inform decision-making around the areas of materiel readiness, compliance and optimized cost;
- 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; and
- Work to further streamline governance, control and execution of all supply chain functions to support training and operations.
Planned results
| Departmental Results | Departmental Result Indicators | Target | Date to achieve target | 2017–18 Actual results | 2018–19 Actual results | 2019–20 Actual results |
|---|---|---|---|---|---|---|
| 5.4 Supplies are available and well-managed | % of stock that is unavailable to meet forecasted demand | 7.93% or less | 31 March 2022 | 5.85% | 5.72% | 7.61% |
| % of stock disposed that was identified as surplus* | At least 23% | 31 March 2022 | Not Available New indicator as of 2018-19 | Not Available* | 1.67% |
Notes:
- * Result not available. For additional context see the Department of National Defence and the Canadian Armed Forces' 2018-19 Departmental Results Report.
- Financial, human resources and performance information for the Department of National Defence and the Canadian Armed Forces' Program Inventory is available in the GC InfoBase.
Planned budgetary financial resources
| 2021-22 budgetary spending (as indicated in Main Estimates) | 2021–22 Planned spending | 2022–23 Planned spending | 2023–24 Planned spending |
|---|---|---|---|
| 4,741,325,826 | 4,741,325,826 | 4,310,164,815 | 3,538,411,344 |
Financial, human resources and performance information for the Department of National Defence and the Canadian Armed Forces' Program Inventory is available in the GC InfoBase.
Planned human resources
| 2021–22 Planned full-time equivalents | 2022–23 Planned full-time equivalents | 2023–24 Planned full-time equivalents |
|---|---|---|
| 2,843 | 2,832 | 2,836 |
Financial, human resources and performance information for the Department of National Defence and the Canadian Armed Forces' Program Inventory is available in the GC InfoBase.
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