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. 

Results

Effective defence procurement remained vital to ensure the Canadian Armed Forces (CAF) had the necessary range of capabilities required to protect and defend Canada and Canadians. To achieve this goal it was necessary to reform Canada’s procurement model, reducing complexity and redundancy, in order to ensure the timely delivery of projects. During FY 2018-19, the department:

  • Used procurement to incentivize Canadian research and development in important and emerging technological areas;
  • Governance committees have been established at the Deputy Minister and Assistant Deputy Minister levels, which have enabled integrated and effective decision-making for defence and major Canadian Coast Guard procurements. The governance structure is intended to improve the implementation of key initiatives by adopting a coordinated, streamlined, and whole-of-government approach; and
  • Steps have been taken in 2018-19 to help streamline defence procurement and build on measures to improve procurement across government. These measures helped keep us on track with planned budget profiles and to deliver new capabilities when they are needed.
Departmental Result 5.1 – Defence procurement is streamlined
  • In FY 2018-19, the department reduced departmental approval times through:
    • A department-wide integrated program view for all capital projects was developed. The integrated program view looks at every aspect of a project’s life, from start to finish, and greatly facilitated discussions on the best way to manage all equipment acquisition considering our capacity to execute programs; and
    • Initiatives of the Project Approval Process Renewal continued to result in reduced approval times, specifically eliminating the requirement for multiple Expenditure Authority approvals by the Minister of National Defence.
  • To increase transparency and timeliness of communication with defence industry associations, an advisory group has been established to allow for discussions with defence industry representatives on crosscutting issues in defence procurement, which have helped inform the Government’s procurement approach. The advisory group includes Assistant Deputy Ministers of Public Services and Procurement Canada ; the Department of National Defence (DND); Innovation, Science and Economic Development Canada; and Global Affairs Canada. Industry membership in the group includes the President of the Canadian Association of Defence and Security Industries, the President of the Aerospace Industries Association of Canada, and industry stakeholders from a mix of sectors, regions, and sizes.
  • The Minister of National Defence received authority for the procurement of goods and services up to $5 million, and a deliberate phased approval to implement this authority throughout DND was started in FY 2018-19.

Results achieved

Departmental Results Performance indicators Target Date to achieve target 2018-19 Actual results 2017–18 Actual results 2016–17 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) To be determined
by 31 March 2019*
To be determined
by 31 March 2019
Results Not
Available
New indicator as
of 2018-19*
Results Not
Available
New indicator as
of 2018-19
Results Not
Available
New indicator as
of 2018-19
% of projects and services contracts that are awarded within established performance targets 100% 31 March 2019 100% Results Not
Available
New indicator as
of 2018-19
Results Not
Available
New indicator as
of 2018-19

Notes:

* A new Project Approval Directive which supports SSE initiative #94, aiming to reduce process and allow projects to be completed in a shorter time, will come into effect in fall 2019. Performance results will be available beginning June 2020.

For more information about the Department of National Defence and the Canadian Armed Forces performance indicators, please visit GC InfoBaseFootnote lxxxi.

Departmental Result 5.2 – Defence equipment acquisition is well-managed
  • The department continued to grow and professionalize the procurement workforce to strengthen the capacity to manage the acquisition and support of today's complex military capabilities. Key highlights for FY 2018-19 include:
    • Since 2015, the department has seen a steady growth in Materiel procurement specifically, a 4.3% growth for 2018-19;
    • The Learning Strategy was reviewed to ensure that the ensuing Implementation Strategy continued to be aligned with the competencies required of Materiel Acquisition and Support; and
    • Work continued towards becoming full participants in the International Defense Education and Acquisition Memorandum of Understanding to Leverage International Best Practices. In particular, DND/CAF investigated partnership opportunities with the Defense Acquisition University in the United States.
  • Highlights from FY 2018-19 on the department’s key equipment projects include:

Arctic and Offshore Patrol Ships continued construction:

  • In December 2018, a contract amendment was signed for the acquisition of six ships and extension of the schedule by 18 months; and
  • Ship 1, Her Majesty’s Canadian Ship (HMCS) Harry DeWolf was launched during a public ceremony and began harbour trial activities in preparation for sea trials in November 2019.

Joint Support Ship continue design and production engineering:

  • In June 2018, early block construction of Joint Support Ships (the Protecteur-class ships) started;
  • The prime contractor Vancouver Shipyards Ltd. awarded significant sub-contracts to the Canadian supply chain; and
  • In February 2019, construction of the first Joint Support Ship was re-sequenced to proceed ahead of the Offshore Oceanographic Science Vessel at Seaspan Shipyards.

Canadian Surface Combatant Project selected a warship design:

  • In October 2018, Canada and Irving Shipbuilding Inc. concluded the bid evaluation and announced Lockheed Martin Canada as the preferred bidder to provide the design and design team for the Canadian Surface Combatants; and
  • In February 2019, the Government of Canada awarded a Definition Contract to Irving Shipbuilding Inc. who, in turn, awarded a Definition Subcontract to Lockheed Martin Canada to finalize the Canadian Surface Combatant design that will be built at Irving Shipbuilding’s Halifax Shipyard. The design is based on the company BAE Systems Type 26 Global Combat ShipFootnote lxxxii.

CF-18 fighter aircraft replacement open and transparent competition (Future Fighter Capability Project (FFCP))*:

  • Formal supplier engagement activities were conducted in March, April, June and July 2018. During this period, representatives of the Government of Canada engaged with eligible suppliers to share and obtain initial feedback on Canada’s requirements and notional procurement approach for this competition;
  • From 23 April to 1 May 2018, Innovation, Science and Economic Development Canada, in concert with National Defence, Public Services and Procurement Canada and Canada’s regional development agencies, conducted six regional forums across the country to position Canadian industry for this opportunity;
  • From May to June 2018: FFCP staff visited suppliers’ facilities to familiarize themselves with operations, support, and infrastructure requirements associated with each supplier’s aircraft;
  • In October 2018, Canada released the draft Request for Proposal (RFP) to eligible suppliers for their review and feedback;
  • In November and December 2018, Canada hosted eligible Suppliers for a first-hand look at existing fighter operations and infrastructure at its main operating bases;
  • On 21 December 2018: Comments and Feedback on the draft RFP were provided by the Supplier Teams; and
  • From January to March 2019: Formal engagements with eligible suppliers continued to refine the draft RFP and to support an RFP release in 2019.

CF-18 interim capability to supplement the CF-18 fighter aircraft fleet until the permanent replacement arrives - Interim Fighter Capability Project (IFCP)*:

  • Entered into implementation phase after being granted Project Approval (Implementation);
  • Signed Government of Canada Purchasing Arrangement with the Australian Government for the purchase of aircraft, spare parts, and support equipment occurred in November 2018; and
  • The first two F/A-18 aircraft were flown to Canadian Forces Base (CFB) Cold Lake, Alberta in February 2019.

Tactical Armoured Patrol Vehicle (TAPV):

  • The Canadian Army (CA) received the last of its 500TAPVs delivered by the project in December 2018;
  • Management of the vehicle fleet has transitioned from the project to the in-service management team; and
  • The vehicle has demonstrated its versatility and capability by deploying with Operation LENTUS in support of domestic flood relief operations.

Logistics Vehicle Modernization (LVM):

  • After a significant amount of effort and great collaboration, LVM entered the Definition phase in February 2019; and
  • Formal industry engagement under the guidance of inter-departmental Defence Procurement StrategyFootnote lxxxiii governance is underway.

*Note: The CF-18, which was adapted from the American F/A-18, is also known as the officially designated CF-188 in Canadian use.

Arrival of the first F/A-18A - at 4 Wing Cold Lake, Alberta

Cette photo montre plusieurs personnes en tenue de camouflage portant des gilets de haute visibilité. Elles semblent travailler sur l'avion à réaction F/A-18A Hornet.

Aircrew members of the Royal Australian Air Force and the Royal Canadian Air Force work outside the Aerospace Engineering Test Establishment after the arrival of the first F/A-18A Hornet from Australia at 4 Wing Cold Lake, Alberta, on 16 February 2019.

Photo: Able Seaman Darren McDonald


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

Results achieved

Departmental Results Performance indicators Target Date to achieve target 2018-19 Actual results 2017–18 Actual results 2016–17 Actual results
5.2 Defence equipment acquisition is well-managed % of capital equipment projects that remain in approved scope 100%
31 March 2019 100%
100%
100%
% of capital equipment projects that remain on approved schedule 100% 31 March 2019 81.25%* 56%
87%
% of capital equipment projects that remain within approved expenditure authority 100% 31 March 2019 100% 100% 100%

Notes:

* The measure is based on 16 Major Projects that are identified by the Department of National Defence and/or the Treasury Board Secretariat to be of significant enough complexity or risk that they should be discussed at regular interdepartmental oversight committee meetings. Schedules are being reviewed for three of these major projects to take risk into account.

For more information about the Department of National Defence and the Canadian Armed Forces performance indicators, please visit GC InfoBaseFootnote lxxxv.

Departmental Result 5.3 – Defence information technology acquisition is well-managed
  • New reporting enhancements have been developed to provide more accurate information on the health of projects. These are presented to partners, clients, stakeholders and colleagues at monthly meetings. The new reporting enhancements reduce the time projects need to produce status reporting and increase overall reporting efficiency.
  • To enhance interoperability of new information technology-enabled systems, both within DND and across the Government of Canada to prevent the development of disparate solutions to common information technology problems, DND continued to be a member of the Government of Canada Enterprise Architecture Review Board and has submitted projects for the board’s review. DND also started the process of establishing its own enterprise architecture review process and governance.

Results achieved

Departmental Results Performance indicators Target Date to achieve target 2018-19 Actual results 2017–18 Actual results 2016–17 Actual results
5.3 Defence information technology acquisition is well-managed % of information technology projects that remain in approved scope 100%
31 March 2019 94%* 100%
100%
% of information technology projects that remain on approved schedule 100% 31 March 2019 88%** 95%
90%
% of information technology projects that remain within approved expenditure authority 100% 31 March 2019 100% 100% 95%

Notes:

* Deviations in scope (6%) were the result of changes needed to satisfy emerging requirements typical of rapidly evolving complex information technology.

** Deviations in schedule (12%) were the result of unforeseen delays in contractor delivery of capability.

For more information about the Department of National Defence and the Canadian Armed Forces performance indicators, please visit GC InfoBaseFootnote lxxxvi.

Departmental Result 5.4 – Supplies are available and well-managed
  • DND/CAF continued to enhance materiel accountability by implementing modern, effective inventory controls, supply chain management, and inventory valuation. In FY 2018-19:
    • The department continued to deliver on the 2016 Inventory Management Action Plan by completing 16 of its 17 commitments this year, exceeding its targets in stocktaking and stock verification. For the 17th commitment, disposal of items identified as stagnant, 98% of the items were disposed;
    • The department completed its review to determine the best option to govern National Defence’s end to end supply chain, and on 18 October 2018, formal joint accountability was assigned for the end to end performance of the Defence supply chain to Assistant Deputy Minister (Materiel) and Director of Staff - Strategic Joint Staff; and
    • As one of the Data, Innovation and Analytics group Value Cases to enhance supply chain effectiveness and materiel readiness, Modernization and Integration of Sustainment and Logistics (MISL) will modernize and improve Warehousing and Distribution operational performance by adopting industry/Allies best-practices, business processes, and by leveraging technology in a single integrated system. The primary objectives are to improve user interface (simplified, integrated, automated), effectiveness and efficiency, service delivery times, supply chain analytics capabilities, and materiel readiness. The original intent was to have MISL completed by the end of 2022; however, the initiative did not receive full funding during FY 2018-19, and therefore the work-plan and timeline have been extended.
  • The department maintained and delivered on its robust materiel management oversight plan comprising of contracted stocktaking/verification activities and reporting of results.

Results achieved

Departmental Results Performance indicators Target Date to achieve target 2018-19 Actual results 2017–18 Actual results 2016–17 Actual results
5.4 Supplies are available and well-managed % of stock that is unavailable to meet forecasted demand Less than 7.93% 31 March 2019 5.72%
5.85%
5.01%
% of stock that is identified as surplus To be determined
by 31 March 2020
To be determined
by 31 March 2020
Results Not
Available
New indicator as
of 2018-19*
Results Not
Available
New indicator as
of 2018-19*
Results Not
Available
New indicator as
of 2018-19*

Notes:

* This metric is under development and scheduled to be implemented starting April 2020.

For more information about the Department of National Defence and the Canadian Armed Forces performance indicators, please visit GC InfoBaseFootnote lxxxvii.

Budgetary financial resources (dollars)

2018–19
Main Estimates

2018–19
Planned spending

2018-19
Total authorities
available for use
2018-19
Actual spending
(authorities used)
2018-19
Difference
(Actual spending minus
Planned spending)
3,135,903,543 3,135,903,543 3,505,268,703 3,069,157,738  (66,745,805)

Human resources (full-time equivalents) 

2018–19
Planned full-time equivalents
2018–19
Actual full-time equivalents

2018–19
Difference
(Actual full-time equivalents minus Planned full-time equivalents)
2,317 2,420 103

Financial, human resources, and performance information for the Department of National Defence and the Canadian Armed Forces Program Inventory is available in the GC InfoBaseFootnote lxxxviii.

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