Status Report on Transformational and Major Crown Projects - RPP 2013-14

AIRLIFT CAPABILITY PROJECT - STRATEGIC

Description

The objective of the Airlift Capability Project - Strategic (ACP-S) is to acquire four new aircraft that will provide the Canadian Armed Forces (CAF) with the global reach and speed necessary to operate effectively over long distances, as well as to deliver personnel and cargo directly into a theatre of operation, including threat environments.

Project phase

Implementation: All four aircraft have been accepted on schedule and project close-out is expected for Winter 2012-13.

Leading and participating departments and agencies

Prime and major subcontractor(s)

Major milestones

Project outcomes

Deliver four aircraft and the required infrastructure at 8 Wing Trenton. Once declared at full operational capability, the project will contribute towards achieving the Canada First Defence Strategy (CFDS) objectives and the following Program Alignment Architecture (PAA) Strategic Outcome: Resources are acquired to meet government defence expectations, specifically the program activity of Aerospace Equipment Acquisition and Disposal.

This capability is being delivered to the Royal Canadian Air Force and will support the Canadian Army.

Progress report and explanations of variances

All four aircraft have been accepted on schedule and the fleet has already flown in excess of 20,000 flying hours. Full Operational Capability is expected in December 2012.

Industrial Benefits

Canada's Industrial Regional Benefits (IRB) Policy applies to this project. IRBs equivalent to 100% are required on the Boeing acquisition contract, Boeing's share of the in-service support Foreign Military Sales contract, and the value of the engines. (A separate IRB agreement was negotiated with Pratt and Whitney USA for the value of the C-17 engines.) Industry Canada is the IRB Authority and monitors the IRB achievements regularly.

AIRLIFT CAPABILITY PROJECT - TACTICAL

Description

The objective of the Airlift Capability Project - Tactical (ACP-T) is to ensure a continued tactical airlift capability. This project will replace the Canadian Armed Forces' (CAF) aging CC130E Hercules fleet, and will provide the CAF with an assured and effective tactical airlift capability that allows the requisite operational flexibility and responsiveness to support international and domestic operations.

Project phase

Implementation: The project entered the Implementation Phase with the December 2007 contract award to Lockheed Martin Corporation for 17 CC-130J aircraft. The contract was subsequently amended to include provisions for in-service support in December 2009, and for maintenance training system in February 2010. Aircraft deliveries began in June 2010. All aircraft have been delivered as of August 2012.

Leading and participating departments and agencies

Prime and major subcontractor(s)

Major milestones

Project outcomes

Deliver 17 CC-130J aircraft, the associated in-service support and training, and the required infrastructure at 8 Wing Trenton. The project contributes to achieving the Canada First Defence Strategy (CFDS) and the following Program Alignment Architecture (PAA) Strategic Outcomes: Resources are acquired to meet government defence expectations, specifically the program activity of Aerospace Equipment Acquisition and Disposal; and ensuring National Defence is ready to meet government defence expectations, specifically the program activity of Aerospace Readiness.

This capability is being delivered to the Royal Canadian Air Force and will support the Canadian Army.

Progress report and explanations of variances

With contract provisions for in-service support and maintainer training, and in conjunction with the infrastructure upgrades at the aircraft's Main Operating Base in Trenton, Ontario, the project is progressively establishing the support systems for this new capability in preparation for the declaration of Full Operational Capability.

All 17 aircraft have been delivered on time and on budget.

Industrial benefits

Canada's Industrial Regional Benefits (IRB) Policy applies to this project. Lockheed Martin Corporation has committed to provide IRBs equivalent to 100% of the eligible contract value for both the capital acquisition and the in-service support portions. Industry Canada is the IRB Authority and closely monitors IRB achievements.

ARCTIC/OFFSHORE PATROL SHIP

Description

The Arctic/Offshore Patrol Ship (AOPS) project has been established in order to deliver to the Government of Canada a naval ice-capable offshore patrol ship to demonstrate sovereignty in Canada's waters, including the Arctic. The AOPS project is acquiring six to eight Arctic/Offshore Patrol Ships, in-service support elements, jetty infrastructures in Halifax and Esquimalt as well as a berthing and fuelling facility at Nanisivik, Nunavut.

Project phase

Definition: The Project is in Definition phase and will advance the planning and ship design to the point of ship construction, followed by the Project Implementation contract for ship construction.

Leading and participating departments and agencies

Prime and major subcontractor(s)

Major milestones

Project outcomes

Deliver six to eight ships, a 25-year In-Service Support Contract and associated infrastructures in Halifax, Esquimalt and Nanisivik. This project will sustain Maritime Forces capabilities of conducting armed, seaborne surveillance of Canada's waters, including the Arctic. Once declared at full operational capability it will contribute towards achieving the Canada First Defence Strategy (CFDS) objectives and the following Program Alignment Architecture (PAA) Strategic Outcome: Resources are acquired to meet government Defence expectation, specifically the program activity of Maritime Equipment Acquisition and Disposal.

This capability is being delivered to the Royal Canadian Navy.

Progress report and explanations of variances

In fiscal year 2012-13, the AOPS project awarded an Ancillary Contract to ISI. The Definition Contract award is targeted for early 2013. The Build Contract award is scheduled for 2015 and delivery of the first AOPS is currently planned for 2018.

Industrial benefits

Canada's Industrial Regional Benefits (IRB) Policy applies to this project. IRBs equivalent to 100% of the contracted value for both the capital acquisition and in-service support will be required. However, IRBs have not been applied to the Ancillary Contract.

ARMOURED PERSONNEL CARRIERS

Description

The Armoured Personnel Carrier (APC) is essential for all foreseeable Canadian Armed Forces (CAF) roles, including territorial defence, United Nations (UN) peacekeeping and peace enforcement operations, other international commitments, and aid to civil power. The existing APC fleet did not meet the minimum operational requirements when compared to the modern, technically sophisticated weapons and vehicles Canadian soldiers encounter during operations. They suffered shortcomings in protection, self-defence capability, mobility, carrying capacity and growth potential. The APC project fielded a fleet of modern, wheeled, armoured personnel carriers. 651 Light Armoured Vehicles (LAV) III were procured in six configurations: Infantry Section Carrier, Command Post, Engineer, Forward Observation Officer, TOW (Tube Launched, Optically Tracked, and Wire Guided) Under Armour, and LAV III Less Kits. The latter was eventually configured into the LAV III with Remote Weapon Station.

Project phase

Close out: All vehicles were delivered by October 2007 and construction activities for indoor accommodation are nearing completion. The project is scheduled for completion in Spring 2013.

Leading and participating departments and agencies

Prime and major subcontractor(s)

Major milestones

Project outcomes

Deliver 651 LAV III vehicles including variants that met the specific performance requirements as well as infrastructure upgrades to accommodate LAV III vehicles in five locations across Canada. This outcome has been achieved under the Program Alignment Architecture (PAA) Strategic Outcome: Resources are acquired to meet government Defence expectation, specifically the program activity of Land Equipment Acquisition and Disposal.

This capability is being delivered to the Canadian Army.

Progress report and explanations of variances

In August 1995, the Government approved, in principle, the procurement of up to 651 APCs. In January 1997, the Government announced the award of a contract to General Dynamics Land Systems - Canada (GDLS-C) to build 240 new eight-wheel-drive APCs. The contract contained three options for an additional 120, 120 and 171 APCs respectively. All three options have been exercised. All vehicles were delivered by October 2007.

The vehicles have been involved in significant operational demands after being fielded and have performed well. They have since undergone a number of modifications to adjust to the modern threat, and will require additional work to optimize their performance against these threats. A separate project has been launched to address this issue.

In March 2004, Treasury Board authorized indoor accommodation of the LAV III to facilitate regular maintenance and training programs, and prevent deterioration that would result from outdoor storage. Construction of these accommodations is taking place in five locations: Wainwright, Petawawa, Montréal, Valcartier, and Gagetown. Construction activities are well advanced and will allow this project to terminate its involvement in Spring 2013.

Industrial benefits

Canada's Industrial Regional Benefits (IRB) Policy applies to this project. IRB valued at 100% of the contract value were required and the Contractor has successfully met its IRB obligations to date. Industry Canada is the IRB Authority and closely monitors IRB achievements.

CANADIAN CRYPTOGRAPHIC MODERNIZATION PROGRAM

Description

The Canadian Cryptographic Modernization Program (CCMP) is an omnibus project that will modernize the Government of Canada's aging cryptographic equipment and infrastructure in order to safeguard classified information and maintain Canada's ability to establish secure communications both nationally and internationally.

The CCMP omnibus project includes the following sub-projects:

• Secure Voice / Telephone Re-key Infrastructure;
• Secure Voice / Telephone Family;
• Classified Security Management Infrastructure;
• Combat Identification Family (Identification Friend or Foe (IFF));
• Link Encryption Family;
• Network Encryption Family;
• Secure Radio Family;
• Combat Net Radio (Enhancement); and
• Secure Mobile Environment.

Project phase

Implementation for some sub-projects, definition for others.

Leading and participating departments and agencies

Prime and major subcontractor(s)

Major milestones

Project outcomes

Deliver affordable Information Protection by means of cryptographic solutions with an adequate level of security to protect Government of Canada classified electronic information and to provide enhanced interoperability to facilitate the exchange of classified information both nationally and internationally. This requires the right balance between interoperability and sovereignty, while striving to meet unique Canadian requirements. Once delivered and declared at full operational capability this project will contribute towards achieving the following Program Alignment Architecture (PAA) Strategic Outcome: Defence operations will improve peace, stability and security wherever deployed, specifically the program activity of Support to Intelligence, Surveillance and Reconnaissance.

Progress report and explanations of variances

The CCMP is on budget. The CCMP schedule is dependent on the American Cryptographic Modernization Initiative and the Key Management Infrastructure Program. This allows Canada to leverage American research and development and maintain interoperability with its Allies. Completion dates for the sub-projects are regularly reviewed to keep them aligned with the American initiative/program.

The CCMP originated as a 12-year program ending in 2016. In November 2012, Treasury Board approved extending the end date of the program to 2020. Although the CCMP baseline schedule and cash flow will be updated, extending the end date of the program will not impact the overall cost of the CCMP.

Industrial benefits

There are no Industrial Regional Benefits requirements associated with this project.

CANADIAN SEARCH AND RESCUE HELICOPTER PROJECT

Description

Maintaining a national search and rescue capability is a key Defence mission. The purpose of the Canadian Search and Rescue Helicopter (CSRH) project was to replace the CH-113 Labradors with a fleet of 15 new helicopters. The new helicopters have addressed the operational deficiencies of the CH-113 Labrador fleet and eliminated the supportability difficulties of the older airframes. Given expected aircraft availability rates and a sufficient fleet size, continuous operations are anticipated well into the 21st century.

Project phase

As of July 2003, all 15 Cormorant helicopters had been delivered. Spare parts and infrastructure were also in place to support operations, and initial training had been completed. Effective Project Closure was achieved in September 2004 at which point the Project Management Office was closed; however, some aspects of the contract were noted as deficiencies. Final contract completion is projected to occur in 2015.

Leading and participating departments and agencies

Prime and major subcontractor(s)

Major milestones

Project outcomes

Deliver 15 CSRH aircraft at full operational capability which contributes towards achieving the Canada First Defence Strategy (CFDS) objectives and the following Program Alignment Architecture (PAA) Strategic Outcome: Defence operations to improve peace, stability and security whenever employed, specifically the program sub-activity of Search and Rescue.

This capability is being delivered to the Royal Canadian Air Force. The primary beneficiary is the Canadian population who require Search and Rescue services.

Progress report and explanations of variances

The project delivered the 15 aircraft and procured the required aircraft spares, maintenance and support equipment, a Cockpit Procedures Trainer and facilities for the four CAF search and rescue bases. The project also established and funded the first two years of an in-service support contractor for follow-on support.

The Cormorant has been operational at the squadrons in Comox, BC, Gander, NL, Greenwood, NS and Trenton. ON. CH-149 operations at 424 Squadron in Trenton have been suspended due to the lack of aircraft availability and difficulty in maintaining adequate aircrew training. The fleet size has reduced to 14, following the loss of an aircraft in a 2006 crash.

It should be noted that although effective project closure was achieved in September 2004, some work is still ongoing and full completion is not expected before 2015. The milestones still outstanding are tied to a three year Technical Publication Revision Service which commenced in Fiscal Year (FY) 2010-11, and a number of milestones related to outstanding aircraft deficiencies which are expected to take at least an additional three years commencing in FY 2010-11.

Industrial benefits

Canada's Industrial Regional Benefits (IRB) Policy was applied to this project. The contractor has successfully completed its IRB obligations. Industry Canada is the IRB Authority and closely monitors IRB achievement.

CANADIAN SURFACE COMBATANT PROJECT

Description

In accordance with the Canada First Defence Strategy (CFDS), the Canadian Surface Combatant (CSC) project will recapitalize Canada's surface combatant fleet through replacement of the capability found in the Iroquois Class destroyers and the Halifax Class frigates, along with the provision of the necessary integrated logistics support and infrastructure. The CSC project will pursue system commonality in ship design and acquisition. System commonality will potentially generate acquisition and through-life cost savings in a number of areas including crewing, training, maintenance and logistics support. This will result in a number of aspects of the ships being common, regardless of variants produced.

Project phase

The project is inDefinition Phase.

Leading and participating departments and agencies

Prime and major subcontractor(s)

Major milestones

Project outcomes

Recapitalize the capability currently found in Canada's destroyers and frigates. The introduction of CSC will ensure that the Royal Canadian Navy can "continue to monitor and defend Canadian waters and make significant contributions to international naval operations". The CSC project contributes to achieving the Canada First Defence Strategy (CFDS) objectives and to achieving the following Program Alignment Architecture (PAA) Strategic Outcome: Resources are acquired to meet Government Defence Expectations, specifically the program activity of Maritime Equipment Acquisition and Disposal.

This capability is being delivered to the Royal Canadian Navy.

Progress report and explanations of variances

The Government announced its broad intention for fleet recapitalization and shipbuilding in CFDS and in announcements pertaining to the NSPS.

Industrial benefits

Canada's Industrial Regional Benefits (IRB) Policy applies to this project. IRBs equivalent to 100% of the Implementation and ensuing In-service support contracts will be required.

CF-18 Replacement Project

Description

The objective of the CF-18 Replacement Project is to replace the CF-18 fleet on its retirement so as to maintain a manned fighter capability necessary for the defence of Canada and North America, and for CAF collective expeditionary operations.

Project phase

Options Analysis

Leading and participating departments and agencies

Prime and major subcontractor(s)

Major milestones

Project outcomes

The CF-18 Replacement project will deliver a fighter aircraft capable of executing the roles and core missions described in the Canada First Defence Strategy (CFDS). Once delivered and declared at full operational capability, this project will contribute towards achieving the following Program Alignment Architecture (PAA) Strategic Outcome: Resources are acquired to meet government defence expectations, specifically the program activity of Aerospace Equipment Acquisition and Disposal.

This capability is being delivered to the Royal Canadian Air Force (RCAF).

Progress report and explanations of variances

A Project Management Office was stood up in October 2010 and work has since been initiated to advance a Treasury Board (TB) submission seeking project approval and initial expenditure authorities.

On 3 April 2012, the Government of Canada announced a comprehensive response to Chapter 2 of the 2012 Spring Report of the Auditor General of Canada that included a seven-step action plan to fulfill and exceed the Auditor General's recommendation. Canada will not sign a contract to purchase new aircraft until these steps are completed. Canada remains committed to ensuring that the RCAF has the aircraft it needs to do the jobs asked of it.

The dates for all major milestones are now 'to be determined', as a result of the comprehensive response to Chapter 2 of the 2012 Spring Report of the Auditor General of Canada. Specifically, additional reviews are being coordinated by the National Fighter Procurement Secretariat and will be completed prior to DND and PWGSC jointly seeking project approval from TB. The project will commence project definition activities following project approval from TB.

Industrial benefits

Canada will continue to identify opportunities for Canadian Industry to participate in the Joint Strike Fighter Program and the replacement of the CF-18 fleet.

CLOSE COMBAT VEHICLE

Description

The Close Combat Vehicle (CCV) project will deliver to the Canadian Army an extremely well protected armoured vehicle with high tactical mobility, able to deliver a combat ready Canadian Army infantry section in close combat, while operating in intimate support of CAF tanks.

CCV is one of the four projects within the Army's "Family of Land Combat Vehicles".

Project phase

Definition.

Leading and participating departments and agencies

Prime and major subcontractor(s)

Major milestones

Project outcomes

The Project scope is for the acquisition of 108 CCV with an option for up to 30 additional vehicles (including Infantry Fighting Vehicle, Forward Observation Officer, Tactical Command and Engineer Reconnaissance configurations), plus an associated long-term or through-life in-service support contract. The project contributes towards achieving the Canada First Defence Strategy (CFDS) objectives and the following Program Alignment Architecture (PAA) Strategic Outcome: Resources are acquired to meet Government Defence Expectations, specifically the program activity of Land Equipment Acquisition and Disposal.

This capability is being delivered to the Canadian Army.

Progress report and explanations of variances

In FY 2010-11, the CCV project successfully completed its Solicitation of Interest and Qualification process, resulting in a list of five Pre-Qualified Bidders. A Request for Proposal (RFP) was issued in April 2011 and closed in August 2011. Following the completion of the technical evaluations of the proposals, it was determined that none of the contenders met all of the mandatory technical requirements, and as a result, the first RFP was cancelled.

A second RFP was issued in April 2012 and closed in September 2012. This resulted in three proposals which are undergoing Test and Evaluation. Proposal testing is planned for completion by February 2013 while the evaluation is to be completed by end of February 2013.

The project is in its definition phase and is proceeding on budget.

Industrial benefits

Canada's Industrial Regional Benefits (IRB) Policy applies to this project. IRBs equivalent to 100% of contract values will be required.

FIXED WING SEARCH AND RESCUE AIRCRAFT REPLACEMENT

Description

The purpose of the Fixed Wing Search and Rescue Aircraft Replacement (FWSAR) project is to replace the fixed wing search and rescue (SAR) capability currently being provided by the CC115 Buffalo and CC130 Hercules aircraft.

This replacement will address the operational deficiencies of the CC115 Buffalo and legacy CC130 Hercules fixed wing SAR aircraft while eliminating the supportability and affordability difficulties of the older airframes. The solution will provide the capability to conduct an effective response and immediate assistance to SAR incidents within the Canadian SAR Area of Responsibility.

Project phase

Definition: Treasury Board approved Expenditure Authority for definition work. Project approval is pending.

Leading and participating departments and agencies

Prime and major subcontractor(s)

Major milestones

Project outcomes

Deliver a replacement capability currently performed by the CC-115 Buffalo and CC-130 Hercules aircraft. The project contributes towards achieving the Canada First Defence Strategy (CFDS) objectives and the following Program Alignment Architecture (PAA) Strategic Outcome: Resources are acquired to meet government defence expectations, specifically the program activity of Aerospace Equipment Acquisition and Disposal.

This capability is being delivered to the Royal Canadian Air Force. The primary beneficiary is the Canadian population who require Search and Rescue Services.

Progress report and explanations of variances

The project entered the project definition phase upon receipt of Expenditure Authority from Treasury Board for definition work in March 2012.

Industrial benefits

Canada's Industrial Regional Benefits (IRB) Policy applies to this project. IRBs equivalent to 100% of contract value will be required.

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FORCE MOBILITY ENHANCEMENT

Description

The Force Mobility Enhancement (FME) project is to acquire Armoured Engineer Vehicles (AEV), Armoured Recovery Vehicles (ARVs), to support the acquired AEVs and Tactical Mobility Implements (TMI) in support of Canada's Leopard 2 Main Battle Tank (MBT). The project is part of the Family of Land Combat Vehicles (FLCV) programme and has been broken down into two phases.

In Phase 1, FME will acquire AEVs and ARVs. Both platforms will support the Leopard 2 MBT until 2035. In addition, they will support all current armoured vehicle fleets and future fleets, including those in the FLCV project.

In Phase 2, FME will acquire TMIs for the Leopard 2 MBT to include mine rollers, mine ploughs, and dozer blades. TMIs provide a key capability for the Leopard 2-based force as the current Leopard 2 MBT does not have an in-service TMI capability.

Project phase

Phase 1 (AEV): Implementation: The FME project received Treasury Board Project Approval Implementation for Phase 1 on 15 March 2012.

Phase 2 (TMIs): Definition: Phase 2 is in Definition as per the Treasury Board Preliminary Project Approval granted on 18 June 2009.

Leading and participating departments and agencies

Prime and major subcontractor(s)

Major milestones

Project outcomes

Delivery of 18 Leopard 2-based Armoured Engineer Vehicles (AEV), four Leopard 2-based Armoured Recovery Vehicles (ARV), and Tactical Mobility Implements (TMI) such as mine rollers, mine ploughs and dozer blades to install onto Leopard 2 Main Battle Tanks. The FME project will provide crucial support to the Leopard 2 tanks, Light Armoured Vehicles (LAV) III, and future fleets, such as the Close Combat Vehicle and the Tactical Armoured Patrol Vehicle. Once delivered and declared at full operational capability this project will contribute towards achieving the Canada First Defence Strategy (CFDS) objectives as well as the following Program Alignment Architecture (PAA) Strategic Outcome: Resources are acquired to meet government defence expectations, specifically the program activity of Land Equipment Acquisition and Disposal.

This capability is being delivered to the Canadian Army.

Progress report and explanations of variances

Phase 1. The AEV Request For Proposal (RFP) was posted on MERX and closed on 27 June 2011. Both bidders were found compliant. Phase 1 received Treasury Board Project Approval Implementation on 15 March 2012. Subsequently, the Tank Replacement Project (TRP) ARV contract was amended to exercise the four FME ARV options on 26 March 2012.

Phase 2. Due to Intellectual Property rights, only the Original Equipment Manufacturer (Krauss Maffei Wegmann (KMW)) replied to the draft RFP. Therefore an Advanced Contract Award Notice (ACAN) was posted on MERX Summer 2011 and, as expected, no other responses were received. The final version of the TMI feasibility study was received from KMW on 16 October 2012 and the Project Management Office (PMO) is considering the Original Equipment Manufacture's (OEM) recommendations before any final technical solution is confirmed. Treasury Board Project Approval Implementation for Phase 2 is now scheduled for October 2013.

Industrial benefits

Canada's Industrial Regional Benefits (IRB) Policy applies to this project. IRBs valued at 100% of the contract value are required in Phase 1, with the exception of the government-to-government purchase of the Leopard 2 MBT chassis. Industry Canada is the IRB Authority and closely monitors IRB achievements.

HALIFAX CLASS MODERNIZATION/FRIGATE LIFE EXTENSION

Description

The Halifax Class Modernization/Frigate Life Extension (HCM/FELEX) project is the principal component of the overall HALIFAX Class Modernization (HCM) program. The project will plan and manage HALIFAX Class mid-life refits, acquire the major elements of the new combat system, and deliver stability enhancements, degaussing improvements and a Commander Task Group capability in four ships. Major equipment acquisitions through HCM/FELEX will include a modernized Command and Control System, Multi-Link, Identification Friend or Foe Mode S/5, upgrades to the radars, new Electronic Support Measures System, upgrades to the Internal Communications system, and an upgraded Harpoon Weapon System. These acquisitions will both sustain current capability and contribute to the new littoral operations role of the HALIFAX Class.

Project phase

Implementation: The implementation of the HCM/FELEX project will occur through three principal contracts: two Multi-Ship Contracts (MSC) for docking work periods/refits and one Combat System Integration contract to develop, procure and install the key combat system elements of the project. Project completion is expected by January 2019.

Leading and participating departments and agencies

Prime and major subcontractor(s)

Major milestones

Project outcomes

Deliver 12 modernized HALIFAX-Class ships capable to execute the roles and core missions of the Canada First Defence Strategy (CFDS). The twelve ships of the HALIFAX-Class were designed for 30 year life with the combat systems designed for 15 years and requiring mid-life upgrade to enable the ships to be effective through end-of-life. Changes in technology since the HALIFAX-Class was originally designed in the 1980s, particularly networks, have fundamentally changed how warfare is conducted at sea. Once delivered and declared at full operational capability, the modernized HALIFAX-Class ships will contribute towards achieving the following Program Alignment Architecture (PAA) Strategic Outcomes: Resources are acquired to meet government defence expectations, specifically the program activity of Maritime Equipment Acquisition and Disposal; and National Defence is ready to meet government defence expectations, specifically the program activity of Maritime Readiness.

This capability is being delivered to the Royal Canadian Navy.

Progress report and explanations of variances

In September 2008, Treasury Board granted Effective Project Approval (EPA) and Expenditure Authority for the project.

A Request for Proposal (RFP) for the Multi-Ship Contracts (docking work periods and refits) resulted in two successful bidders, Halifax Shipyard on the east coast and Washington Marine Group (Victoria Shipyards) on the west coast. Contracts were awarded to the two shipyards in March 2008. The Combat System Integration contract was awarded to Lockheed Martin Canada in November 2008.

As of the Fiscal Year (FY) 2012-13, the HCM/FELEX project was in its Implementation Phase with three ships in the contractor phase of mid-life refit and another two ships (HMCS HALIFAX and HMCS CALGARY) having transitioned back to the Navy for part two of the mid-life refit and with the test and trials phase of the program set to commence early in the new year.

The project is currently within budget and on schedule to achieve Full Operational Capability by January 2018.

Industrial benefits

Canada's Industrial Regional Benefits (IRB) Policy applies to this project. IRBs equivalent to 100% of the contract values are required. Industry Canada is the IRB Authority and closely monitors IRB achievements.

INTELLIGENCE SURVEILLANCE, TARGET ACQUISITION AND RECONNAISSANCE

Description

Intelligence Surveillance, Target Acquisition and Reconnaissance (ISTAR) is an omnibus project that received Treasury Board approval for Definition Phase activity in April 2003. The purpose of this project is to develop, deliver and evolve an integrated, interoperable ISTAR capability that will improve the ability of commanders to visualize the operational area, manage sensors and information collection resources, and to plan and implement actions to successfully complete operational missions. The project will provide enhancements to existing capabilities and include the acquisition of new capabilities in the areas of communications, command and control and sensors.

Project phase

Implementation: The implementation of these sub-projects has been delayed in order to progress numerous Unforecasted Operational Requirements (UOR) for Afghanistan that have been implemented by the Land Force (LF) ISTAR Project Management Office (PMO). The final three sub-projects have received Effective Project Approval for Implementation in January 2012.

Leading and participating departments and agencies

Prime and major subcontractor(s)

Major milestones

Project outcomes

To deliver an integrated intelligence capability with the surveillance, target acquisition, and reconnaissance assets to improve Commanders' Situational Awareness at all level of commands. Once all sub-projects are delivered and declared at full operational capability, ISTAR will contribute towards achieving the following Program Alignment Architecture (PAA) Strategic Outcome: Resources are acquired to meet government defence expectations, specifically the program activity of Land Equipment Acquisition and Disposal.

This capability is being delivered to the Canadian Army.

Progress report and explanations of variances

Current estimates are that the project will be completed in 2016. This delay is associated with the necessary diversion of staff effort to address UORs, and with the maintenance of an off-the-shelf philosophy. In support of UORs for OPERATION ATHENA in the 2003-04 timeframe, the project delivered equipment in the areas of Command and Control, Tactical Unmanned Aerial Vehicles (TUAV), Weapons Locating Sensors and Electronic Warfare capabilities. These early deliveries enhanced professional knowledge and contributed to project definition work. Early deliveries of elements of the Unmanned Aerial Vehicles, Electronic Warfare and Data Link Communications sub-projects continued during 2006 with the UOR for OPERATION ARCHER. As well, urgently required systems, in particular the Acoustic Weapons Locating System, the Lightweight Counter Mortar Radar system, and additional Electronic Warfare systems were fielded in 2007. Responding to the need for persistent surveillance identified by the Canadian Armed Forces (CAF) Counter Improvised Explosive Devices (IED) Task Force and confirmed in the recommendation of The Independent Panel on Canada's Future Role in Afghanistan, the LF ISTAR PMO delivered additional Small Unmanned Aerial Vehicle capability through a service contract in 2008. In early 2008, the Electronic Warfare sub-project and the Command and Control sub-project were approved for implementation. The final three sub-projects have received Effective Project Approval for Implementation in January 2012.

The Tactical Unmanned Aerial Vehicle project was closed in June 2009 and the Acoustic Weapon Locating System and Beyond Line Of Sight sub-projects were closed in May 2010.

Industrial benefits

The benefits to Canadian industry from the ISTAR project continue to be determined during the approval of the procurement strategy for each sub-project. Canadian industry has derived long-term benefits from many aspects of the ISTAR project through the establishment of long-term in-service support contracts.

JOINT SUPPORT SHIP

Description

The Joint Support Ship (JSS) Project will recapitalize Canada's naval support vessels, modernizing and apportioning joint force capabilities in line with the strategic vision outlined in the Canada First Defence Strategy (CFDS). The JSS will provide Canada with a modern, task-tailored and globally deployable naval support capability. The JSS project will acquire two new support ships (with an option for a third vessel if it is affordable or if additional internal funding becomes available). In addition to being able to provide at-sea support to deployed naval task groups, they will also be capable of providing limited sealift operations and limited support to forces deployed ashore.

Project phase

Definition.

Leading and participating departments and agencies

Prime and major subcontractor(s)

Major milestones

Project outcomes

Deliver two Joint Support Ships (JSS) by the project completion date of 2019. This project will sustain Maritime Forces capabilities and enhance Canada's ability to ensure peace and stability at Canadian, Continental, and International levels as laid out in the November 2010 Defence Priorities (for years 2011-14) and the Canada First Defence Strategy (CFDS).

Capability is being delivered to:

• CAF (specifically the sustainment of the Royal Canadian Navy) for both national and international operations;
• Canadian and international communities, when humanitarian assistance is required to be rendered; and
• Canadian Shipbuilding Industry, in accordance with the NSPS.

Progress report and explanations of variances

On 10 June 2010, the JSS project received Treasury Board expenditure authority for its Revised Definition Phase. The procurement strategy aims to provide a ship design to the NSPS designated shipyard: Vancouver Shipyards Co. Ltd (VSY). The ship design could be based either on an existing Military off the Shelf (MOTS) design or a newly developed design. The assessment of an existing, proven design is being undertaken as a potential means of reducing project risks and ensuring program affordability.

Since achieving a revised Preliminary Project Approval, it has been determined that the project's definition activities will exceed the original baseline estimate of 25 months. This slippage has occurred to support the development, negotiation, and assessment of complex design contracts.

JSS will be built in Vancouver, along with three classes of vessels for the Coast Guard including the Polar Icebreaker. The Joint Support Ship and the Polar Icebreaker are progressing on a very similar schedule such that they both could be ready for construction at the same time. Once the decisions on the build sequencing of the Polar Icebreaker and JSS builds are made, more refined cost and schedule information will be determined. Assuming JSS is not delayed by the initial Coast Guard projects and the Polar Icebreaker program, Vancouver Shipyards continues to indicate that a first JSS delivery will be possible in the 2017-18 timeframe.

Industrial benefits

Canada's Industrial Regional Benefits (IRB) Policy applies to this project. IRBs equal to 100% of the contract values for the capital acquisition and in-service support will be required.

JOINT UNMANNED SURVEILLANCE AND TARGET ACQUISITION SYSTEM

Description

This project will deliver a mature Medium Altitude Long Endurance Unmanned Aircraft System to provide the mandatory capabilities for domestic and international operations. This Joint Unmanned Surveillance and Target Acquisition System (JUSTAS) will complement existing reconnaissance, surveillance, and target acquisition capabilities, increase maritime and arctic domain awareness and provide precision force application in support of Land and Special Operations Forces.

Project phase

Option Analysis.

Leading and participating departments and agencies

Prime and major subcontractor(s)

Major milestones

Project outcomes

Deliver a mature Medium Altitude Long Endurance Unmanned Aircraft System capability that meets the objectives of the Canada First Defence Strategy (CFDS) for a robust domestic and international surveillance capability. JUSTAS delivery contributes to the following Program Alignment Architecture (PAA) Strategic Outcome: Resources are acquired to meet government defence expectations, specifically the program activity of Aerospace Equipment Acquisition and Disposal.

This capability is being delivered to the Royal Canadian Air Force, and will support the Canadian Army and the Royal Canadian Navy.

Progress report and explanations of variances

The project is in the options analysis phase.

Industrial benefits

Canada's Industrial Regional Benefits (IRB) Policy applies to this project. IRBs equal to 100% of the contract value will be required.

LIGHT ARMOURED VEHICLE III UPGRADE PROJECT

Description

The recent experience of the Canadian Armed Forces (CAF) and other nations in Afghanistan, Iraq and global operational theatres highlighted the ongoing requirement for a highly protected, yet highly mobile Light Armoured Vehicle (LAV). The threats of mines and Improvised Explosive Devices (IEDs) have proliferated and are likely to be faced in most medium to high threat missions. Despite improvements to the protection of the vehicle, the current LAV III fleet has insufficient protection to defeat modern threats. Further, it has insufficient mobility given the increased protection and payload requirement of the vehicle. As well, the target acquisition and fire control systems require upgrading to overcome obsolescence issues and to improve technical effectiveness and lethality. The LAV III Upgrade Project will capitalize on existing and evolving technology to upgrade a significant portion of the LAV III fleet to a standard required to protect the soldiers and equipment of the CAF in current and future operations.

Project phase

Implementation: The project is currently finalizing the system design that will allow manufacture and delivery, with first deliveries scheduled for end 2012.

Leading and participating departments and agencies

Prime and major subcontractor(s)

Major milestones

Project outcomes

To deliver 550 LAV III vehicles upgraded in the areas of mobility, protection and lethality capable of executing the roles and core missions of the Canada First Defence Strategy (CFDS). Once delivered and declared at full operational capability, this project will contribute towards achieving the following Program Alignment Architecture (PAA) Strategic Outcome: Resources are acquired to meet government defence expectations, specifically the program activity of Land Equipment Acquisition and Disposal.

This capability is being delivered to the Canadian Army.

Progress report and explanations of variances

The project received Preliminary Project Approval in June 2009 and was announced by the Minister of National Defence in July 2009. The PWGSC submission received Treasury Board (TB) approval in April 2010. The project received Effective Project Approval and Contract Approval from TB in October 2011. Both approvals were announced by the Associate Minister of National Defence and the Minister of PWGSC in October 2011. The project is on-track to meet the above milestones.

Industrial benefits

Canada's Industrial Regional Benefits (IRB) Policy applies to this project. General Dynamics Land Systems-Canada is committed to provide IRBs valued at 100% of the contract value. Industry Canada is the IRB Authority and closely monitors IRB achievements.

LIGHTWEIGHT TOWED HOWITZER

Description

The Lightweight Towed Howitzer (LWTH) project is a key facet of the Land Forces current indirect fire capability deficiency. Specifically, over the summer of 2011, the project fielded 25 M777 lightweight 155mm towed howitzers to the Canadian Army, each with a Gun Management System (GMS), to augment the 12 M777 howitzers currently in service. The project will also field improved ammunition, Gun Line Communication System (GLCS), and wheeled gun tractors, based upon the Medium Support Vehicle System (MSVS) project Standard Military Pattern (SMP) vehicle. These howitzers provide a capability enhancement in terms of lethality, range, precision, mobility and digitization, and support future missions and tasks likely to be assigned to the CAF.

Project phase

Implementation.

Leading and participating departments and agencies

Prime and major subcontractor(s)

Major milestones

Project outcomes

Deliver the following capabilities:

• 25 M777 155mm lightweight howitzers each equipped with a GMS, a Gun Line Communication System (digital radio/enhanced position location reporting system (EPLRS), a Land Ethernet Switch (LES), a Power Distribution Unit (PDU), and an antenna);
• 37 wheeled gun tractors (based upon the MSVS SMP) that will pull the howitzer and be equipped with an ammunition handling and storage system (ASHS);
• Ammunition (including propellant, projectiles and fuses);
• Integrated logistics support; and
• Infrastructure enhancements.

Once delivered and declared at Full Operational Capability (FOC), this project will contribute toward achieving the following Program Alignment Architecture (PAA) Strategic Outcome: Resources are acquired to meet government defence expectations, specifically the program activity of Land Equipment Acquisition and Disposal.

This capability is being delivered to the Canadian Army.

Progress report and explanations of variances

The LWTH project is achieving defined project objectives. Final deliveries of the M777 howitzer and the GMS components commenced in late 2010 and were completed Summer 2011.

The Initial Operational Capability (IOC) was originally forecasted to occur in July 2011 and was shifted to October 2011 as a result of unforeseen issues with technical integration. The project achieved IOC on October 2011.

The M777 infrastructure initiative is currently in the design phase and the construction should commence in 2013. The majority of infrastructure initiatives are expected to be completed prior to the Effective Project Closure (EPC) in June 2014.

The LWTH project is currently running within the allocated budget and is currently planning to achieve EPC in June 2014, representing a 13 month slippage from the original EPC date of March 2013 due to the requirement to deliver the infrastructure, truck and ammunition components of the project.

Industrial benefits

Canada's Industrial Regional Benefits (IRB) Policy applies to this project. The LWTH project has IRB agreements with BAE Systems on the M777 LWTH FMS Acquisition case and with SELEX on the GMS acquisition contract. Industry Canada is the IRB Authority and closely monitors IRB achievements.

MARITIME HELICOPTER PROJECT

Description

The purpose of the Maritime Helicopter Project (MHP) is to replace the CH124 Sea King with a fleet of 28 new fully equipped Maritime Helicopters bundled with a long-term in-service support contract and the modification of the HALIFAX class ships to accommodate the new Maritime Helicopters. This replacement will address the operational deficiencies of the current CH124, eliminate the supportability difficulties of the older helicopter, and provide a sufficient fleet size of multi-purpose shipborne Maritime Helicopters for operations well into the 21st century.

Project phase

Implementation: In November 2012, the project marked the eight-year milestone in the Implementation Phase. The project continues to shift focus from design and engineering to flight test and preparations for operational testing and evaluation, followed by delivery of the fully capable Maritime Helicopters which contractually were required to start in June 2012. The delivery of fully capable helicopters is now expected to occur in 2015.

Leading and participating departments and agencies

Prime and major subcontractor(s)

Major milestones

Project outcomes

Deliver 28 fully equipped Maritime Helicopters to support operations and deploy with the Halifax Class Frigates capable of executing the roles and core missions of the Canada First Defence Strategy (CFDS). Once delivered and declared at full operational capability, it will contribute towards achieving the following Program Alignment Architecture (PAA) Strategic Outcome: Resources are acquired to meet government defence expectations, specifically the program activity of Aerospace Equipment Acquisition and Disposal.

This capability is being delivered to the Royal Canadian Air Force and will support the Royal Canadian Navy.

Progress report and explanations of variances

In December 2008, following discussions to minimize delays in the planned delivery of the integrated Maritime Helicopter, the Government and Sikorsky International Operations Incorporated agreed to a new schedule for the delivery of six interim helicopters starting in November 2010, with delivery of fully capable helicopters commencing in Summer/Fall 2012. A second contract amendment in June 2010 modified the requirements for the interim Maritime Helicopter to allow delivery with an earlier version of mission system software while still enabling the start of initial training and operational testing. Contractually required delivery of the maritime helicopter in June 2012 was not achieved. It is now estimated that the interim maritime helicopters will be delivered in 2013.

Other components of the project such as construction of the Training Centre building in Shearwater, NS, and ship modification work on the 12 Halifax Class Frigates have progressed well. The first test flight of the Maritime Helicopter occurred in November 2008. The second Maritime Helicopter, the first aircraft with complete Mission System Hardware installed, underwent its first test flight in July 2009. Defence crews, as part of the Combined Test Force with Sikorsky International Operations Incorporated, began aircraft testing in July 2009. The first and second Ship Helicopter Operation Limitations - Sea Trials are now complete. To date, 9 test and interim helicopters have been built, and the production of helicopters 10 though 23 has commenced. The project is running well within its authorized budget.

Industrial benefits

Canada's Industrial Regional Benefits (IRB) Policy applies to this project. Sikorsky has committed to IRBs equivalent to 107% of the contract value for the capital acquisition and 80% of the contract value for the in-service support. Industry Canada is the IRB Authority and closely monitors IRB achievements.

MATERIEL ACQUISITION AND SUPPORT INFORMATION SYSTEM

Description

The mission of the Materiel Acquisition and Support Information System (MASIS) project is to provide the Department of National Defence (DND) with an integrated materiel acquisition and support information system that enables the cost-effective optimization of weapon/equipment system availability throughout the life cycle. The scope of MASIS includes all end-to-end information requirements within Defence related to the materiel acquisition and support functions, which are comprised of systems engineering, supply chain, Integrated Logistics Support (ILS), equipment configuration management, technical data management, asset management, maintenance management, project management, performance management, operational support, business management, decision support analysis and contract management.

Project phase

Implementation: To date, the project has completed Phases 1 to 4 and implementation of Phase 5 is currently underway where emphasis is on the delivery of the MASIS solution to the Army, Air Force, Navy ships and supply chain.

Leading and participating departments and agencies

Prime and major subcontractor(s)

Major milestones

Project outcomes

Deliver an end-to-end information system to enable materiel acquisition and support processes to the Navy, Army and Air Force. This system has improved visibility and efficiency of weapon system and equipment support. MASIS has also enabled Defence's vision of business renewal. Once delivered and declared at full operational capability, this project will contribute towards achieving the following Program Alignment Architecture (PAA) Strategic Outcome: Resources are acquired to meet government defence expectations, specifically the program activity of Joint and Common Support Equipment Acquisition and Disposal.

Progress report and explanations of variances

In June 2007, the MASIS project received Treasury Board approval for Phase 5.

In September 2011, the project received TB approval for a refinement in its scope of work and an increase to the contracting authority to complete Phase 5 activities. The Expenditure Authority granted in 2007 was not amended as sufficient funds remain.

Industrial benefits

There are no Industrial Regional Benefits requirements associated with this project. IBM Canada has committed to providing industrial benefits on the project, with the total value of the contract procured in Ontario where IBM Canada is based.

MEDIUM-TO-HEAVY LIFT HELICOPTER

Description

Over the last decade, the ability to move personnel and equipment by air has become a vital and growing capability requirement for the Canadian Armed Forces (CAF) in fulfilling a wide range of roles. CAF operational experience, particularly in current operational theatres, has highlighted the urgent need for medium-to-heavy lift helicopters (MHLH) to support land forces in a threat environment by quickly, efficiently and safely moving large numbers of personnel and heavy equipment from forward deployed bases, thus reducing their vulnerability to attack. Both at home and overseas, MHLH will provide the Government with a wider range of military options for addressing threats and emergencies beyond the CAF's current helicopter fleets.

The MHLH project will deliver 15 Chinook CH-147F helicopters to support land-based domestic and international operations and to support land staff training on the road to high readiness, as well as integrated logistic support and other related support elements.

Project phase

Implementation. The MHLH Project entered the implementation phase in July 2009. Two aircraft are currently in a flight test programme conducted by Boeing. In June 2012, the project started the one-year intensive test and evaluation of the helicopters. The first of fifteen helicopters is scheduled for delivery in June 2013 and the final helicopter will be received in June 2014.

Leading and participating departments and agencies

Prime and major subcontractor(s)

Major milestones

Project outcomes

Deliver 15 Chinook CH-147F helicopters capable of executing the roles and core missions of the Canada First Defence Strategy (CFDS). Once delivered and declared at full operational capability, this project will contribute towards achieving the following Program Alignment Architecture (PAA) Strategic Outcome: Resources are acquired to meet government defence expectations, specifically the program activity of Aerospace Equipment Acquisition and Disposal.

This capability is being delivered to the Royal Canadian Air Force and will support the Canadian Army.

Progress report and explanations of variances

In June 2009, Treasury Board granted Effective Project Approval. In March 2010, a contract amendment to the existing CAE contract for Operational Training was issued to include MHLH requirements. The MHLH project is currently on budget and in scope. The project is to be completed by June 2018.

Industrial benefits

Canada's Industrial Regional Benefits (IRB) Policy applies to this project. IRBs equivalent to 100% of the contracted value are required for both the capital acquisition and integrated in-service support. Industry Canada is the IRB Authority and closely monitors IRB achievements.

MEDIUM SUPPORT VEHICLE SYSTEM PROJECT

Description

The Medium Support Vehicle System (MSVS) Project is a capability replacement project for the existing Medium Logistics Vehicle Wheeled (MLVW) fleet that has reached the end of its service life due to age, heavy usage and corrosion. The MSVS project will deliver the following mix of vehicles:

• Medium-sized Standard Military Pattern (SMP) vehicles:

- Up to 1,500 vehicles;

- Up to 150 integrated armour protection systems, and

- Up to 300 companion Load Handling System trailers.

• Medium-sized Militarized Commercial Off-the-Shelf (MilCOTS) vehicles:
  - 1,300 commercial vehicles with militarized components.
• Special Equipment Vehicle (SEV) Baseline Shelters:
  - 961 SEV Baseline Shelters.
• Special Equipment Vehicle (SEV) Kitting:
  - 846 SEV Kits.

Project phase

Definition for SMP and Implementation for MilCOTS, SEV Baseline Shelters and SEV Kitting.

Leading and participating departments and agencies

Prime and major subcontractor(s)

Major milestones

Project outcomes

Deliver a replacement fleet of medium-weight trucks capable of executing the roles and core missions of the Canada First Defence Strategy (CFDS). At the conclusion of the project, the Canadian Armed Forces will have acquired two fleets of medium-weight vehicles (MilCOTS and SMP) as well as new SEVs. Once delivered and declared at full operational capability, the project will contribute towards achieving the following Program Alignment Architecture (PAA) Strategic Outcome: Resources are acquired to meet government defence expectations, specifically the program activity of Land Equipment Acquisition and Disposal.

This capability is being delivered to the Canadian Army.

Progress report and explanations of variances

On 29 November 2012, Treasury Board (TB) expenditure authority was obtained for Kitting, and a Revised Preliminary Project Approval was granted for all components of the MSVS project.

• MilCOTS - An Agreement in Principle was reached in August 2008 with the single responsive bidder. Contract approval was received in December 2008. The contract was awarded on 9 January 2009 and the last vehicle was accepted in March 2011. Delivery of "kitted" Engineering variants and Gun Tractor variants were completed in October 2012.
• SEV Baseline Shelters - An Agreement in Principle was reached in April 2009 with the single responsive bidder. Revised Preliminary Project Approval and contract approval was received in June 2009. The contract was awarded on 24 July 2009. The first shelter was delivered in April 2012. On 29 November 2012, TB approved the procurement of an additional 66 shelters.
• SMP - The RFP was cancelled in July 2012. The RFP is intended to be re-issued in 2013.
• SEV Kitting - Contract award is expected in December 2012. On 29 November 2012, TB approved the procurement of an additional 54 kits.

Industrial benefits

Canada's Industrial Regional Benefits (IRB) Policy applies to the MilCOTS, SEV Baseline Shelter and SMP contracts. IRBs equal to 100% of the contract values are required. Industry Canada is the IRB Authority and closely monitors IRB achievements.

The IRB Policy does not apply to the SEV Kitting contract due to international trade agreements.

MERCURY GLOBAL

Description

The Mercury Global (MG) project will provide wideband global satellite communications that are guaranteed and directly interoperable with our principal Allies. The project will deliver a Canadian Wideband Global System (WGS) Military Satellite Communications System for near-worldwide assured, wideband communications to the Canadian Armed Forces for the command and control of deployed Canadian commanders and forces, as well as interoperability with some of our principal allies, the United States, Australia, Denmark, the Netherlands, Luxembourg, and New Zealand.

Project phase

Definition.

Leading and participating departments and agencies

Prime and major subcontractor(s)

Major milestones

Project outcomes

Deliver a near-worldwide, Canadian assured, wideband global Military Satellite Communications System. When operational, this system, when coupled with the secure and protected capabilities being delivered by the Protected Military Satellite Communications project, will ensure, in part, that the CAF will be well-equipped with modern strategic and tactical satellite communications, permitting them to be fully-integrated, flexible, multi-role, and combat-capable. Once delivered and declared at full operational capability, the project will contribute towards achieving the following Program Alignment Architecture (PAA) Strategic Outcome: Resources are acquired to meet government defence expectations, specifically the program activity of Joint and Common Informatics Infrastructure Acquisition and Disposal.

Progress report and explanations of variances

In Phase 1, procurement of guaranteed access to and participation in the US Department of Defense (DoD) Wideband Global Satellite constellation to the year 2032 was approved by Treasury Board (TB) with Preliminary Approval in October 2011. TB also granted approval for DND to enter into a Military Satellite Communications (MILSATCOM) Memorandum of Understanding (MOU) with, principally, the US DoD, and also Denmark, The Netherlands, Luxembourg, and New Zealand. The MOU is the vehicle used to fund the construction and launch of the ninth Wideband Global System satellite and, thereby, provide the US DoD Wideband Global System service to the Department of National Defence (and the others) to, at least, the year 2032. The MOU was signed by Canada in January 2012. In addition, approval was granted to define the terminal segment and to provide funds to facilitate early use of the Wideband Global Satellite Communications service.

Effective Approval for Phase 2 will be sought in late 2013 for the procurement and installation, where necessary, of the associated Wideband Global Satellite anchor station and strategic deployable satellite terminals. The EPA date was changed after consultation with PWGSC who advised that the project seek Project Approval and Contract Authority simultaneously.

With a Wideband Digital Channelizer (WDC) upgrade, Wideband Global SATCOM (WGS) satellites 8 and 9 within the nine-satellite constellation will almost double their current bandwidth availability through innovative and efficient frequency allocation. This satellite modification is being undertaken by the U.S. Department of Defense; International Partners will not share the cost, in part or in total, for this upgrade.

Industrial benefits

Canada's Industrial Regional Benefits (IRB) Policy applies to both phases of this project. In Phase 1, a separate IRB agreement between Boeing and PWGSC was reached in which Boeing committed to IRBs equivalent to 100% of DND's proportionate share of the final negotiated price of the Boeing contract with the US DoD for the ninth Wideband Global Satellite. In Phase 2, IRBs will also be required. Industry Canada is the IRB Authority and closely monitors IRB achievements.

PROTECTED MILITARY SATELLITE COMMUNICATIONS

Description

The Department of National Defence (DND) and the Canadian Armed Forces (CAF) are being provided with global communications that are secure, guaranteed and directly interoperable with our Allies by the Protected Military Satellite Communications (PMSC) project. The project will deliver a Canadian Advanced Extremely High Frequency (AEHF) Military Satellite Communications System for near-worldwide assured, secure, survivable, and jam-resistant communications to the CAF for the command and control of deployed Canadian commanders and forces, as well as interoperability with some of our principal allies, the United States, The United Kingdom, and The Netherlands.

Project phase

Implementation: The PMSC project is being implemented in two phases with project completion expected for winter 2020-21.

Leading and participating departments and agencies

Prime and major subcontractor(s)

Major milestones

Project outcomes

Deliver a near-worldwide, assured, secure, survivable, and jam-resistant Canadian Advanced Extremely High Frequency (AEHF) Military Satellite Communications System. This system, when coupled with the wideband capabilities being delivered by the Mercury Global project, will ensure, in part, that the CAF will be well-equipped with modern strategic and tactical satellite communications, permitting them to be fully-integrated, flexible, multi-role, and combat-capable. Once delivered and declared at full operational capability the project will contribute towards achieving the following Program Alignment Architecture (PAA) Strategic Outcome: Resources are acquired to meet government defence expectations, specifically the program activity of Joint and Common Informatics Infrastructure Acquisition and Disposal.

Progress report and explanations of variances

In the completed Phase 1, procurement of guaranteed access to the US Department of Defense (DoD) Advanced Extremely High Frequency (AEHF) satellite constellation was approved by Treasury Board (TB) with Preliminary Project Approval (PPA) in August 1999. TB also granted approval for DND to enter into a Military Satellite Communications (MILSATCOM) Memorandum of Understanding (MOU) with the US DoD. This would ensure DND access to the US DoD Advanced Extremely High Frequency (AEHF) satellite constellation. This MOU was signed in November 1999. In addition, approval was granted to define the terminal segment.

Phase 2 has been underway since November 2003, when TB granted Effective Project Approval (EPA) for the procurement and installation, where necessary, of the associated Advanced Extremely High Frequency satellite terminals.

The project is on budget.

Due to slippages in the US DoD overall satellite launch schedule and the Victoria Class submarine installations, the PMSC System Full Operational Capability, has moved to December 2020 from the original expected date of November 2017.

Industrial benefits

Under the completed Phase 1, the US DoD committed to a work share with Canadian industry proportional to our contribution. Suppliers from both nations were permitted to bid on project work. In Phase 2 Canada's Industrial Regional Benefits Policy was applied and an IRB Agreement was negotiated with Raytheon. IRB equal to 100% of the contract value are required. Industry Canada is the IRB Authority and closely monitors IRB achievements.

SUBMARINE CAPABILITY LIFE EXTENSION

Description

The Submarine Capability Life Extension (SCLE) project replaced the Oberon class submarine fleet with four surplus British Upholder class (renamed Canadian Victoria class) submarines. The project will ensure that Canada preserves its submarine capability within the existing capital budget. The project supports Canada's ability to conduct surveillance and control of its territory, airspace and maritime areas of jurisdiction, as well as Canada's ability to participate in bilateral and multilateral operations.

Project phase

Implementation: The project has delivered four functional Victoria class submarines with up-to-date, safe-to-dive certificates, four crew trainers (including a combat systems trainer, a ship control trainer, a machinery control trainer, and a torpedo handling and discharge trainer), and four trained crews. Canadianization of three platforms and 13 of 17 associated projects have been completed. The last platform (HMCS Chicoutimi) will complete Canadianization during her Extended Docking Work Period (EDWP) which officially began in July 2010 and is scheduled to be complete in time for Chicoutimi to join the fleet in 2013. Effective Project Closure of SCLE is planned for 2013. The remaining associated projects will be completed by the end of HMCS Corner Brook's EDWP in December 2015.

Leading and participating departments and agencies

Prime and major subcontractor(s)

Major milestones

Project outcomes

The SCLE Project has acquired a complete submarine capability to replace the previous OBERON class submarines; this replacement capability includes:

• four functional Victoria class submarines, acquired from the United Kingdom Ministry of Defence, with up-to-date "safe to dive" certificates;
• four crew trainers; including a combat systems trainer, a ship control trainer, a machinery control trainer, and a torpedo handling and discharge trainer;
• a technical data package consisting of manuals, design data, trials reports and maintenance and configuration records;
• initial spares including on-board and depot spares, special tools and other support equipment; and
• initial conversion training of four Canadian submarine crews and the fleet support personnel necessary to maintain and operate the Victoria Class.

This project contributes to achieving the following Program Alignment Architecture (PAA) Strategic Outcome: Resources are acquired to meet government defence expectations, specifically the program activity of Maritime Equipment Acquisition and Disposal.

This capability is being delivered to the Royal Canadian Navy.

Progress report and explanations of variances

EPA was granted to the SCLE project in June 1998. The expenditure ceiling was increased by Treasury Board in June 2003 to accommodate increased scope to include 17 submarine related projects and initiatives that were progressing outside the bounds of SCLE. The SCLE project is within budget.

Canada has accepted all four Upholder submarines from the United Kingdom. The operational status of each of these vessels is summarized below as follows: Her Majesty's Canadian Submarine (HMCS) VICTORIA and WINDSOR are now operational on the west and east coast respectively. HMCS VICTORIA has proven the class weapon capability with the successful sinking of a decommissioned United States Navy Ship during the multinational RIMPAC exercise in 2012. HMCS CHICOUTIMI is currently in the first scheduled deep maintenance period to be conducted by industry. HMCS CHICOUTIMI is planned to begin sea trials later in 2013. HMCS CORNER BROOK will begin her deep maintenance in 2013 and return to the RCN in 2016.

Based on progress to date and current information, all performance objectives of this contract will be met within the allocated budget.

Although Effective Project Closure is expected to be achieved by Fall 2013, a small number of Engineering Changes still require installation in HMCS Corner Brook during her upcoming deep maintenance. This will necessitate the scheduling of funding to FY 2015-16.

Industrial benefits

Canada's Industrial Regional Benefits (IRB) Policy applied to this project. IRBs valued at 100% of the contract value were required and the contractor successfully met its IRB obligations. Industry Canada is the IRB Authority and closely monitors IRB achievement.

TACTICAL ARMOURED PATROL VEHICLE

Description

The Tactical Armoured Patrol Vehicle (TAPV) Project is one of the four projects within the Army's "Family of Land Combat Vehicles".

The TAPV Project will deliver a wheeled combat vehicle to the Canadian Army that will fulfill a wide variety of roles on the battlefield, including but not limited to reconnaissance and surveillance, security, command and control, cargo and armoured personnel carrier. It will have a high degree of tactical mobility and a very high degree of crew survivability.

The project scope includes an estimated initial purchase of 500 TAPV and an optional purchase of up to 100 additional vehicles, plus associated long-term in-service support.

Project phase

Implementation.

Leading and participating departments and agencies

Prime and major subcontractor(s)

Major milestones

Project outcomes

The TAPV project expects to achieve the following outcomes:

• An initial purchase of 500 TAPV;
• An optional purchase for up to 100 additional vehicles;
• Procurement and delivery of essential Integrated Logistics Support (ILS) to sustain the fleet the first two years;
• Acquisition of an operational stock and two years of training stocks of ammunition; and
• Implementation of a long-term (25-year) through life In-service Support Contract to be funded through Army National Procurement funds.

This project contributes to achieving the Canada First Defence Strategy (CFDS) objectives and the following Program Alignment Architecture (PAA) Strategic Outcome: Resources are acquired to meet government defence expectations, specifically the program activity of Land Equipment Acquisition and Disposal.

This capability is being delivered to the Canadian Army.

Progress report and explanations of variances

The TAPV Project entered its implementation phase with the approval of Treasury Board in June 2012. The TAPV Project is within its approved budget.

In November 2008, the Senior Project Advisory Committee approved a procurement strategy for a phased approach within a competitive process. PWGSC released the Letter of Interest/Price and Availability in July 2009 to obtain cost and schedule information to support the Project Approval (Implementation) submission. A Statement of Interest and Qualification was released in March 2010 and closed in June 2010 with seven pre-qualified bidders announced in July 2010. A draft Request for Proposal (RFP) was issued in November 2010 and the final RFP was issued in March 2011 with a closing date of August 2011. RFP evaluation and testing of contender vehicles commenced in Fall 2011 and was completed in January 2012. Contract award and effective project approval was 7 June 2012.

Industrial benefits

Canada's Industrial Regional Benefits (IRB) Policy applies to this project. IRBs equal to 100% of the contract values are required for the capital acquisition of the TAPV and its associated in-service support. Industry Canada is the IRB Authority and closely monitors IRB achievements.

TANK REPLACEMENT PROJECT

Description

The purpose of the Tank Replacement Project (TRP) is to replace Canada's aging Leopard 1 tank fleet with a modern, heavily protected, mobile, direct fire support capability. The Tank Replacement Project is divided into two phases. Phase 1 consisted of the loan of 20 Leopard 2 A6M Main Battle Tanks (MBT), two Armoured Recovery Vehicles (ARVs), and logistics support from the German Government for immediate deployment to Afghanistan, as well as the purchase of 100 surplus Leopard 2 MBT from the Netherlands Government. Phase 2 consists of the repair, overhaul, upgrade and introduction of up to 100 Leopard 2 MBTs and ARVs into service with the CAF as well as the Integrated Logistics System (ILS) inherent to the variants.

Project phase

Implementation: The project received Preliminary Project Approval (PPA) (inclusive of Effective Project Approval (EPA) for Phase 1) from Treasury Board (TB) in March 2007 and EPA in June 2009 for Phase 2. The project is capped at $650M.

Leading and participating departments and agencies

Prime and major subcontractor(s)

Major milestones

Project outcomes

Deliver the following capabilities:

• 20 Leopard 2 A6M - Operational MBTs. L55 Gun with additional mine protection and slat armour systems;
• 20 Leopard 2 A4M - Operational MBTs. L44 Gun with mine protection, slat armour and all around add-on armour systems;
• 42 Leopard 2 A4 - MBTs primarily used for training. L44 Gun with basic protection;
• 8 Leopard 2 Armoured Recovery Vehicle (ARV);
• Appropriate ammunition, parts and special maintenance tools and training; and
• 10 Leopard 2 MBTs were provided to the Force Mobility Enhancement (FME) project for conversion to Leopard 2 AEVs.

This project contributes to achieving the following Program Alignment Architecture (PAA) Strategic Outcome: Resources are acquired to meet government defence expectations, specifically the program activity of Land Equipment Acquisition and Disposal.

This capability is being delivered to the Canadian Army.

Progress report and explanations of variances

TB approved the PPA Amendment in June 2008 allowing the replacement in kind concept for the loaned tanks. Canada will retain the loaned German Leopard 2 A6M. In return, the purchased Dutch Leopard 2 A6 will be converted to a German standard and returned to the German Ministry of Defence.

TB granted EPA in June 2009 supporting the Phase 2 procurement strategy including development of a work capacity in Canada. In the EPA submission, the development of this capacity was expected to lead to Full Operational Capability (FOC) in October 2012. The new estimate for FOC is February 2015. The change is linked to two primary issues. One is contractor challenges with delivery of the ARVs. The second is a delay in the planned schedules of tanks being converted and loaned Leopard 2 ARVs being reconstituted for return to Germany. Cost continues to be tightly managed within the cost ceiling in accordance with the core deliverables and prioritized activities.

In June 2011, the Senior Review Board (SRB) endorsed the release of funds for the acquisition of 120mm ammunition.

The project continues to move forward aggressively while ensuring effective support to Army high readiness training and the establishment of critical support contracts.

Industrial benefits

Canada's Industrial Regional Benefits (IRB) Policy applies to this project's Phase 2, but not Phase 1. IRBs equal to 100% of the contract values are required for the Phase 2 acquisitions Industry Canada is the IRB Authority and closely monitors IRB achievements.