Procurement

Procurement - General

Improving Defence Procurement

Key Facts

Strong, Secure, Engaged

Details

• Strong, Secure, Engaged outlined six key commitments to streamline defence procurement, to better meet the needs of the military, and deliver projects in a timelier manner.
  1. Increasing financial authorities: In May 2019, the Government of Canada increased National Defence’s financial authorities for competitive service contracts from $1 million to $5 million. National Defence now handles over 80% of its contracts. Service contracts over $5 million are still handled by Public Services and Procurement Canada, on behalf of National Defence.
  2. Simplifying project approval: For low-risk projects managed by Public Services and Procurement Canada on behalf of National Defence, a pilot project was established to eliminate the additional step of seeking Treasury Board approval. This will reduce project development and approval times by at least 50% for these types of projects.
  3. Incentivizing research and development: Through the application of the Industrial and Technological Benefits policy to defence procurement, the Government incentivizes Canadian research and development. For example, the policy has been integrated into the procurement of new advanced fighter aircraft and remotely piloted aircraft systems.
  4. Enhancing industry engagement: Public Services and Procurement Canada and National Defence regularly engage with defence industry to respond to questions and increase clarity regarding project requirements. For example, through the procurement process for a new advanced fighter aircraft, the Government of Canada hosted an industry day, regional forums, and consultations designed to engage and inform industry on the proposal process.
  5. Increasing the procurement workforce: Since 2015, National Defence has hired an average of 75 new procurement experts per year to strengthen its capacity to manage the acquisition of complex military capabilities.
  6. Enhancing transparency: With the publication of the 2018 Defence Investment Framework and the 2019 Annual Update, National Defence delivered on the commitment to increase transparency of deference procurement by providing Canadians with regular updates on major projects and programs.

Procurement - Navy

National Shipbuilding Strategy Overview

Key Facts

Strong, Secure, Engaged

Details

• On June 3, 2010, the Government announced Canada’s National Shipbuilding Procurement Strategy (renamed the National Shipbuilding Strategy, in March 2016).
• In 2011, the Government selected Seaspan’s Vancouver Shipyards and Irving Shipbuilding Halifax Shipyard for the construction of large ships.
• The National Shipbuilding Strategy Combat Package, which includes the Arctic and Offshore Patrol Ships and the Canadian Surface Combatants (replacements for the frigates and retired destroyers), will be built by Irving Shipbuilding.
• The National Shipbuilding Strategy Non-Combat Package, which includes the Joint Support Ships for the Royal Canadian Navy, science research vessels, and Multi-Purpose Vessels for the Canadian Coast Guard will be built by Vancouver Shipyards.
• The publicly available budget for the Joint Support Ships is $3.4B is currently under review to reflect experience gained to date from the Offshore Fisheries Science Vessels and Arctic Offshore Patrol Ships projects.

Procurement of 15 New Multi-Role Combat Ships

Key Facts

Strong, Secure, Engaged

Details

• Canada’s new class of warship – the Canadian Surface Combatant – will replace both the Iroquois-class destroyers and the Halifax-class frigates, one for one. This single class of ship will be capable of meeting multiple threats on the open ocean and the coastal environment.
• The new warships will be able to conduct a broad range of tasks, including:
  • Delivering decisive combat power at sea;
  • Supporting CAF forces, and Canada’s allies ashore;
  • Conducting counter-piracy, counter terrorism, interdiction and embargo operations for medium intensity operations; and
  • Delivering humanitarian aid, search and rescue, and law and sovereignty enforcement for regional engagements.
• Irving Shipbuilding has been selected as the prime contractor for the construction of the warships. In February 2019, the Government announced that Irving Shipbuilding had contracted Lockheed Martin Canada to provide the design and design team. The selected design for the future fleet is based on BAE Systems’ Type 26 ship design.

Arctic and Offshore Patrol Ships

Key Facts

Strong, Secure, Engaged

Details Arctic Offshore Patrol Ships Project

• Strong, Secure, Engaged committed to the acquisition of five to six Arctic and Offshore Patrol Ships. In November 2018, the government of Canada announced a decision to acquire a sixth vessel.
• These vessels will be able to perform a wide variety of tasks, including:
  • Surveillance operations of Canadian waters;
  • Support of sovereignty operations;
  • International operations;
  • Humanitarian assistance, emergency response and disaster relief; and
  • Search and Rescue.
• The Arctic and Offshore Patrol Ships will operate in the Arctic between June and October, providing a greater and longer Canadian Armed Forces presence in the north.

Current Status

• The Arctic and Offshore Patrol Ship is the first of its class. Production challenges, typically seen with a first-of-class vessel, delayed the delivery of the first ship from 2018 to 2020.
• The shipbuilder has learned lessons from the build of the first ship that will help ensure efficiencies in the construction of the subsequent ships. The schedules for these following ships will therefore be easier to plan.
• Out of the total of six ships, four are in various stages of production.

Procurement of 2 New Supply Vessels

Key Facts

Strong, Secure, Engaged

Details

• Public Service and Procurement Canada selected Seaspan’s Vancouver Shipyards as the prime contractor to build these vessels for the Navy.
• In 2013, after a rigorous interdepartmental selection based upon affordability, capability, and risk, National Defence selected a design for its Joint Support Ship project that offers the best value to Canada.
• The new support ships are intended to replace the Navy’s Auxiliary Oiler Replenishment vessels. They will provide at-sea support to naval task groups, limited sealift capabilities, and support to operations ashore.

Current Status

• In June 2018, Seaspan‘s Vancouver Shipyard started the construction of the first supply ship. It is expected to be delivered in 2023.

Cost

• The Joint Support Ship’s acquisition cost is being reviewed (public statements have placed the cost at a range between $1B-4B).
• An additional cost of approximately $5.5 billion includes personnel, operations, and maintenance over the 30 year lifespan of the vessels.

Interim Auxiliary Replenishment Vessel – MV Asterix

Key Facts

Strong, Secure, Engaged

Details

• The premature retirement of the Royal Canadian Navy’s remaining supply ship, in 2016, combined with the operational delivery dates of the new Joint Support Ship, in 2022-2024, resulted in a capability gap.
• To help bridge this gap, in 2015, the Government of Canada entered into a Provision of Service contract with Project Resolve Inc. for the conversion of a commercial container ship into an interim supply vessel – the MV Asterix. The vessel commenced service in support of the Royal Canadian Navy on January 28, 2018.
• There were multiple firms in Canada who expressed an interest and had the capability to do the conversion work. The Provision of Service contract was directed to Federal Fleet Services (then Project Resolve Inc.) The conversion work was then sub-contracted to Davie in Levis, Quebec. Davie also sub-contracted some conversion work outside of Canada, including superstructure to Almaco, a firm in Finland, and engineering support to Rolls Royce in Croatia. Canada was not a party to the conversion contract and is not aware of the overall costs of this outsourcing.
• The Provision of Service contract represents a five-year cost to the Government of Canada of up to $587 million (taxes not included) for the contract.
• The MV Asterix is operated by Federal Fleet Services and is crewed by Canadian civilian mariners. A limited number of Canadian Armed Forces personnel are deployed as mission specialists.
• MV Asterix is outfitted with much of the same at-sea replenishment equipment that will be fitted on the Joint Support Ships. This is allowing Royal Canadian Navy personnel to maintain competencies in replenishment at-sea procedures to ensure they do not fade away prior to the arrival of Joint Support Ships. However, being a commercial vessel, it does not meet all military requirements in the areas of performance, in-service lifespan and survivability, precluding it from operating in high risk areas.
• Since it became operational, the MV Asterix has supported numerous deployments and exercises at sea.

Request for Contract with Davie for a Second Interim Supply Ship (the Obelix)

Key Facts

Strong, Secure, Engaged

Details

The Asterix

• The premature retirement of the Royal Canadian Navy’s remaining supply ship, in 2016, combined with the operational delivery dates of the new Joint Support Ship, in 2022-2024, has resulted in a capability gap.
• To help bridge this gap, in 2015, the Government of Canada ordered the conversion of a commercial container ship into an interim supply vessel – the Asterix. The vessel became fully operational in 2017.
• The Asterix is operated by a civilian company (Federal Fleet Services) and is crewed by Canadian civilians. A limited number of Canadian Armed Forces personnel (up to approximately 130) are deployed as mission specialists. Since it became operational, the Asterix has supported numerous deployments and exercises at sea. This included supporting the operation to monitor and enforce UN sanctions against North Korea (Operation NEON).

Request for the Obelix

• Davie Shipbuilding is making the case to convert a second commercial vessel – the Obelix. Furthermore, the Bloc Québécois and the Conservative Party of Canada are advocating for the procurement of a second interim supply ship from Davie.
• The Parliamentary Budget Officer estimated the cost of a second interim supply ship is $607 million. This costing was requested by the Conservative Party of Canada as part of its larger platform costing during the election period.

Maintenance and Modernization of Canada’s Submarine Force

Key Facts

Strong, Secure, Engaged

Details

• An unparalleled strategic asset, Canadian submarines deliver a world-class, forcemultiplying deterrent effect as well as an unmatched sovereign defence and security capability. They do so by being capable of covertly monitoring evolving situations at home and abroad as well as by factoring significantly as an option for relevant Canadian action – be it continuing to provide “indications and warning” or vital jointtargeting information, weapon delivery, or Special Operations Force insertion. Additionally, submarines provide critical, sovereign force protection capacity for our sea-based forces when required.
• When compared to the multi-billion dollar investment and time required to deliver a new submarine, the decision to modernize remains the most effective means of continue submarine operations for the Royal Canadian Navy into the 2030s.
• The Victoria-class Modernization project will provide the capability enhancements required to keep the submarines operationally relevant against the evolving threats and the future operating environment.
• This project is currently in the options analysis stage which will identify best ways to implement the project and achieve capabilities.
• The Victoria-class Modernization project will focus primarily on enhancing three distinct capabilities:
  • Habitability – to improve habitability and deployment conditions onboard Victoria-Class submarines
  • Joint Force Capability – Position the Victoria-Class submarines to contribute meaningfully to joint operations ashore; and
  • Survivability – to ensure the survivability of the Victoria-Class submarines against an evolving complex threat in an ever changing battle space.
• The Victoria-class Modernization project will enhance the ability to operate in the environmentally sensitive regions such as the near Arctic.

Mould Aboard Royal Canadian Navy Ships

Key Facts

Details

• Maritime and shipboard environments are humid and often warm. These specific environments are prone to the growth of mould.
• In 2011, the Royal Canadian Navy conducted surveys under the HALIFAX-class Modernization/Frigate Life Extension project. The results showed mould on some frigates namely, HMCS ST. JOHN’S, HMCS HALIFAX, and HMCS CALGARY.
• The Navy cleaned the affected frigates of the mould and is making three major technical ventilation upgrades on all frigates to address the issue. These upgrades will ensure conditions under which mould grows within ships (temperature, humidity, and ventilation) are better controlled.
• In 2016, the Navy initiated air quality assessments to identify and quantify the presence of airborne hazards. As a result, it increased the frequency of surface and ventilation cleaning.

Procurement - Air

Economic Benefits of the Cf-18 Replacement Project

Key Facts

Strong, Secure, Engaged

Details

• On December 12, 2017, the Government of Canada launched an open and transparent competition for the permanent replacement Canada’s CF-18 fleet with an advanced fighter aircraft.
• Canada will evaluate proposals on elements such as technical capability, cost, risk and economic benefits. The evaluation of bids will also include an assessment of each bidder’s overall impact on Canada’s economic interests.
• Dassault and Airbus officially withdrew from the competition, citing difficulties in meeting requirements to integrate equipment with US military requirements, and to provide industrial and technology benefits to Canadian industry.
• Three suppliers remain in the competition: Boeing (US), Lockheed Martin (US) and Saab (Sweden).
• Eligible suppliers have until early 2020 to submit their proposals and the winning bidder will be announced in 2022.
• The first of the new advanced fighter aircraft is expected to be delivered in 2025.

Fighter Jets

Key Facts

Strong, Secure, Engaged

Future Fighter Capability Project

• On December 12, 2017, the Government of Canada launched an open and transparent competition for the permanent replacement of Canada’s fighter fleet.
• The Government of Canada identified five eligible supplier teams to submit proposals in the competition for the advanced fighter aircraft: Dassault, Lockheed Martin, Boeing, SAAB, and Airbus. Dassault and Airbus have officially withdrawn from the competition, citing difficulties in meeting requirements to integrate equipment with the Canadian and American militaries, and to provide industrial and technology benefits to Canadian industry.
• Eligible suppliers have until March 30th 2020 to submit their proposals. Canada will evaluate the proposals based on technical capability, cost, risk and the economic impact on Canadian industry.

Interim Fighter Capability Project

• To maintain Canada’s fighter jet capability, the Government also announced its decision to pursue the acquisition of 18 Australian F-18 Hornets to supplement Canada’s current fleet of fighter aircraft.
• Canada received the first two Australian aircraft in February 2019. Canada received a third aircraft 17 Nov 2019. Canada will receive the remaining 15 aircraft at regular intervals with the final delivery expected by December 2021.
• In order to help sustain our existing CF-18s and these additional aircraft until the future fighter fleet is fully operational, this purchase includes the option to acquire up to seven additional airframes for spare parts and equipment.

Joint Strike Fighter Program

Key Facts

Strong, Secure, Engaged

Details

• The Joint Strike Fighter program involves the development, production and sustainment of a modern, multi-role fighter aircraft. It is the largest fighter aircraft program in the world.
• Early involvement in the Program has provided Canadian industry with the opportunity to become a part of the Joint Strike Fighter supply chain.
• The latest industrial participation updates from the F-35 prime contractors indicate that companies in Canada have secured in excess of CAD $1.5 billion in contracts. This represents work across a range of aerospace subsectors, including airframe, propulsion, tooling, software and mission systems.
• There are nine countries in the program, including the US, UK, Italy, Netherlands, Turkey, Norway, Denmark, Australia, and Canada.
• Canada has spent USD $471.2 million to date to participate in the Program. The past two payments are the following:
  • May 1, 2018: USD $42.6 Million (Oct 1, 2017 to Sept 30, 2018)
  • May 1, 2019: USD $55.8 million (Oct 1, 2018 to Sept 30, 2019)
• Payments are made annually and are based on the actual program costs for the efforts to be conducted in that specific year, in addition to a country’s intended fleet size as a percentage of the total intended fleet size of all participants. Therefore annual payments can fluctuate.

Replacement of the Challenger Fleet

Key Facts

Strong, Secure, Engaged

Details

Challenger Fleet Operations

• The Royal Canadian Air Force Challenger fleet is composed of executive-style passenger aircraft that provide the Canadian Armed Forces with the capability to conduct aeromedical evacuations, and transport senior military leadership, small military teams and equipment to military theaters of operations.
• The Challenger fleet also provides flights for government representatives, including the Prime Minister and Cabinet Ministers. It also provides flights for the Governor General and members of the Royal Family.

Capability

• The Challenger aircraft has insufficient range, passenger capacity and fleet size to meet current and future requirements for global operations. In modern terms, neither the CL601s nor the CL604s are considered long-range aircraft.
• While a number of missions can be completed with the capacity of the Challenger (nine to ten passengers), there are many missions that require a greater capacity. In these cases, another larger asset such as the CC150 Polaris is employed, even if the requirement is only for slightly more than the Challenger capacity. An increase passenger capacity would be more efficient in terms of both cost and greenhouse gas emissions in achieving the desired objectives.
• To be globally effective, the capability should minimize the number of refueling stops required within an aircrew duty day (18 hours) and within the maximum allowable planned flight itinerary time of 14 hours. However, most importantly, the capability must be able to reach the high priority destinations within this timeframe within a single flight.

Regulations

• Aviation authorities around the world established new regulations to improve aviation safety in increasingly congested skies. These requirements will be effective in the US starting in January 2020. Europe and Australia will follow suit in June 2020 and Canada in 2021.
• The new regulations require the use of satellite-based navigation (GPS) systems commonly referred to as ADS-B. Two of the four Royal Canadian Air Force Challenger jets are not equipped with the required navigation systems and could face restrictions from aviation authorities. This can include undesirable flight routing, lower airport priority, or the refusal of access to airspace.
• Modifying the CL601 aircraft to meet the new regulations is not cost effective as it requires a complete cockpit replacement. The Royal Canadian Air Force is looking at replacement options and is in discussions with regulatory authorities to establish procedures to reduce some of the operational limitations to the current jets.

Remotely Piloted Aircraft Systems

Key Facts

Strong, Secure, Engaged

Details Remotely Piloted Aircraft System Project

• Through the Remotely Piloted Aircraft System project, National Defence will acquire long range and long-endurance capabilities to support domestic and expeditionary operations.
• Procuring Remotely Piloted Aircraft Systems fulfills key objectives in Strong, Secured, Engaged.
• The project seeks to acquire Remotely Piloted Aircraft Systems through an open and transparent procurement process.
• The systems will complement the Canadian Armed Forces existing intelligence, surveillance, target acquisition and reconnaissance, and precision strike capabilities.
• The systems will support expeditionary, domestic, overland, maritime and Arctic operations in the Intelligence, Surveillance and Reconnaissance roles.
• This system will have a variety of sensors, including high resolution electro-optical cameras, imaging radar and Signals Intelligence gathering equipment that will be relayed to the ground control station and Canadian Armed Forces units in real-time. When these systems are used domestically, they will be operated in full accordance with Canadian privacy laws and statutes.
• Therefore, the systems will enable flexible and responsive decision making by providing commanders with comprehensive and reliable intelligence in real-time.
• The Request for Proposals is expected to be released to eligible suppliers will be in 2020-2021.
• Acquisition costs of the project are estimated to be between $1-5 Billion.

Canadian Armed Forces Usage of Remotely Piloted Aircraft System

• During Canada’s mission in Afghanistan, the Canadian military operated a fleet of unarmed Remotely Piloted Aircraft Systems, which have since been retired.
• The Canadian Armed Forces does not currently operate a Remotely Piloted Aircraft Systems fleet. The Canadian Army, the Royal Canadian Navy and the Canadian Special Operations Forces, however, operate fleets of small, mini, and micro Unmanned Aerial Systems, which are not in the same category as Remotely Piloted Aircraft.

CC-150 Polaris

Key Facts

Strong, Secure, Engaged

Details

CC-150 Polaris

• The CC-150 Polaris is a multi-purpose, twin-engine, long-range jet aircraft. It can be used for passenger, freight or medical transport and air-to-air refueling. The Polaris can reach a speed of up to 1029 km/h carrying a load of up to 32,000 kilograms. It can carry up to 194 passengers, depending on the particular aircraft tail number and configuration.
• All five CC-150 Polaris aircraft are stationed at 8 Wing Trenton, Ontario. During its years in service, the Polaris fleet has transported vast amounts of supplies to Canadian Armed Forces personnel deployed on missions all over the globe.
• Two CC-150 Polaris aircraft have been converted to strategic air-to-air refuellers for Canada’s fleet of CF-18 Hornets. The Polaris Multi-Role Tanker Transport is capable of transferring 36,000 kilograms of fuel to receiving aircraft over a journey of 4,630 kilometres. One Polaris tanker can ferry a flight of four CF-18 Hornets non-stop across the Atlantic Ocean.
• The CC-150 Polaris can also be used to transport high-ranking government officials and foreign dignitaries. The aircraft has carried the Prime Minister, the Governor General and members of the Royal Family across Canada and around the world.

Strategic Tanker Transport Capability (STTC)

• The operational priority for Strategic Tanker Transport Capability is to provide domestic air-to-air refueling and support to NORAD, North Atlantic Treaty Organization and coalition operations.
• The Strategic Tanker Transport Capability project is currently in the Options Analysis phase.
• The next milestone is Definition phase, which will involve further refinement of the requirements, the preparation of a Request for Proposal, followed by a formal engagement period with Industry and finally the release of the Request for Proposal.

Recent Events

• On October 18, 2019, while being towed into a hangar at 8 Wing Trenton by contracted maintenance personnel, the CC-150 (01) Polaris aircraft that usually transports the Prime Minister suffered significant structural damage to the nose and right engine cowling and will not return into service until at least August 2020.
• On December 2, 2019, during a post-flight inspection, a problem with one of the engines on the backup Polaris CC-150 (03) used by the Prime Minister to attend the North Atlantic Treaty Organization summit in London was discovered, which required a standard 3-day repair that did not meet the Prime Minister’s timelines. This required the Royal Canadian Air Force to provide an alternative aircraft, CC-150 (02), in returning to Canada.

Fixed-Wing Search and Rescue Aircraft

Key Facts

Strong, Secure, Engaged

Details

• Canada is buying 16 Airbus CC295 aircraft equipped with advanced technology systems to support search and rescue operations. As part of the Request for Proposal, Airbus was required to team up with Canadian companies and reinvest 100% of the contract value in Canada.
• The aircraft will be based in Comox, BC, Winnipeg, MB, Trenton, ON, and Greenwood, NS. Five aircraft will be based at 19 Wing Comox, with two of those allocated to the Canadian Forces School of Search and Rescue. Three aircraft will be based at 17 Wing Winnipeg, three aircraft will be at 8 Wing Trenton, and three aircraft will operate out of 14 Wing Greenwood. The remaining two aircraft will be rotated through the four bases to cover periods where aircraft must undergo maintenance.
• RCAF search and rescue aircraft and personnel are located where they can effectively respond to search and rescue incidents in all regions of Canada, considering factors such as the historical distribution of incidents, aircraft performance, and the co-location of forces with supporting infrastructure.
• These aircraft will be equipped with a state-of-the-art sensor suite which is expected to reduce search times; make searches more effective in all weather conditions, day and night, and at longer range; and increase interoperability with other search and rescue assets.
• A new training centre will be located at 19 Wing Comox in British Columbia, and will be known as the Canadian Forces School of Search and Rescue. This new facility will include simulators and training devices, which will be used to train aircrew and maintenance personnel on the new aircraft starting in late 2020. The training program is expected to create a total of 300 Canadian jobs over the three-year development phase.
• In addition to the 16 aircraft that will be delivered into operations, Airbus will be delivering a complete aircraft to serve as a training aid. This aircraft is scheduled to be flown to Comox in early 2020 to be installed in the new training centre.
• The Royal Canadian Air Force will continue to fulfill its search and rescue mandate through the use of the CC115 Buffalo and CC130H Hercules until they are replaced by the new fixed-wing platform in the period leading to Full Operational Capability in 2022.

Procurement - Land

Selection of a New Canadian Camouflage Pattern

Key Facts

Strong, Secure, Engaged

Details

• The Department of National Defence is developing a new camouflage pattern that will be the property of the crown. Canada will use Intellectual property protections and license agreements to ensure the Canadian Armed Forces controls the use of the new pattern. Canada will retain the right to make changes to the pattern to ensure we have an agile and adaptable Camouflage solution for the future operating environment.
• The Canadian Armed Forces considered multiple options before field testing a single pattern at a large scale. Other patterns remain in development and revision.
• The new single camouflage option is made from sophisticated, computer-generated patterns. It will better reflect the current operational environments and will also simplify supply and distribution to uniforms and equipment to soldiers.
• Once approved, the new camouflage pattern will be printed on several operational clothing uniforms and personal equipment items. The Canadian Armed Forces will procure new uniforms and items by leveraging existing contracts and the establishment of new ones.
• A Canadian content requirement will compel the chosen contractor to use Canadian textile and apparel manufacturers.