Ottawa, 22 November 2011—National Defence has adopted new approaches to contracting for maintenance and repairs. But weak implementation of these approaches has resulted in missed opportunities to improve the maintenance and repair of military equipment and to save on costs, says John Wiersema, Interim Auditor General of Canada, in his report tabled today in the House of Commons.
“These new approaches have the potential to help National Defence better manage maintenance and repair activities and realize cost savings,” said Mr. Wiersema.
In 2009–10, National Defence spent more than $2 billion on maintenance and repairs, excluding its own staff and overhead costs—the Department does not track the full costs of maintenance and repair activities. Having proper information on total costs could help it to determine, for example, whether it would be more cost-effective to assign maintenance and repair tasks for a given fleet to the private sector, and when it would be more cost-effective to replace a fleet than to continue maintaining it.
The new approach for existing equipment bundled hundreds of short-term maintenance contracts into a few longer-term contracts. The audit found that implementation of this approach has been slow and more limited than planned because of a lack of concerted effort and follow-through. As a result, National Defence has lost opportunities to fully realize the potential benefits of this approach—including reduced cost and improved contractor accountability.
National Defence’s contracting approach for new equipment awards both the acquisition and the long-term maintenance contracts to the same supplier. The audit found that while the Department knows this approach could reduce maintenance and repair expertise within the Forces and create dependence on a single supplier for each fleet, it is not taking enough action to address these problems.
“I encourage National Defence to take the necessary steps to move ahead with these new approaches,” said Mr. Wiersema.
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The chapter “Maintaining and Repairing Military Equipment—National Defence” is available on the Office of the Auditor General of Canada website.
