Question Period Note: IMPROVING DEFENCE PROCUREMENT

• How will this government improve the efficiency of the defence procurement process to ensure the Canadian Armed Forces receives the equipment it needs?

• National Defence currently delivers 90% of procurement projects within scope and budget.
• To build on this record, we continue to improve and streamline our procurement processes.
• For example, we have increased National Defence’s ability to directly manage contracts, from $1 million to $5 million.
• This means the number of approvals has been reduced, and the progress of projects managed by National Defence will move quicker.
• National Defence will continue to work with other departments and Canadian industry to deliver on major projects.

BACKGROUND

• Strong, Secure, Engaged outlined six key commitments to streamline defence procurement, to better meet the needs of the military, and deliver projects in a more timely 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.

RECENT PARLIAMENTARY INTEREST

• Over the course of the 42nd Parliament, Members of the House of Commons and Senators demonstrated sustained interest in defence procurement projects, such as the replacement of Canada’s fighter jets and frigates. Parliamentarians regularly requested updates regarding the progress and costing of individual projects in committee or through the intermediary of the Parliamentary Budget Officer.

• During the last Parliamentary session, the Senate Standing Committee on National Finance started a study on defense procurement. This study has not yet been completed.

RECENT MEDIA INTEREST

• During the federal election campaign, the media covered party commitments relating to individual defence projects, such as fighter jets, ships and submarines, as well as proposed changes to the defence procurement process. Beyond the Liberal Party platform commitment to create a defence procurement agency, the Conservative Party committed to create a new cabinet committee on defence procurement and a new procurement secretariat within the Privy Council Office.

GBA+

• Strong, Secure, Engaged made a firm commitment to the integration of GBA+ in all defence activities including the design and implementation of programs and services that support its procurement of equipment.

INDIGENOUS

• Nil.

Responsible Principals: Assistant Deputy Minister (Materiel)

QUICK FACTS

• National Defence manages over 12,000 service contracts.