Procurement of Capabilities

Description

Procure advanced capabilities to maintain an advantage over potential adversaries and to keep pace with Allies, while fully leveraging defence innovation and technology. Streamlined and flexible procurement arrangements ensure Defence is equipped to conduct missions.

Results

The Department of National Defence (DND) continued to procure advanced capabilities to maintain an operational advantage over potential adversaries and to keep pace with allies, while fully leveraging defence innovation and technology.

Effective defence procurement remained vital to ensure the Canadian Armed Forces (CAF) had the necessary range of capabilities required to protect and defend Canada and Canadians. To achieve this goal, it was necessary to reform Canada’s procurement model, reducing complexity and redundancy, in order to ensure the timely delivery of projects. During FY 2019-20, the department:

• Leveraged procurement to incentivize research and development in emerging technology areas through the application of Industrial and Technological Benefits policy; and
• Personnel continued to work with Innovation, Science and Economic Development Canada and Public Services and Procurement Canada to develop Value Propositions under the Industrial and Technological Benefits policy to ensure that defence procurement dollars continued to drive investment in emerging technologies aligned with government priorities.

Experimentation

Defence related experimentation activities are outlined in this report under Core Responsibility 4 – Future Force Design.

Key Corporate Risk(s)

One DND/CAF key corporate risk can be associated with the Procurement of Capabilities core responsibility. There is a risk that the complexity of development, program approval and procurement processes will prevent DND/CAF from meeting our investment targets in critical physical assets. This risk is prevented and mitigated by many of the controls articulated as activities of each Departmental Result below.

Departmental Result 5.1 – Defence procurement is streamlined

• In FY 2019-20, the department reduced departmental approval times through:
  • Continued collaboration with Public Services and Procurement Canada and Treasury Board of Canada Secretariat on the 18-month pilot project initiated in fall 2018 to evaluate a risk-based approach for defence procurement contract approvals in support of Strong, Secure, Engaged (SSE). A total of 16 contract authority submissions were progressed under this pilot project, 13 of which were progressed during FY 2019-20. The pilot project finished in March 2020 and will be followed by an evaluation report, which will include an assessment of the time savings realized through the streamlined risk-based approval process;
  • Initiatives such as the Tailored Project Approval Process (formerly known as Project Approval Process Renewal) continued to result in reduced approval process time, specifically in the later phases of the projects, eliminating the requirement for multiple Expenditure Authority approvals by the Minister of National Defence; and
  • In June 2019, contracting authorities for competitive services contracts increased from $1 million to $5 million, further streamlining our procurement process. This increase allows DND/CAF to handle over 80% of contracts in-house.
• To increase transparency and timeliness of communication with defence industry associations, the established advisory group has undergone discussions with defence industry representatives on crosscutting issues in defence procurement which have helped inform the government’s procurement approach. The advisory group facilitates coordinated dialogue and increased stakeholder engagement between the government and the defence industry.

Results achieved

Departmental Result 5.2 – Defence equipment acquisition is well-managed

• The department continued to grow and professionalize the procurement workforce to strengthen the capacity to manage the acquisition and support of today's complex military capabilities. Key highlights for FY 2019-20 include:
  • The department has seen a steady growth in the procurement workforce; specifically, 1.5% overall military and civilian growth for FY 2019-20;
  • The Learning Strategy continued to ensure that the ensuing Implementation Strategy remained aligned with the competencies required of Materiel Acquisition and Support; and
  • Work continued towards becoming full participants in the International Defense Education and Acquisition Memorandum of Understanding to Leverage International Best Practices. In particular, DND/CAF investigated partnership opportunities with the Defense Acquisition University in the United States.
• Highlights from FY 2019-20 on the department’s major equipment projects:
  • The Fixed-Wing Search and Rescue Aircraft Project – To acquire 16 CC-295 to take over the search and rescue duties currently being undertaken by six CC-115 Buffalo aircraft and 12 CC-130H Hercules aircraft. On 18 December 2019, Canada took delivery of the first CC-295 aircraft in Spain;
  • The Arctic and Offshore Patrol Ships Project (AOPS) – To construct and deliver six Arctic and Offshore Patrol Vessels (AOPV) for the Royal Canadian Navy (RCN). In May 2019, construction began for the fourth AOPV, the future Her Majesty’s Canadian Ship (HMCS) William Hall and construction of the seventh and eighth AOPV for the Canadian Coast Guard was announced, which will further mitigate the remaining production gap. In November 2019, Canada’s second AOPV was launched in Halifax, the future HMCS Margaret Brooke;
  • The Joint Support Ship Project – To deliver two new support ships to replace the RCN’s Auxiliary Oiler Replenishment vessels that have reached the end of their service lives. The project progressed the finalization of the Joint Support Ship design and the early construction of blocks which started in June 2018. The RCN celebrated a construction milestone for its future HMCS Protecteur with a keel laying ceremony held 16 January 2020 at Seaspan Vancouver Shipyards;
  • The Canadian Surface Combatant Project – To build 15 ships to recapitalize the CAF's surface combatant fleet. Following the selection of a starting point design and a design team in February 2019, and the award of the resulting Definition Contract and Definition Subcontract, the Project achieved substantial completion of Requirements Reconciliation in November 2019 and commenced Preliminary Design;
  • The Future Fighter Capability Project – Comprises the acquisition of 88 advanced fighter aircraft and associated capability. The project released the Request For Proposal on 23 July 2019 and completed the assessment of the preliminary security offers in February 2020;
  • The Medium Support Vehicle Systems Project – To acquire a new fleet of medium capacity logistics trucks to replace our current fleet, in service since the 1980s, and acquire new ISO container-based mobile workspaces. The project has delivered all 1 587 trucks and 322 trailers. 135 of 161 Armoured Protection Systems have been delivered with expectation to complete delivery of remaining quantities in July 2020. The project also plans to extend the in-service support contract to continue supporting the fleet;
  • The Light Armoured Vehicle III (LAV III) Upgrade – The LAV III is the backbone of domestic and expeditionary task forces. 2019 saw the final delivery of the LAV III Upgrade, which modernized 550 LAV III to the new LAV 6.0, extending the life span of the LAV to 2035; and
  • Modernize and grow our CH-149 Cormorant search and rescue fleet – In FY 2019‑20, the Cormorant Mid-Life Upgrade Project entered into Definition Phase where DND progressed activities leading to a defined configuration of the upgraded helicopters and a training solution, resulting in the release of a Request For Proposal in January 2020.

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

• Investing in Equipment and Current Projects.

Fixed-Wing Search and Rescue Aircraft Replacement

Results achieved

Departmental Result 5.3 – Defence information technology acquisition is well-managed

• Efforts have continued to expedite the delivery of information technology capability within DND while ensuring adequate oversight and stewardship of public funds. During FY 2019-20, the focus has been on the following efforts:
  • Contributed to the new guidelines and directives contained in the new DND Project Approval Directive and used the new inherent flexibility and tailored approaches to expedite delivery of our Major Capital Information Management (IM) and Information Technology (IT) projects; and
  • Continued to use a balanced approach where urgent/smaller capability requirements have been delivered quickly via the orchestration of IM/IT Minor Projects while larger efforts have been progressed via Major Capital Projects.
• DND has fully delivered and reached full operational capability for the following projects over FY 2019-20:
  • Defence Cryptographic Modernization Project – Identification of Friendly or Foe Mode 5;
  • Defence Cryptographic Modernization Project – Network Encryption Family; and
  • Grey Goose Project.
• Due to dependencies on other organizations that experienced delays, the Defence Biometric Collection and Identification Management project and the Juniper Green project did not reach full operational capability as originally planned.

Results achieved

Departmental Result 5.4 – Supplies are available and well-managed

• DND/CAF continued to enhance materiel accountability by implementing modern, effective inventory controls, supply chain management, and inventory valuation. In FY 2019-20:
  • Commenced the development of an analytics capability, which will provide an integrated view of all Defence Supply Chain activities at the tactical, operational and strategic levels of the organization, providing end-to-end visibility;
  • Various strategic level initiatives intended to re-align, modernize, and streamline the Defence Supply Chain have commenced and continue to evolve. The Defence Supply Chain Governance Charter was also approved as a first step towards improving the end-to-end governance of the Defence Supply Chain;
  • Received approval of the proposed Performance Measurement Framework concept in March 2020;
  • Completed policy and process updates, encompassing multiple improvements to internal business processes to ensure optimal alignment between materiel planning, materiel management and disposal. The department has undertaken, and continues to undertake, modernization initiatives that improve alignment between business policy, processes and the integrated Enterprise Resource Planning tool for improved materiel management; and
  • Continued to progress a transformation agenda that will modernize the Defence Supply Chain. The Automatic Identification Project progressed to the Definition Phase and is on schedule to deliver mobile barcode reading technologies which will enhance materiel traceability and data accuracy. The Materiel Identification initiative progressed steadily towards implementation with the intention to modernize materiel identification policy and deliver tools to support the generation of quality materiel master data.

Results achieved

Budgetary financial resources (dollars)