Evidence of meeting #36 for National Defence in the 41st Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was national.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

Bill Jones  Associate Deputy Minister , Department of National Defence
Keith Coulter  Special Adviser to the Minister, Department of National Defence

4:15 p.m.

Special Adviser to the Minister, Department of National Defence

Keith Coulter

It is being set up under the accountability of the minister, but it will be providing independent third party advice to the minister. It will not be part of the normal DND governance process. They will continue to define requirements, work on requirements. But before they go to the level of decision, there will be an independent third party panel that will directly challenge them and provide advice on whether they think a good job has been done or whether there are holes in it.

4:15 p.m.

NDP

Jack Harris NDP St. John's East, NL

You're stated to be part-time, sir, with a per diem. There's nothing wrong with that. It's just that it's for a 12-month period. Since you've been appointed, have you been working every day? Do you expect to still until January or February?

4:15 p.m.

Special Adviser to the Minister, Department of National Defence

Keith Coulter

No. I am part-time, but I have a small team assisting me that is full-time. I'm kind of the quarterback calling the plays and they're running them full-time. I am doing a lot more days up front than I will as we move along. In fact, I'm starting to do fewer now that some pieces are in place and it's organized.

Actually, I started on my own. I even had to spend some time getting the right team together to assist me and whatnot. It's one of those ones that's fuller time at the beginning, but as you may have noticed in my order in council appointment, I will be the interim chair at the beginning to make sure there's continuity and this panel is fully running and that will be a part-time job.

4:15 p.m.

NDP

Jack Harris NDP St. John's East, NL

Thank you.

4:15 p.m.

Conservative

The Chair Conservative Peter Kent

Time, Mr. Harris.

Mr. Williamson, please.

4:15 p.m.

Conservative

John Williamson Conservative New Brunswick Southwest, NB

Mr. Coulter, thank you for appearing today.

Could you share your thoughts on how our allies conduct defence procurement? What are they doing right, and what could we learn from them, or could we even mimic some of their best practices?

4:15 p.m.

Special Adviser to the Minister, Department of National Defence

Keith Coulter

I can give you some short comments.

4:15 p.m.

Conservative

John Williamson Conservative New Brunswick Southwest, NB

Short, yes.

4:15 p.m.

Special Adviser to the Minister, Department of National Defence

Keith Coulter

We're looking at it. Every country has a different machinery of government around this. Every country has a different history. All the western countries we're looking at have their issues. They're all dealing with serious issues around defence procurement. But at the end of the day, we have to come up with answers for the system that we have. I can't find a system that is so like ours, or a challenge function that is so good, that we could simply copy that.

This is a piece that I'm still working on. We're still having some work done on the practices in other countries, taking advantage of every opportunity. The deputy minister very recently went to Australia. I gave him my questions to ask the key people who were his interlocutors there. I'm trying to do everything I can to learn about countries that could have some aspects of some things that would be of interest to us.

November 6th, 2014 / 4:15 p.m.

Conservative

John Williamson Conservative New Brunswick Southwest, NB

I'd be curious to pursue this a little bit. When I go around the world, I see American hardware being used—Taiwan is perhaps a good example—whether it's for the army, the air force, or the navy. Maybe it's because the price is right, but they certainly make do with American hardware.

Maybe the United States is not the example, but I'm wondering if we are so different from the United States that from a taxpayer point of view it might not make sense to be more integrated with their supply mechanism or with another northern country. I recognize that the U.S. is not a northern country, but of course they have operations in Alaska as well. They're familiar with it.

Are these options that you're looking at to streamline the process so that we're getting good hardware in a timely fashion?

4:15 p.m.

Special Adviser to the Minister, Department of National Defence

Keith Coulter

No. I mean, those considerations are part of the broader defence procurement strategy. There's a DM committee that's looking at a lot of broader issues. My piece is around the statement of requirement: what the capability gap is that we're trying to address; how the requirement is being stated in a way that we know what performance is required and we aren't necessarily boxing ourselves in with a solution that's too early and whatnot.

In terms of the procurement strategies around these things, that is under the new defence procurement strategy, the purview of the DM committee initially, and of course there is a committee of ministers now that will deal with the procurement strategies for specific projects.

4:20 p.m.

Conservative

John Williamson Conservative New Brunswick Southwest, NB

I probably should have reversed these questions, then.

Can you give us some insight into the new defence procurement strategy initiated by the government, and how you see it improving the situation?

4:20 p.m.

Special Adviser to the Minister, Department of National Defence

Keith Coulter

There are three components of it. The first thrust is to deliver the right equipment in a timely manner to the Canadian Forces. That's where this piece fits in, because getting the front end of a procurement “genetically correct”—somebody said that to me, and I really liked it—at the front end can do nothing but help avoid problems later. There are a number of initiatives around that, i.e., the defence acquisition guide, the challenge function, engaging industry better, with more genuine and early engagement of industry. There is the whole industrial piece around leveraging these procurements for jobs and growth. That's the discussion around the value propositions and so forth.

Then there's the streamlining of processes. I think everybody around this table would agree with me that these processes take too long. They're cumbersome. They're awkward. They're even embarrassing at times. Streamlining these processes and getting things done quicker, with fewer problems, is key.

Now, Public Works and Government Services Canada has the lead on the defence procurement strategy. They've set up a secretariat. I've met with them on a number of occasions. They've set up a DM governance committee chaired by the deputy minister over there, and they're watching over all of that. Meanwhile, I'm grinding away to try to set up the perfect challenge function, under the defence minister's authority over at Defence, to get the front end of this thing as good as it can be so that we won't run into as many problems later.

4:20 p.m.

Conservative

The Chair Conservative Peter Kent

Thank you.

That's time, Mr. Williamson.

Ms. Murray, please.

4:20 p.m.

Liberal

Joyce Murray Liberal Vancouver Quadra, BC

Through the chair, I appreciate that you're here, Mr. Coulter. You have a pretty fearsome challenge in front of you.

I was the minister responsible for major procurement for the Province of British Columbia for a period of time. One of the key success factors was that there was one minister signing off on things and also that the right equipment for our client really was the priority.

On this local work and local industries sort of industrial benefits priority, which seems to me to be a greater priority than the right equipment, judging by some of the amazing failures to deliver so far, are you concerned that whatever good work you do might be frustrated by that preference to have industrial benefits over having the right equipment?

4:20 p.m.

Special Adviser to the Minister, Department of National Defence

Keith Coulter

It's a conversation that I've had with a lot of people around town. I'm comfortable that if we do this right, we're going to be good, and I'm determined to do my part right.

The idea is that with the requirements set, the high-level mandatory requirements for a project should set the basement for a project, and you can't go below that basement. If we all have confidence that we have that consensus, that we have this set the right way, there should be no discussion about going below that line. On value propositions, that discussion has to be above that minimum requirement line.

4:20 p.m.

Liberal

Joyce Murray Liberal Vancouver Quadra, BC

Is a factor in the failure to deliver on major equipment so far the lapsing of capital budgets, or the clawback of capital budgets, and the blocks and barriers to actually spending operational budgets, which means there are probably internal expert positions unfilled? How does this kind of budget cutting on the back of National Defence potentially undermine the success, no matter how good the statement of requirements is? Will you have anything that you can recommend on that level for the budgeting process?

4:25 p.m.

Special Adviser to the Minister, Department of National Defence

Keith Coulter

It's not within my terms of reference to be looking at those issues. You're the committee for defence. You have to ask others about those.

I wanted to say that I'm from B.C., too, though.

4:25 p.m.

Liberal

Joyce Murray Liberal Vancouver Quadra, BC

I also wanted to note from my meetings with the French defence department that they have their inter-ministerial committee at the front end. What they told me was that the reason their procurement works as well as it does is that they iron out things early on, rather than defence doing a great job in the beginning and going down a certain track and then every other minister and deputy minister having their fingers in the pie.

Has there been any discussion about the potential for getting that collaborative approach at the front end so that the buy-in has happened before you're too far down the track?

4:25 p.m.

Special Adviser to the Minister, Department of National Defence

4:25 p.m.

Liberal

Joyce Murray Liberal Vancouver Quadra, BC

Or are you stuck with this new procurement process that does the opposite?

4:25 p.m.

Special Adviser to the Minister, Department of National Defence

Keith Coulter

Well, the new procurement process will attempt to develop that consensus better. The conversation has started. We have a lot of pieces in motion, but the intention is to get a better consensus.

I have a different view of the French procurement system. I don't think it's that great. They have a lot of issues. Everywhere you look, there are a lot of issues, there's a lot of trouble, and there are a lot of national interests that are brokered for different things. I don't think they have a model for us.

4:25 p.m.

Liberal

Joyce Murray Liberal Vancouver Quadra, BC

Also, you mentioned working with the Privy Council, the Treasury Board, Public Works, and Industry. In this latest procurement model, rather than simplifying, there were two other departments added: Trade, and also DFO when there's coast guard involvement. That seems to complicate things. Are they among the group of senior leaders you're working with as you set this up?

4:25 p.m.

Special Adviser to the Minister, Department of National Defence

4:25 p.m.

Liberal

Joyce Murray Liberal Vancouver Quadra, BC

Are Trade and DFO also part of whom you're consulting as you set this up?