Government Operations Committee on Nov. 22nd, 2012

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

Thank you, Mr. Chair.

I echo my colleagues on the great work you've done to date.

I want to pick up on Ms. Duncan's comments. Skills training is so important. It's all about jobs, jobs, jobs for the next 30 years—for children, grandchildren, and future Canadians across this country. Having the privilege of representing constituents in interior British Columbia, I already know that our college is training welders and trades, with university president Toope from UBC, and UBC Okanagan, looking at engineers. That industrial liaison is really important not only for governance but institutional post-secondary training. I'm glad to see that this continues to work forward.

I have a couple of questions. One is about the process for contract bidding for smaller vessels. There is still about a $2-billion portion. Has it been allocated? Maybe you can update the committee on how that is going to unfold. My understanding is that Irving and Seaspan would not be eligible for bidding on those contracts.

[RAdm Patrick Finn]

Each of the smaller-vessel projects within National Defence will proceed as independent competitions. The one we currently have under way is for the replacement of our tugs on the east and west coasts. We've started the process of consulting with industry to get feedback from them.

You are correct that the two yards and their affiliates that have the shipbuilding strategy umbrella agreements and contracts were precluded from bidding on the smaller vessels. We are entering our definition phase, and we're getting into the design piece. In the next few years, we'll be seeking a competitive process to replace them as a key component of the work that will go to other yards.

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

Similar to Ms. Duncan, growing up in Alberta, actually in the riding she represents today, I know about the skills shortage, the labour, the demands. One joke was that the West Edmonton Mall had a larger subfleet than the Canadian Navy. It's a joke, but it's also a very serious concern of my constituents of Kelowna—Lake Country. I've been there over 22 years.

Government has a pretty poor track record of procurement. There's not a lot of faith from some of the actions of former governments—the cancellation of contracts, and the billions of dollars that have been wasted. Maybe you share with the committee, and my constituents, how you can put some confidence in the process and alleviate their concerns.

[Tom Ring]

Do I have time to answer the question?

[The Chair, NDP, Pat Martin]

Yes, you do.

I'm getting a little restless because the bells have begun to ring in Parliament for a vote at 10:34.

Perhaps maybe we should canvass the committee for its wishes.

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

Can he answer the question?

[The Chair, NDP, Pat Martin]

You certainly have time to answer the question, Mr. Ring. I'm just taking this opportunity to ask the committee how we want to handle this.

[John McCallum, Liberal, Markham—Unionville, ON]

I wouldn't mind being able to ask a couple of questions. I think I'm next.

[Mike Wallace, Conservative, Burlington, ON]

I think we should be consistent, whether we like the witnesses or not. We have been consistent as a committee. As soon as the bells ring, we leave.

[Linda Duncan, NDP, Edmonton Strathcona, AB]

No, we need to vote. As soon as the bells ring, we decide.

[Mike Wallace, Conservative, Burlington, ON]

That's not true, Linda.

[The Chair, NDP, Pat Martin]

It has been the practice that as soon as the bells start to ring this committee adjourns.

[Mike Wallace, Conservative, Burlington, ON]

It's safer that way.

[The Chair, NDP, Pat Martin]

That's when we begin to make our way to Parliament to vote. That has been the past practice.

[Mike Wallace, Conservative, Burlington, ON]

If he wants to answer this question, we could....

[John McCallum, Liberal, Markham—Unionville, ON]

What about asking for written answers?

[The Chair, NDP, Pat Martin]

That would certainly be in order if you wanted to put the questions. I think we could take a minute for you to put those questions and ask for written answers.

Mr. Ring, you were about to answer Ron's question. We'll let John put a few questions to which you could respond in writing at a later date.

Go ahead, Mr. Ring.

[Tom Ring]

I think your question was directed at assurances regarding the integrity of the procurement process. In fact, I'm not certain I would say that the NSPS is a gold standard. But it set a high standard, a high bar, for ensuring a fair, open, and transparent procurement process. It dealt with the siloing of the different evaluation teams, keeping the results secret, and coding the results. At times Treasury Board approvals were received without knowledge of the names of the bidders. All of these things taken together contributed significantly to I think an overwhelming view that the process was run in a fair, open, and transparent fashion.

It's more complex than that with the engagement of the shipyards. For instance, the shipyards were consulted on evaluation criteria and how we would weight them. We even sat down with potential suppliers and asked them to tell us what they thought the weighting should be for these criteria. The transparency has been extraordinary. The shipyards themselves agreed to share their own evaluations of how the yards fared, one against the other. That level of transparency we think contributes to the integrity of the procurement process.

[The Chair, NDP, Pat Martin]

Thank you, Mr. Ring. Thank you, Mr. Cannan.

John, you wanted to get on the record a couple of questions that you'd like to have answered in writing.

[John McCallum, Liberal, Markham—Unionville, ON]

Yes, I have three questions.

I'm not saying this is the case now, but echoing a little bit what Mr. Cannan said, in my day at Defence there was always a tendency to lowball. For example, they'd offer a bid for planes without taking account of the cost of the hangars.

First, what is the inflation rate, approximately? Is it 2%, 5%, 10%? This question is mainly to Admiral Finn, I believe.

Second, I might have missed something, but you said that construction will be delayed for various reasons. What's the expected date of the beginning of construction of ships? Is it two years from now, five years from now, eight years from now?

And third, in terms of this lowballing comment, does this estimate of $35 billion include all the costs or are there certain things such as hangars, if they were planes rather than ships, that are left out?

[The Chair, NDP, Pat Martin]

Okay John, I think you've made your point. We've cut some latitude to have you pose those questions.

We'll look forward, perhaps, to a brief written response, Mr. Ring. There's no need to write a big essay, but perhaps some brief answers to those questions.

I will simply say thank you very much for a very interesting presentation. You can tell by the enthusiasm from the committee members that we're all as excited about this as a lot of Canadians are, and credit goes to all of the actors. Perhaps it is a new standard in how we make major procurements.

Could I add one question to those put by John?

I'd like to know how much of the money is actually being invested in the shipyards to upgrade the shipyards. What is the federal government's role in the technical upgrading of the shipyards?

[Tom Ring]

We will provide a direct answer to that question.

[The Chair, NDP, Pat Martin]

Okay.

Rear-Admiral Finn, Mr. Ring, Mr. Leslie, and Mr. Vermette, thank you very much for the time and trouble you took to be with us today.

The meeting is adjourned.