Government Operations Committee on March 9th, 2017

[Lisa Campbell]

Fighter aircraft and their component goods are heavily controlled, as I'm sure all of you know. Purchasing them requires collaboration with governments, and also with private industry. We are making sure in our competitive process that in the actions Canada is involved in now, whether it's participation in the F-35 joint strike fighter MOU for industrial benefits to Canadians or interim purchases of other types of aircraft to supplement the existing fleet, we still create a level playing field for the future for the competitive process. Our desire in all of this is to encourage everyone who has something to offer to compete, so that we can get the best value for Canada.

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

The 18 new Super Hornets we want to acquire, will they be subject to the ITB policy as well?

[Lisa Campbell]

We are exploring a potential acquisition using the foreign military sales program, which means we are buying via the U.S. government. But we are also looking to suppliers, Boeing principally but also others, to negotiate a side agreement for industrial benefits for Canadian industries. Yes, with every one of our procurement processes, we look to maximize economic benefits to Canada by applying the industrial and technological benefits policy.

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

That's great. Will the new procurement process to replace the existing fleet be subject to the industrial and technological benefits policy?

[Lisa Campbell]

Very much so. These are wonderful opportunities to maximize opportunities for Canadian industry. We have a very strong aerospace industry, and these are important opportunities for them, not only to participate in this procurement but also to globally export their talent and capacities. We work closely with industry, consult with them, and find out where the areas of strength are to make sure we maximize each procurement for the benefit of the Canadian industry.

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

What are some of the lessons learned based on some of the challenges you've experienced over the last 10, 20, or 30 years in jet procurement? What are some of the challenges that PSPC has applied and learned, and how are you applying this to the new procurement process?

[Lisa Campbell]

I've been in this job for two years. I did other work before then. We have tried very much to apply procurement best practices to this procurement, as we have done to many others. That includes robust industry engagement, understanding what the client department's needs are but also going out and talking to industry. That means not just the prime manufacturers but also the entire supply chain. We ask how we can structure this for the benefit of all of the supply chain, making sure that we're maximizing industrial and technological benefits. What is the best way to procure?

One of the things that we look at these days in procurement processes is pre-qualification processes to make sure we're talking to serious bidders who actually want to submit a bid, making sure we focus the requirements and make it easy for them to submit bids. We will consult with them, share drafts, and requests for proposal to make sure we get the maximum number of compliant bids in a reasonable time. We try to do these as rapidly as possible, but we also need to give industry time to consult with their supply chains, to consider whether or not they're going to bid, and to submit robust bids.

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

Great.

[The Chair, Conservative, Tom Lukiwski]

Unfortunately, we only have about 15 seconds left.

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

Thank you, I appreciate it.

[The Chair, Conservative, Tom Lukiwski]

Mr. McCauley, you have seven minutes, please.

[Kelly McCauley, Conservative, Edmonton West, AB]

Thanks for joining us.

Ms. Campbell, I won't assume you've been around for 30 years.

[Lisa Campbell]

Thank you.

[Kelly McCauley, Conservative, Edmonton West, AB]

We'll stick with the fighter jets, please. How many parts of the Super Hornet are actually made in Canada? Is anything?

[Lisa Campbell]

For questions about the specifics of the Super Hornet, I would ask that you question DND for those. One piece I would say is that we are buying this via foreign military sales from an American company, but we are negotiating a side agreement if this—

[Kelly McCauley, Conservative, Edmonton West, AB]

The reason I ask is that I've heard nothing of it is made in Canada. Is that correct?

[Lisa Campbell]

We are exploring the foreign military sales acquisition. I should say two things, if I may. Canadian and American supply chains are integrated to some extent, but we always look to maximize the participation of Canadian industry.

[Kelly McCauley, Conservative, Edmonton West, AB]

I understand there are politics involved in the sole-sourcing of the Super Hornet and the F-35, but from a technical point of view, a lot of our ally countries have picked up the F-35. The Netherlands, Denmark, Norway, Israel, etc., have so and they've done, from start to order, anywhere from 12 to 18 months for the procurement process. We have a very experienced, very knowledgeable, very capable procurement department, so why are other countries, which are much smaller than us and with fewer resources, able to do it, from to start finish, from 12 to 18 months, and it's going to take us anywhere up to five years?

We're going to spend two years sole-sourcing a Super Hornet, which is going to be obsolete in a couple of years. That's not your decision, I understand, but why is it going to take us so long when smaller countries with fewer resources are able to do it in a much shorter time?

[Marie Lemay]

There are a few things in there.

When we look at it, the other countries don't necessarily start the process at the same place we do, so it's hard to compare one with the other.

[Kelly McCauley, Conservative, Edmonton West, AB]

We're starting at the point where we had chosen before, so we have a lot of the information already. We're not starting from scratch here.

[Marie Lemay]

If we go back to the previous, one of the things we are insisting on is doing a process that will engage everybody, that will give the opportunity, and level the playing field.

[Kelly McCauley, Conservative, Edmonton West, AB]

Denmark, Norway, and all those other countries do the same thing. Why does it take us so long?

[Marie Lemay]

It's because we want to engage industry and make sure we have the best process.

Now the other thing is that we are waiting for a couple of pieces since we've started this process. You know there is a defence policy review. There are a number of things. We will be building all of the pieces into this process. It will be a thorough, fair process, and we don't want to have to come back and do it again. We want to do it right.

[Kelly McCauley, Conservative, Edmonton West, AB]

Yes, it's just—

[Marie Lemay]

This is the shortest time frame we have laid out for doing it in a rigorous fashion.