National Defence Committee on Feb. 6th, 2007

[Dawn Black, NDP, New Westminster—Coquitlam, BC]

My final question is this. You talked about the process among the three different departments of government. Where does the military involvement in procurement start and where does it end? You said that the military defines its requirements, and then it goes over to the Department of National Defence and the public works department to set the process in place.

[Gordon O'Connor, Conservative, Carleton—Mississippi Mills, ON]

I'll let the deputy minister answer.

[Ward Elcock, Deputy Minister, Department of National Defence]

Mr. Chairman, the military defines the requirement. That's done in part with the participation of ADM Materiel, who is part of the Department of National Defence. Ultimately, once we have defined a requirement, it is the Department of Public Works that actually does the procurement—signs the contracts, and so on. It's the Minister of Public Works who actually signs the contract.

[The Chair, Conservative, Rick Casson]

Thank you. That finishes our time.

Mr. Hiebert, you have ten minutes.

[Russ Hiebert, Conservative, South Surrey—White Rock—Cloverdale, BC]

Thank you, Mr. Chair.

Mr. Minister, I think all members of this committee would agree that with our men and women in uniform putting their lives at risk, they deserve and need to have the best equipment to do their job. I want to thank you for the tremendous leadership you've been showing in this respect when rebuilding our military.

As you may be aware, the former ADM for materiel, Alan Williams, has published a book on procurement. I expect him to be coming before this committee at some time in the future. He states that during his time at the defence department and at Public Works, no minister ever attempted to influence the procurement process, because the process simply doesn't allow it.

We've heard, even today, some members of the opposition suggesting that there is opportunity for influence in the C-17 contract. Perhaps they don't fully understand the process. I was going to give you some more time to explain to the members of this committee how this decision is made by the military alone.

[Gordon O'Connor, Conservative, Carleton—Mississippi Mills, ON]

I have my two major subordinates here with me, and you can ask them independently whether I've ever interfered with any of the requirements. You'll find that I never have. And I never will.

I'll let the DM carry on. He was explaining the process when he ran out of time.

[Ward Elcock]

I'm not quite sure how much more you want me to explain, but I was just about to say that the other part of the process, which is industrial regional benefits, is the responsibility of the Department of Industry; they oversee that process.

Once all of that is approved, we go to contract, and it is the Department of Public Works.... We work with them, but they are the ultimate authority in the signing of the contract.

[Gordon O'Connor, Conservative, Carleton—Mississippi Mills, ON]

All right.

One part that the military does get into is at the end. The military receives the product, they employ the aircraft or ship or truck or whatever it is, and they have to have a training system. That all has to be part of the process so that they can be effective.

[Russ Hiebert, Conservative, South Surrey—White Rock—Cloverdale, BC]

In your presentation you talked about how the department is moving from a technical requirements specification to a performance-based specification. Could you briefly explain to us what the difference is between these two processes, and secondly, how the performance-based specifications make the acquisition of major military equipment more efficient and more timely, to the benefit of our men and women in uniform?

[Gordon O'Connor, Conservative, Carleton—Mississippi Mills, ON]

I'll ask the chief to respond.

[Gen R.J. Hillier]

Mr. Chair, ladies and gentlemen, when we started walking through specifications, what we would use in the past was detailed specifications for every conceivable part of a piece of equipment, in order to get something.

For example, for an aircraft, we said we need a wing so big, wheels so big, the aircraft had to be so long and have so many doors and do certain things—and all in great detail. In fact, in the Maritime helicopter project, for example, those specifications went to 17,000 pages.

We looked at that and asked why we were doing it. We were actually doing it to say that we needed an aircraft that could carry a certain size of load, by weight and capacity; could carry it at a certain speed, because you have a certain timeframe that you want to close; could carry it thus and thus far; and when it got there could land on a certain kind of airstrip—perhaps a rough, unprepared, short airstrip in the middle of the north of Canada, or in the middle of Afghanistan—and be able to unload the equipment without being dependent upon outside equipment that might not be on the ground. In short, it had to be self-contained.

We asked why we didn't actually just say that we need an aircraft to deliver this kind of weight, of a size that fits the major equipment we have or the normal containers that we have now and are developing for use of transport; that we need to carry it this far and this quickly and be able to do those things on the ground.

We decided that by far the best, the simplest, and the clearest process was to go out and say: “If you can do this, bring your aircraft. We don't care what kind it is. We actually don't care how big the wing is. We don't care about anything else, as long as it can do this.” Then we judge which is the best—the cheapest, or whatever—if more than one show up.

We think it is actually the right approach. Then you take the aircraft that wins, that says it can do this and do it most cheaply—or do it—and say, these are the specifications we want. It's so simple. We've gone through it for months and years and never gotten to that place, and we actually think this makes eminent common sense.

[Russ Hiebert, Conservative, South Surrey—White Rock—Cloverdale, BC]

It certainly sounds as though it does.

When did the defence department start incorporating this approach?

[Gen R.J. Hillier]

Sir, it was two years ago. A little while after I took over as Chief of Defence Staff—I believe Mr. Bachand was there—I spoke at the Canadian Defence Association and said we needed to do this, from our perspective, to meet our responsibilities to a minister of national defence.

This Minister of National Defence—like Mr. Graham before him, I will say—is most supportive of that, and we work well with our minister here to provide him exactly that. He then holds us accountable, saying: “Show me your line of logic here. What kinds of missions, what kinds of tasks are we asking you to do?” Obviously, with Mr. O'Connor's past experience, some of those things are very intuitive, but in other cases he peels right down to the level so that we show him our reasoning, our line of logic for why we said we need to be able to land on an airstrip that's 3,000 feet long and is not paved and is in an area where there is some air threat. He holds us accountable to clearly lay out that line of logic.

[Russ Hiebert, Conservative, South Surrey—White Rock—Cloverdale, BC]

It is safe to say, then, that these sorts of performance-based specifications were used in the decision to purchase the C-17s.

[Gen R.J. Hillier]

In fact, yes.

[Russ Hiebert, Conservative, South Surrey—White Rock—Cloverdale, BC]

Thank you.

Mr. Minister, you've been a close observer of the military procurement process for your entire career. I was wondering if you could share with the committee some of your observations about the strengths and weaknesses of the procurement process and offer any advice on where we should focus this committee's efforts.

[Gordon O'Connor, Conservative, Carleton—Mississippi Mills, ON]

As the chief just explained, it started a couple of years ago. The reforms that defence has begun to implement are showing fruit. It used to take about four years from the time somebody had an idea until we got to the point where we could move beyond the department. That is down now to basically months.

So great improvements have been made in the defence department, but the defence department is just one part in the process. You have Public Works, you have Industry, you have Foreign Affairs, and you have the Treasury Board. What we have to do is make sure that together all these departments and processes are as smooth as possible; that you have the normal checks and balances in the government, but that you don't put undue processes in.

We could probably theoretically keep speeding up the process in the defence department, but unless procurement moves at a good rate, and the industry department's industrial benefits are identified, and Foreign Affairs deals—in some cases—with ITARs, then you get a fast start and things slow down.

So it's a matter of reforming the whole process. That started in our government. The Prime Minister has mandated a number of us to get together to keep refining the process to make it simpler and faster.

[Russ Hiebert, Conservative, South Surrey—White Rock—Cloverdale, BC]

With my last question, I'd like to touch on what the benefits of the strategic lift will mean to the military. I note that 13 years ago, in 1993-94, the air force had 700 serviceable aircraft; 10 years later they were down to 290, with serviceability rates of 30% to 60%; the air force suffered a 75% drop in air power in 10 years.

I was wondering, again, if you could mention for this committee the benefits we will experience from the acquisition of strategic lift.

[Gordon O'Connor, Conservative, Carleton—Mississippi Mills, ON]

I think the chief will respond.

[Gen R.J. Hillier]

I would say a couple things, sir. First of all, I'll speak from what I hear from the men and women in uniform. This, to them—and they tell me this—is a visible, tangible sign that they'll get the tools to do the job they need to do. We have had a bonding between the air, land, and sea forces as a result of this Afghanistan mission, because they are all there in Afghanistan, as perhaps you saw, although the navy is not in as primordial a role. They have had a bonding that shows, and their appreciation for each other and for what each part—air, land and sea—brings to the Canadian Forces to give one effect for Canada, which we haven't seen in the Canadian Forces in decades, for sure....

They see the C-17 as a sign; it's the tool they need to do the job. It is coming, it is coming quickly, and it's coming because they need it. For them it is a morale issue that is huge.

Second, simply from being able to do that mission, or missions similar to it, or missions around the great expanse of Canada, the C-17, as I mentioned earlier, gives us a flexibility and an agility, particularly at the front end, when we own the aircraft.

Obviously, as you get into longer timeframes, you can perhaps rely more on leased aircraft, although there are some limitations, as I also mentioned earlier. But at the front end of any mission, such as the ice storm where I was, here in eastern Ontario, or the Red River Valley flood, where in the first several days we were trying to get large numbers of men and women and equipment into the area to help Canadians during what was the worst time in their lives, the C-17 and the strategic lift gives us a flexibility and an agility we simply do not have right now. It helps set conditions for success, and in a place like Afghanistan, whilst helping to increase the probability of success of the mission we have been asked to do, it also helps us in a very real way reduce the risk to the men and women who are involved in implementing the mission.

[The Chair, Conservative, Rick Casson]

Thank you, General.

We have finished our first round, and I thank you all for your cooperation. We start our second round. It's five minutes, so it's quite a bit faster. We will start with the official opposition and then go over to the government and then back to the Bloc.

Mr. Martin.

[Keith Martin, Liberal, Esquimalt—Juan de Fuca, BC]

Thank you, Mr. Chair.

Mr. Cannis may want to ask a question after me.

Mr. O'Connor, thank you for being here, and General Hillier and Mr. Elcock also.

Certainly, General Hillier, through you we'd certainly like to express our profound thanks to the men and women in our forces for the courageous job they are doing day in and day out, and to their families.

[Gen R.J. Hillier]

Thank you.

[Keith Martin, Liberal, Esquimalt—Juan de Fuca, BC]

My first question, Minister, is to you. It concerns the replacement of our Buffalo search and rescue planes. Quietly the statement of requirements has been changed. The minimum speed required has been raised to 140 knots.

In my province of British Columbia, to do adequate contour searches you have to fly between 70 knots and 120 knots. This change will make us purchase a plane that is going to put the lives of our SAR techs in danger and also make us unable to do an adequate job of doing contour search and rescue.

Why was the statement of requirements changed to raise the minimum flight speed?

The second question concerns an MC that went with respect to the purchase of the tactical airlift. By leasing the strategic airlift from the U.S., we would save $400 million of taxpayers' money, something that would have been more efficient. The Globemasters would have been in Canada. We would have access to it and save $400 million.

The outcome of the plan you have, sir, is that I suspect that you're forcing to contract capabilities in other areas. For example, there is the plan to remove our refueling and supply ships from the navy two years prior to the new ones coming on board; I'd like to have your assurance that our navy's supply ships will be able, functional, and operational until the new ones come on line.

Finally, are you going to extend the combat role of our troops in Afghanistan beyond 2009?

[The Chair, Conservative, Rick Casson]

Mr. Minister, the last question hasn't got much to do with procurement, but the first two do.