Evidence of meeting #37 for National Defence in the 39th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was boeing.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

Michael Fortier  Minister of Public Works and Government Services
David Marshall  Deputy Minister, Public Works and Government Services Canada
Terry Williston  Director General, Land, Aerospace and Marine Systems and Major Projects Sector, Public Works and Government Services Canada

8:40 a.m.

Minister of Public Works and Government Services

Michael Fortier

As I said in my statement, there's the committee of senior public servants from my department, Treasury Board, and National Defence who are working on ways to simplify the process—basically to collapse the fifteen years into something that's far more reasonable. I think seven years is still, frankly, a bit on the long end of it.

One of the ways to do this, to be honest, Mr. Hiebert, is to have fewer specs when we're looking for assets: rather than trying to define every single widget in an airplane, tank, submarine, or whatever, just to come up with larger or macro specs, as we did with the C-17s. I think there were fewer than ten.

In some cases I've seen, there were more than 300 in prior years. It's very difficult when you have 300 specs. People don't agree on the specs, and it takes years and years for all these committees to reach a consensus. Then you go out to the market, and some folks can meet 201 of the 300, and other guys can meet 175, but they're not even the same ones. Frankly, it's a bit of a mess, and we need to streamline this, which is what we've undertaken to do.

8:45 a.m.

Conservative

The Chair Conservative Rick Casson

Thank you, Mr. Minister.

Starting our second round, five minutes, we have Mr. McGuire, then Ms. Gallant, and then Mr. Bouchard.

Mr. McGuire.

February 20th, 2007 / 8:45 a.m.

Liberal

Joe McGuire Liberal Egmont, PE

Thank you, Mr. Chairman.

Mr. Minister, you said in your remarks that you need a plan B when you were negotiating a sole-source contract. Who's the plan B with?

8:45 a.m.

Minister of Public Works and Government Services

Michael Fortier

You need a plan B in the sense that we would have gone back....

Do you mean with respect to the C-17s?

8:45 a.m.

Liberal

Joe McGuire Liberal Egmont, PE

Yes.

8:45 a.m.

Minister of Public Works and Government Services

Michael Fortier

We would have gone back to the defence department in the case of having not reached an agreement with Boeing and we would have started the process again in terms of deciding how they could acquire this asset otherwise.

8:45 a.m.

Liberal

Joe McGuire Liberal Egmont, PE

So there really wasn't a plan B. If you failed in your first negotiation then you would try something else.

8:45 a.m.

Minister of Public Works and Government Services

Michael Fortier

I would go back to the client.

The client came to us with these specs. Mr. Williston's team negotiated with Boeing. We're now “in theory”, because we know we succeeded with plan A. In plan B you go to the client and tell them listen, we couldn't acquire the asset at a reasonable price so we have to go back to the drawing board. I can only guess at what would have happened in plan B here.

8:45 a.m.

Liberal

Joe McGuire Liberal Egmont, PE

If you weren't that sure of the Boeing contract, why didn't you have a competition and let Airbus compete at the same time?

8:45 a.m.

Minister of Public Works and Government Services

Michael Fortier

There was a competition, Mr. McGuire.

8:45 a.m.

Liberal

Joe McGuire Liberal Egmont, PE

Between who?

8:45 a.m.

Minister of Public Works and Government Services

Michael Fortier

There was an ACAN, which was published. The other manufacturers could not meet the specs in the ACAN. Some of them actually raised their hands and we had a committee look at the types of assets they were proposing. It was decided by this committee that these alternative assets could not meet the requirements.

8:45 a.m.

Liberal

Joe McGuire Liberal Egmont, PE

So your client would have to change the specs if the Boeing contract had fallen through? The client would then have to change the specs in order to...?

8:45 a.m.

Minister of Public Works and Government Services

Michael Fortier

I don't know what would have happened. I haven't been involved in a plan B, but I believe you need a plan B in any negotiation--for sure.

8:45 a.m.

Liberal

Joe McGuire Liberal Egmont, PE

Even though we don't know what it was.

8:45 a.m.

Minister of Public Works and Government Services

Michael Fortier

It doesn't matter. You need to make sure you're not going to be buying assets at an unreasonable price just because you believe those assets are required.

8:45 a.m.

Liberal

Joe McGuire Liberal Egmont, PE

Do you think the 20-year maintenance contract with Boeing was good for this country?

8:45 a.m.

Minister of Public Works and Government Services

Michael Fortier

In what sense? From a financial perspective?

8:45 a.m.

Liberal

Joe McGuire Liberal Egmont, PE

For the development of our aerospace industry, which we all want to support.

8:45 a.m.

Minister of Public Works and Government Services

Michael Fortier

That's a side issue.

To me, what's important is that we get a warranty contract. When you buy your Ford automobile, most people have an extended warranty. They want to make sure the car is going to be fine for the years they require the car. These assets are expensive, and I think it's reasonable for us, as a purchaser, to ensure that we have an extended warranty.

8:45 a.m.

Liberal

Joe McGuire Liberal Egmont, PE

The car warranty is usually at your local garage; it's not in some other country.

8:45 a.m.

Minister of Public Works and Government Services

Michael Fortier

You actually go back to the dealership, Mr. McGuire.

8:45 a.m.

Liberal

Joe McGuire Liberal Egmont, PE

That's right.

8:45 a.m.

Minister of Public Works and Government Services

Michael Fortier

That's right.

8:45 a.m.

Liberal

Joe McGuire Liberal Egmont, PE

The dealership in your analogy is not in another country, it's in your local town.