National Defence Committee on Feb. 20th, 2007

[Michael Fortier]

Mr. McGuire, believe you me, I would have loved to have bought these aircraft in Canada. They're not manufactured in Canada. Most of the assets—

[Joe McGuire, Liberal, Egmont, PE]

But they could be maintained here.

[Michael Fortier]

With most of the assets we buy at Public Works--the billions of dollars this department buys on behalf of all of you--the very large majority is purchased here in Canada, from Canadians employing Canadians.

[Joe McGuire, Liberal, Egmont, PE]

But the maintenance could happen in Canada.

[Michael Fortier]

Well, for four aircraft--I'll let Mr. Williston explain, as he's much more technical on this than I can be--it was more reasonable. I think it fit in with an overall long-term maintenance support feed that Boeing had with the U.S. Air Force. They have stations around the world where these aircraft are serviced. For us to build a system here in Canada for only four aircraft, most experts would tell you would be unreasonable.

[Terry Williston]

And that's the key. For a fleet approaching 200 airplanes, setting up a maintenance facility in Canada for only four was seen as completely inefficient, particularly when you could obtain those same benefits through indirect IRBs for other activities in the country.

[Joe McGuire, Liberal, Egmont, PE]

On page 5, you said you bought 50 armoured vehicles. Are those the Nyala vehicles?

[Terry Williston]

Correct.

[Joe McGuire, Liberal, Egmont, PE]

I thought they were purchased by the previous government.

[Terry Williston]

They were delivered in theatre in 2006.

[Joe McGuire, Liberal, Egmont, PE]

But the operation was conducted by the previous government, so you really haven't purchased anything off the shelf since you became minister?

[Michael Fortier]

Sorry, there is something called the C-17 that we've been talking about, which is off the shelf, sir.

[The Chair, Conservative, Rick Casson]

Thank you, Mr. McGuire.

[Joe McGuire, Liberal, Egmont, PE]

But it was competitively off the shelf.

[The Chair, Conservative, Rick Casson]

We will now go over to the government.

Mr. Blaney.

[Steven Blaney, Conservative, Lévis—Bellechasse, QC]

Thank you, Mr. Chairman.

Welcome, Minister. With respect to the two witnesses who preceded you, I would first of all like to say that I had the privilege of working at the same department as they do, and that this department has a reputation for integrity and results.

Mr. Minister, although it was clearly apparent that your role is to prepare the terms of reference, purchase equipment and that it is up to National Defence to clearly define requirements, I would like to read a brief quote:

The occasion arises so seldom in column writing to say something good about a government that we should waste no time congratulating Ottawa for its decision to step away from a hornet's nest of regional rivalries....

I'd just like to review some of what was said.

What I have gathered this morning—and this is a first for our government—is that now, when military procurements are made, it's a dollar for a dollar. Consequently, every time a dollar is invested in military equipment, it is put into the country. I am pleased that you have reminded us about that.

I would also like to tell you that I went to Afghanistan and I boarded that Nyala that was purchased this summer. These are really secure vehicles, which are appreciated by the Department of National Defence.

My question is very simple. We have just adopted the Accountability Act. I would like to know, initially, if there has been any impact on the general Public Works Canada procurement process, but also on the procurement process for National Defence, which is the subject of our study?

[Michael Fortier]

The impacts of the federal Accountability Act are general in nature and therefore could apply to both the Department of National Defence, the Department of Health or the Department of Foreign Affairs.

As for the guidelines or significant changes that have an effect on my department and suppliers, there are two aspects: the creation of a procurement ombudsman position and the drafting of a procurement code.

Currently, this code is online and is open to a comment period until March 7 on the MERX system. This is an online procurement system, a little bit like an eBay for the state, in order to purchase goods and services. This is a code that will govern contractual and other types of relationships between the suppliers and the state. It will establish the guidelines enabling us to do business together, namely the state and its suppliers.

As for the procurement ombudsman, this is a position that also was created by the statute. This individual will be called upon to advise the minister and also to receive complaints. These will not be complaints made by individuals because most they have lost a contract, because of these items can be dealt with through a court, either the Federal Court or the Canadian International Trade Tribunal, the CITT. The ombudsman may also receive complaints from people who may have been awarded a contract, but feel that the department has not treated them properly, that the promised payment for compensation has not been made. As I said earlier, the ombudsman will also advise the minister on ways to improve the procurement system in general.

Those are, Mr. Blaney, the two main changes or improvements introduced by the Federal Accountability Act that will deal with procurement in general.

[Steven Blaney, Conservative, Lévis—Bellechasse, QC]

For example, the ombudsman will ensure that suppliers who feel that they have been mistreated could consult him.

[Michael Fortier]

That would depend. If this is a supplier who was not awarded a contract further to the bidding process, it would depend on the amount: he would then have to appeal to either the Federal Court or the Canadian International Trade Tribunal, which we also call the CITT. Depending on the amount, he could also consult the Procurement Ombudsman.

[Steven Blaney, Conservative, Lévis—Bellechasse, QC]

In your presentation, Mr. Minister, you mentioned that the individuals in charge of project management and federal government procurements were facing a problem in the area of recruiting, retention and training.

Is this an internal problem? Are there adequate internal resources enabling us to run the procurement process?

[Michael Fortier]

Public Works and Government Services Canada is the drop-off place, but in some services on Parliament Hill, we have officials who look after procurement.

Accordingly, we have to act as a bridge between them and us as far as, for example, best practices are concerned and ensure that the practices of my department and that of another department with procurement responsibilities are harmonized.

[The Chair, Conservative, Rick Casson]

Thank you, Mr. Minister.

Mr. Bouchard.

[Robert Bouchard, Bloc, Chicoutimi—Le Fjord, QC]

Thank you, Mr. Chairman. Mr. Minister, gentlemen, welcome. Thank you for your presentations.

I have a few brief questions. I am presuming that the answers can be brief as well.

The Minister of Defence, Mr. O'Connor, testified before us. He stated that it was the responsibility of the armed forces to determine the requirements. Do you agree with that?

[Michael Fortier]

Yes.

[Robert Bouchard, Bloc, Chicoutimi—Le Fjord, QC]

The Minister of Defence stated that tendering under the procurement process was the responsibility of Public Works and Government Services Canada.