National Defence Committee on Feb. 22nd, 2007

[VAdm D. Robertson]

I'll start, and then I'll ask Commander Greenwood to add slightly more.

Absolutely, we need a domestic shipbuilding industry for construction and ongoing maintenance of our vessels, and I think the same applies to the other government fleets. So the degree to which we can provide predictability certainly helps the shipbuilding industry.

If I use the example of a joint support ship, the openness and transparency that has characterized the project has allowed the industry to stay ahead of our requirement and to make sure they have the capacity ready when the time comes to take on the job.

Certainly one of the things that is offered by a steady shipbuilding program is that predictability that allows industry to make efficient investments and allows us to maintain a steady output of government fleets as well, rather than having the dips in output that are typical when one is engaged in batch—that is, very short-term—upgrading or construction.

[Commodore R.W. Greenwood, Director General, Maritime Equipment Program Management, Department of National Defence]

Following on from that, one of the important aspects of having a domestic shipbuilding industry is that it helps to maintain the skills in the industry, both in terms of the hand skills in the trained labour, but also in the systems integration skills, which are so necessary to be able to upgrade and modify the ships in service, and that's certainly a requirement domestically.

So from a point of view of ongoing construction, it is of advantage to the navy to be able to forecast steady-state naval requirements, to look ahead at replacing the classes of ships, not so much as an individual class-by-class replacement, but look at it strategically as a replacement or an ongoing renewal of the navy as a system.

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

I think what you're saying to me is that you do see domestic shipbuilding as part of a strategic asset for Canada.

I grew up on the west coast, and I remember the Burrard dry docks being a very busy place at one time. They're not any more. I worry about the decline in Canadian capacity to fulfill the needs of shipbuilding as an industry in Canada, but to fulfill the needs of the Canadian navy as well, in the long-term, both on the east coast and on the west coast of Canada.

[Cmdre R.W. Greenwood]

Certainly taking a long-term strategic planning view makes it easier for industry to be in a position to respond to the navy's needs.

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

Okay, thank you.

What, in your opinion, holds up the procurement process in Canada? Do you think it's the bureaucracy, or is sometimes the fact that governments and cabinets and ministers...? There seems to be this spread of responsibility in this whole process that I'm trying to understand and find out who is finally accountable on all this. What do you believe holds up this procurement process, which can often take a very, very long time?

[Terry Williston]

Well, I'm part of the procurement process—that's for sure. We'd like to think we operate the pieces that we're responsible for to the maximum efficiency possible. I think, as Mr. Ross indicated when he was here, a lot of the time taken in procurement is in the deciding stage. Perhaps a lot of time is spent either deciding or redeciding on many of these priorities and projects. I would tend to think that takes the longer piece of that whole procurement timeline.

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

What do you think is an acceptable timeframe for procurement? What do you think that goal should be?

[Terry Williston]

It's project- or asset-specific. As was mentioned, on the shipbuilding side we tend to design to specific Canadian requirements--a design-and-build concept--that take much longer to procure involving Canadian industry, rather than some of those other types of procurements, which we talked about, that involve just procuring things off the shelf.

For example, to talk to your other question as well about the strategic interest or importance of shipbuilding, we host a marine procurement outlook conference annually where we bring together the departments that are involved in requiring ships--RCMP, Coast Guard, Fisheries and Oceans, and DND. They lay out their plans and programs for the next five and ten years in front of an industry audience, and the industry audience has the opportunity to understand what's coming down the pike, so to speak, and to prepare for those procurements. We'd like to think that helps us to better plan and manage the whole procurement process and the volume of procurements that are required in the Canadian shipbuilding industries.

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

In terms of the purchase of the joint supply ships, does the navy foresee any need in the future for a change in that doctrine?

[VAdm D. Robertson]

With respect to the employment of the ships?

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

The purchase.

[VAdm D. Robertson]

The manner in which they are purchased? I'm not sure I....

[Cmdre R.W. Greenwood]

I'm not quite sure I understand your question. Is your question whether the navy sees a need for a change in the design-and-build approach?

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

In the doctrine of how the process works, I think is what I'm asking you.

[VAdm D. Robertson]

No. In fact, I think the joint support ship project is a bit of a template for how we'll move for future acquisitions. As I noted earlier, I guess it would start with the long-term forecasts to industry in general and the specific information associated with any individual ship like the joint support ship. Getting it out early is what allows industry to coalesce their capability around the requirement and become efficient. In fact we're already using it as the template for future acquisitions.

[The Vice-Chair, Liberal, John Cannis]

Thank you very much.

We'll go to Mr. Hiebert.

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

Thank you, Mr. Chair, and thank you all for being here this morning.

Admiral Robertson, I have a quick question. Based on your experience of maritime acquisition, what's your greatest concern, as it affects the navy?

[VAdm D. Robertson]

The greatest challenge is always in recapitalizing the fleet. That's an enduring challenge in all navies, because of the two points I mentioned earlier, one being the long time it takes to procure warships. Since it takes a long time, there never seems to be a sense of urgency, because a decision today only generates effect seven, eight, nine years from now. Delay is almost always possible in making decisions, because they won't cause an immediate effect. That's one challenge based on time.

The other is based on cost. Naval platforms being expensive, there is always an issue of fitting them into a program. The cost coupled with time means it's always easier in some cases to push things off just a little bit. That's why sailors tend to value a long-term plan that regularizes the acquisition, since it makes the coming to terms with a decision today for something that's going to generate effect a decade from now easier to deal with.

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

Recently, the Chief of Defence Staff explained that the Canadian Forces lost a lot of talent in the 1990s. I think he referred to it as a decade of darkness. In light of this admission, is there sufficient maritime expertise in terms of further procurement of fleets?

[VAdm D. Robertson]

I'd break that into two parts. The first would be the seagoing ship's officers, as opposed to the seagoing engineers, who are required to drive for any project. In this case, relatively fewer are required than the number of engineers required for a new project. But we still need a number of seagoing ship's officers to deliver any project. And in our case, it's just a matter of priority. We have to have a future fleet; therefore we have to invest in any project to see it through. Consequently, it's just a matter for us of reallocation of talent.

It's a different issue for the engineers because of the size of these projects. I'll let Commodore Greenwood speak to that.

[Cmdre R.W. Greenwood]

I think the question also comes, though, back to this issue of strategic planning. With a long-term look ahead, we can plan the requirements we need, and we can also look at how the different recapitalization projects overlap and how the different demands of the different phases of a project intersect.

We're also working, as was mentioned with respect to the JSS project, on new ways of doing business and ways of engaging industry earlier and in a more open and partnership fashion, which also serves to mitigate the issue of expertise and to balance it between requirements for internal expertise and external expertise.

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

I understand that the Canadian patrol frigate project came in on time and on budget. I'm wondering if there are some lessons that this committee could take from your successful experience with that procurement?

[VAdm D. Robertson]

Yes. Actually, I'd start merely by saying not only on time and on budget, but it delivered a world-class product. It is still, 15 years later, operating around the world and will be for decades to come, and certainly today it is a platform that other countries are envious of.

[Cmdre R.W. Greenwood]

Certainly it demonstrated that Canadian industry can coalesce around requirement, where we'd had a hiatus in shipbuilding before that, between the building of the Tribals and the building of the Halifax class. So industry was able to coalesce around requirement. It illustrated to us the benefits of contracting out on a performance-based requirement, specifying the operational performance requirements rather than the fine details of how that performance would be delivered. Those have certainly been lessons that have been brought forward into subsequent shipbuilding programs, such as the Kingston class and currently the JSS.

One of the things that it did also illustrate, though, was that when we delivered 12 ships within a four-year period—they were all commissioned between 1992 and 1996—that then has continued the issue of boom and bust that the admiral referred to earlier. So that has also been a lesson that indicated to us that we wish to try to—again going back to the expertise question—phase out our deliveries in order to provide more of a stable demand on industry that they can plan for and work ahead to.

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

So if I hear you correctly, you're suggesting that the application of a performance-based specification worked well.

I've also heard you mention in earlier testimony that doing a technical specification is also a big part of identifying your requirements because of the size and enormity of the platform. Could you explain that a bit more, how it's a combination of both technical specifications and performance-based?