Thank you, Mr. Chairman and members of the Standing Committee on National Defence. I very much appreciate your invitation to appear before you today to support your study of military procurement and associated processes.
I'm currently employed as the senior advisor to the Center for Defense Information, a non-profit organization, a division of the World Security Institute, which is a Washington, D.C.-based national security study centre. To help ensure our independence, the World Security Institute and the Center for Defense Information do not accept any funding from the federal government, any other government, or from any defence contractor.
In my current capacity I'm called upon sometimes to provide independent expertise on various defence matters. I have about 30 years of experience involving U.S. defence systems and equipment. My remarks today will be based on those experiences and may not apply to the situation in Canada, which may be quite different from that in the U.S.
I want to note from the outset that many U.S. military acquisition programs work very well. You never read about them in the newspapers. They provide the user with the intended capabilities and they work just fine. However, in some recent years there have been some disturbing trends. For example, in some recent years, 80% of U.S. army systems did not achieve 50% of their required reliability in operational testing. Not long ago, two-thirds of U.S. air force systems had to halt operational testings because they weren't ready for it. Going back a little farther, the navy has also had to deal with its difficulties. In 1992 there was a period where only 58% of navy systems undergoing operational testing to support a Milestone III decision were successful. The navy instituted several changes and a few years later their success rate was up to about 92%.
More generally, today there is concern about finding ways to reduce technology risk in U.S. defence acquisition programs, which too often overrun their costs and schedules.
When such problems arise, it's usually, I feel, because of a general lack of realism, which manifests itself in four ways, the first being unrealistic requirements. While we all want our soldiers, sailors, airmen, and marines to have the very best equipment, and they also of course want more capable systems, that can translate into multi-mission systems, and this can lead to more complicated, multi-functional systems, often with computers and sensors working together for information fusion. These days, practically everything has a computer in it, as we see in our everyday lives.
For example, the cancelled Crusader howitzer program had roughly a million lines of code in its computer. Some people would be surprised that a howitzer would need that sort of computational power, not unlike what you might have on a modern jet fighter aircraft.
So in the United States today, what often happens is the technical challenges that must be overcome to achieve effective multi-function systems are regularly underestimated.
It's also not uncommon for the U.S. Department of Defense to have unrealistic expectations for costs and schedule as well as performance. Sometimes this originates in proposals first put forward by industry. To make new proposals attractive, the U.S. defence industry may overstate what can be delivered and how inexpensively.
But whether it's driven by contractors or by the government itself, this can lead the contractors to buy-in, as the phrase goes, in order to be competitive. This often is caused by a failure by both the government and the contractor to fully understand and address the technical challenges in a program early. When the technical challenges have not been candidly identified, the cost of schedules to solve these problems can overrun by billions of dollars and many years of delay.
Also, with the intent of saving time and money, sometimes the military departments or defence contractors turn to commercial off-the-shelf or non-developmental items, so-called COTS/NDI. Usually these items are really not on the shelf, in the normal sense of the phrase, commercial or otherwise, and if they are, often the designer of these equipments never contemplated that product would be put to military use in a harsh military environment.
I feel a third area of unrealism is that too often the U.S. Department of Defense goes into highly complex technical programs expecting the contractors to deliver under firm, fixed-price contracts. Even if they are not firm, fixed price, many contracts are structured with little or no incentive to continue development to improve the system and every incentive to get into production as soon as possible. Also, the contractual environment for these contracts often requires defence companies to make unrealistic bids simply to be competitive. You've heard the phrase “you can make it up in production”. Later, if production quantities are cut, which they often are, that further reduces the prospects for profit.
Finally, fourth, in the sense of preparing for a realistic operational environment, sometimes defence acquisition programs underestimate the importance of the operational environment, such as bad weather, the stresses of battle, or operational loading. For example, computer systems may be loaded much more heavily in battle than in the laboratory. Sometimes acquisition programs do not prepare adequately for operational testing, which by definition will be operationally realistic. Complex systems that have done well in the laboratory sometimes do not perform well in realistic operational tests.
With these issues in mind, I have laid out ten solutions for you, ten things you may already be considering or you might want to consider. I don't think I need to go through each of those ten things. I think they're pretty self-explanatory. They range from increased parliamentary oversight and review, competition in contracting, to making sure you pay attention to the technical details. I won't take your time by going through those ten things, but I'd be happy to take questions when the time comes.
As I said at the outset, not all my suggestions will be appropriate for the Canadian government. For one thing, the scale of most Canadian military procurements is different from that in the U.S. However, the trend in defence procurement worldwide is toward larger, more complex, and more costly systems that involve advanced technology, computers, and software, and these big systems are difficult to manage.
Thank you, Mr. Chairman.