Evidence of meeting #27 for National Defence in the 40th Parliament, 3rd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was competition.
A recording is available from Parliament.
4:35 p.m.
former Assistant Deputy Minister (Materiel), Department of National Defence, As an Individual
Okay, all I'm saying is--
4:35 p.m.
Conservative
4:35 p.m.
former Assistant Deputy Minister (Materiel), Department of National Defence, As an Individual
That's exactly right. It was agreed to by the Auditor General, by the way, at the end.
4:35 p.m.
Conservative
4:35 p.m.
former Assistant Deputy Minister (Materiel), Department of National Defence, As an Individual
Okay. I still stand by my record of 8.8% as opposed to 42.1% of dollars.
4:35 p.m.
former Assistant Deputy Minister (Materiel), Department of National Defence, As an Individual
Well, what?
4:35 p.m.
Conservative
Laurie Hawn Conservative Edmonton Centre, AB
Both those numbers are accurate. Your 8% is fine. I'm not....
4:35 p.m.
former Assistant Deputy Minister (Materiel), Department of National Defence, As an Individual
It is eight percent of dollars. If the government sole-sourced a lot of procurements for $30,000 and $35,000, that's a big difference, in terms of the overall money being spent, from 42 cents on the dollar.
4:35 p.m.
Conservative
Laurie Hawn Conservative Edmonton Centre, AB
Ten billion dollars is a chunk of change.
You suggest that Canadian industry would be better off with a competition and IRBs, traditional IRBs, to the value of the contract.
4:35 p.m.
former Assistant Deputy Minister (Materiel), Department of National Defence, As an Individual
Yes.
4:40 p.m.
Conservative
Laurie Hawn Conservative Edmonton Centre, AB
Yes. What's the contract value we should measure those IRBs against? What is the dollar value?
4:40 p.m.
former Assistant Deputy Minister (Materiel), Department of National Defence, As an Individual
Well, if I use the government's figures, at a minimum, I think that of the $9 billion they're saying that $5 billion are attributable to the actual acquisition and $4 billion are for other stuff. I don't know if it's $5 billion or whatever it is. Plus, they're arguing that it's another $7 billion for.... So that's at least $12 billion.
4:40 p.m.
Conservative
Laurie Hawn Conservative Edmonton Centre, AB
No. You see, that's where you're using the wrong figures. Any IRB is measured against the value of the contract for the piece of equipment, including initial spares, training, and so on. It's not valued against the long-term sustainability.
4:40 p.m.
former Assistant Deputy Minister (Materiel), Department of National Defence, As an Individual
No, you're incorrect.
4:40 p.m.
Conservative
4:40 p.m.
former Assistant Deputy Minister (Materiel), Department of National Defence, As an Individual
That is how it's valued.
4:40 p.m.
Conservative
4:40 p.m.
former Assistant Deputy Minister (Materiel), Department of National Defence, As an Individual
No, you're wrong. You're wrong.
4:40 p.m.
Conservative
4:40 p.m.
former Assistant Deputy Minister (Materiel), Department of National Defence, As an Individual
When we bought the latest helicopters, okay, for $5 billion, that included the initial cost of a couple of billion dollars and ongoing support for $3 billion, and the total IRB was $5 billion.
4:40 p.m.
Conservative
4:40 p.m.
former Assistant Deputy Minister (Materiel), Department of National Defence, As an Individual
No, no, no. That wasn't what was realized. That was what was demanded by the IRBs policy and what was delivered by all of the bidders.
4:40 p.m.
Conservative
Laurie Hawn Conservative Edmonton Centre, AB
The measure of performance with the F-18, for example, was in fact $5 billion, and that's the traditional IRB model.
4:40 p.m.
Conservative
