Thank you very much, Mr. Chairman and members of the committee, for the invitation to speak today and to give you some information on NATO and the NATO Communications and Information Agency, for which I'm general manager.
It's an honour to be with you this morning. I came to Ottawa for the first time in 1983, as a graduate student from the University of Texas. It was a small grant from your government to study the Auto Pact, which of course was a predecessor of NAFTA. I've had a warm affinity for Canada ever since and been up here several times. It was fortunate that my travel from Brussels happened at the same time as this committee hearing, so I'm happy to be here.
My name is Kevin Scheid. I'm an American originally from Pennsylvania, but I've been living in Alexandria, Virginia, for the past 30 years. I recently retired from the American civil service, where I worked for 10 years at the White House Office of Management and Budget, 10 years in the U.S. intelligence community, and about 10 years at the Department of Defense. I took the position of general manager of the NATO Communications and Information Agency on July 1, 2017. I live in Brussels, Belgium, now.
I'm joined this morning by the Chairman of my agency oversight board, my supervisory board, Mr. Guy Charron of Canada. He's part of your Department of National Defence. I'm also joined by U.S. Army Colonel Joyce LuGrain, who heads up my Executive Management Office, and Ms. Virginie Viscardy, who represents my office in North America and will be making more visits to Ottawa as well as Washington. She works out of Norfolk, where we have NATO's Allied Command Transformation.
As you know, NATO is composed of a political headquarters in Brussels and has two military commands: one for operations in Mons, Belgium, at SHAPE, and the other for transformation in Norfolk, Virginia. There are two agencies. One's for support and procurement, and the other is for communications and information infrastructure and other technology capabilities. I'm the general manager for the latter.
Together, NATO as an organization, as a bureaucracy, has about 17,000 civilians and military staff and operates with a budget of about two billion euros annually. We strive to support the nations who protect over a billion citizens, from Ankara to Honolulu.
NATO Communications and Information Agency was established after a significant reform effort in 2012 that saw the consolidation of five NATO agencies and offices in order to realize some funding savings and manpower reductions, and to increase effectiveness. My agency provides support to both the political and military leadership of NATO. Our responsibilities are deeply rooted in the North Atlantic Treaty, which is 69 years old as of next week, and focuses on consultation of the 29 NATO members, which is article 4—we provide the communications to allow that consultation to take place at a political level—as well as collective defence, article 5. We support NATO troops in the field, particularly in Afghanistan, where I have about 200 staff and contractors.
Our history goes back to 1955, with the establishment in The Hague, Netherlands, of the SHAPE Air Defence Technical Centre, a centre that I'm certain has provided support to these two gentlemen when they were in combat and leading various parts of NATO. Today we work to ensure that missile attacks are thwarted, that military aircraft fly safely in European and North American airspace, that NATO troops have the secure and readily available communications they need to conduct operations, as well as to make sure that the Secretary General has a secure cellphone to use.
NCIA does not receive an annual appropriation but is funded through revenues we earn by delivering services and executing technical programs of work for the commands and NATO headquarters, or work directly with the nations. During this fiscal year, NCIA projects an operating revenue of about 250 million euros, and will contract out with NATO national industries about 630 million euros for goods and services. These range from communications networks in Afghanistan, as I mentioned, networks across Europe, cybersecurity capabilities, software-intensive programs such as air command and control, and “C2” for missile defence.
NCIA has a workforce of about 3,000 employees; roughly 1,500 civilians, 1,000 military, and 500 contractors. We have three campuses—Brussels, The Hague, and Mons. We're also expanding into a new training facility that the nations have invested in. It's common-funded, so Canada participates in this. It's a training facility in Oeiras, Portugal.
NCIA employs 61 Canadians, 51 civilian and 10 military. The latest estimate from this morning is that there are 435 Canadians throughout the 17,000 NATO employees, so Canada is well represented, and well represented in NCIA. I think we have the largest percentage of Canadians of any of the organizations. They mostly work in The Hague and in Mons in the technical areas. Their responsibilities range from executing highly technical engineering and software programs, such as the maritime program that Canada just won as a contract; NATO-wide defence planning projects; in the defence planning program we have a Canadian leading that effort; and project and program management and oversight.
Canadians are major contributors to NCIA, to NATO, and represent Canada very well with their quiet dedication, professionalism, and grit. And I mean that seriously. Some served in Afghanistan with us, and they pull their weight.
Today NCIA's priority is the digital transformation of the NATO enterprise. NATO nations, including Canada, have made large investments in a new NATO headquarters, which represents a significant improvement in NATO's IT capabilities. The new headquarters essentially is a network surrounded by glass and steel, and it includes modern data centres, sophisticated cybersecurity, and thousands of desk-top and mobile user devices.
As the Secretary General recently stated, the new HQ is a modern building for a modern alliance. It goes to what these gentlemen spoke to, that we need to modernize the capabilities of NATO and make sure that we're doing the best we can to facilitate the nations' engagement when they need to deploy. NCIA is very proud of our central role in the new headquarters transformation.
Similarly, we're transforming the digital infrastructure of the NATO commands through a project we call—cleverly, I'll say—“IT modernization”. We're deploying modern infrastructure with multiple redundant data centres and moving NATO towards the cloud, thereby centralizing services and support for the commands in order to reduce our cybersecurity vulnerabilities as well as improve effectiveness. All these efforts are protected by about 200 staff, who are monitoring and protecting NATO's networks on a 24-7 basis, whether in Europe, Afghanistan, or North America, as well as on NATO-deployed ships and aircraft.
These efforts as well as others represent what I like to call NATO's digital endeavour, the digital transformation of the NATO enterprise, so that we can support the member nations of the alliance better and become more effective and efficient. This will not happen immediately but is something that is going to occur over the next several years.
A critical aspect of what I do as a general manager is engage with the industries of the NATO member nations, the industries who actually deliver those capabilities. Last evening, and even this morning just before arriving here, I met with several leaders of the Canadian defence industry to learn more about their experience in working with NATO. This engagement follows from NCIA's industry conference held here in Ottawa last year, which attracted more than 700 participants from Europe and North America. This was the agency's most successful of these engagements to date, and the first one to be held in North America. Our next industry conference, NITEC'18, will be held in Berlin on May 22-24.
Last December I was very proud to award the largest NATO contract ever to a Canadian company, MDA. The project is Triton, and it supports our maritime operations. Your permanent representative to the North Atlantic Council, Ambassador Kerry Buck, participated in the signing ceremony at the NATO headquarters just before the Christmas holiday. In fact, I met with MDA leadership this morning just to get my own personal assurances, eye to eye, that things were on track and the program was moving forward.
Triton, which is the project that they won, will replace the operational-level functionality of the current maritime command and control information system, or MCCIS, and other operational support functions. Once Triton reaches its full operational capability, it will become the main platform for conducting all military maritime operations throughout the alliance. Nations and commands will be able to share their maritime information in a live environment, mutually benefiting from the shared data, so that Triton may live up to its name, “messenger of the sea”.
In conclusion, from my perspective as somebody who works in the trenches of the NATO bureaucracy, Canada is an essential part of NATO. It always has been; it always should be. NATO benefits, I believe, from the outstanding military and civilian talent that you send to operations as well as to Brussels. The alliance also benefits from your direct support through activities such as air policing. The alliance would not be as capable of deterring threats from NATO's east flank, or southern flank, which these gentlemen have discussed, without Canada's steadfast participation.
Thank you again for this opportunity to speak and to brag a little bit about my agency.
I'd be glad to take questions.