National Defence Committee on Nov. 28th, 2024

[Simon Page]

My bottom-line, upfront answer is no. I'm not tracking an initiative or effort to mirror what the United States is doing.

As I mentioned before, we apply the national security exception to a portion of our procurements. That recommendation, that decision, is made with a lot of things taken into consideration. I find that within government, it's fairly well executed. We apply it diligently. The GCRs will continue to apply.

I'm not aware of an effort to step out of the boundaries of the current execution.

[Lindsay Mathyssen, NDP, London—Fanshawe, ON]

Certainly, you can understand that there is a desire to increase transparency and accountability, especially from taxpayers, but also from the industry itself.

There were specific concerns about the consistent use of the exception and sole-sourcing. Are there any steps that could allow us to get away from that? Are there any other plans to increase transparency?

[Simon Page]

Thank you for your question.

I'm not sure if I'm capturing what you want me to say.

Consistency is the number one thing I look at when we review national security exceptions. Most of the time I will go back to the list of current projects that have an NSE and I'll compare if we're speaking the same language.

On your point about transparency, I think some improvement could be done with respect to transparency on the larger scale of defence procurement overall.

[The Vice-Chair, Bloc, Christine Normandin]

I must interrupt you, Mr. Page.

[Simon Page]

I think some of the things we want to do that we have in motion will increase transparency and the communication [Inaudible—Editor] with respect to the NSE itself.

Excuse me.

[The Vice-Chair, Bloc, Christine Normandin]

There's no problem.

Before we continue, I want to make sure I have everyone's consent to end the rounds of questioning, even though the bell has rung.

Is there unanimous consent?

We can continue. That's wonderful.

Mr. Bezan, you have the floor for five minutes.

[James Bezan, Conservative, Selkirk—Interlake—Eastman, MB]

Thank you, Madam Chair.

Thanks to the witnesses for being here.

Mr. Page, can you confirm whether or not the surface combatant design has been finalized, or are they still tinkering around?

[Simon Page]

No, the Canadian surface combatant design has not been finalized. It has been brought to a really good level of maturity. It's at a level with a bit more work to do ahead of the full-rate production cutting of steel.

[James Bezan, Conservative, Selkirk—Interlake—Eastman, MB]

How many years have we been in the design phase?

[Simon Page]

I think it's been approximately five years.

Just so it's understood, the design of the Canadian surface combatant will last well past the full-rate production cutting of steel. It is smart to do this. You cannot expect to lock something in before you start on platform number one and when you have 200-plus systems being integrated and many things in play.

[James Bezan, Conservative, Selkirk—Interlake—Eastman, MB]

When we did our procurement study, one thing we heard from many witnesses is that PSPC and DND have a culture of risk aversion. Instead of being risk-evaders, how do we turn everybody into risk-takers?

[Simon Page]

Maybe I'll let my colleague ADM Harty speak about that and some of the work she's doing.

Speaking as the ADM at PSPC for the last four years, I think we are very much an organization that looks at every variable around procurement. I'd like to think we have taken some risks in the last few years with respect to some of our procurements, and it has paid off. I think we are sensing the operational urgency of doing things differently. That has the risk aversion piece being assessed and managed accordingly.

[James Bezan, Conservative, Selkirk—Interlake—Eastman, MB]

I'll just keep going, because I have a number of questions.

In the procurement review process you're undertaking right now, when will you be consulting the defence industry on how to improve it?

[Siobhan Harty]

I've been consulting on a more bilateral basis. I did that starting late last year, into the spring and up to the summer, and then started working on our recommendations.

In the context of the defence industrial strategy that my colleagues at National Defence will be leading with Minister Blair, there will be additional consultations with the industry.

[James Bezan, Conservative, Selkirk—Interlake—Eastman, MB]

When you say bilateral, you're talking just to the major companies that right now are supplying—

[Siobhan Harty]

I'm talking to companies and industry associations and I'm appearing at meetings. I've been very accessible.

[James Bezan, Conservative, Selkirk—Interlake—Eastman, MB]

Have you been talking to CADSI and others?

[Siobhan Harty]

Yes, absolutely.

[James Bezan, Conservative, Selkirk—Interlake—Eastman, MB]

You were talking about using UORs and NSEs. If we're going to do a UOR, why don't we just do an NSE—a national security exception?

[Simon Page]

I would say that, case by case, some UORs may not necessitate a national security exception. We will examine the requirement just as we do for a larger procurement.

[James Bezan, Conservative, Selkirk—Interlake—Eastman, MB]

Right now, what's the threshold for National Defence to do procurement themselves before they have to go to PSPC? What's the level?

[Simon Page]

Do you mean in terms of money?

[James Bezan, Conservative, Selkirk—Interlake—Eastman, MB]

Yes, in terms of money.

[Simon Page]

Actually, I wrote it down. At National Defence, for a competitive requirement, they can go up to $7.5 million.

[James Bezan, Conservative, Selkirk—Interlake—Eastman, MB]

Is that it? When was the last time that was increased?