National Defence Committee on June 16th, 2023

[Alan Williams]

It's not the same mistake. The F-35 is a unique program that could not comply with the ITB policy. The ITB policy basically says that, if you're going to bid, you have to commit to guarantee in Canada benefits equal to the value of the contract. The joint strike fighter program, as I'm sure you are aware, is concerned with the exact opposite perspective. No member is guaranteed work. You have to earn your work by successfully bidding on contracts. That's unique to that program.

[The Chair, Liberal, John McKay]

Thank you, Ms. Mathyssen and Mr. Williams.

Mr. Aboultaif, you have four minutes.

[Ziad Aboultaif, Conservative, Edmonton Manning, AB]

Thanks, Chair.

Thanks to the witnesses.

From what I've heard from both of you, there are three things about that question. There is a lack of budget, a lack of organization, or a lack of will to make the procurement on the defence side as successful as we look for. Which one is it?

[Alan Williams]

Yes, yes and yes.

Clearly, as David said, there's been a lack of political will to make the organizational changes that you want to make. There has clearly been the lack of budget to do what the government says needs to be done. There is a lack of people to make it happen. These are all parts of the problem, and all three should be fixed.

[Ziad Aboultaif, Conservative, Edmonton Manning, AB]

We should just go with the low-hanging fruit and try to solve this problem. We know that heavy equipment takes a lot of planning. You're counting on things that may be delivered 10 years down the road.

Where can we start to improve? I know that we don't produce many of these things in Canada, so we also have the challenge of dealing with outsourcing.

[Alan Williams]

For sure, but this isn't as complicated as it sounds. Any piece of equipment you want.... It's not like there are 10 or 15 of these in the world. There are usually two or three trucks or two or three ships. It's not that there are that many out there. We spend a lot of wasted time by trying to Canadianize what we buy. We should be going out looking for only highly developed assets. We didn't do that with the ships. The ships we're buying are not developed. The systems we're putting in them are not developed. All these things add risk and money.

If you, in fact, go out and find the best product out there, that doesn't take a great deal of time and effort. If we don't spend billions of dollars trying to Canadianize them, we lower the integration risk, and you can get what you want fairly quickly.

What we buy today is essentially software. We buy software in different frames; be it a ship or a truck, it doesn't matter. When you buy something today, you can buy it quickly and efficiently and have the life cycle look at upgrading the software in a cost-effective way. That's what we should be doing.

[Ziad Aboultaif, Conservative, Edmonton Manning, AB]

The system is bureaucratic enough. I've also heard that we may have to find another organization of some kind to be able to look after this, sort of a private or third party. I don't—

[Alan Williams]

That's not what I was saying.

[Ziad Aboultaif, Conservative, Edmonton Manning, AB]

I'm just throwing that question. Is that the solution?

[Alan Williams]

No. I think the minister, the government, has to remain accountable for defence. I think one minister should be held accountable for defence. Where you put that minister, in what organization, is up for debate and discussion, be it PSPC, National Defence or a third one. I'm not advocating whatsoever outsourcing the accountability for defence.

[Ziad Aboultaif, Conservative, Edmonton Manning, AB]

So the buck rests with the government.

[Alan Williams]

Absolutely, and the Prime Minister.

[The Chair, Liberal, John McKay]

You have one minute.

[Ziad Aboultaif, Conservative, Edmonton Manning, AB]

We know the system is bureaucratic enough so there's no solution—

[Alan Williams]

There is a solution.

[Ziad Aboultaif, Conservative, Edmonton Manning, AB]

Thank you very much. I think you've been informative.

The system is very bureaucratic. We know that. I know this is a result of a long-serving time for the people inside the department.

By the way, I had a chance in my previous life to tap into the procurement system, because I used to bid on projects with the Government of Canada. I see the process is more complicated now than ever, but I don't have answers why.

Would you be able to explain that?

[The Chair, Liberal, John McKay]

He would be able to explain it, but he can't do it in three seconds.

Thank you, Mr. Aboultaif, for your question.

We have Madam O'Connell for the final four minutes, please.

[Jennifer O'Connell, Liberal, Pickering—Uxbridge, ON]

Thank you, Mr. Chair.

Thank you, both, for being here.

Mr. Perry, you spoke about data on procurement. Could you elaborate on what some of that data looks like? How do you envision it?

My colleague, Mr. Fisher, asked about other countries, but what would you see...? We have to make recommendations in this committee, so could you elaborate on your request for data and what that might look like?

[Dr. David Perry]

Sure. As an example, there are many different what's called “capability sponsors” for projects. Across the army, the navy, the air force and the infrastructure folks at National Defence, we don't systematically look at which projects do better or worse.

Are there some that are better at moving through all the gates they are expected to? If that's the case, why is that? Do the people working in that organization get more training? Do they have more staff? It's those kinds of things.

You could also look at other parts of the organization. There's a general theme from National Defence that the ITB process is problematic for their procurement. I don't know if that's actually grounded in any kind of evidence.

It's great to make that assertion, but if that is a problem, how big is it? How many days are being lost to that? Is it on all projects? Is it just one for the air or for the marine?

That kind of information isn't systematically collected. I could keep going on a whole bunch of other examples. It would be useful to have a better understanding to look at opportunities to learn from what works, as well as to fix identified deficiencies.

[Jennifer O'Connell, Liberal, Pickering—Uxbridge, ON]

That's fair enough. Is there a comparison, though?

As a committee, after this study, we'll have to make recommendations. Simply saying “more data” might not get us to the place you are looking for. Is there a comparison, even in another area of government, so that we can say, “Produce data in a fashion similar to X, Y, and Z”?

[Dr. David Perry]

I come back to a comment I made earlier. The production of data on the part of the public service of Canada, I would say, is not a great strength writ large.

One thing you could do is ask for yearly reports on a more systematic basis. Come back with information year over year.

How is the whole procurement program moved? What are the top 10, 20 or 30 files? Could the department identify for you what the top 10, 20 or 30 files are?

[Jennifer O'Connell, Liberal, Pickering—Uxbridge, ON]

That's fair enough. Thank you.

Mr. Williams, you spoke about a capital plan for each project's life cycle. I want to hone in on this a bit more.

In my previous life in municipal politics.... This might not be an accurate analogy for defence procurement. One of the challenges was.... Let's say we had to have a public driveway paved or an ops depot paved. Our bids would come in significantly higher than those for an individual person or company looking for bids on paving, for example.

What's the balance between the public transparency and allowing the market to drive some of these bids so that it's not a higher than normal bid that might come in for any given project or contract?

[Alan Williams]

I don't think there's a disconnect at all. If you do competitive procurement properly, you're playing one company against the other. That's how you drive the market price down. It's not all that complicated. Do that and you'll get the lowest compliant bid.

If your terms and conditions are appropriate, it will be a company that has experience and that has proven it can do the job. You'll also know, in an open, fair and transparent way, that you're doing well with your citizens' money by not overspending, because that's how you determine the market—

[Jennifer O'Connell, Liberal, Pickering—Uxbridge, ON]

My question, though, was you always had that balance—

[The Chair, Liberal, John McKay]

We're blowing through the timeline here, which is unfortunate, because it is an important question.

Unfortunately, I'm going to have to bring this discussion to a close.

I particularly appreciate the clarity of your opinions, and I'm sure my colleagues also appreciate the clarity of your opinions. They will clearly be fed into our analysis and study.

Thank you, both, for coming and sharing, and for your contributions over time to the defence industry. Thank you again.

With that, colleagues, we'll suspend and repanel.