Public Accounts Committee on June 17th, 2008

[Jean-Yves Laforest, Bloc, Saint-Maurice—Champlain, QC]

Thank you, Mr. Chair.

Good morning. First off, I would like to ask Mr. Fonberg a question.

In the response we received this morning from National Defence, you state that the deployment of forces in Kandahar has been the most demanding and complex since the Korean War. I get the impression that you are saying that to justify the problems with the supply chain. Since this is such a major deployment involving manifest danger, that should be not used as an excuse, but rather as a motivation to have a perfect supply chain. That should be an additional reason to send even more precise goods and equipment from Canada to support the armed forces. Further, your excuse is something that was identified by the Auditor General. You have repeated something the Auditor General said in order to draw a comparison with the Korean War.

I would like to hear you explain that.

[Robert Fonberg]

Mr. Chairman, I would obviously ask my military colleagues to respond in part, but having gone from limited combat operations to a sustained combat operation and everything that this entails over the last few years has required the Canadian Forces not only to in some ways relearn what it takes to fight a mission 12,000 kilometres away, but to get better at that process day after day and week after week. I would just say two things and then perhaps turn it over to the vice-chief.

Number one is, again, that the deficiencies and surplus that the Auditor General discovered happened—1.3% of the total inventory in theatre, actually measured at a time of perhaps the highest operational tempo during this combat mission—at the time of Operation Medusa. If you look at the variances before and after that, you'll see them to be quite a bit lower; in fact, although I haven't done the numbers, probably well below 1% of the inventory in theatre, when you look at them.

But I would turn to the vice-chief to see whether he would like to comment on the complexity of the mission, Mr. Chair.

[LGen Walter Natynczyk]

I would first like to say that our inventory is under the responsibility of the entire command chain, i.e., from the master corporal all the way up to myself, the vice-chief of defence staff. We say that amateurs talk about tactics, but professionals talk about logistics.

The situation in Afghanistan is far more complex than the operations we conducted in Bosnia, Kosovo and East Timor. There, the theatres had been stabilized. But in Afghanistan, the pace of operations changes daily, not to mention all the troop deployments. There are changes happening each and every day.

[Jean-Yves Laforest, Bloc, Saint-Maurice—Champlain, QC]

I am sorry to interrupt you but we have little time.

The Auditor General raised supply problems, and some commanders said that those problems hindered them somewhat, and yet no report was made. Do you find it normal that the commanders did not write a report on the fact that equipment was missing? That equipment was worth seven million dollars. We do not know what it included. My predecessor asked that we be provided a list, and I think that that would be important for us to have. I asked Ms. Fraser whether the missing supplies were medical products or weapons.

I am somewhat concerned by the fact that the commanders did not write a report on the missing equipment.

[LGen Walter Natynczyk]

I will ask Major General Benjamin to talk about the details, but I would first like to repeat that the situation is complex because of the pace of operations and all the displacements.

Daniel will give you the details by sector.

[MGen Daniel Benjamin]

Mr. Chair, I would like to put that inventory into context. As part of this mission, we work with other national armed forces. They begin and end their mission, and then do their accounting. Canada goes one step further. Each time a new commander arrives in the theatre of operations, one of my teams travels there to conduct a spot check in order to ensure that the people in the theatre of operations have properly kept their inventory.

My team collected the data and calculated the $7.1 million deficit and $6.6 million surplus. That was only a spot check. You have to keep that in perspective.

[Jean-Yves Laforest, Bloc, Saint-Maurice—Champlain, QC]

Before the Auditor General did her report, did you know that $7 million in inventory was missing?

[MGen Daniel Benjamin]

My team travels there twice a year, and every six months, we know what our contingents are doing to monitor their equipment. We therefore do not know ahead of time what the results of the spot check will be. We do not assess the entire inventory. There are some one billion dollars in inventory in the theatre of operations, spread out over hundreds of square kilometres. Of course, we cannot stop all the operations and do like they do at Canadian Tire, where one evening they will decide to take their inventory and make sure that everything is where it should be.

[Jean-Yves Laforest, Bloc, Saint-Maurice—Champlain, QC]

That is quite understandable.

[MGen Daniel Benjamin]

It is impossible to do. So, everything is constantly being displaced, and my people try to conduct spot checks.

The chain of command wants to know where we think there are problems, and my team does spot checks in those areas.

[The Chair, Liberal, Shawn Murphy]

Mr. McRoberts, do you have something to say?

[Hugh McRoberts]

Thank you, Mr. Chairman.

I'd just like to clarify this so that we don't leave an impression....

In terms of the commanders' reports, they dealt at length with logistical issues and supply issues, and they certainly did raise concerns, in some instances, about deficiencies in the supply chain. What we identified as being notable was the fact that in reviewing all of those reports, at the end of the day, yes, there had been problems with the supply chain, but what they also indicated was that those had not affected combat operations, which we thought was important to draw attention to. But they certainly addressed logistical issues at some length in those reports.

The second thing I just want to be clear about is that the $6 million and $7 million—the other end-of-rotation inventories—was not something that we identified. That was something we drew attention to as a result of the reports and the very good work that DND had done. If they had not done that work, we certainly would not have had the audit capacity to detect that.

I think, in fairness to the forces, I just wanted to clarify that.

[The Chair, Liberal, Shawn Murphy]

Thank you, Mr. McRoberts.

Merci, Monsieur Laforest.

Mr. Sweet, for seven minutes.

[David Sweet, Conservative, Ancaster—Dundas—Flamborough—Westdale, ON]

Thank you, Mr. Chairman.

First and foremost, I'd like to say to those who have had to handle the responsibility of a very difficult mission, all Canadians are proud of you and appreciate the work that you're doing there and continue to do.

I wanted to ask a couple of questions. I probably took a look at this report in a different light from what most people would, because as a leadership assignment I read General Pagonis's book, Moving Mountains, and have an idea of just how sophisticated a supply chain is. As I was reading this report, I thought it was too bad that we didn't have everything labelled as tonnes of equipment moved, as General Pagonis did in his book, because you really realize when you're constantly feeding a small city of people just how much work it is.

I wanted to ask some questions to get some details on some of the things the Auditor General highlighted.

In paragraphs 2.43 and 2.51 in the Auditor General's report, on pages 15 and 18, there's some talk about the Nyala and other equipment, and something was really niggling at me when I was reading that. What responsibility do the manufacturers have in this? I would think that when they come to you, they probably make some significant promises about equipment. And as Major General Benjamin said, you almost have to have this down to an art in figuring out when something is going to break down. Are the manufacturers of this equipment fulfilling their responsibilities?

[LGen Walter Natynczyk]

I'll just start off, if I might, Mr. Chairman.

Any piece of military equipment put out there is a compromise of a number of factors: protection, mobility, power, its firepower. It's always a compromise of all of these characteristics of a vehicle. The Nyala is a great vehicle. And we realized, because of how the mission was evolving, that we needed to provide a more heavily armoured car than we initially had with the G-wagon or the jeep that we had in theatre, which were armour-protected but didn't have sufficient protection.

On the market at the time, the Nyala, the RG-31, was out there. It was designed more specifically for road work. Well, in the Kandahar area there aren't a lot of roads, so it's going over some pretty tough terrain. Also, it's a vehicle that we fielded pretty quickly, because we needed it out there. That vehicle has saved a lot of lives, and we've learned a lot about how it is to be employed, and the drivers have learned what they can put it through. That put a lot of strain on the vehicle.

Because the vehicle is so popular, a lot of our allies have lined up at the manufacturer to buy it as well, so all of the parts are actually not going for spares, but to the manufacturing of original equipment. So therein lies the challenge. At the same time, the manufacturer is learning about its vehicle and producing better variants of that vehicle.

I will turn this over to General Grant, who, as the commander on the ground at the time, received those vehicles and put them into theatre.

[Major General Timothy Grant, Deputy Commander, Canadian Expeditionary Force Command, Department of National Defence]

Thanks very much, sir.

I was the commander during the time of the audit, but more particularly, the commander when the Nyalas were being introduced into theatre. The one thing that made it a success story from my standpoint is the fact that the manufacturer provided us with two individuals, two civilian technical experts—“field service representatives” they were called—who provided us with the expertise, not only on how to maintain this vehicle, but also to help the drivers to use the right techniques to manoeuvre it through some of the terribly complex and rough terrain the vice-chief has spoken about.

So certainly from my standpoint, although we had some challenges with getting spare parts, the fact that we had those two technical experts provided by the company was a huge step in the right direction, and allowed us to maintain the serviceability of that fleet.

[LGen Walter Natynczyk]

I would also add that in any theatre, Mr. Chairman, when you introduce a piece of equipment, the manufacturer may not have had that vehicle to the exact specifications of that theatre.

The kind of fine powder that General Benjamin mentioned earlier gets everywhere. It gets into air filters, and therefore your consumption rate of parts like that is totally unlike what you'd face anywhere else. So we're dealing with those kinds of things, and there are extraordinary efforts by the entire chain, right from the soldiers who are driving those vehicles up through to Mr. Ross, working with the Department of Public Works, to try to get those kinds of pieces.

[David Sweet, Conservative, Ancaster—Dundas—Flamborough—Westdale, ON]

Thank you.

Mr. Fonberg, towards the end of your opening remarks you talked about the bar code readers in theatre. I'm just wondering if that will bring the level of supply chain capability and functionality to the same level in theatre that it is at back here at home.

[Robert Fonberg]

I'll turn to Major General Benjamin on that. My understanding is it will certainly take care of part of that. My understanding is that as the supplies come off the airplanes now, what was bar-coded at home ends up getting manually entered at Kandahar airfield, because we haven't introduced that capability. But that does not or will not help with the pushing forward of those supplies to the forward operating bases where they have to be received again and inventoried again.

I would turn to the general to add any more detail on the bar code orders.

[MGen Daniel Benjamin]

Thank you.

Mr. Chairman, I had the chance to introduce the RFID, the radio-frequency identification device, to track the items up to the theatre. I'm really looking forward to having the bar coding, because there's a massive amount of equipment that is getting there, and we want our supply technician to have this bar code type of technology and register and remove any of the errors that you could make when you type the eight-digit or twelve-digit numbers into the system. This will greatly enhance that. I'm really looking forward to getting that technology very rapidly.

Mind you, you should realize that many of our allies use it, and they will use it at the entry point, for example, in Kandahar, but they very rarely push it to the forward operating bases, and this is something we will have to explore. This is a combat zone. How do you do stock-taking in a combat zone?

[David Sweet, Conservative, Ancaster—Dundas—Flamborough—Westdale, ON]

That makes sense.

Another question I have refers to page 9, paragraph 2.23. One of the things that was causing a lot of delay was the materiel-handling equipment. I believe there was a promise there that you were going to deal with that. Has that equipment actually arrived? Is there new materiel-handling equipment to fix that aspect of the supply chain?

[MGen Daniel Benjamin]

Yes, Mr. Chairman.

This is very much linked to the C-17, which is a tremendous capability that we have acquired, but you have to load it up. And what we don't have in Canada as part of the capability is proper handling equipment. It's called a K60 loader, so it loads 60,000 pounds. You put things on a pallet and roll it into the C-17.

The U.S. were out of stock, but we have been dealing with the commander of US TRANSCOM. They have been very helpful and have provided us with two of those devices. The assistant deputy minister for materiel is moving forward to get some of our own for the future. So right now the problem has been solved, and what a capability it is.

[David Sweet, Conservative, Ancaster—Dundas—Flamborough—Westdale, ON]

I have just one point. Did you say these loaders are 60,000 pounds?

[MGen Daniel Benjamin]

The loader can lift up 60,000 pounds.

[David Sweet, Conservative, Ancaster—Dundas—Flamborough—Westdale, ON]

Is that on one single pallet?