Thank you, Mr. Chairman. I'm very pleased to appear before you today with my counterparts from the Treasury Board Secretariat and the Department of National Defence as part of your study of the Auditor General's fall 2010 report, in particular the chapter on the acquisition of military helicopters. With me is Mr. Tom Ring, Assistant Deputy Minister of the Acquisitions Branch of my department.
I would like to thank Madam Fraser for her work. As in other audits her office has carried out, we take the findings seriously, as we fundamentally believe in continuous improvement. As such, we have already addressed the two recommendations put forward in the report, and the two “lessons learned” exercises have already been completed. As a result of these exercises, we have concluded that we need to undertake to review terminology and documentation requirements to support the use of an ACAN to eliminate the possibility of misinterpretation. Second, we need to develop tools and templates for complex procurement activities, which will inform best approaches vis-à-vis lowest cost compliant or best value to the crown. Finally, we need to provide enhanced training for staff assigned to complex procurement processes.
I have filed with the committee a copy of Public Works and Government Services Canada's action plan.
I would also like to note that one of the issues at hand is related to an interpretation as to the documentation maintained on file to support and justify a procurement course of action, whether competitive or sole source. We have taken steps to review our various guidance documents on the issue of level of documentation required to support the decision to proceed with a public and open posting of an advanced contract award notice on the government's electronic tendering system, MERX. This will be done in full consultation with the Treasury Board Secretariat and the Office of the Auditor General if they so wish. Subsequent changes will be made as necessary.
With respect to the Cyclone, the Auditor General has acknowledged that officials followed policies and regulations regarding contract management. However, her report also raised questions as to whether the lowest price compliant approach used under this project is compatible with the acquisition of complex military equipment.
On this point, the department agrees, even if the lowest price compliant approach was fully respected throughout the acquisition of the Cyclone. As indicated in the report, it is necessary to recognize that the acquisition of such complex equipment brings with it unique challenges.
I would be happy to answer any questions.