Preserving capacity, General Tom Lawson, Chief of the Defence Staff, Keys to Canadian SAR
Issue link: http://vanguardcanada.uberflip.com/i/111458
sit rep S Report lays groundwork for key industrial capabilities Could major defence procurement reform be on the near horizon? In mid February, Public Works Minister Rona Ambrose accepted a report from an expert panel led by Tom Jenkins, the chairman and chief strategy officer of Open Text, that centres on leveraging key industrial capabilities based on Canadian Forces needs, access of products to global markets, and the potential for innovation. "Even in the absence of a major increase in defence spending, it would be in the national interest to have a strong domestic defence industrial base, one that goes well beyond the basic capability of maintenance and repair to the actual sovereign production of key goods and services. In addition to a sovereignty rationale, defence-related industries are important sources of technological dynamism and innovation," the report states. "They are leading-edge participants in global value chains, and generators of high-value exports and well-paying jobs. Accordingly, they should be supported as drivers of long-term growth and prosperity." As the report notes, $240 billion of the $490 billion earmarked for the Canada First Defence Strategy is allocated to equipment, readiness and infrastructure. Approximately $48 billion of the "equipment" pillar and $116 billion of the "readiness" pillar have yet to be allocated. "The Panel understands that decisions on procurement plans for most of that amount are scheduled to be taken over the next three years. This suggests that the unique window of opportunity to leverage defence procurement is closing rapidly." In a sector characterized by a single customer – government – Jenkins' team notes that for many companies an early Canadian government contract is often the proving ground to foreign markets and the catalyst for future growth. The panel urges the government to conduct a regular and robust review of key industrial capabilities (KIC), but offers up an initial list of six clusters: Arctic and maritime security; protecting the soldier; command and support; cyber security; training systems; and in-service support. However, it acknowledges that KICs will only prove beneficial if existing defence-related procurement policies and programs are modified. Among its recommendations: encourage innovation and make it an upfront requirement in all procurements by requiring bidders to specify "the value they propose to add to Canada's economy as a result of their bid proposal"; review the impact of Single Point of Accountability on the implementation of a defence procurement strategy; and ensure that in-service support contracts require "participation and leadership by Canadian firms, including, as necessary, reasonable access to the required intellectual property." The impetus for change isn't hard to see. The report observes that as the U.S. Department of Defense shifts its emphasis away from expensive new platforms, companies are focusing more on "specialized capabilities for existing platforms," niche areas like IT, logistics and maintenance that have been a Canadian strength. The Canadian Association of Defence and Security Industries, which has been hammering away at procurement reform and the need for a defence industrial strategy, applauded the report, saying the recommendations "should serve as the groundwork for the government as it moves forward on its commitment to create a defence procurement strategy that maximizes jobs, innovation, manufacturing and economic activity in Canada from defence spending." Tim Page, the association's president, said the "upcoming Spring Budget will be a critical opportunity to learn how the government intends to address the advice it has now received." www.vanguardcanada.com FEBRUARY/MARCH 2013 7