Vanguard Magazine

Aug/Sept 2014

Preserving capacity, General Tom Lawson, Chief of the Defence Staff, Keys to Canadian SAR

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Page 23 of 47

e eXeCuTIVe INTERVIEW From check box to unique partnerships The government's Defence Procure- ment Strategy may be six months old, but there is still considerable specula- tion about what value propositions, technological benefi ts, assistance with export strategies and leveraging of key industrial capabilities will mean for the defence sector. DEFSEC Atlantic will host a panel on the implications of the DPS in early September. Derrick rowe, Chairman of the Board for training and simula- tion experts Bluedrop Performance Learning in St. John's and one of the panellists, believes the strategy is an opportunity to change the relationship between Original Equipment Manufac- turers and their Tier 1 suppliers and the thousands of small- and medium-sized companies that make up much of the Canadian sector. 24 AUGUST/SEPTEMBER 2014 value proposition: Q What's your impression of the DPS? Has it changed your landscape? I think it is a step in the right direction for everybody. How well this plan will be executed and how it will be rolled out are important, though. The government has said they are going to impact procurement on things like the value propositions in key industry capabilities and on a host of leveraging issues, all of which industry has talked about for years, but the real question remains how it will affect both larger orga- nizations – OEMs and Tier I and Tier 2 suppliers – and smaller Tier 3 SMEs like us. Q Do you have specifi c hopes or concerns? We have had a classic IRB check box ap- proach – pass or fail. Exactly what an in- dustrial technological benefi t (ITB) calcu- lation looks like, we still are learning. But I see it as an opportunity to do things dif- ferently in a way that could impact SMEs positively right across the spectrum. In a major procurement program under the IRB model, you have teaming arrange- ments where the OEMs and Tier 1 suppli- ers put together their teams to meet their IRB compliment, and part of the strategy is to gobble up capacity in the IRB com- pliance sector – make your team stronger and make everyone else's team weaker. That has been a problem area for most SMEs in this country because often they request exclusivity and yet we have very little infl uence on the outcome. Our strat- egy at Bluedrop has always been to team with everybody, treat everybody fairly and transparently because we don't want to be dependent on one supplier. We want to be the partner of choice for our niche. So I think under an ITB approach, we can do that differently: now we are not just checking an IRB compliance box, we are actually looking at opportunities to have unique value propositions with each of our partners. This has the potential to be very positive for smaller companies, to establish unique relationships with bid- ding partners that are different and hope- fully more benefi cial to the company in developing products for export and resale outside of the initial delivery. The OEMs or Tier 1 suppliers that deliver more tech- nology benefi ts to their SME suppliers will score higher and again each can have a unique approach. It will require a bit of a mindset shift for some people. The government's Defence Procure-

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