Vanguard Magazine

April/May 2015

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

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Page 17 of 51

D PROCUREmENT T he release of the defence Procurement Strategy (dPS) in February 2014 has signifi cantly transformed the way equipment is acquired by the Canadian armed Forces. Industry bids for defence contracts will be as- sessed not only on their technical merit and price, but also on the eco- nomic contribution they make to Canada – at 10 percent of an overall bid score, potentially an important diff erentiator. For Industry Canada, the goal is to leverage the major recapitalization eff ort underway across the army, navy and air Force to help Canadian companies and innovators grow, conduct R&d and fi nd new markets. among the department's new tools are an industrial benefi ts policy focused on technological opportunities and weighted and rated value propositions on which to assess company bids. Following the release of the Value Proposition Guide in december, Philip Jennings, assistant deputy Minister for Industry Canada's Industry Sector, has been touring the country to explain how this will aff ect the defence and aerospace sector. He recently sat down with editor Chris Thatcher. 18 aPRIL/May 2015 requires larger companies to partner with smaller companies, as well as research institutions, and it's really about trying to create an innovation cluster that supports the growth of the sector. Canada's offset policy has always had a focus on innovation. Under the Industrial and Regional Benefi ts (IRB) Policy, we had what we called multipliers – enhanced credit – for fi rms who made investments in R&D, including in public/private consortia. That remains in place, but now under the Industrial and Technologi- cal Benefi ts (ITB) Policy, strong R&D investments are further incented in Value Propositions that are rated and are a weighted element in the bid selection. Q In presentations you have delivered over the past months, you have placed a lot of emphasis on early engagement with the industry. What is the nature of the relationship you are try- ing to achieve? Engagement is one of the tenets of the DPS and it permeates every aspect of what we do. What we have learned through past procurement experiences is that early engagement is positive, that it ensures Canadian industry can better position themselves to participate in procurement process, and it also allows the govern- ment to better understand the landscape before it proceeds with a procurement – who the bidders are likely to be and how much Canadian industry participation there can be. You want to leverage the best economic outcomes you can for the Forces and the only way to fully understand what Canadian capabilities may be out there and what solutions may apply to what you are trying to procure is by engaging with industry. You also want to understand all the issues that could come up in a pro- curement and early consultation helps to identify some of those so you can move forward with a streamlined process and procure in a timely way. THe VaLue proposiTion Q Is there a larger vision for the defence and aerospace sector or is the DPS more about improving processes that people have been critical of for many years? There is absolutely a larger vision for the defence and aero- space sector in Canada, one whose long-term competitiveness is grounded in innovation, a focus on global markets, and a shift to higher-value knowledge work. The sector has been a priority for the government, with direct programs and a formal offset policy since 1986. What we strive to do is get better outcomes for the sector. The government has recently transformed the offset policy to motivate companies to make higher quality investments that have a longer-term impact. In his report, Tom Jenkins references the fact that we have a window of investment that the CAF and Canadian Coast Guard would be making, and what you want to do is build and leave behind a legacy of strong Canadian capabili- ties that will outlast the life of those procurements and create an industrial base that will continue to grow and access opportunities both domestically and globally. Of course, improving processes under the DPS is one of the ways we will achieve that vision. Q There is a vigorous debate in the U.S. over a perceived loss of a military technological edge. Is that factoring into how you look at defence capability for Canada? We realize that for fi rms in Canada to remain competitive, they have to continue to invest in R&D and be at the cutting edge of technology. So our tools are always focused on supporting that type of innovation. The Strategic Aerospace and Defence Initia- tive and the recently announced Technology Demonstration Pro- gram are really focused on supporting that R&D and innovation investment and making sure that we support an ecosystem. For example, the Technology Demonstration Program by defi nition on defence acquisiTion

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