Vanguard Magazine

P Procurement 32 AUGUST/SEPTEMBER 2016 www.vanguardcanada.com 1990s. These ongoing delays mean that needed equipment is not brought into service on schedule. This forces the Cana- dian Armed Forces (CAF) to operate el- derly and sometimes operationally obsolete equipment longer than planned. In some cases, it has created capability gaps when aged equipment has been removed from service before it can be replaced. A second negative impact of an underper- forming procurement system is the expo- sure of equipment budgets to the ruinous effect of inflation. The impact of inflation has been acutely felt in the shipbuilding program where annual cost escalation runs as high as 11 per cent a year. As an exam- ple, Canada's largest postwar procurement project, the Canadian Surface Combatant, is losing a million dollars' worth of buying power for each day the project is delayed. Although the impact is especially critical for shipbuilding, the consequences are felt throughout the defence program as proj- ects progressively lose purchasing power with every day they are delayed. Improving defence procurement One of the central procurement problems of the last decade is a mismatch between the procurement workload and the capac- ity of the procurement system to maintain it. Tens of billions worth of capital equip- ment projects were added to the defence budget between 2005 and 2008. This transformed radically the workload of a system that had purchased few big, costly or complex pieces of equipment during the 1990s, but was now expected to pro- cure, and quickly, new combat fleets for the Canadian Army, Royal Canadian Air Force and Royal Canadian Navy concur- rently. Even more problematic, the pro- curement workforce across government had been decimated by Program Review and spending patterns during the 1990s. As a result, by the mid-1990s, the pro- curement workforce was too small and had little experience managing large complex files. After 2011, the procure- ment workforce at DND was cut as a deficit reduction measure. Consequently, there are too few people with the neces- sary experience and training trying to do too much work at once. Increasing the capacity of the procure- ment workforce can be accomplished in three ways. First, its numbers must grow, ideally by bringing people with relevant prior experience into government. While efforts to do so were launched over the last year, they have languished. Changes or exceptions to the Public Service of Canada hiring process should be ex- plored to address this. Second, the skill- sets of officials throughout the procure- ment workforce must be enhanced. Too often workers with inadequate training are moved into positions and expected to succeed, despite a lack of preparation. Sufficient training and career develop- ment opportunities must be made avail- able to ensure success. Third, defence procurement should be considered a spe- cialized, professional occupation within the government of Canada and treated accordingly. Frequent staff rotations and an inattentiveness to subject matter ex- pertise may work well in other areas of government, but it is ill-suited to acquir- ing expensive, complex technology from a unique market. Across government, defence procurement positions should be staffed by experienced officials and given enough time in a position to develop the skills and experience required to be effec- since 2007, an average of more than 20 per cent of funds for capital equipment (as much as $1.5 billion a year) has gone unused annually because the system could not deliver equipment on schedule.

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