Defence acquisition reform takes many forms. All of them involve complex equations between the procurement of effects-oriented equipment and services efficiently, in a timescale acceptable to all stakeholders and at a price that is affordable for the user and profitable for the supplier. Overlaid on this matrix, in many countries, are considerations of sovereign capability, security of supply and economic impact.
It is this last that leaps from the pages of the recently published report “Canada First: Leveraging defence procurement through key industrial capabilities.” The government seeks to bolster its indigenous industry and derive maximum potential benefit from the investment of public money in defence equipment and services by requiring bidders to provide offsets in specific areas of technology or service (such as cyber or training systems, for example) at increasingly high levels. In its bid to sell the F/A-18 Super Hornet to Canada, Boeing is already promising offsets amounting to 100% of contract value.
There’s nothing wrong with that. Indeed, on first glance, the 88-page report seems to promise some interesting and rewarding benefits stemming from the proposed reforms, which reach much further than the comments above might suggest. But there is a sting in the tail, as far as this writer is concerned, which threatens to negate all the good the proposed policy might bring.
One of the perennial challenges faced by small companies trying to obtain defence work is the gestation period of the acquisition process and the spiralling bid costs associated with it. A small company can often not afford the impact on cash flow that a sales decision cycle of two or three years will entail. So the process needs to be streamlined and shrunk.
Why, of why, therefore, has the government effectively done just the opposite. In order to implement and monitor the proposed new defence procurement strategy, a Defence Procurement Secretariat will be established within the Department of Public Works and an independent, third-party Defence Analytics Institute established to provide analysis and support. Long and somewhat bitter experience indicates this will add layers of bureaucracy, significant additional cost and potential aeons of time to an already cumbersome process.
Spending public money efficiently is a laudable ambition. So is making the process easy for one’s supply chain to be able to benefit from.