'Dysfunctional' DND Purchasing Result Of Brain Drain, Staff Cuts, Red Tape: Report

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OTTAWA - A study of Canada's dysfunctional military procurement system became a political football Wednesday as opposition parties pounced on the premise that delays and miscues were due in part to the Harper government's own policies.

The report, entitled "Putting the 'Armed' Back into the Canadian Armed Forces," was written jointly by the Conference of Defence Associations Institute and the MacDonald-Laurier Institute.

Critics say it will be hard for the Conservatives to dismiss the exhaustive analysis, which is based on more than 50 confidential interviews and a workshop with retired and currently serving acquisition officials, political staff and consultants.

The report provides an unvarnished, in-depth look at the system, which has long been beset by delays, cancellations and cost overruns.

Liberal defence critic Joyce Murray said the findings underscore the gap between the government's rhetoric and its inability to deliver long-promised replacements for Canada's CF-18 jets, Sea King helicopters and navy supply ships.

"The gap undermines the government's credibility," Murray said.

A spokeswoman for Defence Minister Rob Nicholson did not address the contents of the report directly, but instead listed what the government has delivered, including the modernization of navy frigates, CH-47F Chinook helicopters and C-17 and C-130J transport planes.

Johanna Quinney also cited plans to procure Arctic offshore patrol ships — which are just about to go under contract and have yet to be built — as well as the national shipbuilding strategy, which is a process agreement and not an actual capital project.

The government's overhaul of defence purchasing last year will pay dividends, Quinney insisted.

"Our defence procurement strategy is about getting the equipment that our men and women in uniform need at the best value to taxpayers — while at the same time maximizing benefits to our Canadian economy and to our Canadian industries here at home," she said in an email.

But NDP defence critic Jack Harris said the joint report is an "objective condemnation" of the government's record, one it will have to face on the campaign trail later this year.

"They claim there was a decade of darkness under the Liberals and they said they were going to fix that," he said. "They've shown they haven't been able to fix that."

The report found a small number of programs with the biggest price tags — fighters and warships — were the source of most of the problems.

And the researchers assign much of the blame to staffing cuts by both Liberal and Conservative governments in the acquisitions branch at National Defence, as well as new reporting requirements introduced by the Harper government.

The numbers are stark.

There were 9,000 staff dedicated to buying military equipment in the early 1990s; by 2004, over the course of successive Liberal budgets, that number had been slashed by more than half to about 4,200.

After the Conservatives came to power, the number of employees versed in the complex requirements and approval process inched up to 4,355 by 2009, but many positions — especially uniformed ones — remained vacant because of the Afghan war.

Then the Harper government's budget cuts took hold.

"The situation worsened due to the Strategic Review and the Deficit Reduction Action Plan (DRAP), which (cut) 400 positions through the end of 2014/2015," says the report, which also notes that the cuts took place despite the federal Treasury Board authorizing National Defence to hire more project planners.

"Set against this significantly increased workload, there is simply not enough capacity in the acquisition workforce to manage it."

Prime Minister Stephen Harper has made a point of urging National Defence to cut backroom administration costs, calling for "more teeth and less tail" — a Conservative mantra that one of the report's authors called short-sighted.

"You cannot double someone's workload and expect things to move in the same way," said Dave Perry, a senior analyst with the Conference of Defence Associations Institute.

The defence department did very little in the way of major procurements under the Liberals. But once the Conservatives took over, they have tried to push forward some of the most complex programs without any additional staff.

Compounding the problem has been a series of new Treasury Board investment and project management accountability policies introduced by the Conservative government.

"Not only has the number of projects increased over the last several years, the reporting requirements for these capital projects have increased by 50 per cent over the last five years alone," the study says.

The overhaul of defence procurement last year was hailed by the government as a major step forward to fix the broken system, but the report suggests it could turn out to be a recipe for more costly delays.

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