{"id":263961,"date":"2016-01-12T14:00:26","date_gmt":"2016-01-12T19:00:26","guid":{"rendered":"https:\/\/policyoptions.irpp.org\/issues\/three-steps-toward-better-defence-procurement\/"},"modified":"2025-10-07T21:05:43","modified_gmt":"2025-10-08T01:05:43","slug":"three-steps-toward-better-defence-procurement","status":"publish","type":"issues","link":"https:\/\/policyoptions.irpp.org\/fr\/2016\/01\/three-steps-toward-better-defence-procurement\/","title":{"rendered":"Three steps toward better defence procurement"},"content":{"rendered":"

With a new government in office, one file that needs attention is how to improve defence procurement.\u00a0 The problems associated with this \u2014 one of the most complex undertakings in government \u2014 are many, varied and by no means unique to Canada.\u00a0 There are no silver bullets here \u2014 if there were, governments would have adopted them long ago. \u00a0Consequently, the goals should be seen not as a \u201cfix\u201d for defence procurement but as an ongoing process of gradual improvement.<\/p>\n

There are three key thematic areas on which the new government should focus, and for which practical measures can be taken to improve the process and outcomes of defence procurement in the short, medium and longer terms.<\/p>\n

    \n
  1. Set more rigorous defence acquisition priorities and stick to them<\/li>\n
  2. Ensure the funds Parliament has approved for the defence capital program are spent<\/li>\n
  3. Develop a defence industrial strategy, and perhaps even a broader Canadian industrial strategy, to improve domestic economic returns from defence acquisitions.<\/li>\n<\/ol>\n

    The first area to be improved is the way defence acquisition priorities are established. About 18 months ago the Department of National Defence (DND) issued the first version of the Defence Acquisition Guide<\/em>, or DAG<\/em>.\u00a0 The DAG<\/em> concept is a good one and could improve the process, transparency and certainty around defence procurement.\u00a0 The DAG<\/em> is updated annually and contains basic information about the capabilities the Canadian Armed Forces (CAF) intend to acquire over the short, medium and longer terms.\u00a0 It\u00a0 should result in firmer capital priority-setting by DND.\u00a0 And in providing basic information about forthcoming projects, notably the timing of the various steps in the procurement process and the estimated budget envelopes for each project, the DAG<\/em> could help industry plan and make investments and teaming arrangements to better compete for these programs.<\/p>\n

    When the first two iterations of the DAG <\/em>were released \u2014 in 2014 and 2015 \u2013 the defence industry understood that it was a major effort to put it together and appreciated that effort.\u00a0 With over 200 projects in the DAG<\/em>, about 50 percent have moved to the right \u2014 that is, were delayed \u2014 from the first to second editions. Nevertheless, the DAG <\/em>could stand to be prioritized and, if necessary, streamlined. From industry\u2019s perspective, the longer a project sits active, the more money companies spend trying to position themselves by undertaking business development and marketing activities.\u00a0 This is money that could be better spent.\u00a0 Consequently, fewer projects with shorter capability gaps to request-for-proposal schedules would likely benefit everyone \u2013 industry, DND and other departments.<\/p>\n

    In addition, the ranges in the estimated budget envelopes for each project are often very broad\u2014 from $500 million to $1.5 billion in some cases.\u00a0 Industry understands the reason for this: once a budget number is made public, there is a desire to keep promises at all costs.\u00a0 So at the risk of under-budgeting and over-promising, the envelopes tend to be broad.\u00a0 The truth is that it is impossible to perfectly estimate the costs of projects, especially those that are developmental and those that will be sustained over many years.<\/p>\n

    We all need to change our thinking around the scope, budget and \u201cpublic promise\u201d equation; i.e., we all need to be more open to changes as the procurement process rolls out.\u00a0 We also need appropriate terms, conditions and systems to be in place for the management of complex projects and for risk management.\u00a0 And we need to ensure the system of approvals and the desire to manage promises are not so rigid that we render ourselves frozen in the process.\u00a0 All that said, an effort should be made to tighten up the cost-estimate ranges in the DAG to ensure its transparency objectives are met and the document is of real value to government, industry and Parliament.<\/p>\n

    The second major area to be improved in defence procurement is in aligning DND\u2019s capital spending with parliamentary financial approvals for the department.\u00a0 Over the past number of years, there have been unprecedented sums of money that have been approved by Parliament and that DND has been unable to spend. This has been in the order of $7 billion; in the last fiscal year alone it was as much as $2 billion.\u00a0 Most of these unspent funds were earmarked for the capital program.\u00a0 The end result of such spending paralysis is that equipment the CAF needs is significantly delayed, thus potentially undermining the Forces\u2019 operational integrity.<\/p>\n

    There are a variety of reasons for these large spending lapses; many of them are internal to government and not all are within the control of DND.\u00a0 Fortunately, according to its 2015 election platform<\/a>, the new government is committed to \u201cnot lapse military funding from year to year.\u201d\u00a0 Given that the causes of the lapses are multiple and varied, and that they also span several government departments, the departments involved should work with industry to identify practical changes in the process that will help ensure capital funding does not go unspent from year to year.<\/p>\n

    In most countries governments use defence procurement to the advantage of their economies…Defence is not anything close to a free market anywhere in the world.<\/p><\/blockquote>\n

    Finally, the third area of improvement is developing a defence industrial strategy to improve economic returns from defence acquisitions. The international marketplace for defence products and services is managed, if not absolutely controlled, by governments.\u00a0 In most countries governments use defence procurement to the advantage of their economies, to drive their industrial base capacity and to bolster their sovereignty and national security.\u00a0 In other words, defence is not anything close to a free market anywhere in the world.<\/p>\n

    Defence industrial policies of various forms \u2014 some explicit, others less so but equally forceful \u2014 are permanent features of the landscape in Europe, the United States, Australia, and most developing countries, but not in Canada.\u00a0 Defence industrial policies also cross the political spectrum and are supported by both leftand right-of-centre governments.\u00a0 An arresting statistic revealed in a 2013 study by the respected international defence consultancy Avascent illustrates this reality. That study concluded that even after three decades of broad-based privatizations throughout Europe, governments in Europe remain the sole or predominant stakeholders, with majority voting rights and control over key strategic decisions, in one-quarter of Europe\u2019s top defence companies.\u00a0 That, coupled with the fact that governments are the primary if not the sole customers in the defence marketplace, tells us all we need to know about the importance of defence industrial policies.<\/p>\n

    It is time for Canada to develop its own defence industrial policy, or a broader Canadian industrial strategy in which defence is a key contributor.<\/p><\/blockquote>\n

    No one is advocating that the Canadian government get into the business of owning or directing defence companies.\u00a0 However, the reality of the international market for defence products and services is that unique benefits accrue to national economies and national security from a vibrant domestic defence industrial base. It is time for Canada to develop its own defence industrial policy, or a broader Canadian industrial strategy in which defence is a key contributor. It should tailor the strategy to Canada\u2019s unique industrial structure and national security requirements.\u00a0 With a once-in-a-generation recapitalization of the CAF now underway, we are on the cusp of being able to do something strategically important for Canada.\u00a0 Now is the time to better position Canada and to bring our policies into closer alignment with those of our allies.<\/p>\n

    The government of Justin Trudeau has a crowded agenda.\u00a0 Judging by the Liberal Party\u2019s election platform, it seems the new government has an interest in making meaningful improvements to defence procurement.\u00a0 Fortunately, there are practical, short, mediumand longer-term steps that can be taken to reform the defence procurement process and facilitate better outcomes for the Canadian Armed Forces, the government, industry and the Canadian taxpayer.\u00a0 We just need to get on with the task at hand.<\/p>\n

    This article is part of the Equipping the Military special feature<\/a>.<\/strong><\/p>\n

    Photo credit: Canadian Forces Combat Camera, DND \/ Crown Copyright<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

    With a new government in office, one file that needs attention is how to improve defence procurement.\u00a0 The problems associated with this \u2014 one of the most complex undertakings in government \u2014 are many, varied and by no means unique to Canada.\u00a0 There are no silver bullets here \u2014 if there were, governments would have […]<\/p>\n","protected":false},"featured_media":250892,"template":"","meta":{"_acf_changed":false,"content-type":"","ep_exclude_from_search":false,"apple_news_api_created_at":"2025-10-08T01:05:49Z","apple_news_api_id":"924ed1db-9ec4-4d01-a0b4-4c5378faef5f","apple_news_api_modified_at":"2025-10-08T01:05:49Z","apple_news_api_revision":"AAAAAAAAAAD\/\/\/\/\/\/\/\/\/\/w==","apple_news_api_share_url":"https:\/\/apple.news\/Akk7R257ETQGgtExTePrvXw","apple_news_cover_media_provider":"image","apple_news_coverimage":0,"apple_news_coverimage_caption":"","apple_news_cover_video_id":0,"apple_news_cover_video_url":"","apple_news_cover_embedwebvideo_url":"","apple_news_is_hidden":"","apple_news_is_paid":"","apple_news_is_preview":"","apple_news_is_sponsored":"","apple_news_maturity_rating":"","apple_news_metadata":"\"\"","apple_news_pullquote":"","apple_news_pullquote_position":"","apple_news_slug":"","apple_news_sections":[],"apple_news_suppress_video_url":false,"apple_news_use_image_component":false},"categories":[9360,9358],"tags":[8401,9132],"article-status":[],"irpp-category":[4217,4295,4385],"section":[],"irpp-tag":[],"class_list":["post-263961","issues","type-issues","status-publish","has-post-thumbnail","hentry","category-international","category-politique","tag-military-fr","tag-politique-canadienne","irpp-category-affaires-internationales","irpp-category-politique","irpp-category-securite-nationale"],"acf":[],"apple_news_notices":[],"yoast_head":"\nThree steps toward better defence procurement<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/policyoptions.irpp.org\/fr\/2016\/01\/three-steps-toward-better-defence-procurement\/\" \/>\n<meta property=\"og:locale\" content=\"fr_FR\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Three steps toward better defence procurement\" \/>\n<meta property=\"og:description\" content=\"With a new government in office, one file that needs attention is how to improve defence procurement.\u00a0 The problems associated with this \u2014 one of the most complex undertakings in government \u2014 are many, varied and by no means unique to Canada.\u00a0 There are no silver bullets here \u2014 if there were, governments would have […]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/policyoptions.irpp.org\/fr\/2016\/01\/three-steps-toward-better-defence-procurement\/\" \/>\n<meta property=\"og:site_name\" content=\"Policy Options\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/IRPP.org\" \/>\n<meta property=\"article:modified_time\" content=\"2025-10-08T01:05:43+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/policyoptions.irpp.org\/wp-content\/uploads\/2025\/08\/PO_3StepsBetterDefence.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"800\" \/>\n\t<meta property=\"og:image:height\" content=\"450\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:site\" content=\"@irpp\" \/>\n<meta name=\"twitter:label1\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data1\" content=\"7 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/policyoptions.irpp.org\/fr\/2016\/01\/three-steps-toward-better-defence-procurement\/\",\"url\":\"https:\/\/policyoptions.irpp.org\/fr\/2016\/01\/three-steps-toward-better-defence-procurement\/\",\"name\":\"Three steps toward better defence procurement\",\"isPartOf\":{\"@id\":\"https:\/\/policyoptions.irpp.org\/fr\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/policyoptions.irpp.org\/fr\/2016\/01\/three-steps-toward-better-defence-procurement\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/policyoptions.irpp.org\/fr\/2016\/01\/three-steps-toward-better-defence-procurement\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/policyoptions.irpp.org\/wp-content\/uploads\/2025\/08\/PO_3StepsBetterDefence.jpg\",\"datePublished\":\"2016-01-12T19:00:26+00:00\",\"dateModified\":\"2025-10-08T01:05:43+00:00\",\"breadcrumb\":{\"@id\":\"https:\/\/policyoptions.irpp.org\/fr\/2016\/01\/three-steps-toward-better-defence-procurement\/#breadcrumb\"},\"inLanguage\":\"fr-FR\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/policyoptions.irpp.org\/fr\/2016\/01\/three-steps-toward-better-defence-procurement\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"fr-FR\",\"@id\":\"https:\/\/policyoptions.irpp.org\/fr\/2016\/01\/three-steps-toward-better-defence-procurement\/#primaryimage\",\"url\":\"https:\/\/policyoptions.irpp.org\/wp-content\/uploads\/2025\/08\/PO_3StepsBetterDefence.jpg\",\"contentUrl\":\"https:\/\/policyoptions.irpp.org\/wp-content\/uploads\/2025\/08\/PO_3StepsBetterDefence.jpg\",\"width\":1920,\"height\":1080},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/policyoptions.irpp.org\/fr\/2016\/01\/three-steps-toward-better-defence-procurement\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/policyoptions.irpp.org\/fr\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Three steps toward better defence procurement\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/policyoptions.irpp.org\/fr\/#website\",\"url\":\"https:\/\/policyoptions.irpp.org\/fr\/\",\"name\":\"Policy Options\",\"description\":\"Institute for Research on Public Policy\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/policyoptions.irpp.org\/fr\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"fr-FR\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Three steps toward better defence procurement","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/policyoptions.irpp.org\/fr\/2016\/01\/three-steps-toward-better-defence-procurement\/","og_locale":"fr_FR","og_type":"article","og_title":"Three steps toward better defence procurement","og_description":"With a new government in office, one file that needs attention is how to improve defence procurement.\u00a0 The problems associated with this \u2014 one of the most complex undertakings in government \u2014 are many, varied and by no means unique to Canada.\u00a0 There are no silver bullets here \u2014 if there were, governments would have […]","og_url":"https:\/\/policyoptions.irpp.org\/fr\/2016\/01\/three-steps-toward-better-defence-procurement\/","og_site_name":"Policy Options","article_publisher":"https:\/\/www.facebook.com\/IRPP.org","article_modified_time":"2025-10-08T01:05:43+00:00","og_image":[{"url":"https:\/\/policyoptions.irpp.org\/wp-content\/uploads\/2025\/08\/PO_3StepsBetterDefence.jpg","width":800,"height":450,"type":"image\/jpeg"}],"twitter_card":"summary_large_image","twitter_site":"@irpp","twitter_misc":{"Est. reading time":"7 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/policyoptions.irpp.org\/fr\/2016\/01\/three-steps-toward-better-defence-procurement\/","url":"https:\/\/policyoptions.irpp.org\/fr\/2016\/01\/three-steps-toward-better-defence-procurement\/","name":"Three steps toward better defence procurement","isPartOf":{"@id":"https:\/\/policyoptions.irpp.org\/fr\/#website"},"primaryImageOfPage":{"@id":"https:\/\/policyoptions.irpp.org\/fr\/2016\/01\/three-steps-toward-better-defence-procurement\/#primaryimage"},"image":{"@id":"https:\/\/policyoptions.irpp.org\/fr\/2016\/01\/three-steps-toward-better-defence-procurement\/#primaryimage"},"thumbnailUrl":"https:\/\/policyoptions.irpp.org\/wp-content\/uploads\/2025\/08\/PO_3StepsBetterDefence.jpg","datePublished":"2016-01-12T19:00:26+00:00","dateModified":"2025-10-08T01:05:43+00:00","breadcrumb":{"@id":"https:\/\/policyoptions.irpp.org\/fr\/2016\/01\/three-steps-toward-better-defence-procurement\/#breadcrumb"},"inLanguage":"fr-FR","potentialAction":[{"@type":"ReadAction","target":["https:\/\/policyoptions.irpp.org\/fr\/2016\/01\/three-steps-toward-better-defence-procurement\/"]}]},{"@type":"ImageObject","inLanguage":"fr-FR","@id":"https:\/\/policyoptions.irpp.org\/fr\/2016\/01\/three-steps-toward-better-defence-procurement\/#primaryimage","url":"https:\/\/policyoptions.irpp.org\/wp-content\/uploads\/2025\/08\/PO_3StepsBetterDefence.jpg","contentUrl":"https:\/\/policyoptions.irpp.org\/wp-content\/uploads\/2025\/08\/PO_3StepsBetterDefence.jpg","width":1920,"height":1080},{"@type":"BreadcrumbList","@id":"https:\/\/policyoptions.irpp.org\/fr\/2016\/01\/three-steps-toward-better-defence-procurement\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/policyoptions.irpp.org\/fr\/"},{"@type":"ListItem","position":2,"name":"Three steps toward better defence procurement"}]},{"@type":"WebSite","@id":"https:\/\/policyoptions.irpp.org\/fr\/#website","url":"https:\/\/policyoptions.irpp.org\/fr\/","name":"Policy Options","description":"Institute for Research on Public Policy","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/policyoptions.irpp.org\/fr\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"fr-FR"}]}},"_links":{"self":[{"href":"https:\/\/policyoptions.irpp.org\/fr\/wp-json\/wp\/v2\/issues\/263961","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/policyoptions.irpp.org\/fr\/wp-json\/wp\/v2\/issues"}],"about":[{"href":"https:\/\/policyoptions.irpp.org\/fr\/wp-json\/wp\/v2\/types\/issues"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/policyoptions.irpp.org\/fr\/wp-json\/wp\/v2\/media\/250892"}],"wp:attachment":[{"href":"https:\/\/policyoptions.irpp.org\/fr\/wp-json\/wp\/v2\/media?parent=263961"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/policyoptions.irpp.org\/fr\/wp-json\/wp\/v2\/categories?post=263961"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/policyoptions.irpp.org\/fr\/wp-json\/wp\/v2\/tags?post=263961"},{"taxonomy":"article-status","embeddable":true,"href":"https:\/\/policyoptions.irpp.org\/fr\/wp-json\/wp\/v2\/article-status?post=263961"},{"taxonomy":"irpp-category","embeddable":true,"href":"https:\/\/policyoptions.irpp.org\/fr\/wp-json\/wp\/v2\/irpp-category?post=263961"},{"taxonomy":"section","embeddable":true,"href":"https:\/\/policyoptions.irpp.org\/fr\/wp-json\/wp\/v2\/section?post=263961"},{"taxonomy":"irpp-tag","embeddable":true,"href":"https:\/\/policyoptions.irpp.org\/fr\/wp-json\/wp\/v2\/irpp-tag?post=263961"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}