The Sixth Estate

A week ago, I predicted that this year’s military procurement scandal would be the National Shipbuilding Procurement Strategy: the plan to build 29 new ships for the navy and the Coast Guard, most of them advanced warships, at an official cost of $35 billion but a true total cost that will probably exceed $100 billion. At the time, my speculation was spurred by the news that the Auditor-General would be passing judgement on the file next fall.

But it seems that the ball may get rolling sooner than that. Apparently soon-to-be-unemployed Parliamentary Budget Officer Kevin Page will be releasing his findings on two of those new ships, the Joint Support Ships, fairly soon now. I thought it might be useful to go over what people should expect from his report. Like most of defence minister Peter MacKay’s procurement projects, from mere trucks to jet fighters, the new support ships promise to be a complete debacle. Fortunately it will be a relatively cheap debacle, provided that you count a starting price of $2.6 billion as “cheap.”

My reference point for this review will be an internal audit of the project published a year ago by DND, which is heavily redacted. It’s also suspiciously redacted. Some details that are left out clearly pertain to operational matters, and that’s understandable, even if I don’t agree with the principle. But others are clearly just financial estimates. One has to wonder why cost estimates for support ships are classified — “legitimate” national security concerns, or political worries about how the public will welcome news of yet more billions of dollars in planned defence expenditures?

Anyhow, away we go.

Right now the Canadian Navy operates the remaining two out of three Protecteur-class supply ships built in the 1960s, which are 172 metres long, displace about 8400 tons and carry three Sea King helicopters each. In 2004, the Liberals initiated a plan to purchase three new replacement ships for $2 billion, with an option for a fourth ship.

In 2008, after receiving bids, the Conservatives scrapped the initial Liberal plan and started a new one of their own. Under the new plan, just two ships would be purchased, for $2.3 billion (now increased to $2.6 billion), with an option for a third ship. These ships won’t just be resupply ships like the ones they’re replacing. The official plan, which has probably been subject to massive downgrading behind the scenes the same way the Conservatives have slashed the F-35′s flight-time plans to keep costs below $50 billion, is buy rather more than some replacement replenishment vessels: one that can do resupply at sea, provide hospital services to a task force, operate helicopters, deliver personnel and cargo ashore using onboard landing craft, and provide space for a mobile command centre which could be used to run a task force either at sea or on land. It looks to my untrained eye like the sealift equivalent of the F-35: everything to everyone, at twice the cost.

Precisely why Canada needs these ships might be a question worth asking, but laying that to one side for a moment, the first complication is that the Conservatives say they will be buying two ships instead of three. The original statement of requirements specified three for a reason: one ship stationed on each coast, and a third available to go overseas as part of an expeditionary force. That’s presumably why Canada bought three of them 40 years ago, too. The consequences of this trade-off are, at least in the internal audit, partially classified, but since each ship will require routine time off for maintenance, refits, training, etc., so that the best-case scenario is lengthy periods with only one operational ship. Hopefully it happens to be on the right coast when the time comes, eh?

DND apparently had similar concerns, because there’s a lengthy discussion about ship availability, all of which is classified. Ordinary Canadians aren’t good enough to know such things.

Amusingly, there’s also a section on “affordability” which is almost wholly classified as well. As I say, it’s suspicious: the only substantive paragraph in the affordability section that didn’t get cut outis one promising that the Joint Support Ships have smaller crews than the current supply ships and therefore will not cost any more than the current ships in that respect.

DND is also expecting some sort of substantial delays, which it refers to as “slippage,” in construction timetables. Unfortunately, I can’t tell you what those are, because they’re classified too.

What is unclassified, interestingly, hints at the fact that we’re buying these ships without a warranty, which is always a good way to go about buying expensive machinery, I’ve found:

Under the ISS [In-Service Support] Contracting Framework,normally the JSS shipbuilding and ISS would be combined in the same competition as a single procurement. As a consequence, the shipbuilder would be accountable for warranty issues and the maintenance plan, while providing the life cycle support. NSPS encompasses shipbuilding only and does not include ISS. Therefore, the shipbuilder is not responsible for ISS costs resulting from the JSS design..

The PMO [Project Management Office] risk management is not aligned with the DND Integrated Risk Management (IRM) framework and does not reflect best ADM(Mat) and Project Management Body of Knowledge (PMBOK) practices.

Oops!