The future of Canadian military procurement will be much friendlier to domestic companies, according to the minister responsible for federal procurement.
Proposals coming in with the lowest bottom line will no longer be given the most weight by the government when making acquisitions for the Canadian Armed Forces, Public Works minister Rona Ambrose announced at a keynote speech at CANSEC Wednesday afternoon.
Using Tom Jenkins’s report on defence and security procurement as a guideline, it’s time for Canada to implement a procurement strategy that will work in favour of Canadian companies, Ms. Ambrose said.
With an estimated government spend of $490 billion into military acquisitions within the next decade, Ms. Ambrose said it’s time Canada joined most other developed nations that already have defence procurement strategies in place.
“It was clear to me that Canada was an outlier,” she said.
Various value propositions in addition to cost – including sustainable job creation, research and development opportunities and intellectual property – will be weighted and rated to ensure that military procurement is benefitting Canadian companies, not just providing the government with the lowest price.
The framework is yet to be determined, but Ms. Ambrose said industry experts have recommended the policy be applied to contracts valued at more than $20 million.
In addition to looking at a broader range of variables, the government will also give domestic companies a better idea of what opportunities are coming down the pipeline by publishing its operational requirements further in advance. This will allow companies to get a head start on pursuing contracts, and give the government more time to survey what Canadian companies have to offer.
“I say to my colleagues, ‘How can we buy off the shelf if we don’t know what’s on the shelf, especially what’s on the shelf in Canada?’” Ms. Ambrose said.
Levering key industrial capabilities, or KICs, will help the government get the best overall value for its money and promote niche specializations of Canadian firms. The six KICs identified by Mr. Jenkins in his report include arctic and maritime security, protecting the soldier, command and support, cyber-security, training systems and in-service support.
“This is a big change to our procurement strategy,” Ms. Ambrose said, adding that additional consultations will take place with industry to determine the best way to implement the new strategy.
Some may argue this new strategy will cost taxpayers more money or give industry too much decisionmaking power.
“The onus is on industry to work closely with our government to make sure that we show them that that’s not true,” Ms. Ambrose said.
Jim Quick, president and CEO of the Aerospace Industries Association of Canada, said in a statement that he is pleased with the new strategy.
“Since taking responsibility for the procurement file, (Ms. Ambrose) has made significant progress in the development of a federal procurement strategy that better leverages the strengths of Canada’s industry and takes into account the important implications that procurement decisions have for Canadian jobs and competitiveness,” he stated, encouraging Canadian companies to cooperate and give feedback during the consultation process.