Military eyes external contracts as cost-saving measure

The Canadian Forces are looking to reduce spending on service contracts with private firms as a means of reining in a budget shortfall, Canada’s top military commander said Wednesday.


Gen. Tom Lawson, the country’s chief of the defence staff, said the military plans to look at all the contracted services that are coming up for renewal in the coming years.

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This currently includes everything from “in service support for our systems” to mental health services and the cleaning of military buildings.

“Every contract, as they come up, will be looked at to be tightened up to see which duties can be moved back into the Armed Forces,” said Gen. Lawson in an interview. “It’s one of the ways that we are able to keep people in uniform while bringing our budget within the new lines.”

The Forces are also going to be looking at contracts they’ve signed recently, he said. However he said they plan to be careful with those because “some contracts are very expensive to break and the return on breaking that contract to save money would not make sense.”

Prime Minister Stephen Harper has told the military it needs to cut spending by $2.5 billion, Gen. Lawson said in a speech to Ottawa’s business community Wednesday morning.

However Mr. Harper has instructed him to do so without reducing the number of front-line personnel, said Gen. Lawson. This is forcing the military to look elsewhere for savings.

Gen. Lawson said the military is now going to “look into how we change our business” and will have to eventually deliver the same amount of services for less.

Despite the plan to reduce spending on service contracts, Gen. Lawson said the message to companies that provide equipment and other long-term items is “heartening.”

That’s because the government told them it plans to protect all of the major investments it announced as part of the Canada First Defence Strategy.

This was a plan announced in 2008 to spend $490 billion over twenty years, including on equipment and infrastructure items such as aircraft and tactical vehicles.

“Those things remain in place,” he said.

Gen. Lawson spoke as part of the Mayor’s Breakfast Series, presented by OBJ and the Ottawa Chamber of Commerce.


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