Detailed Action Plan for OAG Report Recommendations

Consolidated Management Action Plan
Fall 2013 Report of the Auditor General of Canada
Chapter 3: National Shipbuilding Procurement Strategy

Audit Recommendation	Response included in Chapter Tabled in Parliament on November 26, 2013	Action (Detailed Action Plan)	Implementation Date	Status Update
3.44 Recommendation. Public Works and Government Services Canada should review the NSPS Request for Proposal process, including the negotiations with the successful bidders, to ensure that lessons learned are captured, examined and considered for application for future complex procurements and strategic sourcing arrangements.	Public Works and Government Services Canada (PWGSC) accepts the recommendation. PWGSC concurs with the Auditor General’s assessment in paragraph 3.29 that the NSPS approach be used in other future major capital acquisitions. The Department is reviewing the process used through the NSPS to strategically source two shipyards in order to draw best practices and lessons learned as they might apply to future complex procurements and strategic sourcing arrangements.	1.1 The National Shipbuilding Procurement Strategy Secretariat will review the process used through the NSPS to strategically source two shipyards in order to draw best practices and lessons learned as they might apply to future complex procurements and strategic sourcing arrangements. The NSPS Secretariat will produce a Report of the observations for approval of the Deputy Ministers Governance Committee. 1.2 Upon approval of the above Report, the Policy, Risk, Integrity and Strategic Management Sector, in collaboration with the Business Management Sector, will develop a plan to disseminate the lessons learned and best practices, and integrate them where appropriate, in the policy instruments being developed to support the implementation of the principles of Smart Procurement in complex procurements and strategic sourcing arrangements.	March 31, 2014 December 31, 2014	Completed March 25, 2014 Report was approved by the Deputy Ministers’ Governance Committee. Work has begun on this action item and is on track to be completed by the intended implementation date.
3.47 Recommendation Public Works and Government Services Canada, supported by Industry Canada, National Defence and Fisheries and Oceans Canada, should regularly monitor the productivity of shipyards in terms of competitiveness, cost-effectiveness, and efficiency, including measuring progress against the target state.	Public Works and Government Services Canada, Industry Canada, National Defence, and Fisheries and Oceans Canada accept the recommendation. The National Shipbuilding Procurement Strategy Secretariat, which is led by Public Works and Government Services Canada with membership from Industry Canada, National Defence, and Fisheries and Oceans Canada, will establish a set of standardized measures that will provide Canada with regular insight into the productivity of the two selected shipyards. In accordance with the terms of the signed umbrella agreements, the National Shipbuilding Procurement Strategy Secretariat will also continue with its plans to develop a strategy for the engagement of third-party experts to measure the shipyards’ progress towards the achievement and maintenance of the target state.	2.1 The National Shipbuilding Procurement Strategy Secretariat will develop a Performance Monitoring Strategy to monitor the productivity of the shipyards. This activity will require the assistance of the shipyards and third party experts to identify standardized metrics capable of periodically assessing the productivity of the shipyards. The Performance Monitoring Strategy will identify a subset of measures which will allow for trend analysis of the progress against the achievement and maintenance of Target State and provide for the early identification of issues at the shipyards. This activity will be validated by the benchmarking assessments of the shipyards captured under the Umbrella Agreements signed with both shipyards. The Performance Monitoring Strategy will be submitted for approval of the Deputy Minister’s Governance Committee. A Performance Monitoring Strategy Implementation Plan will be developed to outline the manner in which the Performance Monitoring Strategy will be executed. The Implementation Plan will be submitted through the governance structure for approval of the Deputy Ministers Governance Committee.	November 30, 2014	Work has begun on this action item and is on track to be completed by the intended implementation date.
3.66 Recommendation National Defence and Public Works and Government Services Canada, working with the Treasury Board Secretariat, should ensure information to Treasury Board ministers includes updated information on changes to costs, capabilities, and schedules and should request additional authorities, as required.	Agreed. National Defence and Public Works and Government Services Canada will continue to meet regularly with the Treasury Board Secretariat to discuss the shipbuilding projects so as to inform decisions on how and when to appropriately update Treasury Board ministers. As well, upon completion of the definition phase of each shipbuilding project, high-fidelity cost estimates for each project will be available, with a clear indication of capabilities to be acquired and the refined delivery schedule for ships. This information will continue to be reported to Treasury Board ministers and additional authorities will be requested, as appropriate, in accordance with the relevant Treasury Board policies.	3.1 National Defence and Public Works and Government Services Canada will continue to monitor shipbuilding projects through the National Shipbuilding Procurement Strategy governance structure, which includes a Director Generals’ Interdepartmental Working Group, an Assistant Deputy Ministers’ Interdepartmental Steering Committee and a Deputy Ministers’ Governance Committee. Treasury Board Secretariat officials are fully integrated into this governance structure, which ensures information will be appropriately reported to Treasury Board, including updated information on changes to costs, capabilities and schedules. Individual departments remain accountable to obtain any modifications or additional authorities in accordance with relevant Treasury Board policies. In addition, a periodic agenda item will be added to DND’s Major Capital Project – Interdepartmental Oversight Committee, of which TBS and PWGSC are members, through which cost, capability, and schedule changes for Major Capital Projects are identified, along with the approaches to address these changes, based on approved project documentation.	March 31, 2014	Completed February 28, 2014 A periodic agenda item has been added to DND's Major Capital Project - Interdepartmental Oversight Committee (MCP-IOC), of which TBS and PWGSC are members, through which cost, capability, and schedule changes for Major Capital Projects are identified, along with the approaches to address these changes, based on approved project documentation. In accordance with the MCP-IOC Terms of Reference (January 2014), all projects with project approval will be reported to MCP-IOC meetings in February and October with respect to scope, cost, and schedule status.

Audit Recommendation

Response included in Chapter Tabled in Parliament on

November 26, 2013

Action (Detailed Action Plan)

Implementation Date

Status Update

3.44 Recommendation.

Public Works and Government Services Canada should review the NSPS Request for Proposal process, including the negotiations with the successful bidders, to ensure that lessons learned are captured, examined and considered for application for future complex procurements and strategic sourcing arrangements.

Public Works and Government Services Canada (PWGSC) accepts the recommendation. PWGSC concurs with the Auditor General’s assessment in paragraph 3.29 that the NSPS approach be used in other future major capital acquisitions. The Department is reviewing the process used through the NSPS to strategically source two shipyards in order to draw best practices and lessons learned as they might apply to future complex procurements and strategic sourcing arrangements.

1.1 The National Shipbuilding Procurement Strategy Secretariat will review the process used through the NSPS to strategically source two shipyards in order to draw best practices and lessons learned as they might apply to future complex procurements and strategic sourcing arrangements. The NSPS Secretariat will produce a Report of the observations for approval of the Deputy Ministers Governance Committee.

1.2 Upon approval of the above Report, the Policy, Risk, Integrity and Strategic Management Sector, in collaboration with the Business Management Sector, will develop a plan to disseminate the lessons learned and best practices, and integrate them where appropriate, in the policy instruments being developed to support the implementation of the principles of Smart Procurement in complex procurements and strategic sourcing arrangements.

March 31, 2014

December 31, 2014

Completed

March 25, 2014

Report was approved by the Deputy Ministers’ Governance Committee.

Work has begun on this action item and is on track to be completed by the intended implementation date.

3.47 Recommendation

Public Works and Government Services Canada, supported by Industry Canada, National Defence and Fisheries and Oceans Canada, should regularly monitor the productivity of shipyards in terms of competitiveness, cost-effectiveness, and efficiency, including measuring progress against the target state.

Public Works and Government Services Canada, Industry Canada, National Defence, and Fisheries and Oceans Canada accept the recommendation. The National Shipbuilding Procurement Strategy Secretariat, which is led by Public Works and Government Services Canada with membership from Industry Canada, National Defence, and Fisheries and Oceans Canada, will establish a set of standardized measures that will provide Canada with regular insight into the productivity of the two selected shipyards. In accordance with the terms of the signed umbrella agreements, the National Shipbuilding Procurement Strategy Secretariat will also continue with its plans to develop a strategy for the engagement of third-party experts to measure the shipyards’ progress towards the achievement and maintenance of the target state.

2.1 The National Shipbuilding Procurement Strategy Secretariat will develop a Performance Monitoring Strategy to monitor the productivity of the shipyards. This activity will require the assistance of the shipyards and third party experts to identify standardized metrics capable of periodically assessing the productivity of the shipyards.

The Performance Monitoring Strategy will identify a subset of measures which will allow for trend analysis of the progress against the achievement and maintenance of Target State and provide for the early identification of issues at the shipyards. This activity will be validated by the benchmarking assessments of the shipyards captured under the Umbrella Agreements signed with both shipyards. The Performance Monitoring Strategy will be submitted for approval of the Deputy Minister’s Governance Committee.

A Performance Monitoring Strategy Implementation Plan will be developed to outline the manner in which the Performance Monitoring Strategy will be executed. The Implementation Plan will be submitted through the governance structure for approval of the Deputy Ministers Governance Committee.

November 30, 2014

Work has begun on this action item and is on track to be completed by the intended implementation date.

3.66 Recommendation

National Defence and Public Works and Government Services Canada, working with the Treasury Board Secretariat, should ensure information to Treasury Board ministers includes updated information on changes to costs, capabilities, and schedules and should request additional authorities, as required.

Agreed. National Defence and Public Works and Government Services Canada will continue to meet regularly with the Treasury Board Secretariat to discuss the shipbuilding projects so as to inform decisions on how and when to appropriately update Treasury Board ministers. As well, upon completion of the definition phase of each shipbuilding project, high-fidelity cost estimates for each project will be available, with a clear indication of capabilities to be acquired and the refined delivery schedule for ships. This information will continue to be reported to Treasury Board ministers and additional authorities will be requested, as appropriate, in accordance with the relevant Treasury Board policies.

3.1 National Defence and Public Works and Government Services Canada will continue to monitor shipbuilding projects through the National Shipbuilding Procurement Strategy governance structure, which includes a Director Generals’ Interdepartmental Working Group, an Assistant Deputy Ministers’ Interdepartmental Steering Committee and a Deputy Ministers’ Governance Committee. Treasury Board Secretariat officials are fully integrated into this governance structure, which ensures information will be appropriately reported to Treasury Board, including updated information on changes to costs, capabilities and schedules. Individual departments remain accountable to obtain any modifications or additional authorities in accordance with relevant Treasury Board policies.

In addition, a periodic agenda item will be added to DND’s Major Capital Project – Interdepartmental Oversight Committee, of which TBS and PWGSC are members, through which cost, capability, and schedule changes for Major Capital Projects are identified, along with the approaches to address these changes, based on approved project documentation.

March 31, 2014

Completed

February 28, 2014

A periodic agenda item has been added to DND's Major Capital Project - Interdepartmental Oversight Committee (MCP-IOC), of which TBS and PWGSC are members, through which cost, capability, and schedule changes for Major Capital Projects are identified, along with the approaches to address these changes, based on approved project documentation.

In accordance with the MCP-IOC Terms of Reference (January 2014), all projects with project approval will be reported to MCP-IOC meetings in February and October with respect to scope, cost, and schedule status.