:
Good afternoon, everyone, and welcome to the 27th meeting of the Standing Committee on National Defence.
In accordance with Standing Order 108(2), we will be continuing consideration of the new generation of fighter planes.
Before beginning, I would like to note that
[English]
we received a motion by Mr. Laurie Hawn, in line with all our regulations, that this committee invite Mr. Dan Ross, Assistant Deputy Minister for Materiel for the Department of National Defence, to appear as the only witness on Tuesday, October 19, 2010, from 3:30 p.m. to 5:30 p.m.
I will give the floor to Mr. Hawn on that.
I am going to oppose the motion that we invite Mr. Ross. I was not present when he appeared, but first, if I understand correctly, Mr. Ross testified on September 15 on the issue before us today. Second, and correct me if I am wrong, all members of the group who attended with him on September 15 presented arguments to the same effect as Mr. Ross's. What that means, in fact, is that all members of the group on September 15 stated opinions that paralleled Mr. Ross's.
In reply to Mr. Hawn, I will say that as I understand things, the people who advocate that view have had two hours to do it and it is entirely reasonable for us now to hear people who advocate a different view.
I therefore oppose Mr. Hawn's motion.
:
Yes, just to add to Mr. Harris's comments, it would be pretty hard to find anybody in Canadian industry who would express anything very much different from what we heard from those folks. So there really aren't two sides to that at all.
With respect to two sides, one of the things we are proposing--and you don't have this yet--is a panel on October 26 of Lockheed and Boeing so that the two major manufacturers of fighter aircraft in North America today could do that.
The position of the ADM Materiel is a pretty unique, pretty powerful position, and it's right and proper that we hear from a former ADM Materiel who has some strong opinions. But that should be balanced by the current ADM Materiel for a similar length of time, as was said, to drill down and focus on the issues that are being discussed and are in some dispute.
Mr. Chair, I'll just say again--and obviously we know where this is going, because that's the way these things work--in our view, it would show a lack of fairness and a lack of good faith if Mr. Ross did not appear on October 19.
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We don't have the same definition of what a 48-hour notice period means, but it isn't a major thing. I don't want Mr. Hawn to think I am blocking his motion, because that isn't the case. It's just that abiding by the time limits in the Standing Orders gives us time to talk about things with our colleagues and see whether we can't negotiate. That's all I wanted to say.
As for my own position, since we are discussing this and we are going to decide the question, I would like to note that last time, and I don't want my opposition colleagues to think ill of me, I said I was interested in hearing from Mr. Ross, since he is the one who currently holds the position. So it's important. Mr. Williams, who is at the meeting today, knows that even within ADM (Mat) there are often differing philosophies. I recall that Mr. Williams had some good discussions with Mr. Lagueux, his predecessor. He doesn't see things the same way. In any event, the important thing is to also hear the opinion of the person who is currently in the position.
I said last time that I feared for Mr. Williams' safety. I talked about the need to keep the former and current occupants of the position a sword's length apart. That image, that principle, is just as applicable in the army as in the Canadian Parliament.
I think you will be at more than a sword's length: you will be about two weeks apart from each other.
So I am going to support this motion, so we can hear his testimony. That will put an end to the political debate around why one would go first and the other second. We will settle the issue once and for all and then move on to something else.
:
Thank you Mr. Chairman for inviting me to speak to you today about the Joint Strike Fighter.
Throughout my 33-year career in the federal public service I have had many opportunities to appear before you on a range of subjects. I always found it to be an honour and privilege to do so and I always enjoyed our exchange of views.
[English]
At the outset, I'd like to thank the clerk, Jean-François Lafleur, for distributing my expansive comments in English and in French. In my allotted ten minutes, I'll present an abridged version of those comments.
During my career I was presented with a number of opportunities that went well beyond my basic job description at the time, and afforded me an opportunity to do something exceptional for Canada and the Canadian people. One of these opportunities was in signing the memorandum of understanding with the United States on February 7, 2002, that resulted in Canada's participation in the second phase of the Joint Strike Fighter, or JSF, program. This signing was unique because its purpose had very little to do with my responsibilities as assistant deputy minister of materiel for the Department of National Defence, but rather what I could do for Canada, for Canadian industry, and for the creation of jobs in Canada. This signing had nothing to do with buying or committing to buy these jets, but rather everything to do with providing an opportunity for Canada's aerospace industry to participate in the United States' largest defence procurement in its history, a procurement valued at over $200 billion.
In the 2001-02 timeframe, the issue of replacing our fleet of F-18s was, and pardon the pun, not even on our radar. These jets were being modernized and were expected to last through 2017-18. Nevertheless, there was one overriding reality that made the decision whether to join this phase rather easy; namely, if Canada did not participate, its industry would not even be provided with the opportunity to compete in this $200-billion program. This possibility was one we could not contemplate, so Canada entered the program.
True, there were other benefits from being a participant, but they paled in comparison to the benefits now open to our industry.
[Translation]
When the government made the decision to sole source for the JSF as our next jet aircraft, I was disappointed. I could not understand why they took this decision. There are obviously valid reasons to sole source. As you are probably aware, defence procurement is subject to the Agreement on Internal Trade. The AIT is an agreement, internal to Canada, which came into force on July 1, 1995. In principle it requires procurements to be competed but recognizes there are exceptions. For example, in the event of National Security or where there is an unforeseen urgency, and I emphasize the word “unforeseen”, competition may be bypassed. I listened closely to the reasons the ministers provided for sole sourcing this acquisition and frankly, all are flawed.
[English]
First, ministers said that a competition was already conducted, so there was no need for another one. The ministers are referring to the competition conducted by the United States to determine which company would build the jet. On October 26, 2001, Edward Aldridge, Under Secretary of Defense for Acquisition, Technology and Logistics, announced that Lockheed Martin was the successful candidate over Boeing. I vividly recall how we were all glued to our TVs at National Defence headquarters awaiting the announcement. We were experiencing our own defence academy award drama. This competition had absolutely nothing to do with the need for a competition to determine which jet aircraft in the marketplace could meet today's Canadian military requirements at the lowest life cycle cost. Equating one competition with the other insults our intelligence.
Second, the minister said the government is buying the Joint Strike Fighter in order to provide Canadian industry with the opportunity to compete for $12 billion in contracts. The fact is, these potential benefits pale in comparison with the guaranteed benefits that would accrue to Canadian industry through a competition. In a competition of this size, all bidders would be required to provide an industrial and regional benefits plan as part of their bid. This plan would require each bidder to provide a guarantee of benefits equal to or greater than the value of the contract.
[Translation]
Third, the ministers claimed that this is the best aircraft available. When asked how he knows this, the Minister, Peter MacKay, responded that it was on the basis of briefing notes provided to him from within the Department of National Defence. Unfortunately, “in-house” analysis will reflect “in-house” bias. Other knowledgeable military experts have voiced other opinions.
[English]
The Joint Strike Fighter may in fact be the best aircraft to meet Canada’s needs. If it is, let it win in a competition. The only way to know for certain which aircraft can best meet Canadian requirements, and at what cost, is to put out an open, fair, and transparent statement of requirements and request for proposal and conduct a rigorous evaluation of the bidders’ responses. The bid that meets the requirements of the Canadian military with the lowest life-cycle costs would be selected.
Directing the contract for aircraft jets to the Joint Strike Fighter highlights the basic risks associated with avoiding competition. These include higher costs--perhaps up to 20% more--reduced opportunities for Canadian industry, and most importantly, uncertainty as to whether the best product has been acquired to meet the needs of the military.
By the way, funds squandered because we pay too much come from the Department of National Defence's capital budget, funds that, were it not for sole-sourcing, would be available for reallocation to other military capital priorities.
Yet the government continues to increase the percentage of non-competitive procurements at an alarming rate. In 2004, 8.8% of the value of National Defence contracts over $25,000 was non-competitive. By 2009, this percentage had risen to 42.1%, a fivefold increase. The phrase “competitive procurement” is quickly becoming an oxymoron. The procurement process is out of control and has degenerated into handouts for the chosen beneficiaries.
There is one other large downside risk to sole-sourcing, namely the increased potential for impropriety. The expenditure of public funds, especially when we're talking about billions of dollars, demands not only the highest degree of integrity, but also the appearance of the highest degree of integrity. An open, fair, and transparent process is critical. Undertaking sole-source deals leaves the procurement process more vulnerable to fraud, bribery, and behind the scenes deal-making and leaves the federal government more susceptible to such charges.
Thank you. I'd be pleased to answer your questions.
:
Very, very minimally, and that's probably exaggerating it. You have to understand that in this program your degree of influence is predicated on your degree of money. We were a level-three player in this. The only level-one player in this was the United Kingdom. They joined for $200 million in this first phase, when we paid $10 million. They paid $2 billion in the second phase; we paid $150 million. They contributed about 8% in the second phase, while ours was .06%, so to think that we would have any degree of influence doesn't really make any sense.
The fact is that on December 20, 1995, the U.K. signed the only level-one partnership agreement with the United States. In so doing, this agreement allowed them to be full partners in the development of the requirements and in the system design. No other player in this program has had that opportunity, so to suggest that we were anything more than what we signed up for in the first phase--i.e., as an observer--is greatly exaggerating any influence or input.
The other point to remember, of course, is that at that time we hadn't even developed requirement statements for our jets. This was nowhere on our radar, so there was nothing to compare and contrast what was going into the U.S. platforms with what we in fact needed. We were in it for one basic reason, and that is, as I've said, to give an opportunity to our industry to participate. As you've heard, they have done a magnificent job and have done really extraordinarily well. For that, they deserve a lot of credit--and by the way, so does a small group of people. I think you've met Michael Slack. He and a very, very small group of people were very aggressive at keeping the primes really focused on making sure that our industry knew the opportunities. He and his small team did a magnificent job and I think they should be applauded for that.
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I never got that impression throughout my retirement period. I know that when the 2006 MOU was signed, if you read the reports and statements at that time, neither did the Canadian government at the time, because they acknowledged in the release of December 11 that they were still looking at competition. Michael Slack at the same time is quoted as saying that this doesn't foreclose any competition. There were subsequent memos from Industry Canada saying that this, again, doesn't preclude.
Even the chief of the air staff, André Deschamps, on the day, I think, that the announcement was made, is quoted in the issue of Canadian Defence Review, when asked about the Joint Strike Fighter.... I'll read this to you. This interview took place just a few months before; it came out in June. The question from the magazine was: “Where is the next generation fighter on your list of priorities?”
The next generation fighter is very high on my list. We know government wants to get to that discussion soon, and we definitely need to get on with a process to get a new fighter. It sounds like a long time away, but as we know it takes a lot to go through a contracting process and produce a new fighter. We just finished upgrading our CF-18s to what we call the R2 standard. It's a tremendous upgrade creating a great platform, and will give us a high performing aircarft to keep us competitive certainly through this decade. That doesn't mean we shouldn't move forward on selecting what will replace the CF-18. Were moving forward hopefully in the not too distant future to establish a discussion with government.
So I would argue that not only had the government basically stated that this didn't preclude a competition, but certainly inside the department the chief of air staff, in response to the question, didn't say “I can't wait to get the Joint Strike Fighter; I expect that announcement to be imminent—that's the only one for us.”
All of this comes clearly to reflect the position that there in fact would be a competition.
I would disagree with him when he says it takes an awfully long time. I think we could do it in a short timeframe, but that's another question.
I would like to welcome Mr. Williams, with whom I have had epic discussions at this committee. Mr. Williams is very competent and capable of defending himself. I think that is why he likes appearing before this committee. To him, facing off with parliamentarians is a great challenge.
Mr. Williams, I am just about to start proceedings against you on a copyright issue. When you made your presentation earlier, you skipped over some sections of your text. That was probably because you wanted to stay within the time limits. You skipped a paragraph that I think is very important, I will read it to you in French:
It is like going to a car dealership to lease a car for 5 years. The salesman says there is a $1,000 down payment and a monthly charge that he cannot reveal. Would any of us lease that car without that information? I doubt it. Yet, this is exactly what we are now doing with billions of dollars of taxpayers' money.
I have also read what you have said in several magazines and I have noticed that you often made that analogy, about car dealerships. I would like you to acknowledge today, before the committee, that I am the one who put the car image in your head, a few years ago. You would have to admit that I hold the copyright on that.
Are you prepared to do that?
First, the reason I didn't mention all my points was that the clerk gave me only 10 minutes. So I had to eliminate a few points.
Mr. Claude Bachand: Including some important ones.
Mr. Alan Williams: It is all important. But the question is very important.
[English]
Let me answer as best I can.
It is very important, in my estimation, for the public to understand why the requirements we select are necessary. To continue--and here I'm going to give you the credit--if I went to a car dealership again and wanted to buy a mode of transportation, I would first have to decide if this mode of transportation was for myself; my wife; myself, my wife, and my ten kids; or whether I need to transport furniture and equipment. The requirements are very specific to the role and the need.
It may be that we need a fifth generation. If so, let's be able to articulate why we need a fifth generation, how that fits into the defence policy we have, and how that fits into the role we see our military performing in the future. If it gets by that hurdle and it turns out that's the only one, that's fine. But we can do that openly. Having someone sitting behind closed doors and saying this is what we need because they say so is frankly not acceptable when you're spending $16 billion of our money. That's the key point you want to make.
Secondly--and this is another point I didn't mention in my oral presentation, but it's in the notes--if after I chose my requirements and went to the dealers that had what I wanted to meet those requirements someone said to me, “Monsieur Williams, it's going to be $1,000 down now, but I'm not going to tell you what the monthly payment will be”, would I buy the car? Of course I wouldn't buy the car. To buy something, commit to something right now when you don't even know the costs, to me is the height of absurdity.
I think the Joint Strike Fighter is a great program and it may turn out to be the perfect aircraft. But we're sole-sourcing a product that right now is four years late in development, its cost has escalated dramatically, and it's under the Nunn-McCurdy compliance review test in the States, where the Senate is cutting back on the numbers it is producing year over year right now because they're missing all the deadlines. It seems to me that we're getting ahead of ourselves. Why are we committing to something now when there are so many risks with this program? I really don't understand it. It may turn out to be the perfect aircraft for us, but I don't think there's any evidence for that today.
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For the companies that are in this program today, and we've achieved up to 85 now, for sure, absolutely you want this program to continue. There is no guarantee, but basically what section 7.3 says is that if you signed the 2006 MOU, which we did, tick; and if you have a contract and you're still continuing to produce the good for which you were contracted in the best value mode, tick; and if you agreed to buy these jets, question mark at the moment, then normally, not always, but normally, you would be entitled to continue to produce this good for the full production numbers of aircraft, the thousands that are coming down the road. That's where the big money is.
So that's an incentive. But keep in mind two things. One is it says “normally”. There is no guarantee that any of the companies that in fact won contracts would automatically be given anything, especially as we've all read there's so much pressure under it that it considered retracting and doing things in a less costly kind of way.
So there's no guarantee, but beyond that, section 7.4 says, what happens if in fact Canada doesn't buy? Section 7.4 then comes in, because those same contracts would then be open for re-bid. Section 7.4 basically says that it's up to each participant country to make sure that the primes give their industries the same due diligence and same opportunity to bid for that again. So either way, there's still an opportunity for IRBs, industrial and regional benefits policy.
I'll just close with one other point, which I probably will make more often. We should never think that the IRBs are the reason we're in this program. It should never take first place over the need to make sure that our military is getting the right aircraft. Sometimes I get the impression.... Okay, I'm done.
:
We can visit that again, but I only have a few minutes here. I wanted you to finish your point.
Mr. Williams, we had a story in the Ottawa Citizen on September 20, the day that Pugliese suggested he had documents from the defence department indicating that there was a plan for a competitive process for both the aircraft and long-term maintenance that was developed in summer 2009. The scheduled plan for the competition was to be run in 2010; the contract was to be awarded by 2012. We also had the state in the House of Commons on May 27 that there would be a competitive process, and he made sure that this was totally clear.
What would have happened between May 27 and six weeks later, in July, when we're told it's a sole-sourced contract, etc.? What would have to happen? How do we get from there to that?
Secondly, tell me about the process of a statement of requirements. Are you aware that there would have been a statement of Canada's requirements for a fighter jet to replace the F-18? When would that have been prepared, and would that be normally available to a committee like this?
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The only thing I could envision is the minister would call me into his office and say he wanted to sole-source these things. I'd say there was no need, that wasn't the intent, we have no reason or rationale to do it. He'd say he wanted to do it anyway. I'd say if he wanted to do it anyway I couldn't stop him. I'd have two choices, either go along or resign. The fact is, he's not doing anything illegal. There is nothing at all outside his authority to do it this way.
I think it's a stupid way of doing business, and I would have advised him that way. In fact, I would point out that I would have said to him, if you're going to do it this way, you're going to undermine all the good. The government would look great if you simply said you're authorizing the Department of National Defence to replace their F-18s. That's a great news story. You get all the kudos and everybody is very proud of what you're doing. I said you're undermining all of that by stepping into a procurement process and predetermining the winner, for which there is no validity. I would have advised him or her strongly against it, depending on who the minister was.
In terms of the statement of requirements, it is typically the basic document for which the military and the military alone is accountable. Certainly when I was there the military in any major procurement had to produce a statement of requirements that would be reviewed and vetted and challenged within the department, get the sign-off of the senior military officials and the Chief of the Defence Staff before it was then made public as part of the overall defence procurement process provided to industry, have discussions, start the whole requirements process with industry in terms of product availability, develop the contractual terms and that kind of stuff. It is fundamentally at the base of any procurement process and nothing typically should proceed without it. Whether it's open to this committee is something I wouldn't be able to comment on factually.
:
No, it doesn't. Basically what I was saying was that this was a great program to be part of. It benefited National Defence in many ways, and there were other benefits. We were learning a great deal about autonomic logistics, about composite frames, about the ways you can manufacture and develop things better, have the better systems. All of that was great for us. At National Defence we were learning all about it. At the same time, interoperability was obviously a factor.
Let me talk in terms of interoperability. I'm sorry about this, but I'll use a car analogy again. If you are travelling from Ottawa to Calgary with ten of your friends in ten different cars, you all don't have to travel in a Ford in order to communicate. It's not the frame that determines interoperability.
You know, it's good that many of our allies would have the same frame and the same product--absolutely--but we operate today with many allies, with many frames. We're totally interoperable with NATO dealing with 16 standards and everything else like that. Many of our allies after this won't have this one, and a lot of our allies that buy this have others as well.
So it's not the frame that determines interoperability, it's the systems inside. And while buying this jet may be the best for Canada and may ensure that interoperability is enhanced, all I'm saying is that if it is, let's go through the front door as opposed to the back door in getting it.
Mr. Williams, I'm not an expert in aviation and national defence, but like you, I think that to be sure that a plane is able to meet Canadian requirements and that we know how much it should cost, we have to have a transparent, clear and detailed bidding process.
One thing I don't understand. In your notes, you say that ministers came forward and talked about the program, and said there had been a competition and we didn't need a second competition. But you also write that the competition that was held had absolutely nothing to do with the subject we're talking about here this afternoon, or in other words, the purchase of these planes. That is what your notes say.
If you would, I'd like you to explain what you mean there. What sort of competition were these ministers referring to, and what sort of competition should there have been, to get a response to a bid solicitation that was not issued?
The basic answer is that the U.S. worked for four or five years trying to get commonality of requirements between its navy, air force, and marines. They produced three different varieties of this with their operational requirements and with the U.K.'s input, because they're a level-one partner. We stood by the side as observers. They picked the one to best meet their needs, and that's great.
What we have to do is what we've talked about here. We have to define our requirements. What does Canada need? What's our role? Our role is not the same as the United States' or the U.K.'s. We're unique in our demographics and in our use of troops. We have to take that statement of requirements. We have to then work with industry, develop the contractual specifications, hold a competition, and say that these are our requirements as proposed by our military; they are sacrosanct, and you have to deliver on them. We will now get bids in, do the evaluations, as I've said—
I want to go back to something Madame Folco said and a remark you made about our role being different from the Brits' and the Americans'.
Obviously, the Americans are involved in many more things than we are, but I would suggest to you that the American requirement for long-range interceptors in the north, just as we fly in the north.... We're side by side with them between Alaska and Canada. The Brits have the same requirement north of their country. Our requirements in those kinds of missions are in fact very similar. They are the same, and we've shown as much with the airplanes we've operated: CF-18s, CF-104s, CF-5s, CF-101s. In other missions, such as Afghanistan, where we're operating together, we're not there with fighters at the moment. The Brits and the Yanks are.
I would suggest to you that our roles are very similar, in fact, to the Brits' and the Americans' role.
:
Mr. Chair, do we have to place absolute trust in people with top-secret security clearance? You know I have always objected to that. Canadian taxpayers pay, and we are their representatives. When it comes time to decide what kind of plane to select, it is very important that we have as many details as possible
So I don't want someone telling me that I have to place complete trust in a guy who has a top-secret security clearance, because that isn't true at all. I want that to be very clear. Unfortunately, I am also frustrated by the fact that I don't have a very high security clearance. I am up against guys like him, and like Mr. Ross who will be coming, who have a top-secret security clearance. I am up against generals, major-generals, lieutenant-generals, who have top-secret security clearance. We ask questions that are sometimes pretty harmless. They tell us they have the truth and they know what is going on. But we have the responsibility of buying these planes or deciding what type of plan. This has to be clear, to me, having top-secret security clearance is not necessarily a guarantee of trust.
There is another thing too, and that is the question of interoperability. If I understand correctly, the fact that we all have the same plane, an F-35, doesn't meet we will be completely interoperable. That is not true. Interoperability is how it operates in a theatre of operations. Personally, I'm sure, although I have great respect for the F-35, that a Eurofighter Typhoon or a Super Hornet is capable of operating interoperationally with the other members of NATO. There is no doubt about that.
Mr. Williams, given the agreement signed by the government, I would like to know what would happen if the government decided that it now wants to solicit bids, if, for example, there were a new government. The present government has committed itself. Would there be a risk of legal action? We all remember how Mr. Chrétien's party had promised to cancel the helicopter order before it came to power. We had a rather hefty fine to pay for breach of contract. It was worse than that, because we went 10 years with no helicopters. You recall, Mr. Williams, that they said that in political terms they couldn't just the same craft, even if we needed them, because they had said they didn't want them. They invented a package where they wanted to get the chassis from one company and the body and weaponry from another company. We come back to the car example—
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If you look at the agreement, there is in fact a dispute resolution clause and ways to get out that are frankly very well and very fairly stated. In other words, there are clauses that say that if you want to get out you have to pay your fair share. We paid $551 million in this.
If in fact we decide to get out of the program—which you don't have to do just because you don't buy the jet—we could. There is no link, so you could stay in the program and make it that you're not going to buy the jets. That might affect our costing, because everything is pro-rated between all the companies, and stuff like that.
There is one significant difference between the cancellation in 1993 and this, and that is, that cancellation was with a contractor in the private sector; this is a government-to-government relationship. I think before any government decides not to proceed, there are probably—this goes well beyond my capability to talk about, but they're obviously big people—little consequences here, because you will have made a commitment, by signing, to buy something government to government. Between now and then, there is nothing to preclude doing a competition, frankly.
:
I have another question.
In listening to your testimony, you talked a couple of times in terms of getting the right aircraft and the great cost of any plane, and in fact you better understand what your needs are before you sign the contract and expend that amount of money. You talked about your earlier process. You asked them about the number of planes they would be purchasing and how, if you get a plane that does not meet your priorities, then you're in part wasting some of that huge amount of money. You made that point a couple of times.
One of the things I've seen many times is how in fact it also works the other way around, where you end up using what you have. If you don't set out and clearly, for the public, have that kind of debate on the direction in which you want to go in terms of your foreign policy, you end up using the tools you have. You end up using the technology you have. In fact, it ends up being technology that drives policy, as opposed to policy driving technology, which really creates a huge, immense, ongoing problem.
Do you have a comment on that?
And I will take this opportunity to point out--and you may want to get a copy of this--that the long-term costs of any asset are often, as I've said, higher than the initial acquisition cost. And we put out while I was there long-term equipment support cost projections, looking 10 to 15 years ahead as best we could, in order to give this committee, as well as industry, an idea.
So my point is that we're doing things smarter today. When we bought the recent helicopters we made sure that the contract was for the initial acquisition as well as the long-term support. When we bought the search and rescue helicopters we weren't as smart and we didn't.
Now we have a very good idea, if we're smart and we purchase things smartly, to know what the long-term costs are.
:
Let me see if I understand your question.
It is absolutely correct, I think--it's what I heard the minister say--that instead of getting a guarantee, we're opening ourselves up for the potential, and the potential can be the potential to bid on $12 billion. When you bid on $12 billion, you might win 10%, 20%, 30%, 40%, 50%. If you go historically by what we've done, it could be in the 30% to 40%. And I should tell you that even when I was there, we estimated that the final contractual amount available to industry might be in the $4-billion to $6-billion range, which would be phenomenal, given the little amount we've put in.
So I think it is absolutely, absolutely correct, and there's nothing in this 2006 MOU that prevents us from continuing to reap those benefits. Having said that, as I've said, there is a risk that if you decide not to buy them, then the companies that have contracts are in a higher jeopardy position. Of course I'm not advocating not buying them, and neither am I advocating getting out of the contract; I'm simply advocating doing a competition.
Frankly, if the government thought it was at risk, it could have made the sole-source decision December 12, 2006. Why wait till now to make that commitment? There's nothing between now and then that makes any difference. Even better, on December 12, 2006, launch a competition, which would have had the results right today, in which case we might have been able to make the commitment following a competition.
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We've heard the military tell us publicly and before our committee that this is the best plane, this is the only plane. This is all we have so far.
The Auditor General did a study last year of urgent procurements for Afghanistan. There's no suggestion that they didn't have urgent procurements, but apparently, according to the Auditor General, for the LAV, the light armoured vehicles with the remote weapons system, National Defence told the ministers that the vehicle was the best option to replace the inadequately protected G Wagon and Bison vehicles. But then internal documents indicated that the LAVs were not one of the preferred options and that the project was in fact to build a better LAV.
So if all someone is saying is that “this is the best”, how can we assess that as a committee, without having either a statement of requirements other than some...? And I don't distrust military people because they're military people. I would want to hear, if someone says they think it's the best, why: tell us why and show us the statement of requirements. We know that for the statement of requirements, for example, for the fixed-wing aircraft, we had a 55-page critique of it by the NRC.
It seems to me that this plane was chosen and then the specs were written to support it. That's my guess and my judgment.
Are we in danger of having the same thing happen here—“we like this plane, we want a fifth-generation plane”—and that's enough?
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Given that there is a statement of requirements out there, and I'm led to believe there is, the process from going from that stage to signing a contract need not take long.
I would point out that we talked about seeking the replacement on December 17, 2003. The minister, David Pratt, said to go ahead and buy. I think it was on November 23, 2004, that the contract was signed. Now, we may have a difference about how well that contract is being managed, but that's another story. So if the statement of requirements is there, the process by which you then start to put that out into the public domain, to do a request for proposal, get the bid back in, do the evaluation, is frankly something that governments have done and the bureaucrats have done for many years. Public Works and National Defence have very capable, competent people who can run with that very quickly. That's why, frankly, when you talked to the bureaucrats up until very recently the whole intent was to compete this.