June 23, 2017
The Right Honourable Justin Trudeau, P.C., M.P. * Prime Minister of Canada
80 Wellington Street Ottawa, Ontario K1A 0A2
Dear Prime Minister:
We write to you representing over 18,000 workers employed at the Department of National Defence, and over 180,000 allied members with the Public Service Alliance of Canada. We are concerned with a worrisome trend in procurement strategy at the Department of National Defence (DND) that leaves private contractors with sweeping responsibility in our next wave of investment in defence infrastructure, accompanied by a lack of parallel commitment to our in-house personnel and capabilities. We wrote the Minister of National Defence on February 27, 2017 with our concerns regarding a lack of transparency in procurement, and have yet to receive a response.
Your Government’s recent announcements highlight an increase in defence funding of $62.3 billion over the next twenty years. Of this, defence expenditure on major equipment will reach a third of overall spending. As we can gather from the details of recent shipbuilding contracts, these major equipment purchases involve significant delegation of core capabilities to the private sector. Given these recent announcements, we are concerned with both the broader extent of industry involvement envisioned in Strong, Secure, Engaged: Canada’s Defence Policy, as well as more detailed announcements regarding new shipbuilding contracts that are coming up in the short term. We outline these concerns below.
The Policy identifies a growing involvement and reliance on private contractors within our overall defence strategy. It is critically important to recognize the inherent conflict of interest between procurement providers and important decisions that are made on what contracts are awarded, and their scope and terms. This relationship between industry providers and DND deserves scrutiny, and an appropriate level of checks and balances to ensure it is not abused.
The government indicates that “industry representatives should not have to deal with burdensome and excessively complicated approval processes” and also that industry should benefit from a “more transparent relationship with government”. It would be helpful to have some clarity on what kind of transparency is envisioned, and whether this includes both government and industry partners. Increased industry partnerships can undermine financial transparency as industry books are not available to the Auditor General, the Parliamentary Budget Officer, Parliament nor the public through Access to Information requests. Publishing the Defence Investment Plan publicly, as is promised, does not address this anomaly.
As such, this transparency is one way, and essentially appears to mean that industry should have a larger “partnering” role in defence procurement and decisions, which implies a much stronger strategic influence and raises red flags regarding the independence of DND decision-making and that of Parliament. Furthermore, recommendations promise to “increase the transparency and timeliness of communication with defence industry associations” and create a Defence Industry Advisory Group. The Defence Industry will have a formal seat at the table, which strengthens to a worrisome degree the extent of industry influence.
We notice with interest that the Department promises to “grow and professionalize the defence procurement workforce” including the “addition of new procurement specialists (60 persons) and enhanced training and professional accreditation for defence procurement personnel”. It is imperative that this type of workforce development is matched with investment in DND’s workforce across maintenance, service delivery, and core capabilities. If not, we will continue to see a drain on our ability to respond effectively in-house, and rely too heavily on outside providers, potentially compromising national security as this imbalance is exacerbated.
As revealed in a National Defence briefing document, the in-service support contract for new acquisitions of the Royal Canadian Navy’s Arctic Offshore Patrol Ships and Join Support Ships will include unprecedented access to Department of National Defence facilities, support equipment, and supervision of DND employees. This $5 billion contract raises significant concerns both for personnel retention at DND, including investment in an effective and adequate workforce, as well as the extent to which it puts significant military intelligence and operations in the hand of a private company.
Prior to the briefing’s release, UNDE was not consulted about the sweeping nature of this new agreement, which puts responsibility for core maintenance and upkeep in private hands – work that is being done in-house with the existing fleet. We are concerned this could be repeated with other tendered projects in the future. As we have learned with expensive public contracts like Phoenix, mismanaged contracts can have significant adverse effects both on the department as well as the broader public service. Within DND, this is compounded by the potential compromising of our national security apparatus by private industry and clear security risks in under- investing in our own core capabilities.
An immediate review is needed for these tenders and the extent of contracted-out services that are included, addressing the precedent this sets for future procurement at DND. We hope that you can address these concerns and reassure both our members and the wider public that Canada’s defence investments will continue to be in the public interest.
John MacLennan, President, Union of National Defence Employees
Robyn Benson, President, Public Service Alliance of Canada
CC: The Honourable Harjit Singh Sajjan, Minister of National Defence The Honourable Chrystia Freeland, Minister of Foreign Affairs
James Bezan, Critic for National Defence, Conservative Party (Selkirk– Interlake–Eastman)
Randal Garrison, Critic for National Defence, New Democratic Party (Esquimalt—Saanich—Sooke)
Elizabeth May, Party Leader, Green Party of Canada (Saanich-Gulf Islands) Martine Ouellet, Party Leader, Bloc Quebecois