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Executive (In)Decision? Explaining Delays in Canada’S Defence Procurement System, 2006-2015

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Executive (In)Decision? Explaining Delays in Canada’S Defence Procurement System, 2006-2015 Executive (In)Decision? Explaining Delays in Canada’s Defence Procurement System, 2006-2015 by Jeffrey Francis Collins A thesis submitted to the Faculty of Graduate and Postdoctoral Affairs in partial fulfillment of the requirements for the degree of Doctor of Philosophy In Political Science Carleton University Ottawa, Ontario © 2018 Jeffrey Francis Collins i Abstract This dissertation asks how delays in Canada’s defence procurement system can be explained. In answering this question, the hypothesis tested is that of the ‘political executive’; the political body composed of the prime minister, cabinet and their advisors who sit at the apex of the federal government. With final decision-making powers over defence policy and budgets, the political executive has been inferred in existing scholarship as a decisive factor in delaying Major Crown Projects (MCPs) from moving through the procurement process but this has never been the subject to a scholarly analysis. Three other independent variables commonly identified in the literature as causing procurement delays were tested alongside the political executive: (1) the defence procurement bureaucracy; (2) the defence industry; (3) and Canada’s military alliances and involvement in the Afghanistan war (2001-2014). Delays are treated as the dependent variable and are defined as a MCP not meeting its original planned project milestone dates. The dissertation relied upon four case studies in performing this analysis: The Joint Support Ships, the Medium Support Vehicle System – Standard Military Patter trucks, the Fixed-Wing Search and Rescue aircraft, and the Halifax-class Modernization/Frigate Life Extension. All four trace their beginnings to the Liberal governments of Jean Chrétien (1993-2003) and Paul Martin (2003-2006), but it was under the Stephen Harper Conservative government (2006-2015) that all were adopted into that government’s procurement plans and it is in this period where delays occurred, for the first three case studies, and where apparent success was established with the fourth, the Halifax-class Modernization. (The first three case studies all experienced delays and are anywhere from seven to fourteen years behind their original schedule.) Relying upon process-tracing and the bureaucratic politics framework, this research concluded with a hypothesis not completely proven: the political executive can partly account for delays by not establishing clear policy guidance and governance models before a MCP reaches the project definition stage; however, a complete accounting for procurement delays is not possible without factoring in at least one the three independent variables, especially the defence procurement bureaucracy. ii Acknowledgments This project was a five-year odyssey that could not have happened without the support of many individuals and groups. First, thanks go to my supervisory team of Professors Elinor Sloan, Kim Richard Nossal and Jonathan Malloy. Professor Sloan deserves special mention for encouraging me to research and stick with this dissertation’s subject matter, especially during those times when I waivered. I am glad I heeded her advice (and deadlines) as this project’s subject matter could not have been more timely. Likewise, to the nearly two dozen interviewees who took time from their busy schedules to address my lengthy questions, thanks. Most of you asked to remain anonymous but without your insights this project simply would not have been able to capture the many nuances of contemporary defence procurement. You know who you are. Thank you. I also extend my deep appreciation to Sean Speer and Dr. David S McDonough of the Macdonald-Laurier Institute and Dr. Brian Bow and Andrea Lane at the Centre for the Study of Security and Development at Dalhousie University who have provided me with a national platform to network, publish and test my ideas. Likewise, my thesis benefitted from professional feedback gained at the 2017 International Studies Association conference in Baltimore, Maryland and the 2016 defence procurement conference hosted by Le Centre interuniversitaire de recherche sur les relations internationales du Canada et du Québec (CIRRICQ) at Gatineau, Quebec. A special ‘shout-out’ to Jacques Fauteux, Dr. David Perry, Rachael Bryson and especially Heather Diamond for their assistance; Dr. Alex Marland for the motivation to complete the thesis on time; and James Sullivan and the Government of PEI for the support to allow a new provincial civil servant to study the procurement processes of our federal cousins. And finally, a very special thank you goes to my number one supporter and best friend, Jenny Mason and to our cat Charli (my personal editor). Thanks for putting up with the late nights and long weekends. Normalcy has returned. iii List of Acronyms Used ADM (Mat) – Assistant Deputy Minister (Materiel) AOR – Auxiliary Oil Replenishment ships CA – Canadian Army CAF – Canadian Armed Forces CCG – Canadian Coast Guard CDS – Chief of Defence Staff CITT – Canadian International Trade Tribunal DM – Deputy Minister DND – Department of National Defence FWSAR – Fixed-Wing Search and Rescue IC – Industry Canada IRBs/ITBs – Industrial Regional Benefits/Industrial Technical Benefits ISEDC - Innovation, Science and Economic Development Canada JSS – Joint Support Ships MC – Memorandum to Cabinet MilCOTS – Military Commercial Off-the-Shelf MLVW - Medium Logistics Vehicle Wheeled MSVS – Medium Support Vehicle System NRC – National Research Council PSPC – Public Services and Procurement Canada PWGSC – Public Works and Government Services Canada RCAF – Royal Canadian Air Force RCN – Royal Canadian Navy RFP – Request for Proposals SMP – Standard Military Pattern SOR – Statement of Requirement TBS – Treasury Board of Canada Secretariat TKMS – ThyssenKrupp Marine Systems UOR – Urgent Operational Requirement iv List of Tables Table 1: The Defence Procurement System: Organizational Roles and Responsibilities……….50 Table 2: The Defence Procurement Process: Stages and Key Components……………………..55 Table 3: JSS Project Milestones…………………………………………………………………76 Table 4: MSVS-SMP Project Milestones………………………………………………………120 Table 5: FWSAR Project Milestones…………………………………………………………...153 Table 6: HCM/FELEX Project Milestones……………………………………………………..200 v Contents Abstract……………………………………………………………………………………………ii Acknowledgements………………………………………………………………………………iii List of Acronyms Used…………………………………………………………………………...iv List of Tables……………………………………………………………………………………...v Chapter 1 – Introduction…………………………………………………………………………..1 Hypothesis and Research Question…………………………………………………..3 Literature Review…………………………………………………………………….6 Literature Gap………………………………………………………………………22 Theoretical Framework……………………………………………………………..23 Methodology………………………………………………………………………..29 Chapter Outline……………………………………………………………………..34 Terminology………………………………………………………………………...37 Chapter 2 – The Defence Procurement System, Process and Policy Environment….…………..38 Introduction…………………………………………………………………………38 The Defence Procurement System………………………………………………….39 The Defence Procurement Process…………………………………………………52 External Defence Policy Environment……………………………………………...56 Internal Defence Policy Environment………………………………………………62 Bringing It All Together……………………………………………………………73 Chapter 3 – Joint Support Ships…………………………………………………………………74 Introduction…………………………………………………………………………74 Political Executive Decisions………………………………………………………76 The Early Years: 1994-2005……………………………………………………..76 The Early Harper Years: 2006-2008……………...……………………………...82 The Later Harper Years: 2009-2015……………...……………………………...87 Exogenous Factors………………………………………………………………….91 Defence Procurement Bureaucracy……………………………………………....91 vi Industry…………………………………………………………………………107 Alliances and War………………………………………………………………109 Bringing It All Together…………………………………………………………..110 Chapter 4 – Medium Support Vehicle System – Standard Military Pattern……………………117 Introduction………………………………………………………………………..117 Political Executive Decisions……………………………………………………..120 The Early Years: 2000-2005……………………………………………………120 The Early Harper Years: 2006-2009…………………………………………....122 The Later Harper Years: 2010-2015……………...…………………………….128 Exogenous Factors………………………………………………………………...130 Defence Procurement Bureaucracy………………………………………….….130 Industry…………………………………………………………………………139 Alliances and War………………………………………………………………142 Bringing It All Together…………………………………………………………..142 Chapter 5 – Fixed-Wing Search and Rescue Aircraft…………………………………………..150 Introduction………………………………………………………………………..150 Political Executive Decisions……………………………………………………..154 The Early Years: 2002-2005……………………………………………………154 The Early Harper Years: 2006-2009……………...…………………………….160 The Later Harper Years: 2010-2015……………...…………………………….167 Exogenous Factors………………………………………………………………...169 Defence Procurement Bureaucracy…………………….……………………….169 Industry…………………………………………………………………………181 Alliances and War………………………………………………………………187 Bringing It All Together…………………………………………………………..190 Chapter 6 – Halifax-Class Modernization/Frigate Life Extension……………………………..195 Introduction………………………………………………………………………..195 Political Executive Decisions……………………………………………………...201 vii The Early Years: 2001-2005……………………………………………………201 The Harper Years: 2006-2015………………………………………………….203 Exogenous Factors………………………………………………………………...206 Defence Procurement Bureaucracy…………………….……………………….206 Industry…………………………………………………………………………217 Alliances and War………………………………………………………………218 Bringing It All Together…………………………………………………………..219 Chapter 7 – Conclusion…………………………………………………………………………223
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