STRUCTURING NAVAL CAPABILITIES FOR STRATEGIC RENEWAL Lieutenant-Commander S.P. Gaetz JCSP 38 DL PCEMI 38 AD Master of Defence Studies Maîtrise en études de la défense Disclaimer Avertissement Opinions expressed remain those of the author and do Les opinons exprimées n’engagent que leurs auteurs et not represent Department of National Defence or ne reflètent aucunement des politiques du Ministère de Canadian Forces policy. This paper may not be used la Défense nationale ou des Forces canadiennes. Ce without written permission. papier ne peut être reproduit sans autorisation écrite. © Her Majesty the Queen in Right of Canada, as represented by the © Sa Majesté la Reine du Chef du Canada, représentée par le Minister of National Defence, 2013, 2015. ministre de la Défense nationale, 2013, 2015. CANADIAN FORCES COLLEGE – COLLÈGE DES FORCES CANADIENNES JCSP 38 DL – PCEMI 38 AD MASTER OF DEFENCE STUDIES – MAÎTRISE EN ÉTUDES DE LA DÉFENSE STRUCTURING NAVAL CAPABILITIES FOR STRATEGIC RENEWAL By Lieutenant-Commander S.P. Gaetz “This paper was written by a student “La présente étude a été rédigée par attending the Canadian Forces College un stagiaire du Collège des Forces in fulfilment of one of the requirements canadiennes pour satisfaire à l'une des of the Course of Studies. The paper is a exigences du cours. L'étude est un scholastic document, and thus contains document qui se rapporte au cours et facts and opinions, which the author contient donc des faits et des opinions alone considered appropriate and que seul l'auteur considère appropriés correct for the subject. It does not et convenables au sujet. Elle ne reflète necessarily reflect the policy or the pas nécessairement la politique ou opinion of any agency, including the l'opinion d'un organisme quelconque, y Government of Canada and the compris le gouvernement du Canada et Canadian Department of National le ministère de la Défense nationale du Defence. This paper may not be Canada. Il est défendu de diffuser, de released, quoted or copied, except with citer ou de reproduire cette étude sans the express permission of the Canadian la permission expresse du ministère de Department of National Defence.” la Défense nationale.” Word Count: 21 681 Compte de mots : 21 681 ii TABLE OF CONTENTS List of Figures .................................................................................................................... iii List of Tables .................................................................................................................... iv Abstract ............................................................................................................................... v CHAPTER 1 INTRODUCTION ................................................................................................... 1 Capability and Business Management Issues ..................................................................... 3 Lowered Readiness ............................................................................................................. 7 Revitalization Cost Increases .............................................................................................. 9 Delayed Procurements ...................................................................................................... 11 Summary ........................................................................................................................... 12 CHAPTER 2 LITERATURE REVIEW ...................................................................................... 14 Canada First Defence Strategy .......................................................................................... 14 Defence Procurement Strategy ......................................................................................... 17 Defence Renewal .............................................................................................................. 19 Allied Capability Management ......................................................................................... 21 Whole of Government Approach ...................................................................................... 23 CHAPTER 3 CAPABILITY GOVERNANCE FRAMEWORKS .............................................. 28 Capability Based Planning ................................................................................................ 32 Defence Budgets ............................................................................................................... 36 Defence Enterprise Management ...................................................................................... 39 CAF Doctrine .................................................................................................................... 42 Military Capability Valuation ........................................................................................... 45 CHAPTER 4 RCN CAPABILITY MANAGEMENT ................................................................. 49 RCN Governance .............................................................................................................. 50 Naval Readiness ................................................................................................................ 68 Naval Infrastructure .......................................................................................................... 81 Naval Equipment .............................................................................................................. 71 Naval Personnel ................................................................................................................ 68 CHAPTER 5 ALIGNING CAPABILITY WITH BUSINESS PLANNING ............................... 83 Capability Contributors ..................................................................................................... 83 Capability Cost and Valuation .......................................................................................... 88 RCN Business Management Model .................................................................................. 90 CHAPTER 6 SUMMARY .......................................................................................................... 95 BIBLIOGRAPHY ……………………………………………………………………..…………98 iii List of Figures Figure 3.1: DND Organizational Chart ................................................................................ 29 Figure 3.2: Defence Services Programme (DSP) Governance Model ................................. 32 Figure 3.3: DNDs Capability Based Planning Process ......................................................... 34 Figure 3.4: 2013 and 2005 Spending by PAA program ....................................................... 37 Figure 3.5: DRMIS functionality modules ........................................................................... 40 Figure 4.1: RCN Governance Tiers ...................................................................................... 51 Figure 4.2: Naval S&T Portfolio .......................................................................................... 55 Figure 4.3: PAA Alignment to RCN Readiness Program Output ........................................ 64 Figure 4.4: Budget for Maritime Readiness PAA Sub Program by IOG ............................. 67 iv List of Tables Table 3.1:1 Defence Planning and Management Framework Processes .............................. 30 Table 3.2:2 Capability Domains ........................................................................................... 43 Table 3.3:3 Capability Valuation Methodology ................................................................... 46 Table 4.1:5 Naval Super-System Identification .................................................................... 73 Table 4.2:4 RCN Readiness Report Categories .................................................................... 79 Table 5.1:6 Naval Capability Matrix (NCM) ....................................................................... 85 Table 5.2:7 RCN Business-Capability Alignment................................................................ 92 v Abstract The Royal Canadian Navy’s (RCN’s) capability is dependent on the government’s means and ambitions for its maritime capability through its navy. The Canada First Defence Strategy, the Defence Procurement Strategy, and Defence Renewal have impacted management of military capability. New changes to the Program Alignment Architecture (PAA), new classes of ship, revitalization of infrastructure, and a new functional models challenge how best to structure RCN business. To be effective, it’s important not only for the RCN business model to conform with governance and aligns with the PAA, but it should also be linked to capability output. An alternative force capability planning approach based on a methodology to define team centric capabilities, contributors, and valuations is proposed along with a method for determining their costs based on existing business processes that support platform-centric models used to acquire replacements for RCN fleets. While aligning the RCN business to precisely defined maritime capabilities, a means to improve the RCN’s management agility is inherent in the methodology. The capability definition used is largely based on RCN readiness doctrine as a reference to define teams within a matrix. The contributor dimension to the matrix includes itemized capability contributors from four categories: Personnel, Equipment, Readiness, and Infrastructure (PERI). 1 INTRODUCTION As the military needs of