ARCHIVED - Defence Acquisition Guide 2014

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Foreword

Foreword

The Honourable Rob Nicholson, P.C., Q.C., M.P. Minister of National Defence

The Honourable Rob Nicholson, P.C., Q.C., M.P. Minister of National Defence

On February 5th 2014, the Government of Canada released the Defence Procurement Strategy with three key objectives: deliver the right equipment to the Canadian Armed Forces in a timely manner; leverage acquisition of defence equipment to create jobs and stimulate economic growth in Canada; and streamline defence procurement processes.  The Defence Procurement Strategy fulfils the Government’s commitment to better ensure that the purchase of defence equipment improves economic outcomes for Canadians while meeting military capability requirements in a timely and responsive way.

The Defence Procurement Strategy will be implemented with early and continuous engagement with Canadian defence industry and potential suppliers through the use of independent advice (including the review of high level mandatory requirements), and timely and effective decision-making to guide and co-ordinate defence procurements. This strategy represents a fundamental shift in the Canadian approach to defence procurement.  As part of this new approach, the Department of National Defence is publishing this inaugural Defence Acquisition Guide (DAG), which identifies future potential Canadian Armed Forces requirements and associated procurement projects. 

It is important to recognize that the majority of the initiatives listed in this guide have not yet been brought forward for Government of Canada approval.  Moreover, they are subject to change as national and international strategic circumstances evolve, as technologies emerge and mature, and as priorities continue to be refined and evolve to reflect Canadian Armed Forces needs.  The DAG outlines the opportunities and choices that may be considered for capability investment by the Government of Canada.  This guide will be updated annually and will be more substantially refreshed every three years in alignment with the Canadian Armed Forces investment planning cycle.

In our effort to maintain early and continuous engagement with industry, I encourage and welcome industry feedback on this product.

Introduction

Introduction

The DAG is a key component of the Government of Canada’s Defence Procurement Strategy and is designed to provide greater transparency on potential defence capability requirements of the Canadian Armed Forces over the next 20 years.  The DAG will enable Canadian industry and potential bidders/suppliers to make informed research and development investments and strategic partnering decisions based on these anticipated needs.     

The DAG will ensure that industry and potential bidders are aware of the Department’s longer-term defence capability requirement areas.  However, as a practical limitation of the DAG, it must be recognized that beyond a 5-year period, there is less certainty and hence, capability requirements are less defined. The majority of the projects in this publication do not have formal authority from the Government and remain subject to change in terms of scope, cost and schedule including termination without any further explanation or liability. Initiatives where the Request for Proposal has been issued and the process is complete, are not included in this document. The DAG will be updated with new projects/proposals annually. At the same time, some capabilities which may be determined not to fit the Canadian Armed Forces strategic needs could be removed in future releases of the DAG.  In this regard, the document will also be substantially refreshed every three years to remain relevant as strategic circumstances evolve, new technologies emerge and priorities are adjusted to reflect the changing needs of the Government of Canada and the Canadian Armed Forces. 

The DAG begins with a synopsis of the Canada First Defence Strategy (CFDS) which provides the context and strategic direction that orients future Defence planning. An overview of capability based planning is then provided to explain the methodology the Canadian Armed Forces uses to determine its capability requirements.  To ensure industry is well aware of the various stages through which the Department of National Defence projects must transit, an overview of its project approval process has also been included.

 The potential capability requirements and associated procurements that follow are arranged into five groups and organized by expected delivery dates and value. Related details include the objective of the project or service, and a preliminary estimated cost of acquisition for each project. It should be noted that the cost estimates are of a Rough Order of Magnitude (ROM) and therefore there is potential for large variability between the cost estimates and the actual costs.  Each proposal summary provides an anticipated timeline of key milestones.  This includes an indication of when the project will be reviewed by Government for expenditure authority (implementation approval) and when the Request for Proposal (RFP) could be released.  A point of contact is also provided. Notably, longer term projects provide less detail as requirements, costs, schedule and risk are not yet well defined.

Canada First Defence Strategy (CFDS)

Canada First Defence Strategy (CFDS)

Released in 2008, the Canada First Defence Strategy is the Government of Canada’s foundational defence policy statement. The Strategy launched a new era of investment in the Canadian Armed Forces, providing the tools necessary to rebuild the Forces into a first-class, modern military.  This strong investment – along with the dedication of our personnel – has and will continue to enable the Canadian Armed Forces to deliver impressive operational results, both at home and abroad. 

The Strategy confirms three enduring roles for the Canadian Armed Forces: excellence in the defence of Canada, strong and reliable partnership with the United States in the defence of North America, and leadership abroad through meaningful contributions to international peace and security.  Within these three roles, the Strategy outlines six core missions that the Canadian Armed Forces must be ready to conduct, potentially at the same time:

  • Conducting daily domestic and continental operations;
  • Supporting a major international event in Canada;
  • Responding to a terrorist attack;
  • Supporting civil authorities during a crisis;
  • Conducting a major international operation for an extended period; and
  • Responding to crises elsewhere in the world for a shorter period.

The Canada First Defence Strategy also highlights the importance of establishing a new relationship with Canadian industry, partnering to deliver core equipment to the military while offering maximum benefit to the Canadian economy.  This DAG, as part of the Defence Procurement Strategy, increases transparency and facilitates engagement with industry, helping to bring this vision to fruition.

As part of a comprehensive modernization plan, the Strategy announced several major equipment recapitalization projects that would be required over the ensuing 10 to 20 years.  These projects, currently in various phases of development, remain of highest priority and represent considerable opportunity for Canadian industry involvement.  

Capability Based Planning

Capability Based Planning

In order to meet Government expectation as articulated in the Canada First Defence Strategy, the Canadian Armed Forces needs to continue to adapt to a dynamic and uncertain environment and to acquire and maintain an appropriate range of capabilities. The Department of National Defence employs capability based planning to analyse, assess and integrate future capability requirements in order to be prepared for success in the future operating environment.

Capability based planning is ultimately about establishing context and choice with respect to long-term strategic investment decisions as it provides the analysis and logic necessary to assess and identify future capability requirements.  The capability based planning process is a three year cycle, divided into three main phases in order to answer three simple questions:  what do we think we will need to do, how well do we think we can do it now, and what do we need to change to perform better.  Capability based planning is a process and a systems-based strategic planning tool that takes a broad look across the entire strategic Canadian Armed Forces capability portfolio, defines possible future requirements based on trends and assesses what capability areas may be considered for investment, divestment or sustainment decisions.  The identified investment areas are then subject to a rigorous analysis and screened for a list of capability options.  This marks the identification of a capability gap or military requirement into the Department of National Defence’s project approval process.

Project Approval Process

Project Approval Process

In accordance with Treasury Board Policy on the Management of Projects, the Department of National Defence project approval process is summarized as follows:

  • Stage 1 - Project Identification.  This stage includes an investment proposal based on an identified capability deficiency or gap, in which the desired outcome, strategic fit and results of the preliminary options analysis are established for entry into the Defence Services Program.
  • Stage 2 - Options Analysis.  Analyse options to determine the optimal method to fill the capability gap.  Department of National Defence Senior Leadership will determine the option to proceed with based on the project business case analysis. 
  • Stage 3 - Definition.  This marks the transition from determining what should be done to mitigate a deficiency, to determining how the preferred option will be implemented.  This work includes standing up a dedicated project management team, determining substantive requirement, cost and schedule estimates and investigating and mitigating risk.  Funding is assigned for final consultations with industry and placement of an RFP.
  • Stage 4 - Implementation.  Implementation approval enables the Department of National Defence to have the contract awarded through Public Works and Government Services Canada.  Stage 5 - Close-Out.  When a project reaches its full operational capability, it becomes a managed capability and no longer a project.  The project approving authority will receive a final report during the Close-Out of each project.   
Conclusion

Conclusion

The DAG is designed to assist industry by providing the Department of National Defence’s procurement intentions for the future.  In our commitment to maintain early and continuous engagement with industry, feedback is encouraged and welcomed on this product to improve future editions.  Subject to Government of Canada expenditure authority, the DAG provides context on potential Department capability initiatives and provides greater transparency concerning possible areas of investment by the Government of Canada.  With this information, companies should be better positioned to take advantage of, and have an opportunity to comment on these potential investments well before they reach maturity. However, industry must be cognizant of the fact that beyond a 5-year period, projects remain less well defined.  Also, the majority of the projects listed in this publication do not have formal authority from the Government and they remain subject to change in terms of scope, cost and schedule and may be terminated without any further explanation or liability.  Initiatives where the Request for Proposal has been issued and the process is complete, are not included in this document.  In addition, more information regarding Government of Canada Tenders can be found at the Government of Canada web site https://buyandsell.gc.ca/procurement-data/tenders.  Please click on the email link below to provide your recommendations for the improvement of the DAG. 

DAG_Force_development-GAD_Force_des_development@forces.gc.ca

How to use/read the Proposals

How to use/read the Proposals

Title of initiative

New system, Replacing System, In Service Support, or Services

Objective.  Short description in broad terms of initiative.

Requirements.   Defence capability is developed and refined over time and details provided on proposals in the DAG should be useful for planning, but industry should consult closely with individual directorates for specific and updated information.

Preliminary Cost Estimate Bracket.   The Bracket System (Acquisition Cost Only for Projects and Projected Value of Support Contracts) and the level of confidence in our project cost estimates are based upon where the initiative is in the project approval process.  The Bracket system is representative of a costing range that will provide Industry an indication of the potential value of an initiative.

Under $20 million
$20 million to $49 million
$50 million to $99 million
$100 million to $249 million
$250 million to $499 million
$500 million to $1.5 billion
More than $1.5 billion

Anticipated Timeline.  Will identify the following milestones: Option Analysis, Definition Approval, Request for Proposal Release, Implementation Approval, Contract Award, Final Delivery.  The dates will be identified as follows:

2014
2015
2016
2017
2018
2019
2020
2021 to 2025
2026 to 2035

Point of Contact.  Will identify a point of contact where questions relating to that specific initiative may be directed.

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