DND Response to Chapter 5 of the 2011 Fall Report of the Auditor General of Canada
On November 22, 2011, the Interim Auditor General of Canada, John Wiersema, tabled his Fall Report in the House of Commons. Chapter 5 of the Auditor General’s Report, “Maintenance and Repair of Military Equipment” examines how the Department of National Defence plans and manages the maintenance and repair of military equipment to meet operational and training requirements. Specifically, it examines the allocation and monitoring of financial resources, and the establishment and implementation of contracting approaches, for fleet maintenance and repair activities.
The findings and recommendations of the Interim Auditor General are found on the Office of the Auditor General of Canada’s website, at the following link: http://www.oag-bvg.gc.ca/internet/English/parl_oag_201111_05_e_
The Department of National Defence welcomes the findings and recommendations made in Chapter 5 of the Report of the Auditor General. In order to ensure key contextual information about the Department’s equipment maintenance and repair activities is available, the Department of National Defence issues the following statements:
Recommendations of the Auditor General:
As the Department of National Defence strives to continuously improve in the area of maintenance and repair of military equipment, it is in this spirit that the Department accepts the recommendations made in Chapter 5 of the Report of the Auditor General. The Department has already undertaken or is planning activities to address each recommendation.
Maintenance and Repair of Military Equipment:
The Department of National Defence is proud of its accomplishments with respect to the maintenance and repair of its military equipment. This is an area where the Department has been advancing a number of leading edge initiatives and, equally, an area where National Defence has consistently performed--most evident in the success the Canadian Forces have achieved in recent years throughout a period of intense operational tempo.
Simply put, the Department of National Defence could not possibly have achieved the remarkable success that it did in Afghanistan and in other key missions unless it was highly proficient in the maintenance and repair of its military equipment.
Performance and Cost Information Management:
The Department of National Defence has made significant strides to improve and streamline its information management systems, enabling the Department to better track costing and performance information in support of fleet maintenance and repair activities.
The Department is implementing its new asset management system in support of weapon systems and equipment maintenance. The Defence Resource Management Information System (DRMIS) system was created by merging the Department’s Financial Management Accounting System (FMAS) and the Materiel and Acquisition Support Information System (MASIS).
DRMIS incorporates spare parts inventory with procurement, financial and maintenance data under a single platform. It will meet the requirements identified in the report, by providing the Department with more complete, reliable and integrated data on the performance and impacts of fleet maintenance and repair activities.
This new approach to information management will allow the Department to make more informed decisions about the life-cycle management of its fleets.
The Department of National Defence has made significant strides in improving its contracting approaches to support maintenance and repair activities for existing and new military fleets.
Optimized Weapon System Management Framework Review
Implementation of the Optimized Weapon System Management (OWSM) framework has been and remains a significant focus for the Department. The framework has been applied at the fastest pace possible to existing military fleets, given such factors as delays in required approvals and challenges related to transitioning to a performance-based approach.
The framework focuses on reducing the number of contracts required to support a fleet, by bundling them into broader, multi-year performance-based contracts while at the same time ensuring Canadian-based companies can continue to participate in the provision of in-service support, and benefit from the Industrial and Regional Benefits (IRB) policy.
Fleets which have been transitioned, or are in the process of transitioning, to the OWSM framework include the Wheeled Light Armoured Vehicle (WLAV), the CC-130 Hercules (E and H models), the CP-140 Aurora, the CF-188 Hornet, and the CH-146 Griffon. Cost savings have already been achieved as a result, along with greater administrative efficiencies and most importantly, increased fleet availability to meet operational and training requirements.
The Department of National Defence is reviewing the OWSM Concept of Operations and will update the framework as required. It will then investigate the feasibility of implementing OWSM on other existing fleets.
In-Service Support Contracting Framework Review
The In-Service Support Contracting Framework (ISSCF) establishes a single long-term, performance-based in-service support contract for each new fleet of military equipment with the supplier at the time of acquisition. This approach ensures a clear point of accountability with the contractor for equipment reliability.
Although the ISSCF is a new and unproven approach, the Department is able to continuously improve and evolve this framework by actively monitoring other nations’ successes and lessons learned with similar contracting approaches, as well as the implementation of the OWSM framework.
The Government of Canada has awarded long-term, performance-based ISSCF contracts for its new CC-130J tactical airlift fleet. In addition, the ISSCF approach has been utilized in the Request for Proposals for the Close Combat Vehicle and Tactical Armoured Patrol Vehicle projects.
In-Service Support Contracting Framework Governance Structure
The ISSCF represents a significant organizational change impacting a number of parties, which include the Canadian Forces environmental commands, Public Works and Government Services Canada and Industry Canada.
The Department is currently reviewing the governance structure of the ISSCF and is working with Government partners to develop a new template for ISSCF contracts. This template will improve the development and implementation of the framework.