Newspaper article The Canadian Press

Report Warns against Sole-Sourced Contracts amid Talk of Fighter Jets Purchase

Newspaper article The Canadian Press

Report Warns against Sole-Sourced Contracts amid Talk of Fighter Jets Purchase

Article excerpt

Report raises red flags on military contracts

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OTTAWA - The Liberal government was warned late last year that a sole-sourced contract for big-ticket military purchases like fighter jets would be bound to drive up costs in the absence of an open competition.

The report, delivered to Public Services and Procurement Canada after the October election, found that choosing one company to provide equipment should be a "subordinate option" to a competitive process so taxpayers receive value for money.

The authors of the report, dated Dec. 17, say that developing better procurement practices is key if the Department of National Defence wants to go ahead with large-scale purchases, specifically referencing the CF-18 replacement process.

The team from PricewaterhouseCoopers listed a number of critical success factors to ensure companies didn't "game" the system and drive up costs in order to also drive up profits in absolute dollars.

That list included reducing the government's reliance on sole-sourced contracting and ensuring independent military specialists respected by government and industry reviewed costs to make sure they weren't inflated.

The report, obtained by The Canadian Press under the Access to Information Act, raises a host of problems with the government's procurement processes amid reports that the Liberals are prepared to go with a sole-sourced contract to purchase Super Hornet fighter jets from Boeing as an interim replacement for Canada's aging CF-18s.

The government says there is looming capability gap when it comes to the CF-18s, which has caught observers and the opposition by surprise, since the previous Conservative government decided to spend hundreds of millions of dollars to keep the jets flying until at least 2025. The Commons defence committee was told last month it would cost about $400 million to overhaul the 77 CF-18s.

Without more details about the capability gap, observers say it is difficult to determine what gap exists, and how pressing it is in the case of the CF-18s, which were purchased in the 1980s and designed to last for 20 years.

The Ottawa Citizen reported this week that cabinet had discussed buying the Super Hornets while officials seek out a long-term replacement. …

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