Tuesday, 18 December 2012



  On their web site the DND writes;” The planning for this program has evolved. A Statement of Operational Requirements (SOR) was first developed in 2004 (emphasis added) outlining the technical requirements for an aircraft to effectively carry out search and rescue missions in Canada’s harsh and vast environment.   In fall 2009, industry feedback was solicited on the high level considerations for the Fixed Wing Search and Rescue SOR. This consultation demonstrated the commitment to an open dialogue with Canadian industry and helped assess its ability to support the procurement of a new fleet. Following the industry consultation, the National Research Council (NRC) was engaged to conduct an independent review of the SOR. In its review, NRC focused on the technical requirements as well as the assumptions and constraints underlying them. The Government received the NRC report in March 2010 and then proceeded to review the report’s findings and recommendations. Based on the NRC review, the SOR has been amended to allow for a wider range of Fixed Wing Search and Rescue solutions and to reflect a capability-based rationale.

In 2005 Peter Pigott at Frontline Canada wrote “In October 2003,(emphasis added) then Defence Minister John McCallum said that the purchase of FWSAR aircraft was a government priority and that it would be funded in the 2004 Budget. To quote the Minister’s General Strategic Plan: “The primary goal of the FWSAR Project is the procurement of 15 airframes with SAR sensor equipment, a simulation and training suite, integrated logistic support, and a 20-year in-service support contract. The RFP (Request for Proposal) will be released by March 31, 2005 with the intent of replacing the current SAR aircraft as soon as possible.

The whole article is well worth reading if only for the sense of nostalgia invoked by the implied belief that something was actually going to happen with the Search & Rescue file.

It has been at least eight years since the FWSAR program became a priority. Why can’t the RCAF buy Search and Rescue aircraft? Canadian Defence Matters has visited this subject in the past. Complaints are easy, and have had little effect, so now we are forced to the expedient of giving practical advice.

It should not be as difficult as the Government and the procurement bureaucracy have made it. James Hasik has written extensively on the economics of defence procurement. What he has to say is directly applicable to the FWSAR program.

The RCAF says they need Search and Rescue Aircraft. The kinds of aircraft being considered are in many ways dual-use products made by several large manufacturers in Canada and elsewhere. There are extensive civil and military markets for those aircraft, so prices, performance parameters, and product quality are all more-or-less readily observed. There are clear tradeoffs to buying Search and Rescue aircraft that are bigger or smaller, faster or slower, and higher- or lower-flying. Those tradeoffs can be piled into a total cost model that handicaps the various prices against the varying overall capability delivered. Or, a total price cap could be imposed, and contractors challenged to provide a general level of capability in lesser or greater numbers of aircraft. For example it is imaginable that a single C-130 could provide the same capability as two C-27’s, or perhaps more, depending on the scenario of employment. It could provide less, for the money, but that's the point of modeling.

That whole approach is what induces price competition for a contract with different offerings. It's also something that pretty much any top drawer MBA knows how to do. Graduate and upper-division undergraduate courses in procurement also teach how to do it. The Air Force should consider hiring a few new graduates, sit them next to the colonels, and watch the spreadsheets flow forth. Structuring that competition correctly is important because without it, the buyer is stuck with a single offering, and thus cedes buying power.

Does the RCAF or the DND or Public Works have “a total cost model that handicaps the various prices against the varying overall capability delivered”? If they do, why can’t we know more about it and if they don’t have such a model, why not?