Tuesday, 4 June 2013


Last week it was reported that the Canadian Army wanted to cancel a program to buy Close Combat Vehicle armoured vehicles. (1) The $2-billion saved would go to operations, maintenance, and training efforts that are currently facing cuts. The government said no.

The reports were that the Army wanted to use the money to fund operations instead of purchasing new vehicles. The government would rather focus on more new equipment. In this case, the military’s priorities are more likely to be correct. It is a lot easier to lose one’s edge than to regain it. (2)

Let us first agree that there is nothing wrong with cancelling military equipment programs

For example, the argument has been made that if the U.S had canceled the Joint Strike Fighter when its cost growth exceeded 15%, it would have done so in 2007.(3) That is when the plane’s costs jumped to $278 billion, a 19 percent increase over 2001’s budget baseline. That would be six years and $117 billion in additional cost growth ago. As of March 2012, the new baseline cost rose to $395 billion, an increase of 69 percent over 2001.

Had the F-35 been cancelled in 2007 Canada could have presumably spent the next 12 years finding a simpler, less-expensive alternative and still have delivered something to the RCAF  by the time the F-35 is projected to be declared operational somewhere around 2019.

In the case of the Close Combat Vehicle (CCV) the project has been in trouble for some time. (4) The competition has been stopped and re-started twice now, and each re-start has cost participants around $2 million each in bid expenses.

The first time, all contenders were reportedly eliminated from the competition for not meeting the armor requirements. That’s an strange outcome when the department is aiming its RFP at military-off-the-shelf vehicles.

The competition was restarted with relaxed requirements, but apparently those in charge didn’t check to see which platforms might meet the new specifications. The re-launched competition would have designated a winner by the fall of 2012, but in April 2012, the CCV competition was stopped again. The government claimed that after testing, none of the finalist vehicles met its requirements. They reportedly “planned to request the firms invest more money to produce new technology to rectify those problems.”(5)

The Department of National Defence needs a tracked vehicle to complement its wheeled vehicle fleet but it has ended up with a requirement which left wheeled vehicles as major bidders for the program. (6) There is no reason to believe that costs have not gone up as the program has foundered. There is no reason to believe it should not have been cancelled already as a failed program.

If you wish to cut programs it is necessary to prioritize. In order to prioritize is necessary to have plan.  Simply put, an assessment of threats, capabilities, and commitments should drive how the Canadian Forces are designed, equipped, and train for conflict.

This assessment in turn should be driven by Canada’s national security strategy. But what is Canada’s national security strategy, do we even have one and what should it be? In the absence of such a strategy it is not possible to prioritize spending.

This is not just about dealing with lower defence budgets. It is about getting a good return on our investment and delivering usable capabilities.  Reducing wasteful spending is always a good idea, even when funding comes easily. It is even more important when budgets are tight to know what your priorities are and to cut your losses when a program threatens more important activities.

(1) Dumping the Close Combat Vehicle – But Why?

(2) How Ottawa’s pro-military stance weakens the Canadian Forces

(3) Faster Better Cheaper: Lessons Defense Could Learn From NASA

(4) Close Combat Vehicle (CCV) Project

(5) FLCV: Canada Looks to Upgrade Its Armor

(6) Companions for the Leopards: the Close Combat Vehicle (CCV) Project — MERX Notice of Proposed Procurement (NPP/SOIQ)