by Chris Thatcher
Like the proverbial iceberg, most of what you see at the Directorate of Land Requirements (DLR) is happening below the surface. The periodic requests for information and letters of interest issued to the defence industry on its behalf by Procurement Canada are just the surface activity of an organization that has pushed an unprecedented number of projects through the governance process in the past 12 months.
In a typical year, DLR teams might receive the necessary approvals to enter three or four projects into the options analysis (OA) phase of the procurement process. “Last year we did 20,” said Colonel Christopher Renahan, Director of Land Requirements. “I think all but three or four of our projects went into OA over the past year, which is a large workload to move through the gateways in one year.”
Much of that is the result of the 2017 defence policy that committed $18.9 billion to the Canadian Army over 20 years, about $9 billion for new projects and $10 billion to complete existing ones. More so than the Air Force or the Navy, the Army had a front end-loaded program with a large number of projects already in the identification phase and ready to progress to OA. When funding was “profiled and aligned, it had us moving the whole program at the same time,” he said.
That might be cause for celebration after several years in which critics in academia, the media and industry charitably referred to the procurement process as molasses-like, but it has resulted in a tempo to which the directorate is still adjusting. The task of steering so many projects through the Defence Capability Board (DCB) and an Independent Review Panel for Defence Acquisition, which provides a challenge function to the stated requirements of major procurement projects, has substantially increased the workload for the project directors, their section heads, DLR himself, and the Army’s Chief of Staff, Strategy.
“Instead of going to DCB with three to four projects a year, we are going with two to three month and the amount of work to prepare and have a successful briefing endorsed by the board is significant,” said Renahan.
The increased activity behind the scenes hasn’t tempered expectations from within the Army or industry waiting for movement on a specific piece of equipment. The volume of ongoing projects might be impressive, but the work required to complete the identification and OA phases has not changed substantially—though there are new risk-management efforts that would fast-track some.
“Most of us are impatient and want to know why you can’t go out and just pick an Army truck off the showroom floor, buy 1,000 of them and be done with it. And that applies to everything from boots to tanks,” Renahan acknowledged.
“The message I give when people ask why it isn’t faster is, it’s complicated. There are some 80 people working very hard in this office, and the average person outside of the acquisition realm doesn’t see the amount of work that goes into advancing these projects and the high level of expectation from the demands of the process.”
Though the defence policy provided momentum, many existing projects needed to be realigned to fit the new directive, which emphasized the ability to conduct multiple complex operations concurrently. For example, ground-based air defence (GBAD) had been in development since around 2008 when the Army began divesting of the air defence anti-tank system (ADATS). But it was more aligned to replacing an airfield defence system that had been in place in Germany until the early 1990s than defeating threats posed by unmanned aircraft systems.
“We had to make sure that GBAD was looking at the right problem, that we understood the [policy] framework in which it would operate,” said Renahan. “But even that one, we were able to reinvigorate it, refresh the work that had been done, and get it into options analysis within about a year. It has completed its OA work and is now at the point where it is waiting to seek endorsement for funding to get into definition.”
The story is similar for large projects like Logistics Vehicle Modernization, Enhanced Recovery Capability, and Land Vehicle Crew Training System, all of which are now in the definition phase after ensuring their fit and direction within the policy. After many years in OA, Common Heavy Equipment Replacement, which has expanded in scope to include heavy support and material handling equipment such as bulldozers, graders, excavators, backhoes, compactors, trailers, container handlers and forklifts, entered the definition phase in August.
LESS RISKY BUSINESS
Defence procurement follows a fairly prescriptive process, but there are changes underway that could fast-track certain projects. For DLR, engagement with a project can begin at conception and continue in perpetuity as the capability is upgraded over its service life and then eventually replaced. But its primary tasks revolve around the identification, options analysis and definition phases, where gaps or deficiencies are identified, the business case for a new or modernized capability is built, the high-level mandatory requirements are established, the implications of various options are assessed, and then the engineering, logistics and other support of the Materiel Group and Procurement Canada is integrated to confirm statements of requirements and work.
The defence policy outlined objectives to reduce departmental approval times by 50 percent and increase contracting authority for goods and services so that 80 percent of procurement contracts could be managed internally. The increase in contracting authority to $5 million gave DLR room to move forward a number of minor capital projects, from digitally-aided close air support to a laser rangefinder. An anticipated increase in the near future to $10 million will provide even greater flexibility.
But in July, the organization began working with an updated Project Approval Directive (PAD) that could have a far greater impact. Using a risk-based approach, it would allow projects a shorter route through the various approvals if they are under a certain cost threshold, on budget, and meet specified risk criteria.
“It would allow us to do the right amount of work for the investment, instead of one cookie-cutter solution for a $6 million project or a $600 million project,” Renahan noted.
One of the first to take that route is the Advanced Sub-Unit Water Purification System project, which will deliver 70 water treatment systems for Regular and Reserve Force units and up to 250 water tank trailers and other equipment. The project, which is completing definition, could make an easier transition to implementation “if the criteria are met for those approvals.”
DLR is still “figuring our way through the new PAD,” said Renahan, but it may offer a way to better manage the risks associated with some of its largest and most complex projects. The Army’s Land C4ISR renewal, for example, consists of six distinct Command, Control, Communications, Computers and Intelligence, Surveillance and Reconnaissance projects under one overarching program. They are riddled with interdependencies and will need to be in constant contact as requirements are developed to ensure radios and other networking capabilities are compatible, but they can be procured individually rather than as one massive solution. Complicating matters further is the fact that Land C4ISR touches on the requirements of a host of other projects, from GBAD to Joint Fires Modernization, the LAV Reconnaissance and Surveillance System upgrade and the Weapon Effects Simulation midlife upgrade.
“We have broken this down into manageable chunks, but we understand it needs to be looked at holistically,” he explained. “And I think that was done to bound each problem and give people a defined space to work in, understanding that there are overlaps.”
He’s also cognizant of the need for a more agile procurement process to accommodate the rapid change in C4ISR and other technologies. The traditional procurement model may work well for buying a truck or combat vehicle that will be in service for 20 years, but capabilities in the Integrated Soldier System Suite (ISSS) and other projects that might evolve almost as quickly as an iPhone require a different approach.
“There are ways to do that in the PAD through spirals,” he said, noting that ISSS is being delivered in three cycles to allow for technology upgrades and the addition of more capabilities as soldiers conduct trials with each iteration.
“But when we are talking about several billion dollars worth of hi-tech equipment, we have to figure out a way to adapt the system to allow us to do that on a bigger scale,” he emphasized. “We are able to do it with our mobile phones or desktop computers. The capital equipment model is meant to spend a bunch of money in a short period of time and then maintain that equipment, but if we can spread out that capital investment over time, or figure out a better way, maybe we don’t need to own all this stuff, maybe there is a way we can get the capability when we need it over time that is updated like our Windows software.”
DLR does not have a specific mandate to buy and try small quantities of a product to better understand the utility of a new capability, but it is using the process selectively in projects such as ISSS, Light Forces Enhancement, Night Vision Systems and Soldier Operational Clothing and Equipment Modernization to define requirements.
One of the upshots of the defence policy has been a concrete effort to make more decisions earlier in the process. That applies not only to the defence procurement governance committees, where procurement strategies are endorsed, or to the sustainment business case analysis, but also to elements such as cyber mission assurance, training and gender-based analysis that might previously have been bolted on once the requirements were developed, Renahan noted.
The Army has always had to protect its networks, but cyber mission assurance means protecting vehicles and anything else with connectivity. That is still a work in progress, but staff with DLR and Land Equipment Program Management are developing a process they hope to test later this year.
“We are going to have to add cyber assurance earlier in the process to make sure we don’t get too far down the road and then try to bolt on a solution that doesn’t work,” he said. “But in a lot of cases, the equipment is already in service, so we are going to have to figure out the risks and work backwards.”
Interoperability with allies is also a concern much earlier in the identification of a capability. In the past two years, the Army has made interoperability with the ABCANZ network (United States, Britain, Canada, Australia and New Zealand) a priority and is working with the partners to develop technical solutions similar to NATO standardization agreements for radios, networks and call for fires.
“We are aiming in the 2027 timeframe to be fully interoperable,” he said. “The work we are doing with ABCANZ is in its early stages to write these technical statements of requirements, but they will then allow us to inform the technical requirements of our projects.”
Early engagement with industry is now commonplace as well. DLR begins planning how to sustain a capability in the identification phase, “before we have even decided what it is,” but it also holds more formal and informal meetings “than we might have had in the past because they help inform our requirements,” Renahan noted.
He suggested the Independent Review Panel for Defence Acquisition, which includes members from industry and academia, plays a key role to “help us see things in a different way. At the end of the day, we have to translate what an Army guy needs into what industry can deliver, while making sure we are all talking the same language. This is forcing us to do a lot more work earlier in the process, but it will pay off in the long run.”
Getting so many projects through the procurement system in the earlier years of a fully-funded 20-year commitment has its advantages and disadvantages. Even as he manages the current wave of active and funded projects through the process, Renahan acknowledged the Army has an equal number on its wish list that it is preparing and will be seeking to prioritize for future funding.
“As projects in implementation close out, that frees up resources. That will keep us busy. But the question will be, where does the next big [funding] injection come from? I’m not sure what comes next.” Whatever the next defence policy announcement, DLR will be ready.