Suspended Vice-Admiral Mark Norman leaves court following a hearing on access to documents in Ottawa, Friday, Nov. 23, 2018. New court documents show public servants discussing the risk to taxpayers as successive federal governments have turned to sole-source contracts to buy desperately needed equipment for the Canadian Forces and others. (Adrian Wyld/The Canadian Press)

Suspended Vice-Admiral Mark Norman leaves court following a hearing on access to documents in Ottawa, Friday, Nov. 23, 2018. New court documents show public servants discussing the risk to taxpayers as successive federal governments have turned to sole-source contracts to buy desperately needed equipment for the Canadian Forces and others. (Adrian Wyld/The Canadian Press)

Sole-sourced contracts can be ‘raw deal’, top officials said in navy ship case

Prime Minister Justin Trudeau’s government has chosen to sign several sole-source contracts to bolster the coast guard’s aging icebreaking fleet and the country’s fighter-jet force

New court documents show public servants discussing the risk to taxpayers as successive federal governments have turned to sole-source contracts to buy desperately needed equipment for the Canadian Forces and others.

The documents were filed on behalf of suspended Vice-Admiral Mark Norman, who is charged with breach of trust in connection with one such contract. They land amid frustrations with Canada’s military procurement system — including because of political mismanagement — that have led to the need for quick fixes.

Prime Minister Justin Trudeau’s government has chosen to sign several sole-source contracts to bolster the coast guard’s aging icebreaking fleet and the country’s fighter-jet force, buying time to find permanent replacements.

READ MORE: Out with the old: Trump to kill old NAFTA to push Congress to approve USMCA

Sole-sourcing does make sense in many cases, said defence analyst David Perry of the Canadian Global Affairs Institute, particularly where there is an emergency or it’s clear that only one company can meet the government’s needs.

“But if you’re sole-sourcing to fill a capability gap, that’s the result of mismanaging a procurement to the point where you are out of options and have no alternative,” Perry said. “That’s not really a good reason to be sole-sourcing.”

The Tories under Stephen Harper once intended to buy a fleet of F-35 fighter jets on an untendered contract, but aborted that plan in 2012 once the full price became known.

Then the Trudeau government planned to spend about $6 billion on 18 sole-sourced “interim” Super Hornets from Boeing because it said Canada needed more fighter jets to support its aging CF-18s until replacements could be purchased through a competition.

The Super Hornets deal eventually fell apart because of a trade dispute with Boeing. So the government is buying 25 second-hand Australian fighter jets, also without a competition. Canada isn’t expected to get new fighter jets until at least 2025.

The Liberals also recently bought three second-hand icebreakers from Quebec-based Davie Shipbuilding for the coast guard, whose existing fleet is on average 35 years old — with no immediate plan to replace it on the horizon.

Suspended as the military’s second-in-command in January 2017, Norman was charged in March 2018 with one count of breach of trust for allegedly leaking cabinet secrets to Davie over a different contract. He has denied any wrongdoing and vowed to fight the charge.

The case against Norman centres on a sole-sourced deal negotiated between Davie and the previous Conservative government in 2015, in which the Quebec shipyard proposed converting a civilian cargo ship into a temporary support vessel for the navy.

The $700-million contract with Davie was not finalized before that year’s federal election. Although the newly elected Liberals at first wanted to delay it for a closer review, they signed off on the deal a short time later.

Before Liberal ministers agreed to buy the converted ship, bureaucrats from the Privy Council Office, the government’s top department, wrote a secret briefing note in November 2015 that discussed the problems with not holding a competition.

“The risk inherent with a sole-source contract is that much of the leverage in the contract negotiation resides with the company,” the bureaucrats wrote, even as they noted that the Conservatives had exempted the deal from the usual oversight for such projects.

Despite these concerns, the officials recommended the government approve the deal. Partly because they had assessed that “risk mitigation measures” were in place, but mostly because the navy urgently needed a support ship for faraway operations.

The court documents, none of which have been filed as exhibits or tested in court, include RCMP interviews with civil servants that suggest politicians’ desire for votes in Quebec also played a role in the decisions about the ship. But the navy’s need for the vessel was real.

The navy at the time had just retired its 50-year-old support ships and while replacements are being built in Vancouver through the government’s national shipbuilding plan, numerous delays and problems mean they won’t be ready until the 2020s.

The navy had originally expected to get new support ships in 2012.

The briefing note said a competition could have been held to find another, perhaps cheaper, solution, but ”a competitive process would take longer to deliver a solution — likely 10-14 months for a contract award, and then more time for the service to be ready.”

RCMP interviews with several senior civil servants raise similar concerns about awarding a contract to Davie without a competition while also alluding to the sense of urgency in getting new support ships.

The Defence Department’s head of procurement, Patrick Finn, told the Mounties that other companies were clamouring to compete to supply a temporary support ship in late 2014, and that “the information existed to say that this could be done competitively.”

But Finn noted that Davie had already found a ship that it could convert for the navy, which “at that point had no replenishment ships.”

Melissa Burke, an analyst with the Privy Council Office who attended various cabinet meetings about Davie’s proposal in 2015, told the RCMP that federal procurement officials were unhappy because “they felt the taxpayers were getting a raw deal.”

Lee Berthiaume, The Canadian Press


Like us on Facebook and follow us on Twitter.

Just Posted

RDEK is calling for nominations for their Volunteer of the Year award in all six electoral districts.
RDEK posts operating surplus as pandemic reduces costs

The RDEK has posted a operational surplus of $8 million as local… Continue reading

North Okanagan business Hytec Kohler set up a COVID-19 vaccination clinic at the Spallumcheen plant Friday, May 14. (Jennifer Smith - Morning Star)
More than half of eligible adults in Interior Health vaccinated

Over 365,000 vaccine doses have been administered throughout the Interior Health region

Fernie Ghostriders head coach Jeff Wagner has committed to two more years with the team. Phil McLachlan/The Free Press
Fernie Ghostriders coach departs: Wagner moves to Coquitlam

Jeff Wagner will move to the Lower Mainland as associate coach and director of scouting with the Coquitlam Express

New Border Bruins owner Dr. Mark Szynkaruk reps team colours with his young sons and wife Tracey. Photo courtesy of the Grand Forks Border Bruins
KIJHL’s Border Bruins sold to Grand Forks doctor

The league announced the sale Friday, May 14

An avalanche near Highway 1 in Glacier National Park. Avalanche Canada will benefit from a $10 million grant from the B.C. government. (Photo by Parks Canada)
Avalanche Canada receives $10 million grant from B.C. government

Long sought-after funds to bolster organization’s important work

An avalanche near Highway 1 in Glacier National Park. Avalanche Canada will benefit from a $10 million grant from the B.C. government. (Photo by Parks Canada)
Avalanche Canada receives $10 million grant from B.C. government

Long sought-after funds to bolster organization’s important work

Daily confirmed COVID-19 cases reported to B.C. public health, seven-day rolling average in white, to May 12, 2021. (B.C. Centre for Disease Control)
B.C. preparing ‘Restart 2.0’ from COVID-19 as June approaches

Daily infections fall below 500 Friday, down to 387 in hospital

Cannabis bought in British Columbia (Ashley Wadhwani/Black Press Media)
Is it time to start thinking about greener ways to package cannabis?

Packaging suppliers are still figuring eco-friendly and affordable packaging options that fit the mandates of Cannabis Regulations

(Kamloops This Week)
Puppy’s home in question as BC Supreme Court considers canine clash

Justice Joel Groves granted an injunction prohibiting the sale or transfer of the dog

Kayak the humpback whale was found dead on a Haida Gwaii beach on Saturday, May 15, 2021. (Marine Education and Research Society)
Kayak the humpback whale found dead on Haida Gwaii beach

Whale was estimated to be only 18 years old

Then-finance minister Kevin Falcon presents his last B.C. budget, Feb. 21, 2012. The province was emerging from the 2009-10 recession and repaying federal incentive to cancel the harmonized sales tax. (Tom Fletcher/Black Press)
Political veteran Kevin Falcon set for second run at B.C. Liberal leadership

Social media run-up includes Dianne Watts endorsement

Conservation Service Officer Kyle Bueckert holds a gold eagle that was revived from acute rodent poisoning Monday, May 12. Photo: Submitted
‘Obviously, he’s a fighter’: Golden eagle, recovered from poisoning, back in Kootenay wild

CSO Kyle Bueckert released the eagle into the wild Thursday, May 13

A fledgling white raven was spotted near the end of Winchester Road in Coombs. (Mike Yip photo)
Legend continues as iconic white raven spotted once again on Vancouver Island

Sightings rare everywhere in world except for central Vancouver Island location

Most Read