Navy desperately needs new ships, but not at any price: Alan Williams

Re: "Canadian Surface Combatant program remains best option for Royal Canadian Navy," (The Hill Times, Feb. 28). I appreciated Richard Shimooka’s response to my review of his paper “No Other Option." However, he conveniently ignores the essential point of my comments. Namely, that the proposed program to acquire 15 Canadian Surface Combatants (CSC) is simply unaffordable. As I mentioned in my critique, I estimate that the cost to taxpayers to acquire and maintain these ships over the next 30 years will exceed a quarter trillion dollars. To put this figure in context, the total funding available in the Department of National Defence’s (DND) budget over the next 30 years to acquire and maintain its capital goods for the Army, Navy, and Air Force combined is only $240-billion. This program alone could bankrupt the department’s capital and maintenance accounts for the next 30 years. It could inhibit the Canadian Armed Forces from fulfilling its mandate. It could mean the evisceration of the Canadian military. We need alternatives. Mr. Shimooka provides none. I do. Mr. Shimooka contends that I placed the blame for the out-of-control costs on the selection of the BAE Global Combat Ship (GSC) design. I outlined a wide range of flaws in the procurement strategy and implementation that have unnecessarily driven the cost well beyond what these ships should cost. These not only included allowing for an immature ship design, but also included allowing for costly developmental systems (like the Spy-7 mentioned by Mr. Shimooka which is currently just a land-based system), allowing industry to modify and expand the “statement of requirements” (driving up costs by allowing for a weight increase in the CSC of 44 per cent, from 5400 tonnes to 7,800 tonnes), the lack of budgetary controls (allowing the acquisition costs alone to nearly triple from $26.2-billion to $70-billion) and devolving accountability for the procurement process to the private sector. Together, these flagrant flaws resulted in the predictable costing debacle facing us now. To support my argument that we can deliver these frigates at an affordable cost, I cited two examples. First, Fincantieri’s unsolicited proposal to build the CSC at less than half of the current estimated costs. Second, I referenced the current program by the U.S. Navy (USN) to build its Constellation-Class frigates for about one-third of Canada’s costs. Mr. Shimooka says, “there is also significant disagreement over the costing of these vessels” and that the U.S. “Congressional Budget Office predicted that the per unit cost to be 40 per cent above the USN’s estimates." He is exactly right on this point, but that is why I used the cost estimates of the Congressional Budget Office, not those of the USN when making my cost comparisons. The Navy desperately needs new ships but they cannot come at any price. Blindly ignoring the cost realities and providing no alternative course is short sighted and frankly does little to assist the government in finding ways out of the current conundrum. Mr. Shimooka finds it hard to see how any major combat vessel would better suit the Navy’s needs without forcing a less capable or unsuitable design upon them. I have no such difficulty. Building bigger and more costly ships does not make them better. My proposal to limit the current process to the construction of three of these ships and conduct an open, fair and transparent competitive process to build the remaining 12 CSC is feasible and cost effective. Contrary to Mr. Shimooka’s contention, it will not delay the delivery timetable beyond the current schedule. Furthermore, while the sunk costs may not be fully salvageable, these costs pale by comparison to the huge savings that will be achieved by following a rigorous procurement process. Alan Williams Ottawa, Ont. Alan Williams is a former assistant deputy minister of materiel at DND. He is now president of The Williams Group providing expertise in the areas of policy, programs and procurement. He has authored two books, Reinventing Canadian Defence Procurement: A View From the Inside, and Canada, Democracy, and the F-35.