Democracy Gone Astray

Democracy, being a human construct, needs to be thought of as directionality rather than an object. As such, to understand it requires not so much a description of existing structures and/or other related phenomena but a declaration of intentionality.
This blog aims at creating labeled lists of published infringements of such intentionality, of points in time where democracy strays from its intended directionality. In addition to outright infringements, this blog also collects important contemporary information and/or discussions that impact our socio-political landscape.

All the posts here were published in the electronic media – main-stream as well as fringe, and maintain links to the original texts.

[NOTE: Due to changes I haven't caught on time in the blogging software, all of the 'Original Article' links were nullified between September 11, 2012 and December 11, 2012. My apologies.]

Friday, June 22, 2012

F-35 stealth fighter jets’ terms of independent review vindicate AG; winning firm must include all lifetime costs

PARLIAMENT HILL—The terms of an independent review to verify full lifecycle costs for the government’s proposed acquisition of 65 F-35 stealth fighter jets vindicate Auditor General Michael Ferguson in his three-month battle with the Department of National Defence over the project’s costs, requiring the firm that wins a competition to conduct the review to include all costs—everything down to jet fuel—for the entire expected lifetime of the aircraft.

Under requirements for the review contract the federal Treasury Board Secretariat has set out for 16 selected firms to submit bids—including several of Canada’s largest and most prestigious accounting firms—the winning firm will have to assess costs for development, acquisition, upgrades, operations, and even end-of-life disposal and decommissioning, including propulsion and mission software systems “throughout the expected operational life” of the aircraft fleet.

The firm that wins the contract to do the work—which Treasury Board has valued at a cost of between $1-million and $5-million—will review all cost assumptions and forecasts that National Defence is preparing after receiving the latest annual briefing on expected acquisition and sustainment costs from the central F-35 project office in the United States.

A request for proposal the Treasury Board Secretariat has prepared and posted on Merx, a central website for Canadian and U.S. government contract tendering, stipulates the outside accounting firm that wins the contract—with past experience in defence procurement and Treasury Board policies for lifecycle costing in major acquisitions—must submit its findings to Treasury Board by Oct. 24.

The terms of work for the independent reviewer, which include broad requirements to investigate and analyse military costing estimates and models used by other countries, state that it will verify the latest National Defence F-35 costing estimates before they are tabled in Parliament as part of the government’s response to Mr. Ferguson’s scathing report last April 3.

The plan goes to the heart of a confrontation between Mr. Ferguson and National Defence, along with Public Works Department officials who authorized a sole-source acquisition of the F-35 aircraft in 2010, about whether National Defence withheld $10-billion worth of forecast costs for the fighter fleet when it told Parliament in March 2011 that the 65 jets would cost $14.7-billion to acquire and maintain over 20 years.

Mr. Ferguson said in his report, and later reiterated his position during hearings by the Commons Public Accounts Committee, that the Department of National Defence should have included operating costs for the same period, which the department had internally estimated would total more than $10-billion in addition to the acquisition and sustainment costs.

Mr. Ferguson also insisted, during a series of Public Accounts Committee hearings the government attempted to end last month, that National Defence forecasts should have been for the entire lifecycle of the aircraft—a minimum of 35 years. During the committee inquiry, senior National Defence officials argued the department bases forecasts on 20-year projections because of the difficulty estimated costs and other factors further into the future.

“This work will provide the Treasury Board Secretariat [TBS] with an independent review of the scope, assumptions and calculations underlying DND’s Next Generation Fighter Capability (NGFC) Project,” the Treasury Board Secretariat request for bids on the F-35 review states. “It will detail the framework to be used to assess the life-cycle cost estimate (which includes aspects such as development, acquisition, sustainment, upgrade, operation and disposal/decommissioning) of a fleet of 65 F-35A Lightning II Joint Strike Fighters, including propulsion and mission software systems, throughout its expected operational life. The independent review will be made available publicly (subject to redactions for operational security reasons).  This work will provide a framework for decision makers with respect to the future cost estimate of this Project, as well as other similarly scoped military acquisitions.”

Conditions for winning the contract include a requirement that the senior auditors who conduct the review must have a security clearance for access to secret documents, with an approved rating for protected documents.

Opposition MPs on Thursday were unaware of the details and reluctant to comment in detail. Liberal and NDP MPs agreed, however, the terms of the contract requirements and the extent of lifecycle costing far past the terms National Defence used in its submission to Parliament—apparently also in its estimates for Cabinet—are a sign Defence Minister Peter MacKay (Central Nova, N.S.) lost any internal government battles in the fallout from Mr. Ferguson’s report.

Reports this week quoted unnamed Conservative sources saying Mr. MacKay is expected to lose his DND portfolio in a summer Cabinet shuffle, while the Chief of Defence Staff, Walter Natynzcyk, is rumored to be set for retirement.

Even though the government said last April it accepted the auditor general’s lone recommendation—that National Defence refine its estimates for complete costs to include the full life cycle of the F-35 fleet and provide “complete” estimated costs—the Cabinet did not compel either National Defence or Public Works to withdraw their dispute with Mr. Ferguson’s findings that they failed to exercise and demonstrate due diligence as the project developed over the past six years.

Liberal MP John McKay (Scarborough-Guildwood, Ont.) said few accounting firms, even among the list of 16 asked to submit bids if they wish, likely have the kind of experience with military procurement that the request for proposal requires.

“My quick response is, in terms of the companies to be selected, it’s already a pre-wired process, because only one or two companies in Canada have that kind of experience,” Mr. McKay said.

Original Article
Source: hill times
Author: 

No comments:

Post a Comment