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Table 9: Status Report on Major Crown Projects for fiscal year 2006-2007

Table of Contents

HALIFAX Class Modernization/Frigate Life Extension (HCM/FELEX)

Submarine Capability Life Extension

Canadian Patrol Frigate (CPF)

Tribal Class Update & Modernization Project (TRUMP)

Joint Support Ship (JSS)

Maritime Helicopter Project (MHP)

Armoured Personnel Carriers (APC)

Mobile Gun System (MGS)

Multi Mission Effects Vehicle (MMEV)

Light Utility Vehicle Wheeled (LUVW)

Intelligence Surveillance, Target Acquisition and Reconnaissance (ISTAR)

Medium Support Vehicle System Project (MSVS)

Canadian Forces Utility Tactical Transport Helicopter (CFUTTH) Project

Canadian Search and Rescue Helicopter Project

Military Automated Air Traffic System (MAATS) Project

Airlift Capability Project – Strategic (ACP-S)

Airlift Capability Project – Tactical (ACP-T)

Fixed Wing Search And Rescue (FWSAR)

Medium-To Heavy-Lift Helicopter (MHLH)

Protected Military Satellite Communications (PMSC)

Material Acquisition And Support Information System (MASIS)



HALIFAX Class Modernization/Frigate Life Extension (HCM/FELEX)

1.  Description: The HCM/FELEX project is the principal component of the overall HALIFAX Class modernization (HCM) initiative. The project will plan and manage HALIFAX Class mid-life refits, acquire the major elements of the new combat system, and deliver stability enhancements, degaussing improvements and a Commander Task Group capability in four ships. As the Design Integration Authority for the HCM, HCM/FELEX is responsible for the ship level design integration of all elements of the HCM including any unique/specific engineering changes required to address integration requirements. To ensure that the overall modernization initiative is achieved in a timely, efficient and coordinated manner, the HCM/FELEX project will conduct overall design integration, coordinate schedules, manage inter-project risk, and manage equipment installation during the mid-life refits. Major equipment acquisitions through HCM/FELEX will include a modernized Command and Control System, Multi-Link, Identification Friend or Foe Mode S/5, upgrades to the radars, new Electronic Support Measures System, upgrades to the Internal Communications system, and an upgraded Harpoon Weapon System. These acquisitions will both sustain current capability and contribute to the new littoral operations role of the HALIFAX Class.

Implementation of the HCM/FELEX project will occur through three principal contracts: two Multiship Contracts (MSC) for docking work periods/refits and one Combat System Integration (CSI) contract to develop, procure and install the majority of the combat system elements of the project.

2.  Project Phase: Definition

3.  Leading and Participating Departments and Agencies


Lead Department

Department of National Defence

Contracting Authority

Public Works & Government Services Canada

Participating Departments and Agencies

Industry Canada and its regional agencies


3.  Prime and Major Sub-Contractors


In-Service Support Contractor (Class Design Agent)

Fleetway Incorporated, Halifax, NS

Internal Communications System

DRS Flight Safety, Kanata, ON


5.  Major Milestones


Major Milestones

Date

Preliminary Project Approval (PPA) Approval

Feb 2005 (FELEX)

Feb 2007 (HCM/FELEX)

Refit Procurement Strategy Approval by TB

Mar 2007

Revised Preliminary Project Approval (Part 1)

Jun 2007

Multi-Ship Contracts (MSC) Awarded (Docking Work Periods & Refits)

Oct 2007

Effective Project Approval (EPA) Approval (Part 2)

April 2008

Combat System Integration Contract Award

Sept 2008

Refits Begin

April 2010

Refits Completed

April 2017

Project Closure

April 2018


6.   Progress Report and Explanation of Variances: In recognition of the significant advantages that could accrue from consolidating the major modernization projects, the annual Senior Review Board on October 4, 2006 directed the FELEX project to change its project scope to include, where practical, existing stand-alone combat system enhancement projects. In addition to the project management advantages, the consolidated project would allow transfer of significant integration risk to a prime contractor. Departmental approval for the consolidated project, now called HALIFAX Class Modernization/Frigate Life Extension (HCM/ FELEX) Project was obtained at Program Management Board in February 2007.  

The Project is presently in its definition phase. Design integration work is underway, the Initial Combat System Integration Performance Specification is nearing completion, consultation with refit shipyards has produced a MSC strategy for mid-life refits (approved by TB in March 2007), consultation with potential combat system integrators is on-going, a continuous risk management program has been implemented and costing efforts for the implementation phase are progressing. Treasury Board previously granted project departmental definition expenditure authority for $63,788M for the original projects consolidated into HCM/FELEX. The HCM/FELEX project will be seeking a revised Preliminary Project Approval and Expenditure Authority for Part 1 (Non-CSI components) of the implementation at a substantive full-up cost estimate, including GST, of $822,608M ($BY) in June 2007 and it is intended to seek Effective Project Approval in April 2008 when substantive costs are available for Part 2 (CSI component). Indicative total full-up project cost, including GST, is $3,108.4M ($BY). The HCM/FELEX project is currently within budget.

7.  Industrial Benefits: The definition phase of the HCM/FELEX Project has no Industrial Benefits implications.

Submarine Capability Life Extension

1.  Description: The Submarine Capability Life Extension (SCLE) project replaced the Oberon class submarine fleet with four existing British Upholder class (renamed Canadian Victoria class) submarines. The project will ensure that Canada preserves its submarine capability within the existing capital budget. The project supports Canada’s ability to conduct surveillance and control of its territory, airspace and maritime areas of jurisdiction, as well as Canada’s ability to participate in bilateral and multilateral operations.

The project delivered four functional Victoria class submarines with up-to-date, safe-to-dive certificates, four crew trainers (including a combat systems trainer, a ship control trainer, a machinery control trainer, and a torpedo handling and discharge trainer), and four trained crews.

2.   Project Phase: Implementation

3.   Leading and Participating Departments and Agencies


Lead Department

Department of National Defence

Contracting Authority

Public Works & Government Services Canada (PWGSC)

Participating Department

Industry Canada and its regional agencies


4.   Prime and Major Sub-Contractors


Prime Contractor

The Government of the United Kingdom (UK) of Great Britain and Northern Ireland, Ministry of Defence, UK

Major Sub-Contractor

British Aerospace Engineering (BAE) Marine Systems (formerly Vickers Shipbuilding and Engineering Limited (VSEL)/Marconi Marine) Cumbria, UK


5.  Major Milestones


Major Milestones

Date

Treasury Board Approval

June 4, 1998

Main Contract Award

July 2, 1998

Initial Support Contract Award

July 2, 1998

Commence lease 1st submarine

October 2000

Commence lease 2nd submarine

October 2001

Commence lease 3rd submarine

February 2003

Commence lease 4th submarine

October 2004

Relocate trainers to Canada

June 2003

Lease completed, submarines purchased

April 2009


6.   Progress Report and Explanation of Variances: Canada has accepted all four Upholder submarines from the United Kingdom.

  1. Her Majesty’s Canadian Ship (HMCS) Victoria finalized her Canadianization in early 2003 and completed her transit to the west coast of Canada in August 2003. She completed a Repair Work Period in May 2004. Due to the incident onboard HMCS Chicoutimi, the operational pause prevented Victoria from going to sea. Once lifted, Victoria continued operations by progressing her Operational Trials and Evaluation (OT & E) work in defining the vessels weapons envelope. In June 2005 Victoria entered her Extended Docking Work Period (EDWP), currently being conducted in Fleet Maintenance Facility (FMF) Cape Breton, which is scheduled to complete March 2009.
  2. HMCS Windsor completed her Canadianization in December 2003. She had begun participating in east coast exercises and patrols during the summer of 2004. Due to the incident onboard HMCS Chicoutimi, the operational pause prevented Windsor from going to sea. Once lifted, she continued with operations on the East Coast. Windsor entered her EDWP in FMF Cape Scott in January 2007. 
  3. HMCS Corner Brook started her Canadianization work in Halifax on January 5, 2004. The modifications required from the Chicoutimi incident were completed as part of her Canadianization work, which completed summer 2006. HMCS Corner Brook is operational and is participating in various exercises and patrols. As the only running submarine a further extension to her materiel certificate is being investigated to ensure one submarine continues to operate through this transition period.
  4. HMCS Chicoutimi was handed over to Canada October 2, 2004. On October 5, 2004, while en-route to Canada, she had an electrical incident at sea and was returned to Canada via sealift. She was in Halifax Shipyard Limited (HSL) undergoing damage repairs and Canadianization work, which was expected to be complete in winter 2007. This Extended Docking Repair Work Period (EDRWP) has been cancelled and the submarine commenced an Extended Limited Maintenance Period (ELMP). Some Canadianization Work Period (CWP) Engineering Changes (ECs) are to be implemented during the ELMP. She will enter an EDWP scheduled to commence in 2009.

Effective Project approval was granted to the SCLE project on December 6, 1998 at an estimated total cost of $812.0M ($BY) net of GST. The expenditure ceiling was increased $84.8M by Treasury Board June 18, 2003 (TB Minute 830633) to accommodate increased scope to include 17 submarine related projects and initiatives that were progressing outside the bounds of SCLE. SCLE project is currently expending to budget.

7.   Industrial Benefits: This project will provide an estimated $200M in direct and indirect industrial benefits. This includes Canadian modifications to the submarines and the relocation of the simulators and trainers to Canada. A further $100M in industrial benefits has taken the form of waivers to provide industrial offsets in the United Kingdom for Canadian companies bidding on defence contracts.

Canadian Patrol Frigate (CPF)

1.   Description: The CPF Project will acquire twelve fully supported multi-purpose HALIFAX Class frigates to replace the aging ST LAURENT Class Steam Driven destroyers. In 1983, the Government approved the procurement of six HALIFAX Class frigates. On July 29, 1983, following a competitive contract definition phase, a contract was signed with Saint John Shipbuilding Limited, Saint John, New Brunswick, to supply six ships, shore facilities and related support to the Canadian Forces. An increase in the scope of the CPF Project from six to twelve ships was approved on December 17, 1987 and a contract amendment signed on December 29, 1987.

2.   Project Phase: Complete

3.   Leading and Participating Departments and Agencies


Lead Department

Department of National Defence

Contracting Authority

Public Works & Government Services Canada

Participating Departments and Agencies

Industry Canada

Atlantic Canada Opportunities Agency

Western Economic Diversification Canada

Federal Office of Regional Development (QC)


4.   Prime andMajor Sub-Contractors


Prime Contractor

Saint John Shipbuilding Ltd, Saint John, NB

Major Sub-Contractors

Lockheed Martin Electronic Systems, Montral, QC

Marine Industries Ltd, Lvis, QC


5.   Major Milestones


Major Milestones

Date

Contract award

July 1983

Contract amendment – change in scope

December 1987

Delivery of first ship

June 1991

Delivery of last ship

July 1996

Close out of Prime Contract

December 2002

Project Completion

March 31, 2007


6.   Progress Report and Explanation of Variances: Treasury Board granted original Preliminary Project Approval to the CPF project for the definition phase in July 1978 at an estimated cost of $59.7M. Effective Project Approval was granted in July 1983, with an amendment in December 1987 at an estimated total cost of $10,435.9M. The final estimated project cost is $8,914.9M ($BY). The Project is now effectively complete and the project office is closed, with remaining CPF project closure activities managed by DMCM HFX. The remaining closeout activities are in accordance with the Effective Project Completion (EPC) Workplan. These activities include archiving, financial reconciliation, and some final implementation of finish-the-job Engineering Changes. Target date for completion of these activities was March 31, 2007. Status as of this date is that archiving, and implementation of Engineering Changes are completed. There are financial reconciliations outstanding, due to Foreign Military Sales (FMS). Completion date for financial reconciliation is now March 31, 2008. Payment at Year End (PAYE) transactions for the FMS Cases have been set up so no new expenses against the project for fiscal 2007-2008 and beyond will occur.

7.   Industrial Benefits: The CPF Project industrial benefit commitments were exceeded. The actual direct and offset industrial benefits achieved totalled in excess of $7.5B ($BY).

Tribal Class Update & Modernization Project (TRUMP)

1.   Description: The TRUMP Project updated the four IROQUOIS Class destroyers originally constructed and delivered to the Navy in the early 1970s. 

The introduction of the HALIFAX Class frigates left the Canadian Task Group (CTG) deficient in two critical areas: the capability to defend escorted vessels against air attack (area air defence) and a Task Group command and control capability. 

To address these deficiencies, the TRUMP project delivered four modernized IROQUOIS Class destroyers having extended life with new platform and combat systems, designed to compliment the frigates and ensure a balance of capabilities within the CTG.

2.  Project Phase: Complete

3.  Leading and Participating Departments and Agencies


Lead Department

Department of National Defence

Contracting Authority

Public Works and Government Services Canada


4. Prime and Major Sub-Contractors


Prime Contractor

Litton Systems Canada Ltd., Etobicoke ON

Major Sub-Contractors

MIL Davie Inc., Lvis QC

Pratt & Whitney Canada Inc., Longueuil QC

MIL Systems Engineering Inc., Ottawa ON


5.   Major Milestones


Major Milestone

Date

Treasury Board Approval for Contract Definition

June 1984

Treasury Board Approval for TRUMP

April 1986

Contract Award

June 1986

Last Ship Returned to Operational Status

September 1996

Finish-the-Job (FTJ) Initiatives, i.e. full project mandate, Approved

July 1995

Project Completion

March 29, 2007


6.   Progress Report and Explanation of Variances: Senior Review Board(SRB) November 12, 2005 endorsed Effective Project Completion (EPC) effective December 31, 2005.All remaining work, including administration and payment of final invoices is now complete.

7.   Industrial Benefits: The TRUMP Contract commitments were achieved and were accepted by Industry Canada at the time of Prime Contract Restructuring (September 1991). As of ships’ acceptance in September 1996, Industrial Regional Benefits (IRBs) stood at $310.7M for Offsets and $856.4M for Direct IRBs.

Joint Support Ship (JSS)

1.   Description: The JSS is a Major Crown Project which will maintain the Canadian Navy’s current naval task group logistic support, while ensuring that the Canadian Forces has an adequate, assured strategic sealift capability to allow it to deploy and sustain operations in support of government policy and enhancing Canada's capability for joint command and control of forces ashore. This will be accomplished by awarding two separate contracts to one contractor for the design and construction in Canada of three vessels and another for In-Service Support of the units throughout their operational life. The ships will replace the two ageing Protecteur class support ship currently in service on the east and west coast.

2.    Project Phase: Definition

3.    Leading and Participating Departments and Agencies:


Lead Department or Agency:

Department of National Defence

Contracting Authority:

Public Works and Government Services Canada

Participating Departments and Agencies:

Industry Canada and the regional agencies


4.   Prime and Major Sub-Contractors: No prime contractor has been selected. Final selection of the prime contractor will occur at Effective Project Approval, planned for 2008.

5.   Major Milestones:


Major Milestones

Date

Memo to Cabinet

April 14, 2004

Treasury Board Preliminary Project Approval - (SS –PPA)

November 24, 2004

Invitation for Bids Posted on MERX

June 27, 2006

Project Definition – Contract Award

December 01, 2006

Treasury Board Effective Project Approval - (SS- EPA) – Approval

2008

Project Implementation - Contract Award

2008

First Delivery

2012

Initial Operational Capability (IOC)

2013

Full Operational Capability (FOC)

2016

Project Close-out

2016


6.   Progress Report and Explanations of Variances: The project continues to progress steadily since obtaining Preliminary Project Approval in November 2004. The Minister of Public Works and Government Services Canada (PWGSC) awarded two Project Definition contracts on December 01, 2006. Treasury Board granted expenditure authority of $72.2M, full up including GST, for the pre-qualification and definition phases. Treasury Board also acknowledged the indicative full up cost of $2,012.9M ($BY), including GST, for implementation.

7.   Industrial and Regional Benefits: Industrial and Regional Benefits (IRBs) for this project are equivalent to 100% of the contracted value for both the capital acquisition and in-service support."

Maritime Helicopter Project (MHP)

1.   Description: The purpose of this project is to replace the CH124 Sea King with a fleet of 28 new fully equipped Maritime Helicopters bundled with a long-term In-Service Support contract and the modification of the HALIFAX class ships to accommodate the new Maritime Helicopters. This replacement will address the operational deficiencies of the current CH124, eliminate the supportability difficulties of the older helicopter, and provide a sufficient fleet size of multi-purpose shipborne Maritime Helicopters for operations well into the 21st century.

2.   Project Phase: Implementation

3.   Leading and Participating Departments and Agencies:


Lead Department or Agency:

Department of National Defence

Contracting Authority:

Public Works and Government Services Canada

Participating Departments and Agencies:

Industry Canada and its regional agencies


4.   Prime and Major Sub-Contractors:


Prime Contractor

Sikorsky International Operations Incorporated, Stratford, Connecticut, USA

Sub-Contractors

General Dynamics Canada, L-3 MAS Canada, Montral, Qubec


5.   Major Milestones:


Major Milestones

Date

Preliminary Project Approval (PPA)

June 18, 2003

Invitations for Bids Posted on MERX

December 16, 2003

Synopsis Sheet (Effective Project Approval) SS (EPA)

November 22, 2004

Contract Award

November 23, 2004

First Delivery

January 2009

Initial Operational Capability (IOC)

January 2010

Full Operational Capability (FOC)

February 2011

Project Close-out

2013


6.   Progress Report and Explanations of Variances: In November 2006, the project marked the two-year milestone in the implementation phase. During this period, design and engineering work progressed mostly on schedule. Manufacturing of aircraft components, as well as construction of the Training Centre building in Shearwater, NS, have also progressed well. The delivery of the aircraft shown above in the milestones table has been adjusted to reflect the acceptance by Crown of an excusable delay request from the Contractor due to a six-week long labour strike at its manufacturing facilities during the period February-April 2006. Although the Crown has granted the requested relief, the Contractor has indicated that it will strive to make up for the lost time and deliver the subsequent helicopters so that the last helicopter is delivered as per the original schedule. The project is currently running within its authorized budget.

7.   Industrial Benefits: The Industrial Regional Benefits is equivalent to 100% of the contract value for the capital acquisition and approximately 80% of the contract value for the In-Service Support.


Region

Capital Acquisition

In-Service Support

Atlantic Canada

239.1M

825.9M

Quebec

555.8M

399.2M

Northern Ontario

3.2M

7.6M

Ontario (excluding Northern Ontario)

924.3M

1,073.2M

Western Canada

210.6M

181.4M

Unallocated

10.0M

105.7M

Total

$1,943.0M

$2,593.0M


Armoured Personnel Carriers (APC)

1.   Description: The Armoured Personnel Carrier (APC) is essential for all foreseeable Canadian Forces roles, including territorial defence, UN peacekeeping and peace enforcement operations, other international commitments, and Aid of the Civil Power. The existing APC fleet does not meet the minimum operational requirements when compared to the modern, technically sophisticated weapons and vehicles Canadian soldiers encounter during operations. They suffer shortcomings in protection, self-defence capability, mobility, carrying capacity and growth potential. The APC Project is fielding a fleet of modern, wheeled, armoured personnel carriers. 651 Light Armoured Vehicles (LAV) III are to be procured in six configurations: Infantry Section Carrier, Command Post, Engineer, Forward Observation Officer, and TOW (Tube Launched, Optically Tracked, Wire Guided) Under Armour, and LAV III Less Kits.

2.   Project Phase: Implementation

3.   Leading and Participating Departments and Agencies


Lead Department

Department of National Defence

Contracting Authority

Public Works and Government Services Canada

Participating Departments and Agencies

Industry Canada and its regional agencies


4.    Prime and Major Sub-Contractors


Prime Contractor

General Dynamics Land Systems - Canada, London, ON


5.  Major Milestones


Major Milestones

Date

Treasury Board approval

December 1995

Contract award

December 1996

First vehicle delivery

July 1998

Exercise of first option

July 15, 1998

Exercise of second option

July 15, 1999

Exercise of third option

July 15, 1999

Last vehicle delivery

August 31, 2007

Project completed

March 2010


6.   Progress Report and Explanation of Variances: In August 1995, the Government approved in principle the procurement of up to 651 APCs. In January 1997, the Government announced the award of a contract to General Dynamics Land Systems – Canada (GDLS-C) to build 240 new eight-wheel-drive APCs. The contract contained three options for an additional 120, 120 and 171 APCs. All three options have been exercised. All vehicles will be delivered by August 2007.

The vehicles are equipped and configured to meet the demands of operational employment at the battle group level by Land Force infantry elements. The APC vehicle will provide a rapid response capability, both strategic and tactical, allowing the Canadian Forces to meet all tasks currently envisaged.

On March 29, 2004, Treasury Board authorized $129M for indoor accommodation for LAV III to facilitate regular maintenance and training programs, and prevent any deterioration that would result from outdoor storage. Construction will take place in six locations: Edmonton, Wainwright, Petawawa, Montral, Valcartier, and Gagetown. Construction activities are under way and are scheduled for completion in early 2010. This portion of the project can then close in March 2010.

7.   Industrial Benefits: This project includes the following regional commitments:


Region

Cash Benefits

Atlantic Canada

$151.4M

Qubec

$150.5M

Western Canada

$155.0M

Small Business

$210.3M

Total

$667.2M


Mobile Gun System (MGS)

1.   Description: It is the army’s intent to transform into a medium-weight, information age force. Key features of a medium weight force are global deployability, operational mobility and flexibility. Currently, the Land Force is primarily equipped with a fleet of multipurpose combat capable wheeled Light Armoured Vehicles (LAVs). Wheeled platforms provide broad operational capabilities and a range of transportability options.

The MGS project was to deliver 66 vehicles with associated integrated logistics support. These vehicles were to be fully developed with minimal modifications required to accommodate unique Canadian equipment, such as the existing communications suites. It was intended to procure all 66 vehicles as part of the Effective Project Approval (EPA) phase and in joint production with the US Army for economies of scale and effort. 

In the spring of 2006, the Army recommended the termination of the Mobile Gun System project. A Government decision on this recommendation is forthcoming.

2.   Project Phase: Definition

3.    Leading and Participating Departments and Agencies


Lead Department

Department of National Defence

Contracting Authority

Public Works and Government Services Canada

Participating Department

Industry Canada and its regional agencies


4.    Prime and Major Sub-Contractors


Prime Contractor

General Dynamics Land Systems (GDLS), London, ON


5.    Major Milestones


Major Milestones

Date

Treasury Board (TB) Preliminary Project Approval (PPA)

March 2004

Contract negotiations complete

To be determined

Treasury Board Effective Project Approval (EPA)

To be determined

First Vehicle Delivery (Forecast)

To be determined

Implementation – Initial Operational Capability (Forecast)

To be determined

Implementation – Full Operational Capability (Forecast)

To be determined

Project completed (Forecast)

To be determined


6.   Progress Report and Explanation of Variances: All work on the Mobile Gun System has been suspended pending a Government decision on project termination. All personnel have been transferred to other Departmental priorities/programs and actions are currently underway to minimize Government liabilities.

7.      Industrial Benefits: This project would have included the following industrial and regional benefits:

Target Industrial Regional Benefits for this project were 100% of contract value, with 50% direct.

Multi Mission Effects Vehicle (MMEV)

1.   Description: Thirty-six Air Defence Anti-Tank Systems (ADATS) entered service in the CF in the late 1980s and early 1990s. Since that time, the Army Strategy has refocused the Army’s efforts into a transformation similar to that being undertaken in the US Army. This project aims to provide an information age direct fire system, which possesses increased lethality, agility and survivability on the battlefield in support of multi-purpose combat forces. The MMEV will require increased precision and accuracy and an automated command, control and communications network capable of the receipt from, and input into, joint and allied tactical data networks. The MMEV must be effective against both ground and air threats including tanks, light armoured vehicles, attack helicopters, Unmanned Aerial Vehicles (UAVs) including armed UAVs, cruise missiles, precision guided munitions and fighter ground attack aircraft.

Planned deliverables include 33 MMEV’s to replace ADATS. They will be a strategically mobile, wheeled light armoured direct fire system capable of the delivery of precision guided, long range munitions in both the ground, direct fire and air defence roles. Deliverables could include the replacement of active sensors (Radar, Electro-Optics), upgrading existing sub-assemblies and components with industrially supportable latest generation technologies, introduction of new training simulators, and the introduction of a ground-based sensor to mounting the ADATS onto the current Light Armoured Vehicles III chassis. Deliverables will also include the associated integrated logistics support.

In the spring of 2006, the Army recommended the termination of the Multi Mission Effects Vehicle project. A Government decision on this recommendation is pending.

2.   Project Phase: Definition

3.   Leading and Participating Departments and Agencies


Lead Department

Department of National Defence

Contracting Authority

Public Works and Government Services Canada

Participating Department

Industry Canada and its regional agencies


4.    Prime and Major Sub-Contractors


Prime Contractor

Oerlikon Contraves Canada, St-Jean sur Richelieu, QC


5.    Major Milestones


Major Milestones

Date

Treasury Board Preliminary Project Approval

September 7, 2005

Treasury Board Effective Project Approval

To be determined

Implementation Contract Awarded

To be determined

Implementation – Initial Operational Capability

To be determined

Implementation – Full Operational Capability

To be determined

Project completed

To be determined


6.   Progress Report and Explanation of Variances: MMEV was granted Treasury Board (TB) Preliminary Project Approval (PPA) on September 7, 2005 and was announced on September 22, 2005. Public Works Government Services Canada is waiting for TB approval to commence contract negotiations for the PPA phase with Oerlikon Contraves Canada. First possible vehicle delivery was intended for early 2010 and an Initial Operational Capability (IOC) in late 2010. The total estimated project cost is $753.4M, GST included.

All work on the Multi Mission effects Vehicle has been suspended pending a Government decision on project termination. All personnel have been transferred to other Departmental priorities/programs and actions are currently underway to minimize Government liabilities.

7.   Industrial Benefits: To be determined.

Light Utility Vehicle Wheeled (LUVW)

1.   Description: Light utility vehicles are highly mobile and essential to facilitating the tactical command of combat, combat support and combat service support units, to assist in the gathering and dissemination of information and to liaison within and between field formations.

The LUVW Project mandate is to replace the current fleet of Canadian Iltis vehicles with two separate vehicle acquisitions: 1,159 Standard Military Pattern (SMP) vehicles (Mercedes Benz G Wagon) with integrated logistic support and 170 Armour Protection Systems ($241.4M), for use by field force units; and 1,061 militarized commercial off-the-shelf (Mil COTS) vehicles (GM Silverado) ($65.4M) for use primarily by the Reserve Force for a total project cost of $306.8M.

2.    Project Phase: Implementation

3.   Leading and Participating Departments and Agencies


Lead Department

Department of National Defence

Contracting Authority

Public Works and Government Services Canada

Participating Department

Industry Canada and its regional agencies


4.   Prime and Major Sub-Contractors


Prime Contractor (Phase 1) SMP

Mercedes Benz Canada, Toronto ON

Prime Contractor (Phase 2) Mil-COTS

General Motors Defense Military Trucks, Troy, Michigan, USA


5.    Major Milestones


Major Milestones

Date

Major Milestone (Phase 1) SMP

 

Award of Contract

October 21, 2003

First Full Production Delivery

March 2004

Final Production Delivery

November 2006

Effective Project Completion

July 2008



Major Milestone (Phase 2) Mil COTS

 

Award of Contract

October 2002

First Full Production Delivery

October 2003

Final Production Delivery

December 2004

Effective Project Completion

July 2008


6.   Progress Report and Explanation of Variances:Project is in full implementation. The LUVW SMP (G Wagon) contract was awarded to Mercedes Benz Canada on October 21, 2003. Fielding of the G Wagon started in March 2004, five months ahead of schedule. A total of 60 basic and 24 C&R/MP (20 Command & Reconnaissance and 4 Military Police) LUVW G Wagons were delivered directly from the manufacturer’s plant in Graz, Austria to Kabul. In 2005 and early 2006, an additional 86 G Wagons were delivered to Kandahar. Delivery of all armour kits was completed in October 2005 and delivery of the total quantity of 1,159 vehicles was completed in November 2006.

The LUVW Mil COTS contract was awarded to General Motors in October 2002 with the first vehicle delivery received in October 2003. All 1,061 vehicles have been delivered as of December 2004. 

There were options on both the LUVW SMP and Mil COTS contracts; however, they have both been exercised and the option quantities are already reflected in the quantities detailed above.

The level of confidence in the LUVW is high. User feedback from Op ATHENA/Op ARCHER on the G Wagon has been positive and, even with the high mileage placed on the vehicles in Afghanistan, the fleet serviceability remains steady at 95%. Due to the optional purchase of 357 additional G Wagons, the project had to be extended 1 year.

In September 2006, the Senior Review Board of the Department of National Defence authorized the transfer of $1.5M of unspent funds from the MILCOTS account and $1M from contingency to the SMP account (for a total of $2.5M increase in the SMP account). This money was required to offset the increase in the cost of the EURO that has increased the cost of Design Change Requests, spare parts and special tools (none of these items was contracted for at a fixed exchange rate).

The remaining high cost items include the delivery of tech data package, Integrated Logistics Support manuals, special tools, establishment of an IRPP (Inspect, Repair and Paint Program) repair facility and migration of the Interim Support Contract into a Long Term Support Contract. Full Operational Capability will be declared after delivery of the special tools. This is estimated to take place April/May 2008, followed by effective project closeout in July 2008. The project will reduce to a staff of three in July 2007.

7.   Industrial Benefits: The industrial benefits are required for Phase 1 for a value 100% of the contract value. Latest report from Industry Canada indicates that Mercedes Benz Canada has exceeded the industrial regional benefit goals by $300M. There are no mandated industrial benefits for the Mil COTS contract.

Intelligence Surveillance, Target Acquisition and Reconnaissance (ISTAR)

1.   Description: The purpose of this project is to develop, deliver and evolve an integrated, interoperable, ISTAR capability that will improve the ability of commanders to visualize the operational area, manage sensors and information collection resources, and to plan and implement actions to successfully complete operational missions. The project will provide enhancements to existing capabilities and include the acquisition of new capabilities in the areas of communications, command and control and sensors. The project includes the acquisition of Unmanned Aerial Vehicles (UAV), Weapon Locating Sensors (WLS) and transformation or enhancement of existing sensor platforms to include Electronic Warfare (EW), Light Armoured Vehicle III, Coyote Reconnaissance Vehicle, Ground Based Air Defence, Geomatic support and Tactical Meteorology Systems. ISTAR is an omnibus project that received Treasury Board approval for definition phase activity on April 3, 2003. Implementation through sub-projects is anticipated upon completion of the definition activities. Although initial delivery of equipment was estimated to occur sometime in fiscal 2005–2006, the Unforecasted Operational Requirement (UOR) for an UAV and other sensor upgrades has resulted in the delivery of a partial tactical UAV and EW capability in Afghanistan in 2003–2004. Early deliveries of ISTAR capabilities for Op ARCHER UORs will continue during 2007.  

2.   Project Phase: Definition

3.   Leading and Participating Departments and Agencies


Lead Department

Department of National Defence

Contracting Authority

Public Works & Government Services Canada

Participating Department

Industry Canada and its regional agencies


4.   Prime and Major Sub-Contractors


Prime Contractor for the UAV UOR Op Athena sub-project

Oerlikon Contraves Inc., Saint-Jean, QC

Major Sub-Contractor for the UAV UOR Op Athena sub-project

SAGEM SA, France

Prime Contractor for BLOS UOR OP Archer

ND Satcom, Germany

Prime Contractors for MEWT EW UOR OP Archer

Agilent Technologies, Ottawa, ON

Digital Receiver Technology Inc, Maryland USA

Signal Technology Associates Inc., Kanata, ON

Xwave, Stittsville, Ontario

Prime Contractor for Mini UAV UOR OP Archer

Thales Canada, Ottawa, ON

Major Sub-contractor for the Mini UAV UOR OP Archer

Elbit Systems, Israel

Prime Contractor for Acoustic Weapon

SELEX Sensors & Airborne Systems Ltd, Basildon

Locating System AWLS OP Archer

Essex, United Kingdom

Type 1 Radios Data Link Communication (DLC) project - Foreign Military Sales (FMS)

US Army, USA

Light Weight Counter Mortar Radars – Foreign Military Sales (FMS)

US Army, USA


5.  Major Milestones


Major Milestones

Date

Treasury Board Preliminary Project Approval

April 3, 2003

MND Approval UAV UOR

July 2003

Treasury Board Project Approval in Arrears UAV UOR

August 2005

Communications & Data Link Component Treasury Board Effective Project Approval

December 2006

Command and Control (C2) Treasury Board Effective Project Approval

October 2007

EW Sensors Treasury Board Effective Project Approval Phase 1

Amendment 1 (AL 1)

November 2005

October 2007

In Service Sensors Enhancement Treasury Board Effective Project Approval

March 2008

WLS Sensor Component Treasury Board Effective Project Approval

March 2008

WLS Acoustic Sensor

Initial Operation Capability (IOC)

November 2005

March 2007

Family of Mini UAV Treasury Board Effective Project Approval

AL 1

November 2005

March 2008

Deliveries Complete all ISTAR sub-projects

2012

Project Completion

March 2013


6.   Progress Report and Explanations of Variances: Given the ISTAR project staffs are managing the UOR procurement for Op ATHENA and OP ARCHER, some of the definition studies have necessarily been delayed and it is possible that there will be as much as a year’s delay in achieving some of the ISTAR project milestones. However, initial capabilities have been procured and the overall project is expected to complete one year ahead of the original schedule.

Delivery of equipment actually started with UORs in Op Athena, and final deliveries are scheduled out to 2012. The currently approved sub-projects in support of Op Athena and Op Archer are:

  1. UAV UOR Op Athena
  2. Beyond Line of Sight Satellite (BLOS) Op Archer
  3. Mobile Electronic Warfare Team (MEWT) OP Archer
  4. Mini UAV UOR Op Archer
  5. Acoustic Weapon Locating System (AWLS) Op Archer
  6. Lightweight Counter Mortar Radar (LCMR) Op ATHENA

In addition the Data Link Communications project received TB approval in December 2006, PWGSC received TB contract approval for radios February 22, 2007. The first FMS case for 650 Radios has been accepted and delivery of equipment is anticipated for November 2007. Some of this equipment is needed for Op Athena.    

7.   Industrial Benefits: A competitive procurement process was held for the UAV UOR.   Oerlikon Contraves won with Sagem SA as the manufacturer of the SPERWER UAV system. How Canadian industry in Canada will benefit from the ISTAR project will be determined during the approval of the implementation procurement strategy for each sub-project. 

Medium Support Vehicle System Project (MSVS)

1.   Description: The Medium Support Vehicle System Project is a capability replacement project for the existing Medium Logistics Vehicle Wheeled (MLVW) fleet that has reached the end of its service life due to age, heavy usage and corrosion. The MSVS project will acquire a mix of up to 1,500 medium-sized standard military pattern trucks including 150 integrated armour protection systems and 300 companion military pattern trailers, up to 800 commercial trucks with militarized components, up to 1,000 associated special equipment vehicle kits, and have a logistics cost of approximately $1.1B (net of GST). Cost, cash flow and schedule estimates will be further refined before the Minister of National Defence seeks effective project approval from Treasury Board.

2.   Project Phase: Definition

3.   Leading and Participating Departments and Agencies:


Lead Department or Agency:

Department of National Defence

Contracting Authority:

Public Works and Government Services Canada

Participating Departments and Agencies:

Industry Canada and its regional agencies


4.   Prime and Major Sub-Contractors: No prime contractor has been selected. Final selection of the prime contractor will occur at effective project approval.

5.    Major Milestones:


Major Milestones

Date

Memorandum to Cabinet

June 2006

Preliminary Project Approval (PPA)

June 22, 2006

Invitation for Bids Posted on MERX - Militarized Commercial Pattern Vehicles

August 2007

Invitation for Bids Posted on MERX - Standard Military Pattern Vehicles

October 2007

Invitation for Bids Posted on MERX - Family of Baseline Shelter

November 2007

Invitation for Bids Posted on MERX - Special Equipment Vehicle Kits

To be determined

Synopsis Sheet (Effective Project Approval) - SS (EPA) 

June 2008

Contract Award - Militarized Commercial Pattern Vehicles

June 2008

Contract Award - Standard Military Pattern

November 2008

Contract Award – Family of Baseline Shelter

June 2008

Contract Award - Special Equipment Vehicle Kits

To be determined

First Delivery - Militarized Commercial Pattern Vehicles

March 2009

First Delivery - Standard Military Pattern

August 2009

First Delivery - Family of Baseline Shelter

July 2008

First Delivery - Special Equipment Vehicle Kits

To be determined

Delivery Complete - Militarized Commercial Pattern Vehicle

September 2010

Delivery Complete - Standard Military Pattern

August 2011

Delivery Complete – Family of Baseline Shelter

June 2010

Delivery Complete - Special Equipment Vehicle Kits

To be determined

Project Close Out

March 2012


6.   Progress Report and Explanations of Variances: Treasury Board granted Preliminary Project Approval on June 22, 2006. The MSVS Project has entered its definition phase. Design integration work is underway in addition to consultation with industry, development and release of Requests for Proposal. Due to difficulties in fully manning the project office there has been a need to incorporate additional time for vehicle performance demonstrations, both on the part of industry to deliver a vehicle with the bid and the Project management office to conduct testing, and also to shift towards performance based specifications linked to performance based requirements. The planned project milestones have shifted to the right by eight months. At this time, the timing for Project Close Out remains unchanged. A continuous risk management program has been implemented and costing efforts for the implementation phase are progressing

With Preliminary Project Approval, Treasury Board provided the MSVS project $25.8M ($BY) Expenditure Authority for the Definition phase. The MSVS project should receive Effective Project Approval in June 2008.

7.   Industrial & Regional Benefits: The target Industrial Regional Benefits (IRBs) is equivalent to 100% of the contract value for the capital acquisition.

Canadian Forces Utility Tactical Transport Helicopter (CFUTTH) Project

1.   Description: The purpose of the Canadian Forces Utility Tactical Transport Helicopter (CFUTTH) Project is to acquire helicopters in support of national and international tactical aviation roles. The project supports the Land Force, Air Force, Deputy Chief of Defence Staff (DCDS) operations and Civil Emergency Preparedness, as well as a wide range of defence objectives. It replaces three aging helicopter fleets – the CH118 Iroquois, the CH135 Twin Huey and the CH136 Kiowa. The Bell 412CF/CH146 was procured as a single role multi-mission helicopter capable of supporting a majority of the tasks previously undertaken by fleets it replaced. The operational requirements for the CFUTTH defined the principle task requirements of the CFUTTH to include the tactical lift of troops and equipment, logistical lift, reconnaissance and surveillance, direction and control of fire, aero-medical support and casualty evacuation, command and liaison, and communications assistance. These mission capabilities are employed in support of DND operational commitments, United Nations peacekeeping missions, and support to other Government Departments and Agencies, including Aid of the Civil Power.   

The project has delivered 100 Bell 412CF/CH146 Griffons, a flight simulator, composite maintenance trainer, facilities, mission kits (including defence electronic warfare suites), as well as other equipment, documentation and services.

2.    Project Phase: Implementation

3.    Lead and Participating Departments and Agencies


Lead Department

Department of National Defence

Contracting Authority

Public Works and Government Services Canada

Participating Department

Industry Canada and its regional agencies


4.    Prime and Major Sub-Contractors


Prime Contractor

Bell Helicopter Textron Canada, Mirabel, QC

Major Sub-Contractors

Pratt & Whitney Canada, Montral, QC

BAE Systems Canada Inc., Montral, QC

CAE Ltd, Montral, QC


5.    Major Milestones


Major Milestones

Date

Contract Award

September 1992

Critical Design Review

April 1993

First Helicopter Delivery

March 1995

Simulator Acceptance

June1996

Last Helicopter Delivery

February 1998

Project Completion

March 2009


6.   Progress Report and Explanation of Variances: This project received Cabinet approval on April 7, 1992 and Treasury Board approval on September 8, 1992, with an original budget of $1.293B. Following directed reductions to the project budget and by assuming certain performance risks, the project will be completed in March 2009 for approximately $200M less than the initial Treasury Board budget approval.

7.   Industrial Benefits: Bell Helicopter Textron Canada has committed to achieving $506.7M in Canadian value-added industrial regional benefits as follows:


Region

Cash Benefits

East

10.0M

Qubec

 420.2M

Ontario

 32.1M

West

12.0M

Unallocated

32.4M

Total

$506.7M


To date, Bell Helicopter has claimed $289.5M direct and $252.1M indirect industrial regional benefits, totalling $541.6M, representing 107% of the overall commitment.

Canadian Search and Rescue Helicopter Project

1.   Description: Maintaining a national search and rescue capability is a direct departmental objective. The purpose of the Canadian Search and Rescue Helicopter (CSH) project was to replace the CH-113 Labradors with a fleet of 15 new helicopters. The new helicopters address the operational deficiencies of the CH-113 Labrador fleet, eliminate the supportability difficulties of these older airframes, and provide a fleet size sufficient for continuous operations well into the 21st century.

2.    Project Phase: Completed

3.    Leading and Participating Departments and Agencies


Lead Department

Department of National Defence

Contracting Authority

Public Works and Government Services Canada

Participating Department

Industry Canada and its regional agencies


4.    Prime and Major Sub-Contractors


Prime Contractor

AgustaWestland International Limited (formerly E.H. Industries Ltd. (EHI)),

Farnborough, United Kingdom

Major Sub-Contractors

GKN Westland Helicopters, United Kingdom

Agusta Spa, Italy

General Electric Canada Inc., Canada


5.    Major Milestones


Major Milestones

Date

Treasury Board Effective Project Approval

April 2, 1998

Contract Award

April 6, 1998

First Aircraft Delivery (at plant in Italy)

September 2001

Final Aircraft Delivery (at plant in Italy)

July 2003

Project Completion (Effective Project Completion)

September 2004


6.   Progress Report and Explanation of Variances: Treasury Board (TB) granted original Preliminary Project Approval on February 8, 1996, providing Expenditure Authority for $3.3M for Definition Phase activities and approval-in-principle for $704.2M. An amendment to the Preliminary Project Approval was granted on April 24, 1997, providing Expenditure Authority for $6.4M for total Definition Phase activities and approval-in-principle for $708.2M.

Treasury Board gave Effective Project Approval on April 2, 1998 including expenditure authority for $788.0M net of GST, which included definition funding expenditures of $6.4M.

On April 6, 1998, E.H. Industries (EHI) Limited (renamed AgustaWestland International Ltd (AWIL)) was contracted to supply 15 AW511 Cormorant search and rescue helicopters, along with initial logistics support to the Canadian Forces. The initial support package includes training, publications, warranty, a repair and overhaul program providing coverage until October 2004, and software support until 2006.

The project has procured the required aircraft spares, maintenance and support equipment, a Cockpit Procedures Trainer and facilities for the four Canadian Forces search and rescue bases. The project has also established and funded the first two years of an in-service support contractor for follow-on support.

As of July 2003, all 15 Cormorant helicopters have been delivered. Spares parts and infrastructure are in place to support operations. Initial training is complete. The Cormorant have been operational at the squadrons in Comox, BC, Gander, NF, Greenwood, NS and Trenton, ON. However, CH149 operations at 424 Squadron in Trenton have been suspended temporarily due to the lack of aircraft availability and difficulty to maintain adequate aircrew training.

It should be noted that although Effective Project Closure was achieved on the September 15, 2004, work is still ongoing and will remain so for many years to come. The major milestones still outstanding are tied to a three (3) year Technical Publication Revision Service which is not expected to begin until fiscal 2007-2008, and a number of milestones related to outstanding aircraft deficiencies which are expected to continue over the next three (3) years and perhaps beyond.

7.   Industrial Benefits: The contractor (AWIL) has committed to providing direct and indirect industrial benefits valued at $629.8M, to be completed within eight years from the date of contract award. It is estimated that these benefits will create or continue roughly 5,000 person-years of employment in Canada. Canadian industry in all regions of Canada will benefit from the project. The contractor has completed its obligations to Canada in regard to Industrial and Regional Benefits under the CSH contract.  Small businesses in Canada will also benefit from the project by the placing of $67.0M in orders. 


Region

Cash Benefits

Atlantic Canada

43.1M

Qubec

317.7M

Ontario

146.5M

Western Canada

86.2M

Unallocated

36.3M

Total

$629.8M


Military Automated Air Traffic System (MAATS) Project

1.   Description: A national air traffic system project to automate air traffic services has been initiated by Transport Canada (now NAV CANADA). To ensure that military air operations continue to function effectively, remain compatible with the national system, and keep pace with these enhancements, the Department of National Defence and the Canadian Forces established the Military Automated Air Traffic System (MAATS) Project. The project directly supports the defence objective of conducting air traffic control operations.

The MAATS project will provide the essential equipment and system interfaces necessary to automate data interchange between applications. The project will deliver a stable, sustainable, and operational Air Traffic Management System (ATMS) while providing as much integration as possible with NAV Canada’s Canadian Automated Air Traffic System (CAATS). Where equipment or system interfaces are not currently available, new equipment will be installed. All existing Defence radar systems will be retained and interfaced to the MAATS as appropriate.

2.    Project Phase: Implementation

3.    Leading and Participating Departments and Agencies


Lead Department

Department of National Defence

Contracting Authority

Public Works Government Services Canada

Participating Department

Industry Canada and its regional agencies


4.   Prime and Major Sub-Contractors


Prime Contractor

Raytheon Canada Limited, Richmond, BC

NavCanada, Ottawa, ON

Major Sub-Contractors

Hewlett Packard Canada Ltd, Ottawa ON

CVDS, Montral PQ

Frequentis Canada Ltd, Ottawa ON


5.    Major Milestones


Major Milestones

Date

Treasury Board Effective Project Approval

July 1993

Contract Award

January 1994

Preliminary Design Review

March 2000

Critical Design Review

January 2001

Factory Acceptance Test

November 2001

Initial Delivery

April 2003

Contract Complete

December 2004

Begin Software Development on Phoenix Systems

October 2006

Complete Phoenix NAMS II Development

July 2007

Initial Operational Capability – First Wing Operational with NAMS II Equipment

Full Operational Capability (FOC) – All wings with delivered Equipment

November 2007

March 2009

Begin project Closeout

April 2009

Project complete

July 2009


6.   Progress Report and Explanation of Variances. Treasury Board initially approved the project with an estimated cost of $179.2M. The project funding was reduced by $15M following departmental review. Partial return of funding was approved at the December 2003 Senior Review Board (SRB). Current departmental funding is $169.2M.

As briefed at the last SRB on June 30, 2006, the MAATS project objectives were declared unachievable within the existing funding envelope and a number of alternative options were presented. PMO MAATS’ recommendation was to replace the implemented MAATS equipment with an “in-house” solution coined Phoenix. A PMB Secretarial Note made the final decision regarding the location of military Instrument Flight Rules (IFR) operations on March 15, 2007. The MAATS project has been directed by Chief of Air Staff to install the Phoenix system at the Wings (Comox, Cold Lake, Moose Jaw, Bagotville, Trenton and Greenwood). The decision to have IFR services remain at the Wings was made in consultation with the Commander of 1 Canadian Air Division. This will address the capability deficiency and provide operational value. The decision was made to de-link the project from CAATS and concentrate on re-vitalization and integration of Air Traffic Controller (ATC) information sources. The Phoenix solution upgrades the current Air Traffic Management System including the Radar Processor, Navigational Aids and Meteorological Sub-System (NAMS), Air Movement Statistics Package and Flight Data System. It is based on the proven Radar Processing Display System II (RPDS II) platform, which has been certified for Operational Air Worthiness and is built on standard commercial off-the shelf (COTS) hardware and open source software. Installation of Phoenix equipment (NAMS II) at 8 Wing Trenton will be completed byFall 2007 and Initial Operational Capability (IOC) will be declared. Actual close out activities, including a project completion report to Treasury Board will be completed in fiscal 2009–2010.

7.   Industrial Benefits. Canadian industry in the following regions of Canada will benefit from the MAATS project.


Region

Cash Benefits

Atlantic Canada

1.6M

Qubec

1.0M

Ontario

1.8M

Western Canada

50.2M

Unallocated

To be determined

Total

$54.6M


Airlift Capability Project – Strategic (ACP-S)

1.  Description: The objective of the Airlift Capability Project - Strategic is to acquire four new aircraft that will provide the global reach and speed necessary to operate effectively over long distances to deliver personnel and cargo directly into a theatre of operations, including a threat environment.

2.   Project Phase:Implementation

3.    Leading and Participating Departments and Agencies:


Lead Department or Agency:

Department of National Defence

Contracting Authority:

Public Works and Government Services Canada

Participating Departments and Agencies:

Industry Canada and its regional agencies


4.   Prime and Major Sub-Contractors:


Prime Contractor:

The Boeing Company, St-Louis, Missouri, USA


5.   Major Milestones:


Major Milestones

Date

Memo to Cabinet

June 6, 2006

Synopsis Sheet (Effective Project Approval)

June 22, 2006

Advanced Contract Award Notice Posted on MERX

July 5, 2006

Contract Award

February 1, 2007

Delivery First Aircraft

August 2007

Delivery Second Aircraft

October 2007

Delivery Third Aircraft

March 2008

Delivery Fourth Aircraft

April 2008

Initial Operational Capability (IOC)

Spring 2008

Full Operational Capability (FOC)

Summer 2009

Project Close-out

Summer 2010


6.   Progress Report and Explanations of Variances: The project received Effective Project Approval from Treasury Board on June 22, 2006 for the purchase of four Strategic aircraft, setup of in-service support for 20 years, ancillary contracts and project office. The contract with the Boeing Company for the Direct Sales Contract was established on February 1, 2007. A Foreign Military Sales case, through the United States Air Force to Boeing, for worldwide in-service support was established on January 31, 2007. The project office is currently working on the implementation phase in support of this acquisition.

7.   Industrial Benefits: Target Industrial Regional Benefits for this project are equivalent to 100% of the acquisition contract and Boeing’s share of the in-service support Foreign Military Sales contract value. 

Airlift Capability Project – Tactical (ACP-T)

1.   Description: The objective of the Airlift Capability Project – Tactical is to ensure a continued tactical airlift capability. In combination with the Fixed Wing Search and Rescue project, this project will replace the Canadian Forces’ aging CC 130E/H fleet. This project will provide the Canadian Forces with an assured and effective tactical airlift capability that allows the requisite operational flexibility and responsiveness to support international and domestic operations.

2.   Project Phase:Definition

3.      Leading and Participating Departments and Agencies:


Lead Department or Agency:

Department of National Defence

Contracting Authority:

Public Works and Government Services Canada

Participating Departments and Agencies:

Industry Canada and its regional agencies


4.   Prime and Major Sub-Contractors:


Prime Contractor:

Lockheed Martin Aeronautics Company, Forth Worth, Texas, USA


5.      Major Milestones:


Major Milestones

Date

Memo to Cabinet

June 23, 2006

Preliminary Project Approval (PPA)

June 23, 2006

Solicitation of Interest and Qualification (SOIQ)

September 1, 2006

Invitation for Bids Posted on MERX

June 2007

Synopsis Sheet (Effective Project Approval) – SS (EPA)

Fall 2007

Contract Award

Fall 2007

First Delivery

Fall 2010

Initial Operational Capability (IOC)

Summer 2011

Full Operational Capability (FOC)

Summer 2013

Project Close-out

Winter   2014


6.   Progress Report and Explanations of Variances: Responses to the Statement of Interest and Quotation (SOIQ) have been evaluated and the Lockheed Martin C 130 J-30 model has been selected as the only qualified aircraft.

The project office is completingdocumentation including those required for the issue of the Request for Proposal to the qualified supplier.

7.   Industrial Benefits: This procurement will provide industrial regional benefits equivalent to 100% of the contracted value for both the capital acquisition and integrated in-service support. For the integrated in-service support portion, 75% of the contract value will be direct work performed by a Canadian company. The selected contractor will be required to identify, as specific work packages, 60% of the total acquisition commitment. These Industrial and Regional Benefits requirements will be negotiated and accepted by Industry Canada prior to contract signing.

Fixed Wing Search And Rescue (FWSAR)

1.   Description: The purpose of this project is to provide a minimum fleet of 15 new fixed wing aircraft. This replacement will address the CC-115 Buffalo, and the CC-130 Hercules fixed-wing search and rescue aircraft that are ageing, becoming less reliable and are more difficult and costly to maintain.

2.   Project Phase: Definition

3.   Leading and Participating Departments and Agencies:


Lead Department or Agency:

Department of National Defence

Contracting Authority:

Public Works and Government Services Canada

Participating Departments and Agencies:

Industry Canada and its regional agencies


4.   Prime and Major Sub-Contractors: No prime contractor has been selected. Final selection of the prime contractor will occur at Effective Project Approval.

5.   Major Milestones: The Department is assessing its Search and Rescue and Intelligence Surveillance and Reconnaissance requirements and will come forward with recommendations in the near future.

6.   Progress Report and Explanations of Variances: The FWSAR Project received departmental approval of its identification phase November 15, 2002. Budget 2004 announced that non-budgetary resources beginning in fiscal 2005–2006 would fund this acquisition. However, the way forward for this project is under review in the light of current priorities.

7.   Industrial and Regional Benefits (IRBs): The selected contractors will be required to provide IRBs equivalent to at least 100% of the contracted value for capital acquisition, in-service support and training system integration.

Medium-To Heavy-Lift Helicopter (MHLH)

1.   Description: Over the last decade, the ability to move personnel and equipment by air has become a vital and growing capability requirement for the Canadian Forces in fulfilling a wide range of roles. Canadian Forces operational experience, particularly in current operational theatres, has highlighted the urgent need for medium to heavy lift helicopters to support land, amphibious and special operations forces in a threat environment by quickly, efficiently and safely moving large numbers of personnel and heavy equipment from forward deployed bases, thus reducing their vulnerability to attack. Both at home and overseas, medium to heavy lift helicopters will provide the Government with a wider range of military options for addressing threats and emergencies than the Canadian Forces’ current helicopter fleets.

The Medium to Heavy Lift Helicopter project will deliver the medium to heavy lift helicopter capability to support domestic and international deployments of land forces, special operations and amphibious formations. The project will acquire a minimum of 16 helicopters, integrated logistic support and other related support elements.

2.    Project Phase: Definition

3.    Leading and Participating Departments and Agencies:


Lead Department or Agency:

Department of National Defence

Contracting Authority:

Public Works and Government Services Canada

Participating Departments and Agencies:

Industry Canada and its regional agencies


4.    Prime and Major Sub-Contractors:


Prime Contractor:

The Boeing Company, Philadelphia, Pennsylvania, USA


5.    Major Milestones:


Major Milestones

Date

Memo to Cabinet

June 2006

Synopsis Sheet Preliminary Project Approval

June 22, 2006

Advanced Contract Award Notice Posted on MERX

July 5, 2006

Synopsis Sheet Effective Project Approval

March 2008

Contract Award

March 2008

First Delivery

March 2011

Initial Operational Capability (IOC)

March 2013

Full Operational Capability (FOC)

Spring 2015

Project Close-out

Fall 2015


6.   Progress Report and Explanations of Variances: The project received Preliminary Project Approval in June 2006, whereby expenditure authority of $8.4M was granted for the definition phase. Treasury Board also acknowledged the indicative cost estimate of $2B ($BY) for total project.

In July 2006, the Government announced, via Advanced Contract Award Notice, its intent to award a contract to the Boeing Company. Definition work is underway, consultation with industry has taken place, a continuous risk management program has been implemented and costing efforts for the implementation phase are progressing.

Contract award has been delayed owing to delays in finalizing Technical Assistance Agreements and the need to conduct additional risk reduction and project definition tasks.

7.   Industrial Benefits: This procurement will provide Industrial Regional Benefits equivalent to 100% of the contracted value for both the capital acquisition and integrated in-service support. For the integrated in-service support portion, 75% of the contract value will be direct work performed by a Canadian company. The selected contractor will be required to identify, as specific work packages, 60% of the total acquisition commitment. These industrial and regional benefits requirements will be negotiated and accepted by Industry Canada prior to contract signing.

Protected Military Satellite Communications (PMSC)

1.   Description. The Department of National Defence and the Canadian Forces require global communications that are secure, guaranteed and directly interoperable with our allies. The aim of the Protected Military Satellite Communications Project (PMSC) is to overcome current Canadian Forces interoperability and global command and control limitations. Upon completion, this project will enable long-range communications to deployed forces and facilitate their interoperability with allies.

2.    Project Phase: Implementation

3.    Leading and Participating Departments and Agencies


Lead Department

Department of National Defence

Contracting Authority

Public Works and Government Services Canada

Participating Department

Industry Canada and its regional agencies


4.    Prime Contractor and Major Sub-Contractors


Prime Contractor

United States Department of Defense

Major Sub-Contractors

To be determined


5.    Major Milestones


Major Milestones

Date

Preliminary Project Approval

August 25, 1999

Effective Project Approval

November 18, 2003

Initial Terminal Delivery

Summer 2009

Initial Satellite Delivery

Spring 2010

Terminal Delivery Completed

Summer 2013

Project Complete

Winter 2014


6.   Progress Report and Explanations of Variances. The PMSC project will be implemented in two phases. Under Phase 1, a Memorandum of Understanding (MOU) with the United States Department of Defense (DOD) will guarantee Canadian participation in their Advanced Extremely High Frequency (AEHF) system. Definition studies for the terminal segment were completed in Phase 1. Under Phase II, the terminal segment will be procured, installed and tested.

On August 25, 1999, Treasury Board granted Preliminary Project Approval to the PMSC Project, with expenditure authority for the implementation of Phase I at an estimated cost of $252M and granted approval for the Department of National Defence to enter into a Military Satellite Communication (MILSATCOM) MOU with the US Department of Defense. The MOU was signed November 16, 1999.

On November 18, 2003, Treasury Board granted Effective Project Approval to the PMSC Project, with expenditure authority for the Implementation of Phase II at an estimated cost of $300M. The total cost is now estimated at $552M.

7.   Industrial Benefits: Under Phase 1, the US Department of Defense has committed to a work share with Canadian industry proportional to our contribution. Suppliers from both nations will be permitted to bid on project work. In Phase II,  Senior Procurement Advisory Committee (SPAC) endorsed that Terminal acquisition and support will be procured through Foreign Military Sales with installation done through DND managed contracts. Industrial and regional benefits will be sought by Industry Canada at 100% of contract value.

Material Acquisition And Support Information System (MASIS)

1.   Description: The mission of the Material Acquisition and Support Information System (MASIS) project is to provide a Department of National Defence (DND) integrated materiel acquisition and support information system that enables the cost-effective optimization of weapon/equipment system availability throughout the life cycle. The scope of MASIS includes all end-to-end information requirements within DND/CF related to the materiel acquisition and support functions which are comprised of systems engineering, integrated logistics support (ILS), equipment configuration, technical data management, asset management, maintenance management, project management, performance management, operational support, business management, decision support analysis and contract management.

2.    Project Phase: Implementation – Phase 4

3.    Leading and Participating Departments and Agencies


Lead Department or Agency:

National Defence

Contracting Authority:

Public Works and Government Services

Participating Departments and Agencies:

N/A


4.    Prime Contractor and Major Sub-Contractors


Prime Contractor

IBM Canada, Ottawa, ON

Major Sub-Contractors

SAP Canada, Ottawa, ON

Pennant, Ottawa, ON


   The project follows the standard departmental project management framework, with a phased approach implemented by a fully Integrated Project Team consisting of personnel from the Contractor, DND and PWGSC.

5.    Major Milestones


Major Milestones

Date

Definition Phase

 

Preliminary Project Approval - Expenditure Authority for Phase 1

June 10, 1998

Contract Awarded for Prime Systems Integrator

December 14, 1998

MASIS system—Go Live Phase 1 (202 Work Depot Montreal)

September 01, 1999

Implementation Phase

 

Expenditure Authority (EPA) for Phases 2 and 3:

  1. Implementation of Complex Contracts;.
  2. Implementation of the MASIS solution to the Navy;.
  3. Operations Support & Maintenance for MASIS;.
  4. Planning and scoping for requirements scheduled to be implemented for the Army.

June 15, 2000

Amended Expenditure Authority (EPA) for Phase 4:

  1. Investigation of opportunities to progress the implementation of MASIS to the maximum extent possible within the future available Phase 5 funding;
  2. Management of Operations Support & Maintenance for MASIS (outside MASIS project Expenditure Authority);
  3. Project was deemed as a Major Crown Project with this approval.

December 2003

Planned Amended Expenditure Authority (EPA) for Phase 5 to cover rollout of additional functionality to wider user base including Air Force and Army. Approval of amended SS(EPA) by TB is expected in June 2007.

2007

Project Close-out

2012


6.   Progress Report and Explanations of Variances: Following Definition phase approval, EPA for MASIS was granted to DND in June 2000 in the amount of $147.8M. This authority provided the project the means to cover the work under Phases 1 to 3, which have been completed.

The project follows a cyclical approval and delivery methodology. In December 2003, an additional $34.4M was approved to fund Phase 4 of the project. The project is currently in Phase 4 and is seeking TB approval in the amount of $170M for Phase 5 when MASIS will be rolled-out to the Army and Air Force. Planned completion of project is 2012 timeframe.

7.   Industrial Benefits: All industrial benefits are attributed to Ontario since all project expenditures occur in Ontario.