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Section III: Financial and Departmental Overview

Table 10: Status Report on Major Crown Projects 

Major Crown Projects that have cost estimates in excess of $100 million and are considered to be high risk by the Treasury Board are listed below.

  1. Frigate Life Extension (FELEX)
  2. Submarine Capability Life Extension
  3. Joint Support Ship (JSS)
  4. Maritime Helicopter Project (MHP)
  5. Armoured Personnel Carriers (APC)
  6. Mobile Gun System (MGS)
  7. Multi Mission Effects Vehicle (MMEV)
  8. Light Utility Vehicle Wheeled (LUVW)
  9. Intelligence Surveillance, Target Acquisition and Reconnaissance (ISTAR)
  10. Medium Support Vehicle System (MSVS)
  11. Armoured Heavy Support Vehicle System (AHSVS)
  12. Canadian Forces Utility Tactical Transport Helicopter (CFUTTH) Project
  13. Canadian Search and Rescue Helicopter Project
  14. Military Automated Air Traffic System (MAATS) Project
  15. Airlift Capability Project – Tactical (ACP-T)
  16. Airlift Capability Project – Strategic (ACP-S)
  17. Medium-To Heavy-Lift Helicopter (MHLH)
  18. Protected Military Satellite Communications (PMSC)
  19. Material Acquisition And Support Information System (MASIS)
  20. Canadian Cryptographic Modernization Program (CCMP)

Frigate Life Extension (FELEX)

1.  Description: The FELEX project is primarily a risk mitigation project to ensure that the modernization of the HALIFAX Class is achieved in a timely, efficient, effective and coordinated manner. FELEX will manage to varying degrees, from total project responsibility to installation responsibility only, all work elements in the Halifax Class Modernization (HCM). As the Design Integration Authority for the 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. Effective risk mitigation will be achieved through the following specific activities: scope management, design integration engineering, integrated risk management across all elements of the HCM, schedule coordination, and implementation/installation management.

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


4.  Prime and Major Sub-Contractors


Prime Contractor

Fleetway Incorporated, Halifax, NS


5.  Major Milestones


Major Milestones

Date

Preliminary Project Approval (PPA) Approval

February 28, 2005

Refit Procurement Strategy Approval

September 2006

Effective Project Approval (EPA) Approval

April 2008

Refits Begin

April 2010

Refits Completed

April 2017

Project Closure

April 2018


6.  Progress Report and Explanation of Variances: The FELEX Project is presently in its definition phase. Design integration work is underway, consultation with industry has begun, a continuous risk management program has been implemented and costing efforts for the implementation phase are progressing.

Treasury Board granted original Preliminary Project Approval to the FELEX project on February 28, 2005, providing $28.0M expenditure authority for the Definition phase. The FELEX project should receive Effective Project Approval on April 1, 2008 at an estimated total cost of $1,077.0 (BY) net of GST, which includes Definition funding expenditures of $28.0M.

The FELEX project is currently running on budget. Most of the significant elements of the modernization are now in their definition phases and targeting installations in the FELEX refits. It was recognized that significant advantages could accrue from consolidating the major projects. In particular, a simplified management structure, transfer of significant integration risk to a prime contractor, greater funding flexibility and simplified accountability framework could be gained by the FELEX Project absorbing the HALIFAX Modernized Command and Control System, Radar Upgrade, Multi-Link and Identification Friend or Foe Mode S/5 Projects. This initiative is progressing and expected to be implemented in 2007 creating the HCM/FELEX Project with an estimated implementation cost of $2.7 Billion.

7.  Industrial Benefits: The definition phase of the FELEX Project has no industrial benefits implications.

Submarine Capability Life Extension

1.  Description: The Submarine Capability Life Extension (SCLE) project will replace the Oberon class submarine fleet with four existing British Upholder class (to be 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 will deliver 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.

a.   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 June 2008.

b.   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 is due to enter EDWP in FMF Cape Scott in January 2007.

c.   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 completed during the summer of 2006. HMCS Corner Brook is now undergoing post maintenance sea trials and is scheduled to participate in exercises and patrols in 2007.

d.   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 winter 2007. This Extended Docking Repair Work Period (EDRWP) has been cancelled and the submarine commenced an Extended Limited Maintenance Period (ELMP). Work is now ongoing to determine the full scope for ELMP. Some Canadianization Work Period (CWP) Engineering Changes (ECs) are to be implemented in follow-on EDWP, which is scheduled for fiscal 2011–2012.

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 on 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 running on 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.

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

SS (PPA) - Approval

November 24, 2004

Invitation for Bids Posted on MERX

June 27, 2006

Project Definition – Contract Award

November 24, 2006

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 November 24, 2006. Treasury Board granted expenditure authority of $72.2M(BY), 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 Benefits: Target Industrial Regional Benefits (IRBs) for this project are equivalent to 100% of the contracted value for both the capital acquisition and in-service support contract values.

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, Montréal, Québec


5.  Major Milestones:


Major Milestones

Date

SS (PPA) - Approval

June 18, 2003

Invitations for Bids Posted on MERX

December 16, 2003

SS (EPA) - Approval

November 22, 2004

Contract Award

November 23, 2004

First Delivery

November 30, 2008

Initial Operational Capability (IOC)

November 30, 2009

Full Operational Capability (FOC)

February 28, 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 aircrafts shown above in the milestones table may be delayed by the six-week labour strike at the Contractor’s manufacturing facilities during February-April 2006. Negotiations with the Contractor are ongoing on its request for an excusable delay as per the terms of the contract. Although it is likely that the Crown will grant 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

($ millions)

In-Service Support

($ millions)

Atlantic Canada

239.1

825.9

Quebec

555.8

399.2

Northern Ontario

3.2

7.6

Ontario (excluding Northern Ontario)

924.3

1,073.2

Western Canada

210.6

181.4

Unallocated

10.0

105.7

Total

$1,943.0

$2,593.0


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 31, 2012


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. A total of 607 vehicles have been delivered to date. The remaining vehicles will be delivered within the next year.

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, Montréal, Valcartier, and Gagetown. Construction activities are scheduled between 2006 and 2011. This portion of the project can then close in March 2012.

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


Region

Cash Benefits

Atlantic Canada

$150.7M

Québec

$149.2M

Western Canada

$150.5M

Small Business

$210.3M


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 LAV mounted 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 LAV 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

Effective Project Completion

July 2007

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 2007


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 Oct 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 being 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 and effective project closeout is now scheduled for July 2007.

In September 2006, the Senior Review Board of the Department of National Defence authorized the transfer of $1.5 M of unspent funds from the MILCOTS account and $1M from contingency to the SMP account (for a total of $2.5 M 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, ILS manuals, special tools, establishment of an IRRP (Inspect, Repair as Required and Paint) 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 2007. The project will reduce to a staff of three in July 2007 at which time effective closure will take place.

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 year 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


5.   Major Milestones   Prime and Major Sub-Contractors


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

March 2007

EW Sensors Treasury Board Effective Project Approval Phase 1

AL 1

November 2005

March 2007

In Service Sensors Enhancement Treasury Board Effective Project Approval

November 2007

WLS Sensor Component Treasury Board Effective Project Approval

November 2007

WLS Acoustic Sensor

IOC

November 2005

February 2007

Family of Mini UAV Treasury Board Effective Project Approval

AL 1

November 2005

March 2007

Deliveries Complete all ISTAR sub-projects

2012

Project Completion

March 2013


6.  Progress Report and Explanations of Variances: Because 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:

a.   UAV UOR Op Athena

b.   Beyond Line of Sight Satellite (BLOS) Op Archer

c.   Mobile Electronic Warfare Team (MEWT) OP Archer

d.   Mini UAV UOR Op Archer

e.   Acoustic Weapon Locating System (AWLS) Op Archer   

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 (MSVS)

1.  Description: The MLVW is nearing the end of its service life. The MLVW has the most wide-ranging support and operational tasks of all fleets. It is the backbone of the Combat Service Support function. The MLVW fleet was acquired in 1982–1983 with an expected service life of 15 years. The age and heavy usage of the vehicle has resulted in a five-fold increase in the maintenance cost per kilometer. Corrosion has become such a problem that a corrective control program has been conducted, which has been followed by a limited recurring corrosion control spray program with the aim of keeping the fleet in service until 2008. After that, the fleet will become increasingly unsupportable due to a combination of various problems including parts availability, continued advancement of corrosion, performance of the brake system and vehicle overloading. The Medium Support Vehicle System Project will acquire a mix of up to 1,500 medium-sized standard military pattern trucks including 300 companion military pattern trailers,

800 commercial trucks with militarized components, 1,000 associated special equipment vehicle kits, and logistics support, at an estimated cost of approximately $1.1 billion (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

SS (PPA) - Approval

June 22, 2006

Invitation for Bids Posted on MERX - Militarized Commercial Pattern Vehicles

April 2007

Invitation for Bids Posted on MERX - Standard Military Pattern Vehicles

July 2007

Invitation for Bids Posted on MERX - Family of Baseline Shelter

March 2007

Invitation for Bids Posted on MERX - Special Equipment Vehicle Kits

September 2007

SS (EPA) - Approval

September 2007

Contract Award - Militarized Commercial Pattern Vehicles

September 2007

Contract Award - Standard Military Pattern

March 2008

Contract Award – Family of Baseline Shelter

December 2007

Contract Award - Special Equipment Vehicle Kits  

June 2008

First Delivery - Militarized Commercial Pattern Vehicles

June 2008

First Delivery - Standard Military Pattern

December 2008

First Delivery - Family of Baseline Shelter

March 2008

First Delivery - Special Equipment Vehicle Kits

September 2008

Delivery Complete - Militarized Commercial Pattern Vehicle

December 2009

Delivery Complete - Standard Military Pattern

December 2010

Delivery Complete – Family of Baseline Shelter

December 2009

Delivery Complete - Special Equipment Vehicle Kits

December 2011

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. 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 $25,799K ($BY) Expenditure Authority for the Definition phase. The MSVS project should receive Effective Project Approval in September 2007.

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

Armoured Heavy Support Vehicle System (AHSVS)

1.  Description: The Armoured Heavy Support Vehicle System (AHSVS) is an Immediate Operational Requirement in response to an existing capability deficiency and concurrent threats from Improvised Explosive Devices (IEDs) and ballistic attacks facing Op ATHENA in Afghanistan, directly impacting soldier safety and survivability.

Three variants, in support of the current fleet and new vehicles, are requested; Wrecker, Palletized Loading System and Tractor.

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


4.  Prime and Major Sub-Contractors: The Project has qualified four potential bidders through a Request for Price & Availability (P&A) in August 2006. A two phase Statement of Interest and Qualifications (SOIQ) closed on October 31, 2006, comprised of a request for Test Plans/Certification of Test Results and, an SOIQ response to forty-three mandatory requirements resulted in no qualified bidders. Site visits to the four potential suppliers submitting on the P&A are currently underway in order to validate the AHSVS requirement in relation to the Military off the shelf (MOTS) vehicles offered by industry and, to verify the level of protection and test results achievable by industry in relation to Mine, Ballistic and IED protection. Once revisions are finalized, the RFP and associated evaluation methodology will be issued in January 2007 to the four suppliers responding to the P&A.

5.  Major Milestones


Request for Price & Availability

August 2006

Treasury Board Approval

October 2006

Statement of Interest and Qualifications

October 2006

Request for Proposal Issue

January 2007

Contract Award

February 2007

Initial Operating Capability

October 2007

Full Operational Capability

January 2008


6.  Progress report and Explanation of Variances: Treasury Board granted approval for an initial 82 vehicles with all variants, with a remaining option for additional 26 vehicles and related equipment. A Treasury Board amendment seeking expenditure authority for the option for purchase of required trailers is anticipated to be prepared in January 2007.

7.  Industrial and Regional Benefits (IRB): An IRB obligation of 100% of the contract value with no predetermined targets for direct transactions will be requested with bidders to propose a mixture of direct and indirect transactions based on supplier capability given requirement and timelines.

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, Montréal, QC
BAE Systems Canada Inc., Montréal, QC
CAE Ltd, Montréal, 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 receivedCabinet 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 2007 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

Québec

 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

Mar 2009


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 (BY) 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.

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

Québec

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, Montréal 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

Initial Operational Capability (IOC) Montreal

October 2008

Full Operational Capability (FOC) Edmonton

September 2009

Project complete

March 2010


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 30 June 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. Although the final decision as to the location of military Instrument Flight Rules (IFR) operations has yet to be confirmed, the recommended option, which included installation at the Military Traffic Control Centres (MTCCs) in Montréal and Edmonton, was presented to and endorsed by the PMB on September 15, 2006. The decision was made to de-link the project from CAATS and concentrate on re-vitalization and integration of 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 COTS hardware and open source software. Installation of Phoenix equipment at each Sensor Site will be completed byFall 2007. Initial Operational Capability (IOC) will be declared at Montreal after the three Eastern sites (Greenwood, Bagotville, and Trenton) are transitioned to Montreal MTCC in October 2008. The infrastructure preparation in Edmonton will commence in the summer of 2008 and Full Operational Capability (FOC) will be declared after the transition of the three Western sites (Comox, Moose Jaw, and Cold Lake) to Edmonton in September 2009. 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

Québec

1.0M

Ontario

1.8M

Western Canada

50.2M

Unallocated

TBD

Total

$54.6M


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


5.  Major Milestones:


Major Milestones

Date

Memo to Cabinet

June 23, 2006

SS (PPA) - Approval

June 23, 2006

Solicitation of Interest and Qualification (SOIQ)

September 1, 2006

Invitation for Bids Posted on MERX

March 2007

SS (EPA) - Approval

Summer 2007

Contract Award

Summer 2007

First Delivery

Summer 2010

Initial Operational Capability (IOC)

Winter 2010–2011

Full Operational Capability (FOC)

Winter 2012–2013

Project Close-out  

Summer 2013


6.  Progress Report and Explanations of Variances: Responses to the 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.

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.

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, St-Louis, Missouri, USA


5.  Major Milestones:


Major Milestones

Date

Memo to Cabinet

June 2006

SS (PPA) - Approval

22 June 2006

Advanced Contract Award Notice Posted on MERX

5 July 2006

SS (EPA) - Approval

July 2007

Contract Award

NLT July 2007

First Delivery

NLT July 2010

Initial Operational Capability (IOC)

NLT July 2011

Full Operational Capability (FOC)

Winter 2012–2013

Project Close-out  

Fall 2013


6.  Progress Report and Explanations of Variances: The project received Preliminary Project Approval in June 2006, whereby expenditure authority of $8.4M (BY) was granted for the definition phase. Treasury Board also acknowledged the indicative cost estimate of $2,022M (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.

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

TBD


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 and the installation will be 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 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:
a.  Implementation of Complex Contracts;
b.  Implementation of the MASIS solution to the Navy;
c.  Operations Support & Maintenance for MASIS;
d.  Planning and scoping for requirements scheduled to be implemented for the Army.

June 15, 2000

Amended Expenditure Authority (EPA) for Phase 4:

a.   Investigation of opportunities to progress the implementation of MASIS to the maximum extent possible within the future available Phase 5 funding;

b.  ; Management of Operations Support & Maintenance for MASIS (outside MASIS project Expenditure Authority);

c.   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 early 2007.

2007

Project Closeout

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 departmental. 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 will require TB approval of an amended SS(EPA) to move to the next phase(s) of implementation. The project team is presently reviewing options for the future based on new government priorities, perceived risk in large IM/IT projects and alignment of Financial and Materiel Acquisition and Support business processes. Based on a review of these options the department will move the submission forward to TB for approval to rollout 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.

Canadian Cryptographic Modernization Program (CCMP)

1.  Description. The Canadian Cryptographic Modernization Program (CCMP) is a 12-year program ( fiscal year 2004–2005 to 2015–2016) that will modernize the Government of Canada’s cryptographic equipment and infrastructure in order to safeguard classified information and maintain Canada’s ability to establish secure communications both nationally and internationally.

The CCMP omnibus project includes the following sub-projects:

  • Secure Voice / Telephone Re-key Infrastructure
  • Classified Security Management Infrastructure
  • Secure Voice / Telephone Replacement
  • Combat Identification Replacement
  • Link Encryption Replacement
  • Network Encryption Replacement
  • Secure Radio Replacement

2.  Project Phase: Implementation

3.  Leading and Participating Departments and Agencies


Lead Departments

Department of National Defence (DND)
Communications Security Establishment (CSE)

Contracting Authority

Public Works & Government Services Canada (PWGSC)

Participating Departments & Agencies

Government of Canada departments & agencies using cryptographic equipment to protect classified information


4.  Prime Contractor and Major Sub-contractors. 


Prime Contractor

N/A

Major Sub-Contractors

Various allied manufacturers of cryptographic equipment


5.  Major Milestones


Major Milestones Date

Preliminary Project Approval for the CCMP omnibus project

March 7, 2005

Preliminary Project Approval for the CCMP omnibus project sub-project: Classified Security Management Infrastructure

November 2, 2006

Secure Voice / Telephone Replacement Completed

September 2007

Secure Voice / Telephone Re-key Infrastructure Completed

March 2008

Classified Security Management Infrastructure – Phase 1 Completed

2009

Link Encryption Family Replacement – Phase 1 Completed

2010

Classified Security Management Infrastructure – Phase 2 Completed

2011

Network Encryption Replacement Completed

2011

Combat Identification Replacement Completed

2016

Classified Security Management Infrastructure – Phase 3 Completed

2016

Link Encryption Family Replacement – Phase 2 Completed

2016

Secure Radio Replacement Completed

2016

Project Completed

2016


6.  Progress Report and Explanation of Variances. 

On March 7, 2005, Treasury Board granted Preliminary Project Approval to the CCMP omnibus project at an estimated cost of $839M with expenditure authority for the project definition phases and management of the program at a substantive cost of $80M.

On November 2, 2006, Treasury Board granted Preliminary Project Approval to the Classified Security Management Infrastructure Project at an estimated cost of $182M with expenditure authority for the implementation of Phase 1A at a substantive cost of $31M.

The following completion dates have changed:

  • Secure Voice / Telephone Re-key Infrastructure project closure was moved from June 2007 to March 2008 due to delays in acquiring critical components.
  • Classified Security Management Infrastructure Phase 1 completion was moved from 2008 to 2009 due to the requirement to split Phase 1 into two parts (1A and 1B) to minimize risk.
  • Combat Identification completion was moved from 2010 to 2016 due to changes in the US program schedule.

Secure Voice Re-key was activated on December 21, 2006. Secure telephone replacement is on track for completion in September 2007.

7.  Industrial Benefits.  

N/A