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Table 5: Status Report on Major Crown Projects

Table of Contents

AIRLIFT CAPABILITY PROJECT – STRATEGIC (ACP-S)

AIRLIFT CAPABILITY PROJECT – TACTICAL (ACP-T)

ARCTIC/OFFSHORE PATROL SHIP (A/OPS)

ARMOURED PERSONNEL CARRIERS (APC)

CANADIAN CRYPTOGRAPHIC MODERNIZATION PROGRAM (CCMP)

CANADIAN FORCES SUPPLY SYSTEM UPGRADE (CFSSU)

CANADIAN FORCES UTILITY TACTICAL TRANSPORT HELICOPTER (CFUTTH) PROJECT

CANADIAN SEARCH AND RESCUE HELICOPTER (CSH) PROJECT

FORCE MOBILITY ENHANCEMENT (FME)

HALIFAX CLASS MODERNIZATION/FRIGATE LIFE EXTENSION (HCM/FELEX)

INTELLIGENCE SURVEILLANCE, TARGET ACQUISITION  AND RECONNAISSANCE (ISTAR)

JOINT SUPPORT SHIP (JSS)

LIGHT ARMOURED VEHICLE III UPGRADE PROJECT (LAV III Upgrade)

LIGHT UTILITY VEHICLE WHEELED (LUVW)

LIGHTWEIGHT TOWED HOWITZER (LWTH)

MAIN BATTLE TANK (MBT)

MARITIME HELICOPTER PROJECT (MHP)

MATERIEL ACQUISITION AND SUPPORT INFORMATION SYSTEM (MASIS)

MEDIUM-TO HEAVY-LIFT HELICOPTER (MHLH)

MEDIUM SUPPORT VEHICLE SYSTEM PROJECT (MSVS)

MILITARY AUTOMATED AIR TRAFFIC SYSTEM (MAATS) PROJECT

PROTECTED MILITARY SATELLITE COMMUNICATIONS (PMSC)

SUBMARINE CAPABILITY LIFE EXTENSION (SCLE)

TACTICAL ARMOURED PATROL VEHICLE (TAPV)

WHEELED LIGHT ARMOURED VEHICLE - LIFE EXTENSION (WLAV-LE)

 

AIRLIFT CAPABILITY PROJECT – STRATEGIC (ACP-S)

Description: The objective of the Airlift Capability Project - Strategic is to acquire four new aircraft that will provide the Canadian Forces (CF) with the global reach and speed necessary to operate effectively over long distances, as well as to deliver personnel and cargo directly into a theatre of operation, including threat environments.

Project Phase: Implementation. All four aircraft have been accepted on schedule and project close-out is expected for summer 2012.


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



Prime and Major Sub-Contractors

Prime Contractor

The Boeing Company, St-Louis, Missouri, USA



Major Milestones

Major Milestones

Date

Synopsis Sheet (Effective Project Approval) (EPA)

June 2006

Advanced Contract Award Notice Posted on MERX

July 2006

Contract Award

February 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)

October 2008

Full Operational Capability (FOC)

Spring 2012

Project Close-Out

Summer 2012


Progress Report and Explanations of Variances: All four aircraft have been accepted on schedule and the fleet has flown in excess of 6,000 flying hours. The project office is currently working on the Implementation Phase of the project. Due to complexities in transitioning to in-service support, Full Operational Capability (FOC) will be delayed to spring 2012 when the infrastructure at Trenton is completed and the Squadron can sustain all Lines of Tasking and all planned mission types as stated in the Statement of Operational Requirement (SOR). The project will close-out after FOC.

Industrial and Regional Benefits (IRBs): IRBs are equivalent to 100% of the acquisition contract, Boeing's share of the in-service support Foreign Military Sales (FMS) contract value and the value of the engines. (A separate IRB agreement was negotiated with Pratt and Whitney USA for the value of the C-17 engines). The three IRB agreements total $1.9 billion. Several IRB announcements have been made and all regions of Canada are benefiting from these contracts.

AIRLIFT CAPABILITY PROJECT – TACTICAL (ACP-T)

Description: The objective of the Airlift Capability Project - Tactical is to ensure a continued tactical airlift capability. This project will replace the CF's aging CC 130E/H Hercules fleet. It will also provide the CF with an assured and effective tactical airlift capability that allows the requisite operational flexibility and responsiveness to support international and domestic operations.

Project Phase: Implementation. The ACP-T project entered the Implementation Phase with the December 2007 contract award to Lockheed Martin Corporation for 17 C-130J-30 aircraft. Aircraft deliveries will commence no later than June 2010, with the final aircraft delivered no later than December 2012.


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



Prime and Major Sub-Contractors

Prime Contractor

Lockheed Martin Corporation, Marietta, Georgia, USA



Major Milestones

Major Milestones

Date

Revised Preliminary Project Approval (Rev(PPA))

June 2006

Solicitation of Interest and Qualification (SOIQ)

August 2006

Issue of Request For Proposal (RFP)

August 2007

Effective Project Approval (EPA)

December 2007

Contract Award

December 2007

First Aircraft Delivery

Summer 2010

Initial Operational Capability (IOC)

Fall 2011

Full Operational Capability (FOC)

Winter 2013/2014

Project Close-Out

Spring 2014


Progress Report and Explanations of Variances: Under the agreement of the December 2007 contract award, Lockheed Martin Corporation is required to undertake an open and fair competitive solicitation for the provision of in-service support. The outcome of this contractor-led solicitation would be one of many deliverables from the contract and will form the basis of a negotiation for amendments to the contract to include in-service support provisions. The in-service support effort will include contractor provided support to the following areas: logistics, engineering, maintenance, material, publications, maintenance training, test equipment and electronic information environment.

The ACP-T project is currently running on schedule and on budget.

Industrial and Regional Benefits: This procurement will provide IRBs equivalent to 100% of the eligible contracted value for both the capital acquisition and the in-service support portions, including a 15% requirement for the participation of small and medium business. For the in-service support portion, 75% of the eligible contract value will consist of direct work performed by Canadian companies on these and similar aircraft in international fleets. Lockheed Martin Corporation will be required to identify, as specific work packages, 60% of each of the acquisition and the in-service support commitments prior to contract/amendment award. These IRBs requirements will be negotiated and accepted by Industry Canada prior to the signing of the contract and its amendments.

ARCTIC/OFFSHORE PATROL SHIP (A/OPS)

Description: The Arctic/Offshore Patrol Ship (A/OPS) project has been established in order to deliver to the Government of Canada a naval ice-capable offshore patrol ship to demonstrate sovereignty in Canada's waters, including the Arctic. When the project is complete, the six to eight fully supported A/OPS delivered to the CF will be capable of:

  • Conducting armed, sea-borne surveillance of Canada's waters, including the Arctic;
  • Providing to Government situational awareness of activities and events in these regions;
  • Cooperating with other elements of the CF and other Federal Government departments to demonstrate Canadian sovereignty, when and where necessary.

Project Phase: Definition/Implementation.


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


Prime and Major Sub-Contractors:

A/OPS is included in the National Shipbuilding Procurement Strategy (NSPS). Procurement options are being developed to precede either within a National Shipbuilding Program, should it be adopted by government, or outside such a program. No prime contractor has been selected. Final selection of the prime contractor will occur at Effective Project Approval (EPA), planned for spring 2011.


Major Milestones

Major Milestones

Date

Treasury Board Preliminary Project Approval (PPA)

May 2007

Release of Definition, Engineering, Logistics and Management Support Request for Proposals (DELMS RFP)

December 2007

DELMS RFP Close

February 2008

DELMS Contract Award

May 2008

Effective Project Approval (EPA)

Spring 2011

Award of Implementation Contract

Spring 2011

Delivery of First Ship

Fall 2014

Initial Operating Capability (IOC) of First Ship

March 2015

Project Complete

March 2021


Progress Report and Explanations of Variances: The project continues to progress steadily since obtaining Preliminary Project Approval (PPA) in May 2007. Treasury Board Secretariat (TBS) granted expenditure authority of $42.8 million (budget year ($BY), full up excluding GST or HST, for Definition Phase. TBS also acknowledged the indicative full up cost of $3,030.8 million ($BY) full-up excluding GST or HST, for Implementation Phase (design build). So far, no variances in cost estimates have been identified. The A/OPS project is currently running on budget. A/OPS is expanding on the Definition Phase to produce a design that will meet the requirements, and can be used by the contractor.

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.

ARMOURED PERSONNEL CARRIERS (APC)

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

Project Phase: Implementation. All vehicles were delivered by October 2007 and construction activities for indoor accommodation are well under way. The project is scheduled for completion in March 2012.


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



Prime and Major Sub-Contractors

Prime Contractor

General Dynamics Land Systems, London, Ontario, Canada



Major Milestones

Major Milestones

Date

Treasury Board Approval

December 1995

Contract Award

December 1996

First Vehicle Delivery

July 1998

Exercise of First Option

July 1998

Exercise of Second Option

July 1999

Exercise of Third Option

July 1999

Last Vehicle Delivery

October 2007

Project Completed

March 2012


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 respectively. All three options have been exercised. All vehicles were delivered by October 2007.

The vehicles have been involved in significant operational demands after being fielded and have performed well. They have since undergone a number of modifications to adjust to the modern threat, and will require additional work to optimize their performance against these threats. Planning is currently underway to address this issue.

In March 2004, TBS authorized $129 million for indoor accommodation of the LAV III to facilitate regular maintenance and training programs, and prevent any deterioration that would result from outdoor storage. Construction of these accommodations will take place in six locations: Edmonton, Wainwright, Petawawa, Montréal, Valcartier, and Gagetown. Construction activities are well under way and are scheduled for completion in early 2012. The project can then close in March 2012.

Industrial and Regional Benefits: This project includes the following overall industrial benefits, and regional and small business achievements:


Content

Benefits

 Direct

$852.9M

Indirect

$742.9M

Total

$1,595.8M

Regional and Small Business

Benefits

Atlantic Canada

$151.4M

Québec

$150.6M

Western Canada

$155.0M

Small Business

$210.3M


CANADIAN CRYPTOGRAPHIC MODERNIZATION PROGRAM (CCMP)

Description: The Canadian Cryptographic Modernization Program (CCMP) is a 12-year program which began in fiscal year 2004-05 and will terminate in fiscal year 2015-16. It will modernize the Government of Canada's aging 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:

  1. Secure Voice / Telephone Re-key Infrastructure
  2. Secure Voice / Telephone Family
  3. Classified Security Management Infrastructure
  4. Combat Identification Family (Identification Friend or Foe (IFF))
  5. Link Encryption Family
  6. Network Encryption Family
  7. Secure Radio Family
  8. Secure Mobile Environment

Project Phase: Implementation for some sub-projects, Definition for others.


Leading and Participating Departments and Agencies

Lead Department or Agency

Communications Security Establishment Canada (CSEC)

Contracting Authority

Public Works & Government Services Canada (PWGSC)

Participating Departments and Agencies

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



Prime and Major Sub-Contractors

Prime Contractor

N/A

Major Sub-Contractor

Various allied manufacturers of cryptographic equipment



Major Milestones

Project/Sub-project Major Milestones

Date

Preliminary Project Approval (PPA) for the CCMP Omnibus Project

March 2005

Preliminary Project Approval (PPA) for a CCMP Omnibus Project sub-project: Classified Security Management Infrastructure

November 2006

Preliminary Project Approval for Classified Security Management Infrastructure Phase 1B Implementation and Phase 2 Definition

February 2008

Secure Voice / Telephone Re-key Infrastructure – Completed

September 2009

Classified Security Management Infrastructure – Phase 1A Completed

2011

Secure Voice / Telephone Family – Completed

2011

Classified Security Management Infrastructure – Phase 1B Completed

2012

Secure Mobile Environment – Completed

2012

Link Encryption Family – Completed

2013

Classified Security Management Infrastructure – Phase 2 Completed

2014

Network Encryption Family – Completed

2014

Classified Security Management Infrastructure – Phase 3 Completed

2016

Combat Identification Family (Identification Friend or Foe (IFF)) – Completed

2016

Secure Radio Family – Completed

2016

CCMP Omnibus Project – Completed

2016


Progress Report and Explanations of Variances: The CCMP is executing within budget. The Secure Voice / Telephone Re-key Infrastructure project was closed on 30 September 2009. This is the first CCMP sub-project to reach completion. The following schedule changes have occurred since the fiscal year 2009-10 Report on Plans and Priorities (RPP).

  • In November 2009, the CCMP Senior Decision Board (SDB) approved moving the Classified Security Management Infrastructure Phase 1A project closure from June 2010 to June 2012 in order to complete the activities required to sustain the current Government of Canada (GC) Electronic Key Management System.
  • The completion of the Network Encryption Family sub-project has been moved from March 2011 to March 2014 to align with the implementation schedule of Defence.
  • Definition of the Secure Radio Family began in March 2009 instead of March 2013 to provide additional time to define and implement the replacement of the large inventory of cryptographic equipment associated with Defence radios.
  • The CCMP schedule is dependent on the American Crypto Modernization and Key Management Infrastructure programs. This allows Canada to leverage American Research and Development and maintain interoperability with its Allies. Completion dates for the sub-projects are regularly reviewed to keep them aligned with the American programs.

Industrial and Regional Benefits (IRBs): There are no IRBs associated with this program.

CANADIAN FORCES SUPPLY SYSTEM UPGRADE (CFSSU)

Description: The Canadian Forces Supply System Upgrade (CFSSU) project will meet the future supply requirements of the Canadian Forces (CF) during all operational situations while effectively and economically managing Defence's inventory. The system will have an inherent flexibility to manage changes in force structure, size and type of mission. The CFSSU project will employ information technology to modernize CF military supply operations. Not only will this technology dramatically improve productivity, it will also enhance the capability for performance measurement, greatly increase asset visibility, and provide a powerful management tool for provisioning. Additionally, the new supply system will have a deployed capability. The deployed solution is complementing the existing September 2001 corporate implementation to Bases and Wings, as well as the November 2002 implementation, which include all remaining CFSS users, at home and overseas.

Project Phase: Close-Out. CFSSU has been deployed on 17 ships as well as at two sites for Canadian Special Operations Forces Command (CANSOFCOM).


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



Prime and Major Sub-Contractors

Prime Contractor

EDS Canada Inc., Ottawa, Ontario, Canada

Major Sub-Contractors

Mincom Pty. Ltd., Brisbane, Queensland, Australia
ADGA Group, Ottawa, Ontario, Canada



Major Milestones

Major Milestone

Date

Contract Award

January 1995

Initial Site Installation

December 1995

Warehouse Management Information System Delivery

July 1997

Test Development Centre Delivery

October 1999

Commence System Development

November 1999

Complete System Development

March 2001

Commence System Pilot

June 2001

Complete System Pilot

August 2001

Commence System Rollout

September 2001

Complete System Rollout

June 2003
(official acceptance)

Project Close-Out (E Status)

September 2004

Project Close-Out (I Status)

Spring 2010


Progress Report and Explanations of Variances: TBS initially approved the CFSSU project with an estimated cost of $289.3 million. TBS approved in April 2000, the de-scoping of certain functionality and an increase of $9.8 million to project contingency funding. In addition, $5 million was approved in order to permit Defence the option of restoring the Distribution Resource Planning (DRP) component. The Implementation Phase of DRP was de-scoped and the project budget remained at $304.1 million.

The CFSSU project has been transferred from implementation to close-out in September 2004. Close-out funding is $3.6 million. In March 2006, the Defence Program Management Board approved the usage of close-out funds for the project; these funds are to be used until fully expended or the work is completed. This project is closed and all close-out funds and related activities will have ended as of the end of fiscal year 2009-10.

Industrial and Regional Benefits: This project includes the following overall IRBs:


Region

Benefits

Atlantic Canada

$51M

Québec

$48M

Ontario

$26M

Western Canada

$105M

Unallocated

$10M

Total

$240M


CANADIAN FORCES UTILITY TACTICAL TRANSPORT HELICOPTER (CFUTTH) PROJECT

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 Forces, Aerospace Forces, Canadian Expeditionary Force Command (CEFCOM) operations and Civil Emergency Preparedness, as well as a wide range of defence objectives. It has replaced 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 the fleets it replaced. The operational requirements for the CFUTTH defined the principle task requirements to include: the tactical lift of troops; logistical lift; reconnaissance and surveillance; direction and control of fire; aero-medical support; casualty evacuation; command and liaison, and communications assistance. These mission capabilities are employed in support of Defence operational commitments, UN peacekeeping missions, and support to other Government Departments and Agencies, including aid of the civil power.

Project Phase: Implementation. 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. It is scheduled for completion in fiscal year 2010-11.


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



Prime and Major Sub-Contractors

Prime Contractor

Bell Helicopter Textron, Mirabel, Québec, Canada

Major Sub-Contractors

Pratt & Whitney, Montréal, Québec, Canada
BAE Systems Canada Inc., Montréal, Québec, Canada
CAE Ltd., Montréal, Québec, Canada



Major Milestones

Major Milestone

Date

Contract Award

September 1992

Critical Design Review

April 1993

First Helicopter Delivery

March 1995

Simulator Acceptance

June 1996

Last Helicopter Delivery

December 1997

Project Completion

Fiscal Year 2010-11


Progress Report and Explanation of Variances: This project received Government approval in April 1992 and Treasury Board Secretariat (TBS) approval in September 1992, with an original budget of $1.293 billion. Following directed reductions to the project budget and by assuming certain performance risks, the project will be completed in fiscal year 2010-11 for approximately $200 million less than the initial TBS budget approval. Remaining work consists of modifying the CH146 to accommodate the Radar Laser Warning Receiver (RLWR) functionality.

Industrial and Regional Benefits: To date, Bell Helicopter has claimed $289.5 million direct and $252.1 million indirect IRBs, totaling $541.6 million, representing 107% of the overall commitment. Bell Helicopter Textron Canada has committed to achieving $506.7 million in Canadian value-added industrial regional benefits as follows:


Region

Benefits

East

$10.0M

Québec

$420.2M

Ontario

$32.1M

West

$12.0M

Unallocated

$32.4M

Total

$506.7M


CANADIAN SEARCH AND RESCUE HELICOPTER (CSH) PROJECT

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 have addressed the operational deficiencies of the CH-113 Labrador fleet and eliminated the supportability difficulties of the older airframes. Given expected aircraft availability rates and a sufficient fleet size, continuous operations are anticipated well into the 21st century.

Project Phase: Completed. As of July 2003, all 15 Cormorant helicopters have been delivered. Spare parts and infrastructure are in place to support operations. Initial training is complete. Effective Project Closure was achieved in September 2004, but some work is still ongoing and full completion is not expected before 2013.


Leading and Participating Departments and Agencies

Lead Department or Agency

Department of National Defence

Contracting Authority

Public Works and Government Services Canada

Participating Department and Agencies

Industry Canada and its regional agencies



Prime and Major Sub-Contractors

Prime Contractor

Agusta Westland International Limited (formerly European Helicopters Industries Ltd. (EHI)), Farnborough, UK

Major Sub-Contractors

Westland Helicopters, Yeovil, UK
Agusta Spa, Cascina Costa, Italy
General Electric Canada Inc., Mississauga, Ontario, Canada



Major Milestones

Major Milestone

Date

Treasury Board Effective Project Approval (EPA)

April 1998

Contract Award

April 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

Expected Project Closure

2013


Progress Report and Explanation of Variances: The project has procured the required aircraft spares, maintenance and support equipment, a Cockpit Procedures Trainer and facilities for the four CF 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.

The Cormorant has been operational at the squadrons in Comox, BC, Gander, NL, 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 in maintaining adequate aircrew training.

It should be noted that although Effective Project Closure was achieved in September 2004, some work is still ongoing and full completion is not expected before 2013. The milestones still outstanding are tied to a three year Technical Publication Revision Service which is not expected to begin until fiscal year 2010-11, and a number of milestones related to outstanding aircraft deficiencies which are expected to take at least an additional year to address.

Industrial and Regional Benefits: The contractor (AWIL) committed to providing direct and indirect industrial benefits valued at $629.8 million, within eight years from the date the contract was awarded. It is estimated that these benefits created or sustained roughly 5,000 person-years of employment in Canada, and that all regions of Canada benefited from this project. The contractor has completed its obligations to Canada in regards to IRBs under the CSH contract. Small businesses in Canada will also benefit from the project by the placing of $67.0 million in orders.


Region

Benefits

Atlantic Canada

$43.1M

Québec

$317.7M

Ontario

$146.5M

Western Canada

$86.2M

Unallocated

$36.3M

Total

$629.8M


FORCE MOBILITY ENHANCEMENT (FME)

Description: The Force Mobility Enhancement (FME) project is a two-phase project. In Phase 1, the project will seek to replace Canada's aging Leopard 1 Armoured Engineer Vehicle (AEV) Badger fleet with a heavily protected and mobile platform capable of supporting the newly acquired Leopard 2 Main Battle Tank (MBT) until 2035. The project will seek to acquire 13 Leopard 2-based AEVs, with an option of an additional 5, including engineering implements for the AEV. In Phase 2, the project will seek to acquire tactical mobility implements for the in-service Leopard 2 MBT. Tactical mobility implements could include, but are not limited to, mine rollers, mine ploughs, and dozer blades. The project will also seek to acquire 2 Leopard 2-based Armoured Recovery Vehicles (ARV), with an option of an additional 2, as support variants for the AEV. The ARVs will be acquired by exercising contract options from the Tank Replacement Project (TRP).

Project Phase: Definition. The FME project entered the Definition Phase with the approval of TBS on June 18, 2009.


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



Prime and Major Sub-Contractors

Prime Contractor

To be determined

Major Sub-Contractors

To be determined



Major Milestones

Major Milestone

Date

Identification Phase Approval – Identification Phase

August 2008

Preliminary Project Approval (PPA) – Definition Phase

June 2009

Revised Preliminary Project Approval (Rev(PPA) – Expenditure
Authority for Phase 1

March 2011

Initial Operational Capability for Phase 1

April 2014

Effective Project Approval (EPA) – Implementation Phase

April 2014

Full Operational Capability (FOC)

2015

Project Close-Out

2017


Progress Report and Explanations of Variances: The Chief of the Land Staff approved the indicative total project cost of $376.4 million (all costs are $BY including GST) in August 2008. On June 18, 2009, TBS approved $11.3 million in definition funds, allowing the Definition Phase to begin.

A Letter of Interest (LOI) for Phase 1 was released on July 17, 2009 and closed 28 August 2009. The release of a draft RFP for the acquisition of AEVs is scheduled for March, 2010. A final RFP will then be released in September, 2010.

The project will exercise unfunded Tank Replacement Project (TRP) contract options for the acquisition of the ARVs.

The project intends to return to TBS in March, 2011 for revised Preliminary Project Approval (PPA), seeking expenditure authority for Phase 1, and again in 2014 for EPA for Phase 2.

There are no cost variances to report.

Industrial and Regional Benefits (IRBs): This procurement will provide industrial regional benefits for the capital acquisition of the Armoured Engineer Vehicle, the Armoured Recovery Vehicle and tactical mobility implements. These IRBs requirements will be negotiated and accepted by Industry Canada prior to contract award.

HALIFAX CLASS MODERNIZATION/FRIGATE LIFE EXTENSION (HCM/FELEX)

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, Project Manager (PM) 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.

Project Phase: Implementation. Implementation of the HCM/FELEX project will occur through three principal contracts:  two Multi-Ship Contracts (MSC) for docking work periods/refits and one Combat System Integration contract to develop, procure and install the majority of the combat system elements of the project. Project completion is expected by January 2019.


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



Prime and Major Sub-Contractors

In-Service Support Contractor (Class Design Agent)

Fleetway Incorporated, Halifax, Nova Scotia, Canada

Internal Communications System

DRS Flight Safety, Kanata, Ontario, Canada

Multi-Ship Contract (East)

Halifax Shipyard, Halifax, Nova Scotia, Canada

Multi-Ship Contract (West)

Victoria Shipyard, Victoria, British Columbia, Canada

Combat System Integration Contract

Lockheed Martin Canada, Montréal, Québec, Canada

Harpoon/Advanced Harpoon Weapons Control System (AHWCS)

The Boeing Company, St-Louis, Missouri, USA



Major Milestones

Major Milestone

Date

Preliminary Project Approval (PPA)

February 2005 (FELEX)
February 2007 (HCM/FELEX)

Refit Procurement Strategy Approval by Treasury Board Secretariat

March 2007

Revised Preliminary Project Approval (Rev(PPA)) (Part 1)

June 2007

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

March 2008 (West)
March 2008 (East)

Effective Project Approval (EPA) Approval (Part 2)

September 2008

Combat System Integration Contract Award

November 2008

Refits Begin

October 2010

Full Operational Capability (FOC)

January 2018

Project Closure

January 2019


Progress Report and Explanation of Variances: In September 2008, Treasury Board Secretariat (TBS) granted EPA and Expenditure Authority for the project. The total full-up project value, including GST, is $2,988 million ($BY).

A RFP for the Multi-Ship Contracts (docking work periods and refits) resulted in two successful bidders, Halifax Shipyard on the east coast and Washington Marine Group (Victoria Shipyard) on the west coast. Contracts were awarded to the two shipyards in March 2008. The Combat System Integration contract was awarded to Lockheed Martin Canada in November 2008.

The HCM/FELEX project is presently in its Implementation Phase and is currently on schedule and within budget.

Industrial and Regional Benefits: IRBs for this project are equivalent to 100% of the contracted value.

INTELLIGENCE SURVEILLANCE, TARGET ACQUISITION AND RECONNAISSANCE (ISTAR)

Description: ISTAR is an omnibus project that received TBS approval for Definition Phase activity in April 2003. 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.

Project Phase: Implementation. Delays have been experienced in formally advancing the sub-projects to the Implementation Phase due to the impact of numerous Unforecasted Operational Requirements (UOR) for Afghanistan that are related to and implemented by the LF ISTAR Project Management Office (PMO). In support of UOR for OPERATION ATHENA in the 2003-04 timeframe, the project delivered equipment in the areas of Command and Control, Tactical Unmanned Aerial Vehicles (TUAV), Weapons Locating Sensors and Electronic Warfare capabilities. These early deliveries enhanced professional knowledge and contributed to project definition work. Early delivery of elements of the Unmanned Aerial Vehicles, Electronic Warfare, and Data Link Communications sub-projects continued during 2006 with the UOR for OPERATION ARCHER. As well, urgently required systems, in particular the HALO Acoustic Weapons Locating System, the Lightweight Counter Mortar Radar system, and additional Electronic Warfare systems were fielded in 2007. Responding to the need for persistent surveillance identified by the Canadian Forces (CF) Counter Improvised Explosive Devices (IED) Task Force and confirmed in the recommendation of The Independent Panel on Canada's Future Role in Afghanistan, the LF ISTAR PMO delivered additional Small Unmanned Aerial Vehicle capability through a contracted service in 2008. In early 2008, the Electronic Warfare sub-project and the Command and Control sub-project were approved for implementation.


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



Prime and Major Sub-Contractors

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

US Army, USA

Light Weight Counter Mortar Radars (LCMR) - Foreign Military Sales (FMS)

US Army, USA

Small UAV Service Contract

In Situ, Bingen, Washington, USA

Remote Viewing Terminal Unforecasted Operational Requirement (UOR)

L3 Communications, CSW, Salt Lake City, Utah, USA



Major Milestones

Major Milestone

Date

Treasury Board Preliminary Project Approval (PPA)

April 2003

Minister of National Defence (MND) Approval TUAV Unforecasted Operational Requirements (UOR)

May 2003

Treasury Board Project Approval in Arrears UAV UOR
Full Operational Capability (FOC)
Project Close-Out

May 2005
December 2005
June 2009

Beyond Line of Sight Communication Effective Project Approval (EPA)
Initial Operational Capability (IOC)
Full Operational Capability (FOC)
Project Close-Out

November 2005
July 2006
February 2010
March 2010

Communications & Data Link Component Treasury Board Effective
Project Approval (EPA)
Initial Operational Capability (IOC)
Full Operational Capability (FOC)

December 2006
October 2009
December 2011

Command and Control (C2) Treasury Board Effective Project Approval (EPA)
Initial Operational Capability (IOC)
Full Operational Capability (FOC)

February 2008
October 2009
December 2011

EW Sensors Treasury Board Effective Project Approval Phase 1 (EPA)
Amendment 1 (AL 1)
Initial Operational Capability (IOC)
Full Operational Capability (FOC)

November 2005
February 2008
March 2008
January 2013

In-Service Sensors Enhancement Treasury Board Effective Project Approval (EPA)

December 2010

Medium Range Radar Treasury Board Effective Project Approval (EPA)

December 2010

WLS Acoustic Sensor Effective Project Approval (EPA)
Initial Operation Capability (IOC)
Full Operational Capability (FOC)
Project Close-Out

November 2005
March 2008
November 2009
March 2010

Family of UAV Treasury Board Effective Project Approval (EPA) for UOR
Family of Mini UAV Treasury Board Effective Project Approval (EPA) for AL 1

November 2005
December 2010

Light Weight Counter Mortar Radar Effective Project Approval (EPA)
Initial Operation Capability (IOC)
Full Operational Capability (FOC)

March 2007
March 2008,
July 2011

Deliveries Complete all ISTAR sub-projects

September 2013

Project Completion

March 2014


Progress Report and Explanations of Variances: Prosecuting the UOR continues to challenge the omnibus project delivery. However, current estimates are that the project will be complete in 2013 as per the schedule contained in the LF ISTAR Omnibus revised PPA submission approved by TBS in December 2006. National Procurement funding requirements are being identified in the EPA documentation for each of the ten sub-projects. EPAs have been received for all but three of the LF ISTAR sub-projects.

Delivery of equipment actually started with UORs in Op ATHENA, and final deliveries are scheduled out to 2013. The currently approved sub-projects in support of Op ATHENA and Op ARCHER are:

  • UAV UOR Op ATHENA
  • BLOS Op ARCHER
  • MEWT Op ARCHER
  • Mini UAV UOR Op ARCHER
  • AWLS Op ARCHER
  • LCMR Op ATHENA
  • Remote Viewing Terminal Op ATHENA

In addition, the Data Link Communications project received TBS approval in December 2006 and Public Works and Government Services Canada (PWGSC) received TBS contract approval for radios in February 2007. The Foreign Military Sales (FMS) cases for 1,300 radios have been accepted. Delivery of equipment started in August 2008 and final delivery of the radio occured in June 2009. In February 2008, TBS approved the ISTAR Electronic Warfare and Command and Control sub-projects. Implementation is ongoing and equipment delivery has now started. The Command and Control sub-project has delivered an All Source Intelligence Center for support to the Vancouver Olympic and Paralympics Games and the G8 Summit.

The Tactical Unmanned Aerial Vehicle project was closed in June 2009 and the Acoustic Weapon Locating System and Beyond Line Of Sight sub-projects will close in March 2010.

The LCMR Full Operational Capability (FOC) is tied to a US Army upgrade program. These activities are delayed due to US delays in contracting for the final retrofit of all US, UK and Canadian LCMR to fully meet the specification. There is no technical risk as the final implementation is already being used for new system delivery to the US. This is purely a contracting process delay on the US side. The retrofit is required as Defence took delivery of a late LRIP model to meet the UOR schedule knowing that Defence would have a retrofit program to meet FOC. This retrofit was planned to reduce fleet maintenance cost by having a single fleet to Repair and Overhaul (R&O) instead of the current 4 fleets.

Industrial and Regional Benefits: The benefit to Canadian industry from the ISTAR project continues to be determined during the approval of the procurement strategy for each sub-project. Canadian idustry has derived long-term benefits from many aspects of the ISTAR project through the establishment of long-term in-service support contracts with Canadian industry.

JOINT SUPPORT SHIP (JSS)

Description: The JSS will maintain the maritime staff's current naval task group logistic support, while ensuring that the CF has an adequate capability to allow it to deploy and sustain operations in support of government policy. It will also enhance Canada's capability for joint command and control of forces ashore. The ships will replace the two aging Protecteur class support ships currently in service on the east and west coast.

Project Phase: Definition/Implementation.


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


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


Major Milestones

Major Milestone

Date

Treasury Board Preliminary Project Approval - (PPA)

November 2004

Invitation for Bids Posted on MERX

June 2006

Project Definition - Contract Award

December 2006

Contracted (PD) phase terminated

August 2008

Preliminary Options Analysis

Ongoing

Revised Preliminary Project Approval (Rev(PPA))

Winter 2010


Progress Report and Explanations of Variances: In August 2008, the Minister of Public Works and Government Services Canada announced the termination of the initial procurement process to acquire three Joint Support Ships.

After receiving and evaluating the mandatory requirements for the Joint Support Ship project from the bidders, the Crown has determined that both proposals were not compliant with the basic terms of the Request for Proposal (RFP). Among other non-compliances, both bids were significantly over the established budget provisions of $1,575 billion for the Project Implementation (PI) Contract for the delivery of the JSS capability (3 ships).

During the August 2008 to September 2009 timeframe, the Project Office conducted Options Analysis that examined cost versus capability of various options. Work continues on a recommended course of action for the JSS project with the aim of achieving revised PPA from TBS by winter 2010.

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.

LIGHT ARMOURED VEHICLE III UPGRADE PROJECT (LAV III Upgrade)

Description: The recent experiences of CF and other nations in Afghanistan, Iraq and global operational theatres demonstrate the ongoing requirement for a highly protected, yet highly mobile Light Armoured Vehicle. The threats of mines, IEDs, explosively formed projectiles (EFPs) and anti-armour weapons have proliferated and are likely to be faced in most medium to high threat missions. Despite improvements to the protection of the vehicle, the current LAV III fleet has insufficient armour to defeat modern threats. Further, it has insufficient mobility given the increased weight of the vehicle due to the protection kits and the increased stowage of combat supplies in theatre. The target acquisition and fire control systems require upgrading to overcome obsolescence issues and to improve lethality. The LAV III Upgrade Project will capitalize on existing and evolving technology to upgrade a significant portion of the LAV III fleet to a standard required to protect the soldiers and equipment of the CF in current and future operations.

Project Phase: Definition. The objective of the Definition Phase is to design, produce, test and select appropriate upgrade packages to address the three main capability deficient areas of mobility, protection and lethality. A model contract was negotiated with the Original Equipment Manufacturer. PWGSC is currently seeking Contract Approval through TBS.


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



Prime and Major Sub-Contractors

Prime Contractor

General Dynamics Land Systems, London, Ontario, Canada



Major Milestones

Major Milestone

Date

Treasury Board Approval (DND)

June 2009

Treasury Board Approval for Contract Approval (PWGSC)

Early 2010

Implementation Start

Spring 2011

First Vehicle Delivery

Late 2011

Last Vehicle Delivery

Late 2017

Project Completed

Spring 2019


Progress Report and Explanation of Variances: The project received Preliminary Project Approval (PPA) in June 2009 and was announced by the Minister of National Defence (MND) in July 2009. In preparation for the PWGSC TBS Submission, a negotiating team engaged the Original Equipment Manufacturer (OEM) in a technical bid evaluation and an agreement in principal has been reached for the definition contract. The PWGSC submission to TBS for Contract Approval is scheduled for early 2010.

Industrial and Regional Benefits (IRBs): The majority of the work in the Definition Contract will be completed in London, Ontario, a region adversely impacted during the recent economic downturn.

LIGHT UTILITY VEHICLE WHEELED (LUVW)

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 liaise within and between field formations.

The LUVW project mandate is to replace 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 ($241.4 million), for use by field force units; and 1,061 Militarized Commercial Off-the-Shelf (Mil COTS) vehicles (GM Silverado) ($65.4 million) for use primarily by the Reserve Force for a total project cost of $306.8 million.

Project Phase: Implementation.


Leading and Participating Departments and Agencies

Lead Department or Agency

Department of National Defence

Contracting Authority

Public Works and Government Services Canada

Participating Department and Agencies

Industry Canada and its regional agencies



Prime and Major Sub-Contractors

Prime Contractor (Phase 1) SMP

Mercedes-Benz Canada (MBC), Toronto, Ontario, Canada

Prime Contractor (Phase 2) Mil-COTS

General Motors Defense Military Trucks, Troy, Michigan, USA



Major Milestones

Major Milestone (Phase 1) SMP

Date

Award of Contract

October 2003

First Full Production Delivery

February 2004

Final Production Delivery

November 2006

Project Close-Out

June 2010

Major Milestone (Phase 2) Mil COTS

Date

Award of Contract

October 2002

First Full Production Delivery

October 2003

Final Production Delivery

December 2004

Project Close-Out

June 2010


Progress Report and Explanation of Variances: The project is in full Implementation. Outstanding issues are Amendment 2 to the SMP production contract and delivery of the Mil COTS battery disconnect switch kits. The amendment to the SMP production contract is required to reflect the costs resulting from Design Change Requests (DCRs), as well as additional Integrated Logistic Support (ILS) publication requirements. For the Mil COTS battery, a contract valued at $1.71 million (including GST) was awarded to Kerr Industries in July 2008 for the delivery of 1,061 battery disconnect switch kits. These kits are required to isolate the electrical system and associated parasitic loads from draining the batteries when the vehicles are not in use. Installations are on going by local General Motors Corporation (GMC) dealerships and should be completed by December 2009.

For the SMP production contract, a total of $19.6 million has been applied as holdbacks, which equate to 10% of all paid invoices. It is anticipated that the amendment will be completed and signed by February 2010, at which time these funds can be released.

An Initial Support Contract (ISC) (valued at $17.9 million including GST) was awarded to Mercedes Benz Canada (MBC) in November 2005 to provide spares, repair and overhaul, lease of diagnostic equipment, support and engineering services, and 4th line vehicle repair, with the last (3rd) year option exercised in October 2007. This contract was amended (value increased by $0.77 million) and extended to June 2009 at which time a new "bridging" ISC contract was awarded to MBC in June 2009 (valued at $9.3 million including GST) to allow continued support of the LUVW SMP fleet until the Long Term Support Contract (LTSC) (estimated value of $47 million including GST over 7 years), expected to be in place by April 2010, can be awarded. The Long Term Support Contract timeline and value has been reduced in order to better meet the land forces plan.

A contract valued at $1.87 million (including GST) for Special Tools and Test Equipment (STTE) was awarded to MBC in November 2008. Delivery for STTE has been completed as planned in September 2009. The project is awaiting spares deliveries in March 2010, at which time FOC will be declared. The project will then begin the close-out process with project closure scheduled for June 2010. Extension of project close-out date has been requested in order to address delays due to change of personnel and late deliveries.

Even with the above mentioned changes, the project is scheduled to close under the allocated funding of $298.4 million. The vehicle fleet has been affected by body cracks and inferior weapons station design and quality issues. On the subject of vehicle body cracks, an agreement was arrived at to address vehicles with body cracks and those potentially at risk of developing future cracks. MBC has provided an improved weapons station to address the deficiencies; the solution has been implemented since August 2009 on a portion of the fleet.

Industrial and Regional Benefits: The industrial benefits required for Phase 1 were valued at 100% of the contract value. The latest report from Industry Canada indicates that MBC has exceeded the industrial regional benefit goals by $300 million. There are no mandated industrial benefits for the Mil COTS contract. Industry Canada is working with MBC to identify regional components of the IRBs program under the Initial Support Contract (ISC). There will be an IRB requirement in the LTSC in the amount of 100% of the contract value.

LIGHTWEIGHT TOWED HOWITZER (LWTH)

Description: The Lightweight Towed Howitzer (LWTH) project is an element of the act domain in the Canadian Forces (CF). This project will bridge a key facet of the land forces current indirect fire capability deficiency. Specifically, the project will field 25 M777 lightweight 155mm towed howitzers, each with a Digital Gun Management System (DGMS), and supported by improved ammunition and a modern truck. The 25 howitzers (six were delivered in a three month period ending July 2009 and the remaining will be delivered by July 2011) will augment the 12 M777 howitzers currently in service. These capability enhancements in terms of lethality, range, precision, mobility and digitization are needed to support future missions and tasks likely to be assigned to the CF.

Project Phase: Definition. The LWTH project entered the Definition Phase with the approval of Treasury Board Secretariat (TBS) in June 2008. Expenditure and contracting authority was also delegated to Defence and PWGSC respectively for the M777 and DGMS acquisitions. The project is planning to enter into full implementation with MND approval in December 2009.


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



Prime and Major Sub-Contractors

Prime Contractor

BAE Systems, Barrow-in-Furrow, Cumbria, UK

Major Sub-Contractor

SELEX Sensor and Airborne Systems Ltd, Edinburgh, UK



Major Milestones

Major Milestone

Date

Identification Phase Approval – Identification Phase

January 2008

Preliminary Project Approval (PPA)– Definition Phase

June 2008

M777 Foreign Military Sale (FMS) Agreement

November 2008

DGMS Contract Award

November 2009

Effective Project Approval (EPA)– Implementation Phase

December 2009

M777 Support Contract Award

January 2010

Initial Operational Capability (IOC)

June 2011

Final Operation Capability (FOC)

December 2012

Project Close-Out

June 2013


Progress Report and Explanations of Variances: TBS approved the indicative total project cost of $278.282 million (all costs are $BY including GST) and delegated EPA authority to MND in June 2008. At the same time, expenditure authority of $3.466 million was granted for the Definition Phase, $106.898 million to acquire the M777 (including ancillary equipment and services), and $25.302 million to acquire the DGMS (including support). In October 2009, the project has submitted a request to the MND for the EPA for the remaining project elements (M777 Support, Trucks and ammunition) with a total project cost $277.929 million (all costs are $BY including GST). The cost variance was mainly due to the fluctuations in the US and UK Sterling exchange rates. The EPA submission is currently with the MND and planned for approval in December 2009. This will permit the project to transition into Implementation and also grant expenditure authorities for the remaining project elements.

The Foreign Military Sales (FMS) Letter of Offer and Agreement (LOA) to procure 25 M777 howitzers was signed in November 2008.

The Contract Award for the DGMS was signed by the Minister of Public Works and Government Services Canada at the end of November 2009 and valued at £10.081 million (UKP).

The M777 Support Contract Award is planned to be awarded in the winter of 2010.

Industrial and Regional Benefits: The IRBs are an integral part of the Lightweight Towed Howitzer project. For the M777 lightweight 155mm towed howitzer, the original equipment manufacturer has committed to 100% of the FMS agreement value (less the value of the US government furnished equipment) through a combination of direct and indirect IRBs. For the digital gun management system, the original equipment manufacturer has committed to 100% of the contract value in direct and indirect IRBS.

In view of the low value of the M777 Initial Support contract and the high proportion of parts and labour, Industry Canada has determined that they will not be seeking IRBS. However, Industry Canada will monitor the Department's future Procurement Review Committee/Advisory Committee on Repair and Overhaul process for the in-service Support or long term support contracts to determine if IRBs are appropriate.

MAIN BATTLE TANK (MBT)

Description: The purpose of the Tank Replacement Project is to replace Canada's aging Leopard C2 tank fleet with a modern, heavily protected, mobile, direct fire support capability. The Tank Replacement Project is divided into two phases. Phase 1 consisted of the loan of 20 Leopard 2 A6M Main Battle Tanks (MBT), two Armoured Recovery Vehicles (ARVs) and logistics support from the German Government for immediate deployment to Afghanistan, as well as the purchase of 100 surplus Leopard 2 MBT from the Netherlands Government. Phase 2 consists of the repair, overhaul, upgrade and introduction of up to 100 Leopard 2 tanks and armoured recovery vehicles into service with the CF.

Project Phase: Implementation. The project received PPA from TBS on March 29, 2007 and Effective Project Approval (EPA) on June 11, 2009 for Phase 2. The project is capped at $650 million.


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



Prime and Major Sub-Contractors

Phase 1

Prime Contractor for ARV upgrades

Rheinmetall Land Systeme (RLS), Germany

Prime Contractor for MBT upgrades

Krauss Maffei Wegmann (KMW), Germany

Prime Contractor for loaned tanks

German Government

Prime Contractor for tank purchase

Netherlands Government

Phase 2

Prime Contractor for 20 Leopard 2 A4 ops tanks

Krauss Maffei Wegmann (KMW), Germany

Prime Contractor for 20 Leopard 2 A6 tanks for return to German Government

Krauss Maffei Wegmann (KMW), Germany

Prime Contractor for 42 Leopard 2 A4 training tanks

To be determined April 2010

Prime Contractor for 8 Leopard 2 ARVs

To be determined August 2010



Major Milestones

Major Milestone

Date

Treasury Board  Preliminary Project Approval (PPA)

March 2007

Phase 1 - Loan Agreement with German MoD

May 2007

Phase 1 - Contract to KMW for upgrades to Loaned tanks

May 2007

Phase 1 - Contract to RLS for upgrades to Loaned tanks

May 2007

Initial Operating Capability (IOC)

August 2007

Phase 1 - Acquisition of tanks from Dutch Government

December 2007

Letter of Interest

April 2008

Price and Availability

June 2008

Phase 1 – PPA amendment approved by Treasury Board

June 2008

Statement of Operational Requirements Approval

August 2008

Treasury Board Effective Project Approval (EPA) with conditions

June 2009

Phase 2 – Contract to KMW for urgent requirement of 20 Leopard 2 A4 Operational tanks (repair, overhaul and upgrade)

June 2009

Phase 1 – Contract to KMW for replacement in kind tank return to German MoD - 20 x A6 (NLD) tanks modified to German standard

July 2009

Phase 2 – Contract for repair and overhaul of 42 Training tanks

Expect April 2010

Phase 2 – Contract for 8 ARVs

Expect August 2010

Full Operational Capability (FOC) – (Phase II)

December 2012

Project Close-Out

2014


Progress Report and Explanations of Variances: Due to schedule constraints to meet Initial Operation Capability (IOC), the Leopard 2 A6M tanks were deployed with slat armour. In addition, mine ploughs, mine rollers and dozers were not fielded with the loaned tanks, therefore, some Leopard C2 have remained in theatre.

EPA directed that work be done in Canada, for the training tanks and ARVs. The key risks are scheduling to achieve Full Operational Capability (FOC) in 2012 and cost management to deliver the core activities within the cost ceiling. The following issues continue to be managed:

  • the effort of managing the multiple contracts;
  • support to the loaned tanks and ARVs deployed in Afghanistan - twenty Leopard 2 A4 ops tanks are being readied to rotate into theatre as replacements starting in fall 2010;
  • the requirement to complete work in Canada (for the training tanks and ARVs) and the resulting risk to schedule and cost;
  • ongoing sourcing of critical spares to support theatre and production activities;
  • return to the German Government of loaned parts and test equipment, ARVs, and linkage of the Leopard 2 A6 contract with German requirements.

Industrial and Regional Benefits (IRBs): No IRBs were required for Phase 1. For Phase 2, IRBs are a requirement. Bidders will be required to submit acceptable IRB proposals with their bids. The successful contractors will be required to undertake IRB activities in Canada valued at 100% of the contract value. IRB proposals will be evaluated by representatives of Industry Canada and the Regional Development Agencies. Contractors will be required to submit annual IRB reports detailing their achievements, which Industry Canada will review and verify.

MARITIME HELICOPTER PROJECT (MHP)

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.

Project Phase: Implementation. In November 2008, the project marked the four-year milestone in the Implementation Phase. The project focus is now shifting from design and engineering to aircraft manufacturing and assembly, followed by flight tests and delivery of the aircrafts.


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



Prime and Major Sub-Contractors

Prime Contractor

Sikorsky International Operations Incorporated, Stratford, Connecticut, USA

Major Sub-Contractors

General Dynamics Canada, Ottawa, Ontario
L-3 MAS, Mirabel, Québec, Canada



Major Milestones

Major Milestone

Date

Preliminary Project Approval (PPA)

June 2003

Invitations for Bids Posted on MERX

December 2003

Synopsis Sheet Effective Project Approval (SS(EPA))

November 2004

Contract Award

November 2004

First Delivery

November 2010

Final Delivery

2013

Project Close-Out

2014


Progress Report and Explanations of Variances: In December 2008, following discussions to minimize delays in the planned delivery of the integrated Maritime Helicopter, the Government and Sikorsky agreed to a new schedule for the delivery of helicopters starting in November 2010, with delivery of enhanced helicopters commencing in July 2012.

Other components of the project such as construction of the Training Centre building in Shearwater, NS, and ship modification work on HMCS Montréal have progressed well and are on schedule. The first test flight of the Maritime Helicopter occurred on November 15, 2008. The second Maritime Helicopter, first aircraft with complete Mission System Hardware installed, underwent its first test flight on July 29, 2009. Defence crews, as part of the Combined Test Force with Sikorsky, began aircraft testing on July 10, 2009. The project is currently running within its authorized budget.

Industrial and Regional Benefits (IRBs): The IRBs are equivalent to 100% of the contract value for the capital acquisition and more than 80% of the contract value for the in-service support.


Region

Capital Acquisition

In-Service Support

Atlantic Canada

$239.1M

$825.9M

Québec

$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


MATERIEL ACQUISITION AND SUPPORT INFORMATION SYSTEM (MASIS)

Description: The mission of the Materiel Acquisition and Support Information System (MASIS) project is to provide Defence with 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 Defence 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.

Project Phase: Implementation. To date, the project has completed Phases 1 to 4 and implementation of Phase 5 is currently underway. Project completion is expected for 2012.


Leading and Participating Departments and Agencies

Lead Department or Agency

National Defence

Contracting Authority

Public Works and Government Services Canada

Participating Departments and Agencies

N/A



Prime and Major Sub-Contractors

Prime Contractor

IBM Canada, Ottawa, Ontario, Canada

Major Sub-Contractors

SAP Canada, Ottawa, Ontario, Canada
Pennant, Ottawa, Ontario, Canada



Major Milestones

Major Milestone

Date

Preliminary Project Approval (PPA) - Expenditure Authority for Phase 1

June 1998

Contract Awarded for Prime Systems Integrator

December 1998

MASIS system - Go Live Phase 1 (202 Work Depot Montréal)

September 1999

Expenditure Authority for Phases 2 and 3:

  • Implementation of Complex Contracts;
  • Implementation of the MASIS solution to the Navy;
  • Operations Support & Maintenance for MASIS;
  • Planning and scoping for requirements scheduled to be implemented for the land forces.

June 2000

Amended Expenditure Authority for Phase 4:

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

December 2003

Amended Expenditure Authority for Phase 5 to cover rollout of additional functionality to wider user base including CF land and air components.

June 2007

Project Close-Out

2012


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

The project follows a cyclical approval and delivery methodology. In December 2003, an additional $34.4 million was approved to fund Phase 4 of the project, which has also been completed. In June 2007, the MASIS project received TBS approval in the amount of $170 million for Phase 5. Phase 5 activities include the rollout of MASIS functionality to CF land and air components. To date, Phase 5 activities are on budget and on time. Planned completion of this project is within the 2012 timeframe.

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

MEDIUM-TO HEAVY-LIFT HELICOPTER (MHLH)

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 (CF) in fulfilling a wide range of roles. CF operational experience, particularly in current operational theatres, has highlighted the urgent need for medium-to-heavy-lift helicopters to support land 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 beyond the CF' current helicopter fleets.

The Medium-to Heavy-Lift Helicopter project will deliver the medium-to-heavy-lift helicopter capability to support land-based domestic and international operations and to support land staff training on the road to high readiness. The project will acquire a minimum of 15 helicopters, integrated logistic support and other related support elements.

Project Phase: Implementation.


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



Prime and Major Sub-Contractors

Prime Contractor

The Boeing Company, Philadelphia, Pennsylvania, USA



Major Milestones

Major Milestone

Date

Synopsis Sheet Preliminary Project Approval (SS(PPA))

June 2006

Advanced Contract Award Notice Posted on MERX

July 2006

Effective Project Approval (EPA) and Contract Award

June 2009

First ACAN Compliant Aircraft

June 2012

First MHLH

June 2013

Initial Operational Capability (IOC)

June 2014

Full Operational Capability (FOC)

June 2015

Project Close-Out

June 2016


Progress Report and Explanation of Variances: Treasury Board Secretariat (TBS) approved the Preliminary Project Approval (PPA) for the Medium-to Heavy-Lift Helicopter project in June 2006 with an estimated cost of $ 2,022 million. In December 2007, TBS approved a revised PPA for an additional $12 million. The requirement for additional funding is a result of delays associated with ensuring that the appropriate analysis and oversight was conducted. In June 2009, TBS granted Effective Project Approval (EPA) at a substantive cost estimate of $ 2,312 million. A contract was awarded to The Boeing Company in June 2009, at a value of $1,156 million (USD). The Medium-to Heavy-Lift Helicopter project is currently on budget. The project is to be completed by June 2016.

Industrial and Regional Benefits: The procurement strategy for MHLH will provide IRBs equivalent to 100% of the contracted value for both the capital acquisition and integrated in-service support. The Boeing Company is required to identify 60% of the total acquisition commitment prior to contract signing. For the integrated in-service support portion, 75% of the contract value will be direct work performed by Canadian companies. As a result, Canadian companies will have access to Boeing's global value chain which will allow them to do long-term, high-value work on Boeing's international fleets of aircraft through global partnerships. This new business being generated in Canada means that Canadian firms will hold an enviable place in the global aerospace industry.

MEDIUM SUPPORT VEHICLE SYSTEM PROJECT (MSVS)

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 cost approximately $1.2 billion (net of GST) and will deliver the following mix of vehicles:

  • Medium-sized Standard Military Pattern (SMP) vehicles:
    • Up to 1,500 vehicles, with options for an additional 650;
    • Up to 150 integrated armour protection systems, with options for an additional 150, and
    • Up to 300 companion military pattern trailers, with options for an additional 240.
  • Medium-sized Militarized Commercial Off-the-Shelf (Mil COTS) vehicles:
    • 1,300 commercial vehicles with militarized components.
  • Special Equipment Vehicle (SEV) Kits:
    • Up to 1,000 special equipment vehicle kits, with options for an additional 150.

Project Phase: Definition for SMP and SEV Kitting, and Implementation for Mil COTS and SEV Baseline Shelters.


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


Prime and Major Sub-Contractors: One prime contractor will be selected for each project component. Final selection of the prime contractors will occur through Revised Preliminary Project Approvals (Rev(PPA)) for Mil COTS Vehicles, SEV Baseline Shelters and SMP Vehicles followed by EPA for SEV Kitting.


Prime Contractor - MILCOTS

Navistar Defence LLC, Warrenville, Illinois, USA

Prime Contractor - SEV Baseline Shelters

DEW Engineering and Development ULC, Ottawa, Ontario, Canada



Major Milestones

Major Milestones

Date

Preliminary Project Approval (PPA)

June 2006

Mil COTS - Invitation for Bids Posted on MERX

November 2007

Mil COTS – Revised  Preliminary Project Approval (Rev(PPA))

December 2008

Mil COTS - Contract Award

January 2009

Mil COTS - First Delivery

June 2009

Mil COTS - Delivery Complete

Summer 2010

SEV Baseline Shelter - Invitation for Bids Posted on MERX

May 2008

SEV Baseline Shelter -  Revised  Preliminary Project Approval (Rev(PPA))

June 2009

SEV Baseline Shelter - Contract Award

July 2009

SEV Baseline Shelter - First Delivery

Summer 2010

SEV Baseline Shelter - Delivery Complete

Spring 2013

SMP - Invitation for Bids Posted on MERX

Spring 2010

SMP -  Revised  Preliminary Project Approval (Rev(PPA))

Spring 2011

SMP - Contract Award

Spring 2011

SMP - First Delivery

Spring 2012

SMP - Delivery Complete

Fall 2013

SEV Kits - Invitation for Bids Posted on MERX

Spring 2010

SEV Kits – Effective Project Approval (EPA)

Spring 2011

SEV Kits - Contract Award

Spring 2011

SEV Kits - First Delivery

Fall 2011

SEV Kits - Delivery Complete

Summer 2013

Project Close-Out

Fall 2014

Progress Report and Explanations of Variances: In December 2008, Project Management Office MSVS obtained TBS expenditure authority for Mil COTS in the amount of $351.8 million ($BY) plus GST and a Rev PPA for an indicative full-up cost estimate of $1.22 billion ($BY) plus GST for all components of the MSVS project. In June 2009, TBS expenditure authority was obtained for SEV Baseline Shelters in the amount of $161.4 million ($BY) plus GST, and a Rev PPA for an indicative full-up cost estimate of $1.24 billion ($BY) plus GST for all components of the MSVS project.

  • Mil COTS – An Agreement in Principle was reached in August 2008 with the single responsive bidder. Rev PPA and contract approval was received in December 2008. The contract was awarded in January 2009.
  • SEV Baseline Shelters – An Agreement in Principle was reached in April 2009 with the single responsive bidder. Rev PPA and contract approval was received in June 2009. Contract was awarded in July 2009.
  • SMP - Portions of a draft Request for Proposal (RFP) were posted on the project website in October 2009 for industry comment. The final RFP is planned for release in spring 2010.
  • SEV Kitting - A draft SEV Kitting RFP was posted on the project website in late December, 2009 for industry comment. The final RFP is planned for release in spring 2010.

Schedule delays have occurred and are attributed to delayed project approval and overall staffing shortages. Cost variances have also occurred and are attributed to the receipt of single bids for Mil COTS vehicles and SEV Baseline Shelters with higher than anticipated price proposals, a volatile raw material market and fluctuation in foreign exchange rates.

At this time, Project Close-Out is anticipated for fall 2014. A continuous risk management program has been implemented and costing efforts for the Implementation Phases of SMP vehicles and SEV Kitting are progressing.

Industrial and Regional Benefits: IRBs equivalent to 100% of the contract value will be required for each project component.

MILITARY AUTOMATED AIR TRAFFIC SYSTEM (MAATS) PROJECT

Description: MAATS and Transport Canada (now NAV Canada) initiated a national air traffic system project to automate air traffic services. Defence and the CF established the Military Automated Air Traffic System (MAATS) Project to ensure that military air operations continue to function effectively with the integrity of the national system compatibility under all domestic operations. The project directly supports the defence objective of conducting air traffic control operations.

The MAATS project will provide the essential infrastructure, systems, and automated capabilities to efficiently interface Air Traffic Management Systems (ATMS) and accurately exchange data between applications. The project will deliver a stable, sustainable, and operational ATMS while providing as much integration as possible with NAV Canada's Canadian Automated Air Traffic System (CAATS). New equipment will be installed where system interfaces are not currently available. All existing Defence radar systems, meteorological and aids sensors are retained and interfaced to the MAATS. In 2006, CAATS was no longer in a position to support military operations so Project Management Office (PMO) MAATS selected the option to progress the project with an in-house solution. Since 2006, the Aerospace and Telecommunications Engineering Support Squadron (ATESS) has been mandated to design, develop and implement the complete Defence ATMS solutions for MAATS.

Project Phase: Implementation.


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



Prime and Major Sub-Contractors

Prime Contractor

Raytheon Canada Limited, Richmond, British Columbia, Canada
NavCanada, Ottawa, Ontario, Canada

Major Sub-Contractors

Hewlett Packard Canada Ltd, Ottawa, Ontario, Canada
CVDS, Montréal, Québec, Canada
Frequentis Canada Ltd, Ottawa, Ontario, Canada



Major Milestones

Major Milestone

Date

Treasury Board Effective Project Approval (EPA)

July 1993

Contract Award

January 1994

Preliminary Design Review

September 1997
- May 2000

Critical Design Review

February 2001

Factory Acceptance Test (Closure)

January 2002

Initial Delivery (Montréal)

December 2003

Contract Complete (Last Payment)

December 2004

Approval received to disengage concurrent development with NAV CANADA project and pursue sustainable minimum military requirement

September 2006

Begin Software Development on Phoenix Systems

October 2006

Complete Phoenix NAMS II Development

October 2007

Initial Operational Capability - First Wing Operational with NAMS II Equipment

October 2007

Full Operational Capability (FOC) - All Wings with delivered Equipment

June 2009

Begin project Close-Out

July 2009

MAATS Project Close-Out Senior Review Board (SRB)

January 2010

Project Management Office (PMO) Close-Out

March 2010

Project Complete

December 2010


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

As briefed at SRB in June 2006, the MAATS project objectives were declared unachievable with CAATS. Given a number of alternative options, the MAATS' PMO recommended to cease MAATS/CAATS development, and continue the project with the implementation of an "in-house" solution coined Phoenix. With the support of the Chief of the Air Staff and the Assistant Deputy Minister (Materiel) Group, the Programme Management Board (PMB) concurred with the PMO's recommendation in March 2007. MAATS' PMO was directed to de-link the project from NAV Canada's Canadian Automated Air Traffic System (CAATS); concentrate on the re-vitalization and integration of Air Traffic Controller (ATC) information sources at each of the seven Wings (Comox, Cold Lake, Moose Jaw, Bagotville, Trenton, Greenwood, and Goose Bay); keep military Instrument Flight Rules (IFR) operations at the Wings vice at two Military Terminal Control Centres; and pursue the development and fielding of the Phoenix solution.

Since approvals were received in July 2007, the Phoenix solution is well on its way to upgrading the current Air Traffic Management System capability inclusive of the following sub-systems: the Radar Processor, the Navigational Aids and Meteorological Sub-System (NAMS), the Air Movement Statistics Package and the Flight Data System. Phoenix is based on the proven Radar Processing Display System II (RPDS II) which was certified for Operational Airworthiness. Phoenix is built on standard commercial Off-the Shelf hardware and open source software, thus keeping technical risk low. Installation of Phoenix equipment (NAMS II) at 8 Wing Trenton was completed and Provisional Operational Airworthiness Clearance (POAC) was granted in October 2007, ahead of schedule. Actual close-out activities, including a project completion report to TBS, will be completed in fiscal year 2010-11.

PMO implemented the last site (Goose Bay) in May 2009 with: 1) NAMS II, 2) Frequentis (voice communication switch) and 3) Control Tower Consoles Revitalization. All sites are now synchronized with same technology and interfaces and the Phoenix environment has been running since 2007 without any downtime or major failure. The Vancouver 2010 Olympics shifted ATESS personnel priorities, delaying the revision of the last REDDS delivery called Flight Data Entry Terminal (FDET II). With SRB endorsement, the PMO plans to devolve FDET II implementation responsibilities to the Director General Aerospace Equipment Program Management (DGAEPM), close the office in March 2010, and close the project in December 2010. In-service Life Cycle Materiel Management (LCMM) support is in place to efficiently manage and co-ordinate the remaining FDET II responsibilities and to assist with project close-out activities.

Industrial and Regional Benefits (IRBs): Canadian industry in the following regions of Canada will benefit from the MAATS project.


Region

Benefits

Atlantic Canada

1.6M

Québec

1.0M

Ontario

1.8M

Western Canada

45.8M

Unallocated

To be determined

Total

$50.2M


PROTECTED MILITARY SATELLITE COMMUNICATIONS (PMSC)

Description: The Department and the Canadian Forces (CF) require global communications that are secure, guaranteed and directly interoperable with our Allies. The Protected Military Satellite Communications (PMSC) System provides a Canadian Advanced Extremely High Frequency (AEHF) Military Satellite Communications System for near-worldwide assured, secure, survivable, and jam-resistant communications to the CF for the command and control of deployed Canadian commanders and forces, as well as interoperability with our principal ally, the United States.

Project Phase: Implementation. The PMSC project is being implemented in two phases with project completion expected for winter 2017.


Leading and Participating Departments and Agencies

Lead Department or Agency

Department of National Defence

Contracting Authority

Public Works and Government Services Canada

Participating Department and Agencies

Industry Canada and its regional agencies



Prime and Major Sub-Contractors

Prime Contractor

United States Department of Defense (DoD)

Major Sub-Contractors

To be determined



Major Milestones

Major Milestone

Date

Preliminary Project Approval (PPA)

August 1999

Effective Project Approval (EPA)

November 2003

Initial Terminal Delivery

Summer 2010

Initial Satellite Delivery

Spring 2012

Terminal Delivery Completed

Autumn 2014

Project Complete

Winter 2017


Progress Report and Explanations of Variances: The PMSC project is being implemented in two phases. In the completed Phase 1, guaranteed access to satellites was procured under the terms of a 1999 Memorandum of Understanding (MOU) with the United States Department of Defense (DoD) in which Defence participation in the US DoD Advanced Extremely High Frequency (AEHF) system is ensured. Definition studies for the terminal segment were also completed. Under Phase 2, the terminal segment is being procured and will be installed, where appropriate, and tested starting in 2010.

In August 1999, Treasury Board Secretariat (TBS) granted Preliminary Project Approval (PPA) to the PMSC Project, with expenditure authority for the implementation of Phase 1 at an estimated cost of $271 million ($BY) including GST, and granted approval for the Defence to enter into a Military Satellite Communication (MILSATCOM) MOU with the US DoD. The MOU was signed in November 1999.

In November 2003, TBS granted Effective Project Approval (EPA) to the PMSC Project, with expenditure authority for the Implementation of Phase 2 at an estimated cost of $321 million ($BY) including GST. The total cost (including funds approved at PPA) is, currently, estimated at $555 million ($BY) net-of-GST. The project is on budget.

Industrial and Regional Benefits: Under Phase 1, the US DoD 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 2, the Senior Procurement Advisory Committee (SPAC) endorsed that terminal acquisition and support will be procured through Foreign Military Sales (FMS) with installation done through Defence-managed contracts. IRBs will be sought by Industry Canada at 100% of the contract value.

SUBMARINE CAPABILITY LIFE EXTENSION (SCLE)

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.

Project Phase: Implementation. The project has 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. Canadianization of three platforms and 13 of 17 associated projects have been completed. The last platform (HMCS CHICOUTIMI) will complete Canadianization during her Extended Docking Work Period (EDWP) which is scheduled to commence in 2010. The remaining associated projects will be completed by project closure in March 2013.


Leading and Participating Departments and Agencies

Lead Department or Agency

Department of National Defence

Contracting Authority

Public Works and Government Services Canada

Participating Department and Agencies

Industry Canada and its regional agencies



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-Contractors

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



Major Milestones

Major Milestone

Date

Treasury Board Approval

June 1998

Main Contract Award

July 1998

Initial Support Contract Award

July 1998

Initial Operational Capability (IOC)

April 2006

Full Operational Capability (FOC)

June 2011

Project Close-Out

March 2013


Progress Report and Explanation of Variances: EPA was granted to the SCLE project in June 1998 at an estimated total cost of $812.0 million ($BY) net of GST. The expenditure ceiling was increased by $84.8 million by TBS in June 2003 to accommodate increased scope to include 17 submarine related projects and initiatives that were progressing outside the bounds of SCLE. The SCLE project is currently expending to budget.

Canada has accepted all four Upholder submarines from the United Kingdom. The operational status of each of these vessels is summarized below:

  • Her Majesty's Canadian Ship (HMCS) Victoria is currently undergoing an Extended Docking Work Period (EDWP) at Fleet Maintenance Facility (FMF) Cape Breton. She is scheduled to undock in June 2010 and complete this activity in December 2010.
  • HMCS Windsor is currently undergoing an Extended Docking Work Period (EDWP) at Fleet Maintenance Facility (FMF) Cape Scott. She is scheduled to undock in late 2010 and complete this activity in 2011.
  • HMCS Corner Brook is operational and is participating in various exercises and patrols. Barring a six-month docking period commencing September 2009, she will remain operational until mid-2011.
  • HMCS Chicoutimi was handed over to Canada in October 2004 and while en-route to Canada, she had an electrical incident at sea that resulted in a fire and was returned to Canada via sealift. Although some of the repairs have been completed, a decision was taken to delay the completion of the repair and Canadianization until her EDWP. HMCS Chicoutimi was signed over to the Canadian Submarine Management Group (In- Service Support Contractor) in June 2009. Her EDWP is scheduled to commence 2010.

Based on progress to date and current information, all performance objectives of this contract will be met within the allocated budget.

Industrial and Regional Benefits: This project will provide an estimated $200 million 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 $100 million in industrial benefits have taken the form of waivers to provide industrial offsets in the United Kingdom for Canadian companies bidding on defence contracts.

TACTICAL ARMOURED PATROL VEHICLE (TAPV)

Description: Emerging threats have highlighted a number of critical deficiencies with the G-Wagon Light Utility Vehicle Wheeled, the RG-31 Armoured Patrol Vehicle, and the Coyote Light Armoured Vehicle. These deficiencies include capacity, protection, mobility, weapons effects, information and human dimensions.

The Tactical Armoured Patrol Vehicle (TAPV) project will deliver to the land forces a wheeled combat vehicle that will overcome these deficiencies. This vehicle will fulfill a wide variety of roles on the battlefield, including but not limited to surveillance, security, command and control, cargo and personnel carrier. It will have a high degree of tactical mobility and provide a very high degree of crew protection.

The project scope includes an estimated initial purchase of 500 TAPV and an optional purchase of up to 100 additional vehicles, plus associated long-term in-service support.

Project Phase: Definition. The TAPV Project entered the Definition Phase with the approval of TBS on June 18, 2009. Expenditure and contracting authority for the Definition Phase were also delegated to Defence and Public Works and Government Services Canada (PWGSC) respectively for the TAPV and its associated in-service support.


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



Prime and Major Sub-Contractors

Prime Contractor

Not identified at this time

Major Sub-Contractors

Not identified at this time



Major Milestones

Major Milestone

Date

Identification Phase approved

March 26, 2008

Project Charter approved

May 29, 2009

Preliminary Project Risk Assessment endorsed

June 1, 2009

Definition Phase approved

June 18, 2009

Statement of Operational Requirements approved

January 2010

Implementation Phase approved

Summer 2011

Contract awarded

Autumn 2011

Initial Operational Capability (IOC) Delivery certified

2013

Full Operational Capability (FOC) Delivery certified

2015

Project Completion Report Approved

2017


Progress Report and Explanations of Variances: TBS approved the indicative total project cost of $1.250 million ($BY), plus $61.9 million GST for a total indicative cost estimate of $1.312 million ($BY). At the same time, TBS granted expenditure authority for the Definition Phase of this project at a substantive cost estimate of $37.5 million ($BY) plus $1.7 million ($BY) GST for a total substantive cost estimate of $39.2 million ($BY). The TAPV Project is currently within budget.

On November 14, 2008, the Defence Senior Project Advisory Committee approved a procurement strategy for a phased approach within a competitive process. Consequently, the TAPV Project issued a Letter of Interest/Request for Price and Availability (LOI/P&A) on July 9, 2009 to support cost planning. Results were received September 10, 2009. Given the multiple contenders who expressed interest in the LOI/P&A, the project will issue a Solicitation of Interest and Qualification (SOIQ) in early 2010 to pre-qualify potential contenders against essential TAPV requirements. Following the SOIQ evaluations, the project will issue a Request for Proposal (RFP) in late 2010 to those contenders that have addressed the SOIQ requirements. Final contract awarding will be completed in summer 2011 after Implementation Phase approval is given April 2011.

Industrial and Regional Benefits: This procurement will provide IRBs for the capital acquisition of the TAPV and its associated in-service support. These IRB requirements have been established at 100% on the acquisition and the in-service maintenance program.

WHEELED LIGHT ARMOURED VEHICLE - LIFE EXTENSION (WLAV-LE)

Description: The Wheeled Light Armoured Vehicle – Life Extension (WLAV-LE) has addressed deficiencies in command, combat support and combat service support capabilities to ensure that the current fleets of wheeled armoured vehicles are capable of operating in the current and anticipated threat environment. The WLAV-LE improved the mobility, protection and capability of the in-service Bison fleets (primarily composed of Infantry Section Carriers (ISC)) through a life extension and conversion to command and support variants dedicated to the LAV III and LAV-Recce (Coyote) fleets. The following capabilities are being provided in the 2004-11 timeframe:

  1. Conversion of the entire Bison fleet of 199 vehicles to 32 Ambulances, 16 Electronic Warfare, 4 Nuclear, Biological and Chemical Defence, 32 Maintenance and Recovery Vehicle, 32 Mobile Repair Team, 83 Command, Control, Communications and Intelligence vehicles;
  2. Provision of updated add-on armour packages for operations stock as a result of changes made to existing vehicles, to provide the crew and mission essential equipment with a basic level of protection; and
  3. Sufficient Integrated Logistics Support to maintain the fleet for the first two years of operations.

Project Phase: Implementation. Just over 85% of the Bison fleet has been converted.


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 Atlantic Canada Opportunities Agency



Prime and Major Sub-Contractors
Bison Re-Role

Prime Contractor (6 variants)

DEW Engineering and Development ULC (DEW), Ottawa, Ontario, Canada

Prime Contractor (1 variant)

General Dynamics Land Systems – Canada (GDLS-C), London, Ontario, Canada



Major Milestones

Major Milestone

Date

Treasury Board Preliminary Project Approval (PPA)

September 1996

Treasury Board Effective Project Approval (EPA)

November 1998

Initial Contract Award with DEW

January 2003

Treasury Board Revised Effective Project Approval (EPA)

September 2006

New Contract Award with DEW

May 2007

Contract Award with GDLS-C

October 2007

Implementation – Initial Operational Capability (IOC)

March 2009

Implementation – Full Operational Capability (FOC)

December 2010

Project Completed

March 2011


Progress Report and Explanation of Variances: Initially, TBS approved the WLAV-LE with an estimated cost of $230.387 million ($BY). In September 2006, TBS granted a reduced expenditure authority to WLAV-LE due to the cancellation of the Armoured Vehicle General Purpose (AVGP) component of the project. This change resulted from the decision taken by Defence in March 2005 to retire the AVGP fleet. The total cost estimate is now $170.3 million ($BY). The planned dates for the Initial Operational Capability (IOC) (August 2008) and Full Operational Capability (FOC)(December 2009) have been deferred as a result of delays experienced in getting contract approval, in completing the prototype build and in achieving a successful first article inspection for the Mobile Repair Team variant. The WLAV-LE is currently running under budget and is to be completed by March 2011.

Industrial and Regional Benefits: There are no industrial and regional benefits strategy associated with this project.

The WLAV-LE is excluded from the Agreement on Internal Trade under article 508 - Exceptional Circumstances. The exceptional circumstance is related to the economic hardship facing the local economy from the closure of CF Base Chatham in New Brunswick. A portion of the work is to be carried out in the Chatham area (now defined as the Miramichi Region). It is a provision of the contract with DEW Engineering and Development ULC that the work is to be done in the Chatham Area of the province of New Brunswick to the maximum extent possible and where cost effective to the Crown.