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Shop at home policy adds $300 million to Forces‘ truck costs - Ottawa Citizen

  • Thread starter Thread starter Jason Jarvis
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Jason Jarvis

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Is any body surprised about this? After his last article on JP-8, it‘s too bad we can‘t verify the author‘s sources on this story.

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Shop at home policy adds $300 million to Forces‘ truck costs
By a journalist

Federal bureaucrats have scuttled a deal that could have saved taxpayers as much as $300 million and given the Canadian army an immediate replacement for its fleet of aging and potentially unsafe trucks, according to government sources.

The military had been given tentative approval last year by then-defence minister John McCallum to move ahead on a deal to buy 1,500 new trucks from the U.S. army at a substantial savings. But federal bureaucrats, fearing the deal wouldn‘t create Canadian jobs, fought to have it overturned and replaced with a competition open to domestic companies.

The end result: the trucks won‘t be delivered until at least 2008 and the program will likely cost around $300 million more than the deal offered by the U.S. military, according to sources.

Under the original plan, Canada would have received the trucks at a reduced price since the American army plans to order 83,000 of the vehicles and was getting a good deal because of the massive size of that purchase. The trucks would have been used to replace the Canadian Forces problem-plagued Medium Logistic Vehicle Wheeled, or MLVW.

Canadian military officials are keen to get rid of the 22-year-old MLVWs as soon as possible. Last year a Defence Department report warned that the vehicles could be hit by a "catastrophic" failure at any time because of poor brakes and steering systems. Catastrophic failure is used to signify accidents that could involve serious injuries or death.

The plan to buy the trucks from the U.S. army was overruled by federal officials when a Canadian company, DEW Engineering and Development of Ottawa, aligned with a U.S. firm, became interested in bidding on the deal. Federal officials want to create Canadian jobs and argued that an open competition must be held.

That competition is likely to drive the total cost up from about $1.1 billion to around $1.4 billion because the savings generated by piggybacking on the U.S. army order will no longer be there, according to sources.

Defence official Geoff Simpson acknowledged that having an open competition is the favoured method of buying a replacement for the MLVW. But he also stressed that no final decision has been made and that a deal involving the purchase of trucks directly from the U.S. military could still be considered.

"It‘s an option," said Mr. Simpson, manager of the truck replacement program. "Other departments will say it‘s off the table but until we come to an actual agreed procurement strategy, then nothing should be off the table."

An inter-department review group, made up of officials from Industry Canada, Public Works and regional development agencies whose mandate is to create jobs in particular parts of the country, will help come up with the purchase plan over the next six months.

Tim Dear of DEW Engineering declined to comment on whether a competition would increase the cost of the program. He said the company has teamed up with U.S. truck giant, Oshkosh to bid on the Canadian project and is ready to deliver the vehicles as soon as possible.

"We believe that DEW-Oshkosh has the right truck and the right system," said Mr. Dear, the company‘s vice-president of strategic initiatives. DEW has a workforce of about 400, most in Ottawa and Miramichi, N.B.

He noted that the Oshkosh truck is in service with the U.S. Marine Corps and is being used in Iraq.

The original military-to-military deal on the trucks was also attractive to the Canadian Forces for another reason; the Pentagon was willing to take payment for the vehicles as the funds became available to the cash-starved Canadian military. In addition, since Canadian army units work closely with their U.S. counterparts, spare parts and other support would be readily available on overseas missions.

Government sources say Stewart and Stevenson, the company building the trucks for the U.S. army, was also agreeable to having Canadian firms provide parts for its vehicle as part of an effort to create jobs in Canada.

Conservative Party defence critic Jay Hill said in cases where equipment is needed immediately and the savings are substantial enough, the military should be allowed to buy the equipment as it sees fit.

"We‘ve had too much emphasis on a shop-at-home policy which has unnecessarily delayed purchases and often resulted in a vastly inferior product at vastly inflated prices," he said.

Mr. Hill used the example of the Iltis, a jeep-like vehicle originally built in Europe. Because of Canadian government attempts to create jobs, it was stipulated that the vehicles had to be built at Bombardier in Montreal. That move hiked the price of the Iltis from $26,500 each to $84,000.
 
Its nice to have make work projects to keep good jobs here. But it shouldn‘t be done on the back of military budget. Hopefully that will be after the next election, but I doubt as most policial parties seem to like pork barrel projects.
 
Not to make me look like an idiot but did anybody read the title of this thread "Shop at home policy adds $300 million to Forces‘ truck costs - Ottawa Citizen" and immediately think of the logistikunicorps uniform supply site on the web.

Shopping at home (getting kit online) adds to truck costs (have to ship the kit out)...

Maybe I‘m nuts ;)
 
I think you are nuts.

Did the Iltis really cost $84,000 each?

How much do the G-Wagons cost each?
 
Which Oshkosh truck is under consideration? They make several models for the military. The MWTR is transportable by C130 and is in use by the Army and Marine Corp. There should be existing contracts with Oshkosh that the Canadian government could ‘piggyback‘ on and, assuming a sizeable order, such trucks should cost no more than what the US pays for them.

I buy equipment for a living and am familiar with these types of agreements.

The Oshkosh truck may cost more than the S&S truck -- I haven‘t been able to find cost figures.

Jim
 
Jim

What you fail to understand is the need to Canadianize the specification.

We can‘t buy a vehicle unless it has Canadian supplied Engine, Transmission and Brakes, all of the most economical type, preferably mismatched and assembled by the company delivering the most government votes.

And of course someone needs to get paid for this wonder of engineering.

Cheers, Chris.
 
Originally posted by Old Guy:
[qb] Which Oshkosh truck is under consideration? They make several models for the military. The MWTR is transportable by C130 and is in use by the Army and Marine Corp. There should be existing contracts with Oshkosh that the Canadian government could ‘piggyback‘ on and, assuming a sizeable order, such trucks should cost no more than what the US pays for them.
[/qb]
It would be a 2 1/2 ton.

GW
 
Thanks, guys. I figured the 2-1/2 ton truck was the one under consideration. Both Stewart & Stevenson and Oshkosh build such trucks using a ‘family‘ concept whereby the base units may be built for a multitude of purposes.

I understand the need to ‘Candadian-ize‘ the truck, for which purpose the Oshkosh might be the best candidate, given that the company appears to already have operations in Canada. Even switching to a Canadian-built engine and trans shouldn‘t present a huge engineering problem nor make the trucks cost a lot more -- except -- the whole thing will be conducted by a government committee.

Therein lies the problem -- no matter who‘s government it is.

Jim
 
Don't forget the MLVW, a rehash of a design that's been around since 1938. two years in trials and over 150 modifications in the first 2 years of service. I remember following a civy jeep in one and having the front left spring mount shear off, while driving at 15k cross country.

Those US trucks 21/2ton are the 4x4 with the tilting Forward Control cab are they not?

There are so many truck designs out there to choose from, likely we will pick a new design that has never been built or modify an existing design to the point where the original designer won't recognise it.

Although their engines won't meet our emission standards, the GAZ trucks are pretty good and likely half the price. They made a name for themselves in the Paris-Dakar races
 
I would point out that the price went from about $8,500.00 CDN to $84,000.00 CDN a lot of rich guys in that manufacturing deal!
 
STUPID STUPID STUPID
THEY MUST BE THAT GANG OF MECHANICS THE PRIME MINISTER WAS TALKING ABOUT
 
I think your about to find out about a lot of things relative to graft etc judging by the reaction to the auditor generals report. Not to many surprises, graft of this type after all requires government "PARTICIPACTION" but then as
Fats would have said "one never knows, do one"
 
From what i read the G-wagon is a great Militart Vehicle, its fast and can easily adapt armor plating. However its is still a small vehicle, If they spent 85k on each Gwagon, i fail to understand why we havent gone with the US HUMVEE
 
Originally posted by *CDN*Blackhawk:
[qb] From what i read the G-wagon is a great Militart Vehicle, its fast and can easily adapt armor plating. However its is still a small vehicle, If they spent 85k on each Gwagon, i fail to understand why we havent gone with the US HUMVEE [/qb]
Shop at home policy ;) Dontcha love it
 
Originally posted by *CDN*Blackhawk:
[qb] From what i read the G-wagon is a great Militart Vehicle, its fast and can easily adapt armor plating. However its is still a small vehicle, If they spent 85k on each Gwagon, i fail to understand why we havent gone with the US HUMVEE [/qb]
Let‘s put this into perspective a little why don‘t we...We are buying the G-Wagons in the Command and Recconnaissance and MP versions. That means they are going to equiped as such. When we started installing TCCS systems in our trucks we sold them to the company cheap (say an Iltis for $2K) and then bought them back at a much higher price (Say $85K for the same Iltis). This new Comms equipment is not cheap. These vehicles will be equiped with this Comms system. The price of Humvees would be just as great, once the Comms equipment is added on.

This is the new Armed Forces--very High Tech.

GW
 
We intend to replace a 2-1/2 ton rated vehicle (MLVW).

Do not assume the replacement will be rated only to 2-1/2.
 
Just looking through the forums and saw the ltis question. In Requiem for a Giant by Palmiro Campagna he states that the government decided to have the iltis produced in Canada to help out bombardier who were facing financial difficulties. Campagna uses the Iltis and its increased cost to demostrate what the government could have done for both Avro and Orenda after the cancellation of the Arrow and iroquois programs.
 
By the way the figures are correct by Campagna‘s stats.
 
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