J
Jason Jarvis
Guest
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.
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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.
