Keywords

In this chapter we take a broader look at large-scale naval procurement than is usually done by defence or policy analysis in isolation. We argue that successful procurement/implementation in naval procurement—working from the general approach above—requires the existence of (1) a clear naval doctrine that supports a rational for the procurement of a particular weapon system and (2) the acceptance on the part of the government of that doctrine and a commitment to ensuring strategic alignment with it. If these two areas are aligned, procurement should proceed relatively smoothly, but issues can emerge if the doctrine is missing or unclear and/or if the government disagrees with the doctrine put forward by the military and prioritizes purchases in other areas or services.

As we have seen, major weapons systems that are developed/procured over long periods of time—during which changes in government priorities and/or changes in governments themselves can occur—are particularly susceptible to challenges in a way that less expensive and shorter-term purchases are not. Below we examine first the successful Australian and then the unsuccessful Canadian experiences in procuring Type 26 frigates and the lessons about Type 4 military platform procurement, and Type 4 porcurement in general, that can be derived from these two cases.

3.1 The Australian Frigate Procurement Case

The Australian experience with its Hunter-class Type 26 frigate procurement moved in a fairly straightforward manner when compared to the Canadian case and the ships are currently under construction after only about a decade of planning and preparation.

To understand why the RAN has been able to commence construction on its Type 26 frigates while Canada has not, it is necessary to appreciate the naval and political backgrounds in the Australian defence context. From its foundation with the Australian Naval Defence Acts of 1910 and 1911 (Stevens, 2001, pp. 17, 19), the RAN has been perceived by Australian governments as an “advanced line of defence” capable of “either countering or deterring any potential attack through a combination of early warning, forward basing and high technology” (Stevens, 2012, p. 189). The prevailing pre-Second World War conception of the RAN’s role was, of course, as a contributor to broader Commonwealth Imperial defence, although by 1938 it was recognized by the British Admiralty that the RAN’s core contribution would be to the defence of Australia and the merchant trade routes in the Pacific (Stevens, 2012, p. 193). During the Second World War, the RAN, much like the RCN, nevertheless, played a key role in training Anti-Submarine Warfare (ASW) personnel during the Battle of the Atlantic (Stevens, 2012, p. 194).

In the period before the Vietnam War, Australia’s naval doctrine was increasingly closely tied to the development of its US alliance (ANZUS) of 1951 and then the Southeast Asia Treaty Organization (SEATO) agreement of 1954–1977 (Beddie, 1979, p. 419; Stevens, 2012, pp. 194–195). The RAN was transitioning away from the United Kingdom and gravitating towards the United States during this period. This was significantly the case during the Vietnam War (1964–1975) by which time Britain’s presence east of Suez was steadily declining (Frame, 2009; Killen, 1976, p. 2).

The Australian military services were unified into the Australian Defence Force (ADF) by the Coalition government of Malcolm Fraser in 1976, based on the recommendations of a 1973 report by then Labor Secretary of Defence Arthur Tange (Edwards, 2006). The period 1972–1975 in general was a reformist period, wherein the Labor government implemented the first commitment to “continental defense” but also reduced service manpower in the wake of the abolition of compulsory service in 1973, with the size of the RAN falling by 1100 servicemen (Beddie, 1979, pp. 414; 422–424). Increasing self-reliance became the main strategic consideration (Mortimer, 2002, p. 15) and the RAN specialized as an Anti-Submarine Warfare (ASW) force under the SEATO umbrella (Frame, 2009), although it was also significantly focused on regional expeditionary operations (Killen, 1976, p. 10). Closer integration with the United States Navy (USN) to counter Soviet submarine expansion in the Pacific was also ongoing after Vietnam (Frame, 2004, pp. 257–258).

Commodore Alan Robertson was appointed Director-General Naval Operations and Plans in 1976 and proceeded to create a 20- to 30-year RAN force structure plan, based on long-term (Plan Blue: 20 years or more), medium-term (Plan Green: 10 years), short-term (Plan Orange: 3 years) and immediate-term (Plan Red: 1 year) variants (Robertson, 2003, p. 14).

This resulted in the 1978 force structure proposals drawn up by Robertson (Robertson, 2003, p. 16) (see Table 3.1).

Table 3.1 Australian Navy Force structure proposals
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This situation began to change with the dissolution of SEATO in 1977, as by the early 1980s the United States was refocusing on its European flank and the Middle East in the post-détente period of the Cold War. Australian defence policy therefore refocused on self-reliance, which for the RAN meant a more balanced capability to defend the sea-lane approaches to Australia (Beazley, 1987, p. 1). The vital nature of continued RAN technology exchange with the USN, however, was highlighted by the acquisition of the Adelaide-class of frigates, based on the USN’s own Oliver Hazard Perry-class of FFGs (Dennis et al., 2009). Capability loss did occur, however, the leading exemplar being the failure to replace the ageing carrier HMAS Melbourne with HMS Invincible, a proposal that was interrupted by the Falklands War, resulting in the loss of the RAN’s fixed-wing aviation between 1983 and 1984 (Frame, 2004, pp. 261–262).

When a new defence policy white paper was released in 1987, the focus was still on self-reliance and the independent defence of Australia had reached its zenith, which meant, for the ADF, focusing on Intelligence, Surveillance and Reconnaissance (ISR) and maritime forces capable of “defending the air-sea gap” (Fortune, 2014, p. 6). The RAN subsequently participated in both the 1991 Persian Gulf conflict and the Iraq War of 2003 in support of US-led coalitions. During the 1990s the retirement of the Seahawk helicopters, plus the retirement of experienced personnel, had caused the RAN’s ASW capability to atrophy (Davies, 2016, pp. 41–42). In the Australian maritime doctrine publication of 2000 (Shackleton, 2000), Chief of the Navy Vice Admiral D. J. Shackleton (based on Sam Bateman and Dick Sherwood’s Principles of Australian Maritime Operations of 1992) continued to identify national security as the highest strategic priority, which meant that the ADF was to continue to focus instead on regional stability and global cooperation (Shackleton, 2000, pp. 29, 31).

The basic principles of Australia’s maritime doctrine, as articulated by AMD 2000, were said to be always geographic: “Australia requires maritime forces capable of meeting the challenges of our strategic geography” defined as the island continent and its vast area of strategic interests (Shackleton, 2000, p. 11). This region is specified to include the Pacific and Indian Oceans, the South East Asian archipelago and the “Southern Ocean”—16 million square kilometres (more than eight million square miles)—which are part of the Australian maritime jurisdiction (EEZ) (Shackleton, 2000, p. 12). This includes defence of the country’s particularly vulnerable offshore petroleum production, representing 85% of Australia’s domestic energy consumption in 2004/2005 (Copley, 2006, p. 2).

The nature and importance of the maritime dimension is further illustrated by the fact that 97% of Australia’s trade moved by sea in 2003, and in that year offshore petroleum production accounted for $8 billion in revenue (Oborn, 2003). The imperative for maritime defence was also recognized in the subsequent 2009 defence white paper which stated that, “A particularly difficult aspect of the ADF’s principal task would be protecting our sovereignty in the offshore domain, which includes strategically significant offshore territories and economic resources in the remote north-western part of the ADF’s primary operational environment” (Fitzgibbon, 2009, p. 53).

Post-Cold War Australian governments also differed from many others around the world in discounting the idea of any post-Cold War ‘peace dividend’. Rather, they expected an increasingly complex spectrum of conflicts to emerge in which “national armed forces … have to do their best to adapt to all these situations and all these possible conflicts. They will need to do more, not less to meet the challenges of the spectrum of conflict” (Shackleton, 2000, p. 21).

Sea control, denial, and power projection were thus identified as the “basic tasks of maritime forces” (Shackleton, 2000, p. 37). Thus the capabilities required to carry out maritime operations and sea control were highly significant, requiring the commitment of significant resources for the RAN. As was recognized in the 2000 defence white paper, amphibious and expeditionary warfare increased in importance for both the RAN and ADF more generally in the post-Cold War period, and this was followed by the announcement in 2003 that major amphibious and sealift ships would be procured (McCaffrie, 2004, p. 33; Moore, 2000, p. 51; Ng, 2004, p. 19). This appreciation was met by the 2009 white paper’s focus on Landing Helicopter Docks (LHDs) and at sea replenishment ships (Fitzgibbon, 2009, p. 73). The decision to procure the F-35 Joint Strike Fighter (JSF), Project Air 6000, also renewed calls for Australia to procure aircraft carriers from which to operate them, as part of a broader “Amphibious Ready Group” concept (Leonard, 2004, p. 21).

The 2003, 2005 and 2007 defence updates by the Coalition government also promised to continue to expand the RAN’s amphibious capability, based on lessons learned from the high tempo of expeditionary operations during the decades of the 1990s and 2000s (Stapleton, 2014, pp. 53–54). While there was renewed focus in the service literature on the Amphibious Ready Group capability to expand RAN maritime options (MacRae, 2010, p. 42), it was also a fact that actual RAN surface combatant numbers declined overall from 14 in 1997 to 12 in 2008 (Cordner, 2008, p. 5), and the services’ manpower likewise declined from 16,059 in 1985 to 13,230 in 2008 (McDonagh, 2010, p. 22).

The decline in ship numbers had by 2009 resulted in an emphasis on recapitalization of the Australian fleet and this and other recruitment promises were made in a 2009 white paper. Together they were deemed to constitute the basis for the foundation of a New Generation Navy (NGN) (Woods, 2010, p. 12). There was significant interest in the Australian Naval Institute Journal, for example, in the procurement of the new submarines (then known as Project Sea 1000), and in particular whether it would be possible to equip them with nuclear power plants to extend their range and stealthiness (Girgis, 2010; Kilham, 2010). The proposed 12 conventional undersea boats were expected to cost somewhere between $17 and $36 billion in 2009 dollars, although there would be significant savings if the submarines were purchased from abroad (Kilham, 2010, pp. 5–6).

Given the increasingly maritime and amphibious focus of the RAN’s doctrine (Wilson, 2013, p. 78), shipping protection was an area of renewed importance (Griggs, 2013, p. 8; St. John-Brown & Lobley, 2001; Till, 2001). One consequence was the 2009 cancellation of the Super Seasprite helicopter procurement project which was replaced instead with one for the MH60R Seahawk, in turn reintroducing a dipping sonar ASW capability into the fleet after a 20-year hiatus (Davies, 2016, p. 43).

In 2013 Vice Admiral Ray Griggs, Chief of the Navy, wrote in the Australian Defence Forces Journal about the Australian maritime strategy, focusing on maritime sovereignty and calling for a stronger joint approach (Griggs, 2013, p. 5). Sea control in amphibious operations became a priority for the RAN and the ADF joint force more generally, although ASW capability was predicted to once again become a core capability, especially once new submarines and frigates were introduced. However, maritime air support was considered to be a point of weakness (Wilson, 2013, pp. 78–79).

Between 2013 and 2017 planning for additional surface ships continued. The Australian Maritime Operations doctrine of 2017 outlined a range of needed operations, from combat to non-combatant roles (Barrett, 2017, p. 13), and stated that reliance on allies was critical for achieving such vast offensive capabilities as blockade and amphibious operations (Barrett, 2017, p. 96). Protecting Australia’s maritime trade received significant attention (Barrett, 2017, pp. 103–120), as did expeditionary and amphibious operations (Barrett, 2017, pp. 123–131), and the sea control capability necessary to enable these (Barrett, 2017, pp. 133–144). Overall, the doctrine outlined a broad array of capabilities at both the high- and low-end of the naval warfare spectrum that would require a balanced and very capable force structure to actualize. This approach included increasingly closer and deeper connections with the military industry. In early October 2017 Vice Admiral Tim Barrett, the Chief of the Navy, gave a speech at the Sydney Sea Power Conference, highlighting the government’s commitment to “the rolling acquisition of new submarines, and continuous build of future frigates and minor naval vessels” to acheive these goals (Barrett, 2018, p. 31). Construction on the new ASW frigates was expected to begin in 2020 (Barrett, 2018, p. 32).

The future frigate programme itself had been kickstarted by the 2000 white paper, wherein the future force structure of the RAN was laid out. This defence white paper argued for the acquisition of a new class of air defence frigates, while laying out expectations that “a major surface combatant program” would follow upon completion of the Anzac-class frigate production run (Moore, 2000), replacing the ageing River-class destroyer escorts which were decommissioned between 1985 and 1994; HMAS Anzac entered service in 1996.

There was significant focus, since 2016, on a A$180 billion commitment to national shipbuilding (Noonan, 2020, p. 17). Australia’s existing air defence frigates, the Adelaide-class, were scheduled to begin decommissioning around 2013, although in the case of the Canberra and Adelaide specifically these dates were brought forward to 2005 and 2008 respectively, which meant that it was necessary to procure “at least three air-defence capable ships” that would be “significantly larger and more capable than the [Adelaide-class] FFGs.” Planning for these future Air Warfare Destroyers (AWDs), the Hobart-class (Moore, 2000, p. 90), then began in 2005/2006 (Watt, 2014). These warships would eventually fill not only the air defence requirement, but also a 20-year DDG (Guided Missile Destroyer) capability gap, that had emerged with the retirement of the three, 35-year-old, Perth-class destroyers between 1999 and 2001. The cumulative project cost was expected to be A$9.1B for three vessels.

The complexity of the AWD programme, and a decision to proceed with a domestic build, however, meant that some delays were incurred; indeed, the Hobart-class were still on order in 2009 (Fitzgibbon, 2009, p. 71). Finally, in 2014, Navantia’s F100 destroyer was awarded the contract (Watt, 2014), and the lead ship was commissioned three years later, late in 2017 (Corby, 2017). Although there were complaints that the destroyers were delivered over budget and behind schedule, with Australia’s ASC shipyard taking the blame for both (Gardner, 2018), these criticisms appear mild when compared to extensive, decades-long delays in the Canadian Type 26 case, as we shall see.

The Adelaide-class frigate upgrade process meanwhile lasted almost two decades, beginning with the initial 1991 policy statement, continuing through to the 1999 contracting of ADI Ltd (Thales Australia) and concluding with the vessels being delivered between 2006 and 2009 (Cordner, 2008, p. 13). Between 2015 and 2019, however, the decommissioning of the Adelaide-class continued, with four ships retired, and the last two Adelaide FFGs were recently sold to the Chilean Navy in April 2020 (Kelly, 2020). This chronology of these Australian naval procurement projects is set out in Table 3.2.

Table 3.2 Australian Type 26 chronology
Full size table

Part of the reason for these delays rests with the Australian commitment to defence self-reliance, historically stemming from the 1976 white paper which put considerable pressure on Australian governments to maintain a long-term shipbuilding capacity (Killen, 1976, p. 39). This was not a simple task: it implied striking a complex balance between ensuring that a competitive defence procurement process was in place, on the one hand, while also fostering industrial growth at the national level to ensure sufficient capacity in case of conflict, on the other (Markowski & Hall, 1998, p. 138). At the end of the Cold War, Australian governments nevertheless had divested from the domestic defence industry, with the goal of fostering private sector efficiency and job creation—but this came at the cost of forgoing rapid recapitalization cycles (Markowski & Hall, 1998, pp. 138–139).

In 2009, the Labor government published a defence white paper reiterating the government’s commitment to the replacement of the Anzac-class with eight new frigates (Davies, 2016, p. 43; Fitzgibbon, 2009, p. 43). However, because the first vessel would not be delivered for another 15 years, there was little immediate urgency. In fact, it was the submarine replacement programme that continued to generate the most interest, in particular whether they would be nuclear powered or not, as mentioned above (Girgis, 2010; Kilham, 2010).

Compounding the defence recapitalization delays, the Global Financial Crisis of 2007–2009 resulted in falling defence budgets. Furthermore, the Australian Labor party was unwilling to significantly increase its defence spending, even if support for the naval recapitalization plan was bipartisan. Under the Howard governments of 1996–2007 defence spending had in fact doubled from A$9.9B (1.87% of GDP) to A$19.9B (1.6%) (Carr & Dean, 2013, p. 81), but remained stable, despite inflation, from 2007 (1.68–1.82%) (Carr & Dean, 2013, p. 77) to 2013 (1.56–1.64%) (SIPRI, 2021). The inflationary reduction in funding, combined with the 2007 financial crisis, meant a significant postponement of the very generous funding that many defence white papers and defence updates had outlined (Davies, 2016, p. 44; Watt & Payne, 2013).

Under the Gillard government various defence reviews took place, including the Defence Planning Guidance, ADF Force Structure Review (2012) (Smith, 2013, p. 75) and the Defence Force Posture Review (Smith, 2013, p. 4). The 2013 white paper specified that the ADF would refocus towards Indo-Pacific security and move ahead with the development of the RAN’s future force structure, which would specifically include a Collins-class submarine replacement and the replacements for the Anzac-class frigates (Davies, 2016, p. 44; Smith, 2013, p. 83). Once again, however, the future submarine programme retained the highest priority, and the FFG replacements were delayed (Smith, 2013, pp. 123–124), despite the RAN considering them a key component of their maritime and amphibious force structure (Griggs, 2012, p. 20; Raymond, 2018, p. 355). Nevertheless, there remained evident connections to the ‘foundations’ of the Australian approach, for example, considering that warships were to undergo “continuous production” (Davies, 2016, p. 44)—a strong signal that self-reliance was still firmly on the books.

By the mid-2010s, the question of how to best manage the increasingly expensive naval construction projects was becoming central, and various reports were produced by Research and Development Corporation (RAND) to analyse the problem. There were a variety of options on the table to replace the FFGs, including the Norwegian F310 Fridtjof Nansen-class (built by Navantia), the Blohm and Voss F125, Meko 600 escort frigate, and Australia’s own designer Austal, who had built the USN’s Independence-class Littoral Combat Ship (LCS), was also in the running (Defense Studies, 2014). In 2014, a report looked at three procurement models for the SEA 5000 programme: the first relied on the ‘built in Australia’ approach, the second centred on the modified off-the-shelf design (MOTS) model, and the report was rounded out by an “evolved MOTS” where major changes were made to an existing MOTS design (Schank et al., 2014).

In April 2015, the third report in this series of RAND analyses of Australian shipbuilding recommended the domestic construction of four Offshore Combatant Vessels (OCVs) as a first step in the transition to the future frigates (Birkler et al., 2015). This approach was comparable to the Canadian warship package model adopted under the National Shipbuilding and Procurement Strategy (NSPS) by the Harper administration, in first constructing several Arctic Offshore Patrol Vessels (AOPVs—the future Harry DeWolf-class) prior to transitioning to its own frigate construction. The downside was that this choice would imply slowing each frigate’s build cycle by something between 12 and 24 months (Thomson, 2015) and ultimately, Prime Minister Tony Abbott’s Coalition government chose instead to accelerate the SEA 5000 project and bring forward its start date from 2024 to 2020 (Davies, 2016, p. 46; Gardner, 2018), while at the same time increasing defence spending from 1.77% of GDP in 2014 to 2.08% in 2016, importantly out-pacing inflation (SIPRI, 2021).

Progress continued under Prime Minister Malcom Turnbull, who, on 18 April 2016, announced that the Royal Navy’s BAE Systems’ Type 26 Global Combat Ship, the Franco-Italian Fincantieri FREMM and the Spanish Navantia F-100 were the three vessels short-listed to replace the Anzac-class frigates. Furthermore, the buy order was increased from eight to nine ships (Davies, 2016, p. 45; Department of Defence, 2016, pp. 21, 93, 113), at a total estimated cost of A$35B (Defence Connect, 2018).

Australian governments continued to pepper the procurement period with policy statements: the 2016 defence white paper, derived from the First Principles Review of August 2014 (Department of Defence, 2016, pp. 165–166), showcased significant continuity in the theme of naval modernization and regional security, which had already been outlined by both the previous Labor and Coalition governments. A ten-year capitalization plan, the 2016 Integrated Investment Program, with funding targeted at A$195B between 2016 and 2026, was also announced (Department of Defence, 2016, pp. 31, 86), which would entail that overall defence spending reach and maintain at least 2% of GDP by 2023/2024 (Department of Defence, 2016, pp. 24, 30).

Criticism of the shipbuilding strategy remained, however, with navalists arguing that the process was too slow and politicized (Davies, 2016, p. 41). To address these concerns, in May 2017, the Naval Shipbuilding Plan (NSP) was released, securing A$168–183B as part of the National Naval Shipbuilding Enterprise (Department of Defence, 2021) and assigning to the DOD as much as 25–30% of its acquisition budget (itself 10% of the overall budget for DOD) for warship procurement (Hellyer, 2020, pp. 32–33).

Procurement reform was an important component of this extensive future shipbuilding programme, which was to include 12 new submarines, 3–4 Hobart-class vessels, and the nine new frigates (Hunter-class), not to mention a number of offshore patrol and combat vessels, two LHDs, and sealift replenishment ships (Anderson, 2016). In June 2018 it was announced that the Type 26 had been selected for the future frigate programme, with the first ship scheduled to enter service in 2027 (although this was later delayed to 2031). In October 2018, BAE System Australia and the Australian government agreed to the details of the advanced work arrangement for the frigates (Kuper, 2018a), and Defence Minister Christopher Pyne signed the A$35B contract on 14 October (Kuper, 2018b). The initial fiscal commitment for the preliminary design and engineering work was A$52M (Defence Connect, 2018).

The government of Prime Minister Scott Morrison, who had succeeded Turnbull in 2018, next released the 2019 Strategic Policy Review, with a 2020 defence policy update and force structure updates immediately following. These documents upped the ante for ship construction even further, embodying a transition to a more assertive strategic posture for Australia, one that would focus on the projection of power in the region, rather than exclusively upon the defence of the continental maritime approaches (Department of Defence, 2020a, pp. 26–27).

The shipbuilding industry was to be developed so as to become both sustainable and continuous (Department of Defence, 2020b, p. 43). The Australian Industry Capability (or Content) programme was the tool chosen to strengthen the national defence industrial base (Department of Defence, 2020b, p. 90) by mandating the domestic development of 65–70% of the now designated Hunter-class Type 26 frigates, which would lead to the contracting of “over 500 [or 700] Australian businesses from every state and territory” (Kuper, 2018b). The Hunter-class programme was already employing 1400 people in both Australia and the United Kingdom in 2021, and the Systems Definition Review (SDR) had been completed at the beginning of that year (Lockhart, 2021, pp. 66–67). Forty additional domestic contracts had also been arranged (Lockhart, 2021, p. 68). In 2020 Chief of Navy Vice Admiral Michael Noonan stated that “the Navy’s relationship with industry is as strong now as it was [in 2018], if not stronger.”

Construction for the Hunter-class was now scheduled to last from 2020 to the 2040s, at an estimated cost of A$45.6B (Department of Defence, 2020b, p. 45). This was a significant quantity of money, nearly equal to the entire defence budget for 2021 (A$44.62B) (Hellyer, 2021). Defence spending was therefore scheduled to increase, with the goal of reaching A$53.24B by 2024/2025 (Brangwin et al., 2021). Prototyping began in December 2020, with construction scheduled to begin in 2022 (Allison, 2020), and the first of the nine Hunter-class frigates indeed began construction that year, the first steel having been delivered in 2021 (Naval News 2021).

At this point, both the Hunter-class and several Arafura-class patrol boats were “on contract and well into the design phase” (Department of Defence, 2020b, p. 43). A successor class to the Hobart-class was also being considered (Department of Defence, 2020b, p. 37), and the future Attack-class submarines were then being negotiated under contract with the French, although they were soon to be upgraded to nuclear propulsion and re-contracted with the British and United States as part of the controversial AUKUS agreement (The Economist, 2021). This was at least in part due to the inability of the French to meet the Australian domestic industry requirements (Master, 2021).

From this short overview, it can be seen then that there was long-term historical alignment between the RAN and the ADF’s maritime doctrine and the expectations of Australian governments articulated in their defence policy statements. Although priorities within the broader defence policy regime varied a little between leaders and governments, this was essentially a bipartisan issue and the RAN’s importance as a vital guarantor of Australia’s safety was recognized by everyone concerned. Warship and submarine recapitalization thus progressed relatively smoothly, with ageing systems being decommissioned and replaced with minimal capability gaps, although occasionally very expensive systems such as aircraft carriers or amphibious landing ships came and went.

The future frigate program waxed and waned in significance, especially as the cost and complexity of the systems increased, but was nevertheless recognized as essential and, significantly, ships are now under construction after only about a decade of serious planning and budgeting although Australian critics still consider build-times too long and programme costs unnecessarily high or over budget, these are very mild concerns in comparison to the problems with the Canadian frigate procurement programme, as we shall see below, which started somewhat earlier and has yet to see construction begin.

3.2 The Canadian Frigate Procurement Case

While Canadian procurement of major military platforms over the past 40 years (including aircraft, helicopters, submarines and surface ships) has been riddled with issues and often been described as a major procurement policy problem (Paas-Lang, 2022; Perry, 2015; Plamondon, 2011; Sloan, 2014; Vucetic, 2016), the process attached to the current Canadian Surface Combatant (CSC) has been, contrarily, praised by multiple stakeholders.

Hence, if lack of progress on ship construction is not determined by the procurement process itself—a commonly pointed at culprit for the many delays and problems which have featured in other rounds of Canadian military procurement (Mack, 2020)—what accounts for the decades of delays, and capability gaps in the case of Canada’s frigate and destroyer replacements? And, in particular, why do we see the same chequered stop-start pattern emerge in this area, much like it did elsewhere with other large procurement processes, for example, during the failed acquisition of the EH-101/Cormorant helicopter when procurement cycles were evidently subject to political over-rides and cancellations (Byers & Webb, 2013; Plamondon, 2010)?

It has been observed above how successful procurement in large, long-term and non-incremental (Type 4) programmes requires that clear and operationalizable objectives and settings be matched to properly calibrated policy tools. There needs to be alignment between these two aspects of procurement if we expect successful implementation and, indeed, this was clearly the case in the Australian frigate example examined above. However, this alignment can be difficult to achieve if the main actors in this process engage in it without a guarantee that their objectives and tools will be matched in the way they would like, and even if they are initially matched, there is no guarantee that this alignment can be sustained throughout a very long-term procurement cycle. As we shall see below, both these circumstances fit the Canadian Patrol Frigate (CPF) replacement case.

Appendix B summarizes the general policy goals of Canadian defence policy since 1964, developed from the government’s major policy statements. As this chronology shows, Canadian defence policy goals and objectives continuously shifted during this time period, and this was especially true when considering the prioritization of the defence policy regime itself. That is, successive Canadian governments prioritized either collective security or national sovereignty, and differed in how governance arrangements around these goals were organized, for example, emphasizing NATO commitments or the preservation and protection of Canada’s Arctic sovereignty, two tasks which require very different equipment.

In general, the picture that emerges is one in which Canadian defence arrangements and broad goals changed somewhat slowly and in a largely secular fashion, although they were either boosted or limited from time to time by major historical events including the end of the Cold War and the 9/11 terrorist attacks. However, meso-level policy objectives were revised more frequently, and often on what appears to be at least partially partisan grounds. For example, when collective defence was centre stage, it became imperative for Canada to showcase a true commitment to NATO and NORAD missions, which in turn meant that—at the very minimum—the country needed to maintain and make available to these organizations a core set of capabilities including logistical support, air defence and anti-submarine warfare, that the Alliance could then draw upon if nuclear or conventional war occurred.

But Canadian governments from Pierre Trudeau onwards often prioritized defence sovereignty in a bid to emphasize an independent Canadian foreign policy beyond the country’s alliance frameworks, the result of which was always a reduction of defence spending commitments as national security was invariably a less expensive option than strategic (collective) defence. Hence, the concept of ‘sovereignty’ as interpreted by Maritime Command, and later the RCN, became coterminous with a renewed focus on coastal defence (especially in the Arctic) that was expected to bleed resources away from the country’s larger scale alliance commitments in the Atlantic and Pacific theatres.

With the end of the Cold War the relative importance of Canada’s commitment to collective defence declined, and the notion emerged in the country that Canada, and indeed the world, would now be able to enjoy a substantial ‘peace-dividend’ because the arms race (and its inherent costs for new and updated equipment) could be abandoned. The RCN, however, as in the Australian case, correctly argued the opposite: that, if anything, Canada’s international commitments would increase as new, multiple threats relating to global terrorism and failing states would emerge in the power vacuum left by the demise of the Soviet Union and its bloc.

This warning fell on generally deaf ears and it was not until 11 September 2001 that the federal government’s reluctance to adequately fund defence ended. In the interim, however, Canada’s military had struggled through a long series of procurement crises—including both ships and helicopters—that severely undermined its international collective security capacity.

Paradoxically, however, for the Navy in particular, 9/11 did not unlock the boost in funding that other parts of the CAF enjoyed. The post 9/11 Afghanistan operation, with its land focus, the decision of the Conservative government to prioritize Arctic patrol vessels, and the F-35 procurement fiasco (see following chapter), further marginalized the RCN, a position from which this service never truly recovered.

As Table 3.3 summarizes, during the study period the RCN’s doctrine attempted to remain constant despite shifting political goals, resulting in alternating periods of alignment and misalignment with government goals and priorities. Between 1960 and 1990, the RCN’s doctrine was firmly set on its NATO collective defence foundation (which primarily meant ASW in the Atlantic theatre), as NATO originally had proposed to then Prime Minister Louis St. Laurent in 1947, extending the Navy’s traditional role from the First and Second World Wars. While the Arctic theatre was also recognized as a risk factor, the lack of nuclear submarines which could operate in that environment meant that that region was largely ignored by the RCN. A specialization in ASW as a component of NATO became the RCN’s force structure justification.

Table 3.3 Canadian naval doctrine 1964–2021
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The end of the Cold War meant shrinking CAF budgets, as we have seen, and the RCN effectively took on the shape of a coastal defence force, albeit retaining some global commitments. With Soviet submarines less and less of a threat, probable missions were understood to range from fisheries protection to coastal patrols, especially in the Arctic. Maritime Command’s minimum fleet size was established at maintaining two small task groups: one in the Pacific and one in the Atlantic.

The top naval task, regardless of doctrine, became national maritime security as collective defence was rapidly deprioritized by successive Canadian governments, a trend that was synergistically accelerated by the emergence of national security as a critical priority following 9/11. Although Canada’s commitment to the so-called Global War on Terrorism required a resumption of some collective defence missions such as anti-piracy actions off Somalia whether the operationalization of this strategy would rely on the traditional Alliance framework or instead be based on a fragmented structure of ‘ad hoc coalitions’ was unclear. Be that as it may, the RCN’s role within the scheme of national security now had two sides: the first was an Arctic reorientation, which increasingly took on both economic and military valence (Leadmark, 2001), and the second was participating in counter-terrorism activities off its own coasts. Both Liberal and Conservative governments after 2001 stuck to this bifurcated national security approach.

However, while this was happening the existing fleet was ageing and required rejuvenation or replacement. The government of Jean Chretien had pursued a gradual replacement project that would have begun with the retirement of the four remaining Cold War-era DDH/DDG 280 destroyers and their replacement by a new set of home-grown Command and Control Air Defence Replacement (CADRE) ships. Paul Martin’s government, however, cancelled the CADRE destroyer replacement programme in June 2003 in the wake of the events of 9/11 and later, as the War of Terrorism drew down, Prime Minister Harper’s Conservatives then prioritized the Arctic as a much more relevant national security issue. As a consequence, in 2008 Ottawa opted for the introduction of Arctic Offshore Patrol Vessels/Ships (AOPVs) and additional bids were let for replacement supply ships and icebreakers. The political will to carry through with these expensive platforms was however almost immediately curtailed by the 2008 Global Financial Crisis and it still took another decade to see realization with the launching of the first AOPV despite its new and high priority.

The RCN’s capacity to undertake its traditional NATO role continued to degrade because of the new focus on the national and maritime security missions, and by the mid-2010s, it had become difficult for it to justify its traditional NATO task group structure. Since the new Arctic patrol vessels were prioritized over major surface combatants (and submarine replacements), the RCN could but await its turn for service recapitalization. By the late 2010s not only was the RCN facing structural collapse from chronic underfunding, but its efforts to maintain its existing fleet, and build new ships, were also foundering.

Unable to abandon its international treaty committments, however, in response the Harper Conservatives proposed a National Shipbuilding Procurement Strategy (NSPS) which was meant to address shipbuilding procurement delays by creating a more deliberate and strategic approach to the procurement of vessels for the RCN, supposedly to ensure a “blue-water capable Canadian Navy” for many decades to come, alongside the new AOPVs. The current Trudeau Liberal government’s National Shipbuilding Strategy (NSS) is a follow-on shipbuilding plan evolved from the NSPS with additional components and elements.

At the core of the NSPS approach, in addition to the AOPVs and new, more capable, support ships, is the Canadian Surface Combatant (CSC) programme. Officially launched in 2004 as the Single Class Surface Combatant (SCSC), the successor of the cancelled CADRE programme to replace the four ageing Iroquois-class destroyers (DDG 280s) which had been purchased by the Pearson government in 1968, the CSC in fact has had a much longer historical background than is generally recognized. The approaching need for replacement destroyers had been clear to the RCN at least since the mid-1990s and had been articulated as we have seen in the CADRE programme, first proposed in 1994 (Burke, 1998).

A detailed mapping of the CSC procurement history is found in Appendix A. However, the major stages of the process are set out in Table 3.4 below.

Table 3.4 The Canadian Surface combatant chronology
Full size table

The CADRE process itself was marred from the very beginning by a lack of clarity about the scope of the doctrine—air defence vs ASW—that should have framed the vessels’ operations and was stalked throughout by funding issues so much so that in a 30 May 2001 briefing note RCN disappointment seemed to boil over: “This three-hull solution appears to be driven by acquisition costs vice [sic] an agreed capability requirement. It is considered premature to be committed to specific hull numbers to fit a funding level before the department has endorsed the capabilities required in CADRE. … The fixation on affordability vice [sic] a discussion on what capabilities are desired is frustrating” (Westlake & Pickford, 2001, p. 2). These concerns about an excessive obsession with costs over commitments were further articulated: “[t]he CADRE project is a complicated project that has the potential to provide the CF [Canadian Forces] with the capabilities necessary to function alongside our allies well into this century. Unfortunately, affordability issues seem to be driving the requirement. Lack of CF doctrine is frustrating development of capability requirements. These issues are going to affect CADRE throughout its development” (Westlake & Pickford, 2001, pp. 3–4).

To make matters worse, the technical complexity of the project and the ‘build-in-Canada’ requirement further hindered the process. As the RCN pitched large new platform acquisitions Canadian defence policy shifted twice, first to support post 9/11 operations in Afghanistan, and then under the Harper Conservatives, to focus on Arctic sovereignty. CADRE was cancelled in 2003 and its successor SCSC and then CSC programme were deprioritized so that no real progress was achieved for the better part of two decades.

But destroyer replacements nevertheless remained a key topic in RCN doctrine. Maritime Command’s Leadmark 2020 doctrine manual of June 2001 (Leadmark, 2001) highlighted the need for large warship replacements and these were mentioned again in the May 2002 Parliamentary report on Canadian Forces readiness (Pratt et al., 2002).

However, the demise of the Soviet Union and the focus on the ‘peace dividend’ approach to defence spending, as we have seen, made a destroyer replacement politically and financially unpalatable for government. Replacements for both the four Iroquois-class destroyers and the 12 Halifax-class frigates were thus bundled together (Graham, 2005), with the Defence Staff’s Directorate of Maritime Strategy proposing the commissioning of SCSCs, for a total of 18–24 hulls, with construction theoretically slated to begin in 2017 (MacLean, 2005).

Since the end of the Cold War, however, as we have seen, Canada’s military procurement systems have been significantly stressed, with few actual deliveries on promised weapon systems taking place anywhere near on time or on schedule. Notable failures include the EH-101 helicopter, the planned replacement for the CF-18 fighters and indeed the replacement of Canada’s ageing surface fleet (Sloan, 2014). Furthermore, the replacement of the 30-year-old Victoria-class submarines, which were built in the 1980s and commissioned in the early 1990s by the Royal Navy before being acquired by the RCN in 1998, and whose life cycle extension should end in the early/mid-2030s, is completely off the radar (Department of National Defence, 2017).

Procurement for the RCN has traditionally been shaped by ‘boom-and-bust’ cycles, with entire classes of vessels allowed to deteriorate before being replaced within a relatively short timeframe once they have reached the end of their operational lifespan (but often much later than that). This ‘boom-and-bust’ approach has been blighted by lengthy, protracted and fraught negotiations that generally have disappointed all parties from ship-builders to foreign bidders, as well as military and defence policy bureaucracies, the media and, not least of all, the public. Indeed, the boom-and-bust cycle has been recognized as a problem by nearly all stakeholders and was one issue the NSS was expected to counter. The usual Canadian military procurement issues, however, quickly reared their head within the NSS. The election of the Harper Conservatives in 2006, for example, brought with it a different approach to the role of the RCN, which included a strong focus on the Arctic (Lajeunesse & Dean, 2016). The frigate replacement lost whatever priority it may have had, and it was determined instead to build first the AOPVs, in order to bolster the government’s claim to sovereignty in the Canadian Arctic (Mack, 2020).

The 2008 Canada First defence white paper (Department of National Defence, 2008) supposedly sped up the CSC project (construction now was intended to start in 2015), but also reduced the number of hulls from the proposed 18–24 to 15. In October 2011, the federal government officially announced that Irving Shipbuilding of Halifax was the winner of the competition for the combat vessel package Ottawa had crafted (supply vessels and new icebreakers were also being bid upon in a separate package), and between 2012 and 2015 initial industry engagement took place. Ottawa at the time intended to both fully design and build the future combat ships in Canada (Perry, 2015), which would necessarily require a lengthy industry process for design and delivery.

As announcements and policy papers followed one another, however, so did the continual downgrading of the CSC programme. In 2015–2016 the Liberal Party under Justin Trudeau took power, and in the Liberal’s 2017 Strong, Secure and Engaged defence policy paper the government budgeted a mere C$14.6 billion for construction of 15 CSCs, with the first hull projected for delivery in 2026 (MacLean, 2017). However, in June 2017 the Parliamentary Budget Officer (PBO) sounded the alarm with regard to these overly optimistic forecasts. The PBO found the CSC project was in such a state of underfunding, due to the choices of the previous Conservative administration, that only six ships, not 15, could be built if the C$26.2 billion budgeted in 2008 were the only funds available. Building 15 vessels was now projected to cost $61.82 billion (Thomas, 2017; Story, 2017), far more than had previously been anticipated.

By October 2018 it had become clear that designing the new CSC vessels in Canada would prove, if not impossible, at least crippling for the projected replacement schedule. Similar concerns had been raised by the RCN during the very early stages of the CADRE discussion when the capacity of the Canadian shipbuilding industry to deliver these vessels autonomously was questioned as it was “believed that very little of the design and engineering expertise involved in the CPF project remains in Canada and yards would require a significant ramp up with high associated costs” (Westlake, 2000, p. 7). This issue would come back to haunt future efforts and effectively required that a foreign design be seriously considered.

It was not surprising then when the federal government, therefore, formally announced in 2017–18 that Lockheed Martin Canada would be the lead company in a consortium that would develop the new surface combatant based instead on the British BAE Systems’ Type 26 frigate design (Collins, 2019). This seemed to indicate that the programme was at last moving ahead, but only a year later a further blow arrived as the government added two more vessels to the original six AOPVs (these destined for the Coast Guard), and therefore, the new frigates would now likely not be laid down until the mid-2020s, pushing their theoretical commissioning into the 2030s (Parliamentary Budget Officer, 2021; S. Webb & Murray, 2016). Even despite this delay, between 2013 and 2020 procurement costs alone for the project reached C$1.01B (Brewster, 2020).

Ultimately, as of March 2023, no CSC ship has been delivered—indeed, the programme is still under review—and cost overruns are expected to increase total project costs well beyond C$80B, and be much higher if total lifetime costs were to be included alongside these initial construction costs (Parliamentary Budget Officer, 2021). As a result, the procurement project for the CSCs is under the very real threat of a major reduction in the proposed 15 hull buy, which would return the RCN to its pre-NSS situation, leaving only a very modest replacement approach that would not fill the operational gap that emerged after the 2014 retirement of the Tribal/Iroquois-class of air defence destroyers and possible downgrading of the current Halifax-class fleet.

An indication of how this situation may resolve itself can be found in the 2021 PBO report, which noted that almost C$50B could be saved if the RCN only purchased three or four of the larger Type 26 vessels, and instead transitioned to the smaller (and presumably much cheaper) export-orienated Type 31 to replace the rest of the Halifax-class, effectively replacing the decommissioned frigates with similarly sized units (Parliamentary Budget Officer, 2021). Meanwhile, a potential third option is emerging, as BAE Systems have announced plans to design and commission by the 2030s a Type 32 General Purpose Frigate, which may better fit the current Canadian approach because of its modular design and lower costs (Willett, 2022). Thus, at the time of writing, after over two decades of planning, not a single new blue-water warship has been delivered and most indications portend yet another round of review, pending a shift to a smaller platform not yet even available from the manufacturer.

Analysing the CSC frigate procurement project as an example of a Type 4 (although Canadian governments often treated it much like a Type 3) procurement process helps to understand why this happened. Such processes require not only that the goals of the political and administrative sides be closely aligned but also that such alignment be maintained over the long-term. As developed in Chap. 2 and examined in the Australian frigate case above, this means that successful Type 4 procurement in the case of naval frigates requires that successful projects must be based on a combination of (a) clear naval doctrine justifying a force structure and (b) government(s) accepting that doctrine and providing funding for the force structure. Procurement can be expected to flow along relatively smoothly if these two conditions are met. However, when (a) no clear doctrine is present and/or (b) the government disagrees with it, procurement processes can become highly problematic, especially over the extended periods of time needed to procure expensive, technically complex, weapon systems—and, moreover, if substantial changes occur at the political level, delays and frustration are likely, as has certainly been the case for the CSC project.

Any procurement project would be hard pressed to recover from the kinds of constantly shifting political and security ground that have underlain Canadian defence policy in the post-Cold War era and this is certainly true of the RCN and its plans for fleet recapitalization. Even for simple Type 1 and Type 2 procurement projects, government goals and agency instrument choices need to be continuously aligned and re-aligned to ensure a successful outcome. This has failed to occur in the even more problematic Type 4 frigate procurement case, which focuses on purchasing a long-term, irreversible, high-cost major platform (Chapman, 2019; Nossal, 2012; Plamondon, 2011; Vucetic, 2016). Here a lack of alignment might well prove fatal.

3.3 Comparison of the Australian and Canadian Frigate Procurement Processes and Outcomes

Procurement represents a key part of public policy, overlapping cognate fields including public administration, policy-making, political economy and, when we talk of defence procurement, straddling the broadly defined field of public policy studies and more narrowly defined subfields such as defence geostrategy and international studies. The efforts of the Canadian and Australian naval services towards procuring new frigates showcases the complexities involved in these processes and in seeking the alignment needed between the preferences of politicians, the role of administrators and the strategic vision of the military when large, long-term Type 4 procurement programmes are in play.

These disagreements and misalignments are critical to procurement policy failures: in the Canadian case, the ambitions of the RCN to build and maintain a blue-water fleet conflicted with the image that multiple governments’ defence policies had of it as a coastal defence force (Fetterly, 2009; C. Stone, 2012). And yet, as the Australian case and even some earlier Canadian examples show, successful major surface warships procurement is possible. This is well demonstrated by the 1970s era Halifax-class CPF programme in Canada, by the Canadian AOPV example, and by the Australian Hunter-class case presented here. However, the Australian case also clearly shows that for Type 4 procurement to be successful multi-year championship of service doctrine by government policy and leadership are required in order to ensure that commitments to a high level of funding, from multiple administrations, are honoured. Key projects need continual political leadership and Cabinet support, or they will stall, or fail, as has happened to date in Canada (Collins, 2018, p. 44; Richardson et al., 2020).

In other words, here, as in many non-military Type 4 cases, including hydroelectric dams and nuclear power plants, governmental political-economic and electoral considerations need to be continually aligned with agency goals so that budget constraints and complex performance requirements can be met (Caldwell & Howard, 2014). Given the long-term nature of these decisions, the development of Type 4 projects such as weapons systems will reflect shifting electoral calculations that affect government spending priorities as well as those changes in geostrategic considerations that influence military needs and priorities (Calcara, 2020).

The Canadian frigate case has to date been a disaster for the RCN, resulting in capability gaps as the Tribal-class destroyers were retired, the CADRE and SCSC successors cancelled, and the practical results of the Canadian approach are that the Halifax-class frigates will not be retired until they are reaching over 40 years of service, while it remains unclear if replacement vessels will in fact be available when the older ships are finally sold or scrapped. Delays in starting the CSC programme, combined with shifting political interest in maintaining continuous building queues for specific kinds of ships, worsened by the 2008 Global Financial Crisis and subsequent cost inflation, have significantly delayed and increased overall frigate programme expense, even in an environment when equipment costs were predictably expected to double every eight years (Sutekh, 2001, p. 24). But more importantly, the RCN’s blue-water collective security-oriented maritime doctrine has not been shared by any recent Canadian government, and the resulting lack of equipment purchases outside the AOPVs has meant that the service has been effectively relegated to a coastal and Arctic defence role which it does not support.