Keywords

Procurement is a hugely important but understudied aspect of public policy-making.

Defence studies, in particular, provides an excellent field for the examination of the most complex type of procurement: those involving large, multi-year purchases, which characterize the acquisition of large complex weapon systems like ships and aircraft. This book represents an effort to bring together the insights of different fields from public management to defence studies in order to shed light both on the background of some of the largest procurement projects in Canadian and Australian history, and on the subject of procurement more generally.

The case studies contained in the book show that Type 4 procurement dynamics are unique in requiring large-scale government and service commitments across multiple decades. But the two platforms considered in the book have shown that there are at least two major areas of focus when we analyse large-scale military procurement from a policy perspective. On the one hand, we need to worry about the formulation phase, which includes the political and strategic dimensions of the process. The other is the implementation phase, which is more directly connected to the process of allocating resources and in particular of managing the funding that is associated with these purchases.

The F-35 cases show how vulnerable procurement efforts are to electoral, budgetary, and other political challenges, but also how politicization is only fatal where consensus/alignment on overall plans and needs does not exist. In other words, in Type 4 cases formulation problems (misalignment) can drive implementation (process) failures and lead to procurement success or failure in this category of purchases. Of course, the F-35 cases also demonstrates that even when alignment exists success is not guaranteed and procurement can also fail due to implementation process issues such as excessive politicization (Collins, 2018).

As Table 6.1 shows, there are four different possible outcomes for these kinds of processes based on the two key dimensions highlighted above. Successful procurement appears only when both the implementation and formulation phases of the process are successful. In other words, when there is alignment between the strategic and political dimensions, and the procurement process also proceeds well, then procurement success can be expected, as occurred in Australia, which tended to have better overall success compared to Canada.

Table 6.1 Typology of large-scale procurement outcomes
Full size table

In the case where just one of these variables is successful, we have intermediate situations where procurement can be either much delayed or fail all together. In the case of implementation process failure, as Collins (2019, 2021) suggested, purchases will either be enormously delayed or never delivered.Footnote 1 Finally, the fourth quadrant encapsulates the ‘non-starter’ option, possibly embodied by the Canadian CADRE fiasco where both implementation and formulation—and financing—never came together and the project was scrapped in its entirety.

Lessons from the study are of use not just for the military, but also in many areas dealing with similar large scale and long-term purchases and projects, ranging from energy megaprojects such as dam construction to scientific research and vaccine development, amongst many others. These have all so far escaped serious and detailed analysis (Doern, 1983; Gunton, 2003; Anin et al., 2022).

The cases show that political and strategic inputs in the process of large-scale Type 4 procurement are critical in that they shape the policy agenda and the behaviours of multiple actors. In fact, the politicization of high-risk decisions, which leads to an engagement in the file by the executive, occurs exactly because of the elevated stakes and risks involved in large-scale, high-cost procurement processes (Krause & Zarit, 2022).

Since large-scale military platform procurement is a very close match for Type 4 procurement, it is unsurprising to find political engagement here. These two cases do show though that in dynamic Type 4 procurement environments it is essential for political-electoral and strategic considerations to meet and that their alignment needs to continue to deal effectively with constraints and issues that arise during planning and commissioning stages, including changing budgeting environments, shifting electoral calculations, partisan composition of government, and emerging complex performance demands (Caldwell & Howard, 2014).

The frigate procurement process case studies set out above in particular illustrate how difficult it is to align governmental preferences with agency ones in large, long-term procurement situations and how disagreements, misalignments and politicization (specifically, where the blue-water force structure ambitions of the RCN conflicted with the coastal defence role imagined by multiple governments’ defence policy, but also the Liberal Party elevation of the F-35 contract to an electoral issue) have crippled both ship and aircraft procurement in Canada and Canadian military security with it (Fetterly, 2009; Stone, 2012a).

The history of successful major surface warships project procurement in Canada (such as the 1970s era Halifax-class CPF programme) in the past, and in the Australian case, both demonstrate that Type 4 procurement success requires multi-year championship of service organization doctrine by government policy and leadership. As the successful Australian F-35 and failed Canadian JSF processes show, Type 4 projects need continual Cabinet support, or they will stall or fail altogether (Collins, 2018, p. 44; Richardson et al., 2020).

This suggests that given the long-term nature of these kinds of decisions, the development of Type 4 purchases will inevitably reflect shifting electoral calculations that affect government spending priorities as well as changes in strategic considerations that influence government and public priorities (Calcara, 2020); and that such changes must be anticipated and managed if Type 4 procurement is to proceed to a successful outcome. Here, as in many Type 4 cases—from hydroelectric dams to major highway or mass transit construction—governmental strategic or political-electoral considerations need to be aligned with agency goals and protected from unwarranted criticism so that budget constraints and complex performance requirements can be overcome and projects completed on time and on schedule (Caldwell & Howard, 2014).

When this alignment did not occur in the Canadian frigate case it was a disaster for the RCN, resulting in capability gaps as the Tribal-class destroyers were retired without replacement, the result of low prioritization and low defence budgets. It is now certain that the Halifax-class frigates will not be replaced until they have reached well over 40 years of service. Delays in starting the CSC programme, political interest in maintaining continuous building queues, combined with the 2008 financial crisis and subsequent cost inflation, significantly increased overall shipbuilding programme costs, in an environment where equipment costs were already predictably expected to double every eight years (Sutekh, 2001, p. 24). But, more importantly, the RCN’s maritime doctrine was not shared by any recent Canadian governments, and the service was effectively relegated to a coastal and limited Arctic defence role (as no nuclear submarines, a must have for effective Arctic defense, were considered during the study period) and its procurement ambitions left to flounder. This is significantly different from Australia where, despite high costs and political risks, Australian governments all recognized the need to maintain and cultivate capabilities through procurement commitments and shipbuilding has proceeded more or less as originally planned.

That these problems are not platform-specific but structural is clear from the historical record. Significant delays in large-scale military procurement efforts are not new in Canada: more than 15 years ago the Chief of Review Services (2006) noted that over the previous three decades DND major capital acquisition processes averaged 15 years each no matter what procurement framework was utilized or what product was being purchased (Auditor General of Canada, 2010). Due to budget constraints, and an emphasis on the domestic economy rather than a defence imperative focus, the Canadian system of military procurement has led to modernization processes in which the recapitalization cycles for major platforms have required more than 20 years (Fergusson, 2002), and invariably capability gaps and cost inflation have occurred simply as a result of these extended timeframes. The CSC project is a case in point, where a ship for ship replacement for the Navy’s destroyers evolved into an ambitious, and perhaps somewhat misguided, programme to replace both the destroyers and frigates simultaneously (and coinciding with the F-35 procurement), despite the government’s priorities being elsewhere (Afghanistan and the Arctic).

Thus, in the case of the CSC frigate Type 4 procurement, the study shows how difficult it is to align governmental preferences with agency ones, while the similar Type 4 F-35 process shows how political disagreements and misalignments can significantly delay procurement.

This is not to say that alignment is impossible to achieve, and the two Australian cases provide many clues about how this can occur. The two cases clearly demonstrate that successful projects require multi-year championship by the government, commonly a multi-administration commitment, and secure funding that at least matches inflation. For example, in the Canadian case, re-alignment could have occurred through the Navy embracing national sovereignty, and its associated coastal patrol and Arctic roles, or if the government shifted to a collective security priority, bringing the two into accord, as may now yet happen in the wake of the current Ukraine crisis. But when neither did so, and when the Navy continued to insist upon a global operations capability, the result was a failed procurement process (Auditor General of Canada, 2021).

Many unanswered questions still remain around Type 4 procurement, of course. These include, for example, why governments or services would persist in their effort to obtain platforms that are clearly not moving forward (Berente et al., 2022). The dominant orthodoxy for why the Canadian government is sticking with the Type 26 programme currently is assumed to involve sunk costs and the allure of the potential for industrial benefits (Perry, 2015). However, a misalignment lens also helps explain this since a lack of alignment reduces any urgency in product acquisitions and opens up a political space to treat the procurement as a purely political issue of either (a) who gets the benefits and who gets stuck with the bill—leading to ‘kick the can down the road’ logics or (b) as a strictly symbolic action in order to placate interested parties without actually completing a purchase or, even more cynically, without ever having any real intent to see procurement through to completion. In the case of the RCN, for example, continual delays have led to a ‘fantasy flotilla’ promotional industry kept alive by repeated bouts of governmental over-promising and under-delivering.