Financially conservative - really?

http://ca.news.yahoo.com/blogs/dailybrew/canada-arctic-patrol-ship-program-same-course-f-204909780.html

Screwing up military procurement contacts is as Canadian as shinny and maple syrup.

Word that there are questions surrounding the Conservative government's program for new Arctic patrol ships, including of course the cost, should startle no one.

 

You can go back a century to the infamous Ross rifle that Canadian soldiers took into the trenches in the First World War, only to find the mud made them jam and worse — the bolts sometimes fell out or even flew back and hit soldiers in the face when they fired.

Flash forward to more recent history and you've got the Liberals' purchase of second-hand British submarines that have been in the repair dock more than at sea, the endlessly delayed replacement for the navy's ancient Sea King helicopters and of course the budget-busting F-35 stealth fighter program.

It is surprising that the government appears to be circling the wagons on questions about the plan to build eight ice-capable offshore patrol vessels, just as it did when questions were first raised about the F-35 program's soaring costs.

But the Conservatives insisted that they were so much better than the others, more honest than the others, more financially prudent than the others. They forgot to tell Canadians that they were less experienced than the others, less competent than the others, less open than the others and of course less intelligent than the others.

How does the tender/bidding system work?

As some may be aware I have been involved in the construction industry for some 40 years now and can speak with some understanding of the tender process at all levels of government. Some projects of note are the Montreal Olympics, Federal buildings in Hull, James Bay, Pickering Nuclear, Darlington Nuclear, Bruce Generating and Mirabel airport. I have been the the prefered consultant to various government departments here up until I decided to slow down 3 years ago.

There are those patronage contracts that are awarded to friends, these are usually small and go relatively unnoticed by upper management. Then there are larger ones that are required to go to open tender, it is these that can and are at times manipulated by the department responsible. From time to time you have tenders that are by invitation only and are sent to pre-qualified contractors.

How are contracts manipulated? The Engineer, Architect or spec writer prepares the document in such a manner as to exclude those that they don't want or that they have been instructed to eliminate. There may be a series of clauses that put up hurdles that must be overcome which make it difficult for contractors to qualify. ( a good example of project/government manipulation by an Engineering firm would be the recent revelation regarding SNC/Lavelin)

Then you have builders/contractors that are the preferred and only ones qualified to do the work. In the case of the F-35 Lockheed Martin was the only one that produced the craft, period. The specifications and wish list of the government were greater than the competition were prepared to supply on the given time line. In this scenario the highest price is the best price.

In the case of ship building the government insisted that the tenders were going out to 3 qualified yards and that the government would be at arms length from the bidding process. What they failed to do was, first and foremost, obtain a professional opinion from those with knowledge of the requirements, competitive pricing and operating environment for the ships. In this scenario there is a very good chance that you can have some form of collusion. While I can't say that is the case here the extreme price of the successful bidder does raise questions.

When and if there is collusion it usually occurs like this.... one bidder informs the purchaser that they are unable to bid at this time. The other bidders have an agreement that bidder (A) will present the low bid while bidder (B) will bid millions higher.... both bidder (B) and bidder (C) will be compensated later for helping bidder (A) be successful.

Does it happen often? Only when the government is inexperienced or lazy.

In this case the government has shown their lack of experience and unwillingness to spend a million to get advice in order to save a billion in taxpayer dollars.