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New Canadian Shipbuilding Strategy

Navy_Pete

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Still wish we had Danish project managers and bookkeepers.



They would lose their minds; they are only reporting on a small fraction of what we have to include on our budgets. Add in things like PM staff, training, ammunition, initial sparing, infrastructure, design costs, weapons, comm systems etc and their cost estimates look a lot like ours. The CSC would be a lot cheaper if the PR cost was just what was the cost paid for getting the hull in the water.

We also include contingency, so at 30% that means about $20 B of the CSC project is 'in case' funds. But things like massive inflation hits, project delays etc all eat into that, so it can turn into real costs pretty quickly (and likely already has) but never something well explained when they do the headlines..
 

Kirkhill

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They would lose their minds; they are only reporting on a small fraction of what we have to include on our budgets. Add in things like PM staff, training, ammunition, initial sparing, infrastructure, design costs, weapons, comm systems etc and their cost estimates look a lot like ours. The CSC would be a lot cheaper if the PR cost was just what was the cost paid for getting the hull in the water.

We also include contingency, so at 30% that means about $20 B of the CSC project is 'in case' funds. But things like massive inflation hits, project delays etc all eat into that, so it can turn into real costs pretty quickly (and likely already has) but never something well explained when they do the headlines..

And thus my call for Danish bookkeepers as well as Project Managers. The problem seems to have roots in the Treasury Board.

The Danes also have this

The Danish Ministry of Defence Acquisition and Logistics Organisation (DALO) is responsible for procurement, supply, maintenance, development and decommission of material capabilities, IT and services for the armed Danish forces and Emergency Agency.


 

KevinB

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And thus my call for Danish bookkeepers as well as Project Managers. The problem seems to have roots in the Treasury Board.

The Danes also have this




Having dealt with DALO, they aren't exactly as fantastic as touted -- mind you they didn't shut down their equivalent of LETE, so there is that...
 

Rainbow1910

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Still wish we had Danish project managers and bookkeepers.



It's even more amusing when you realize that the Iver Huitfeldt-class frigates further obfuscate their true cost due to the fact that the Danish government had the hull sections built in Estonia and Lithuania before being moved to Denmark to be assembled.
 

Czech_pivo

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And thus my call for Danish bookkeepers as well as Project Managers. The problem seems to have roots in the Treasury Board.

The Danes also have this




To borrow a few phases, lines from another thread on there - we here in Canada have 'Roman' bookkeepers and PM's and not 'Hanseatic' ones and therein lies the bane of our problems.
 

Spencer100

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To borrow a few phases, lines from another thread on there - we here in Canada have 'Roman' bookkeepers and PM's and not 'Hanseatic' ones and therein lies the bane of our problems.
Yes true! But then I think the Canadian Private sector has bookkeepers of a small town English storekeeper.

Also its more of a government/civil service schizophrenic we are cheap and but also spend like crazy!
 

Navy_Pete

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To borrow a few phases, lines from another thread on there - we here in Canada have 'Roman' bookkeepers and PM's and not 'Hanseatic' ones and therein lies the bane of our problems.

It's only really a problem when our own government compares the two costs like they are apples to apples and can't be arsed to even understand the internal rules they make us follow if we want approvals, then complain that the timeline slips and perceived and real costs go up.

On the plus side for our allies, it makes them look like rockstars because their goverments likely don't understand the reports either, so they look like absolute geniuses in comparison, even if they are paying something comparable in reality, just in different line items that aren't rolled up.
 

CBH99

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They would lose their minds; they are only reporting on a small fraction of what we have to include on our budgets. Add in things like PM staff, training, ammunition, initial sparing, infrastructure, design costs, weapons, comm systems etc and their cost estimates look a lot like ours. The CSC would be a lot cheaper if the PR cost was just what was the cost paid for getting the hull in the water.

We also include contingency, so at 30% that means about $20 B of the CSC project is 'in case' funds. But things like massive inflation hits, project delays etc all eat into that, so it can turn into real costs pretty quickly (and likely already has) but never something well explained when they do the headlines..
I know we’ve touched on this previously in other threads, but the CAF & GoC do a horrible job at selling these equipment procurements both to approval boards & the public by either…

a) proposing a procurement that does not not sound financially reasonable, while simultaneously not explaining what all is included in those costs

(Not explaining that the costs include a 10 year support contract, spare parts, simulators, etc - perhaps even including the estimated costs of the salaries of those expected to operate/maintain it - is doing us no favours at all…)


b) explaining to government it is their policies that slowed things down, which causes the costs to go up substantially, which then causes everybody to re-evaluate the project as a whole.

Yes DND must show solid stewardship of money allocated to it, and use that money to move projects ahead however it can, while putting the money to good use.

The current system is designed to ensure good use of taxpayer dollars by having various levels of review prior a project proceeds to its next phase. The problem is, the current system is also part of what’s causing so many taxpayer dollars to be spent accomplishing literally nothing…
 

Navy_Pete

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a) proposing a procurement that does not not sound financially reasonable, while simultaneously not explaining what all is included in those costs

The initial project approval is a ROM cost, and is basically an educated guess based on a market survey, past data and projections, with a lot of contingency built in.

It's not a rectal pluck, and there is usually a detailed estimate somewhere. The cost breakdown in the proposals at all the approval gates is there though.

The problem is the project cost estimate will go from a detailed plan, to a half page summary to maybe a ppt slide with a pie chart, and then to a single number for headlines. But the number of things to include in project costs keeps growing, and that's due to TBS telling people what to include as costs. If they want total cost of ownership for something that takes 15 years to deliver and will run for 40 years it will be eye-watering, but doesn't mean it's not financially reasonable for what the capability is.

Between the DND PMO and TBS there is PSPC and the actual TBS advisor, who is the one that presents the project. There is a weird firewall setup, and if there are any follow on questions it is a slow telephone game, as the people that know the answers are about 5-6 layers of bureaucracy away from the question asker.
 

Kirkhill

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What is the cost of operating the CN for the next 50 years? Including sufficient profit to make it a viable investment.

What is the cost of a new engine and 100 cars?
 

KevinB

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What is the cost of operating the CN for the next 50 years? Including sufficient profit to make it a viable investment.

What is the cost of a new engine and 100 cars?
I'd say not a relevant factor for the Military...

You can't run the Military like a business, as there is no tangible benefit.
Sure you can't point to the things they do, and what additional assets will allow to be done (or keep doing) - but they don't have a direct financial reward, so you can't extrapolate from that, or use a business case like above.
 

Kirkhill

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I'd say not a relevant factor for the Military...

You can't run the Military like a business, as there is no tangible benefit.
Sure you can't point to the things they do, and what additional assets will allow to be done (or keep doing) - but they don't have a direct financial reward, so you can't extrapolate from that, or use a business case like above.

I'd say a 50 year timeline is not a relevant factor for a military. And yet those are the timelines to which the CAF is being held.

The military is a business. It hires people. It buys equipment. It provides a serviced. It uses money. It requires management. It is as much a business as a railway, a broadcaster or an insurance company. It is in every way conceivable a Security Company. The only question is whether it is a Government Agency, a Crown Corporation, an NGO, a Non-Profit, a publicly listed corporation or a private corporation.

You're right in one sense. Nobody asks CN or the CBC how much it costs them to supply a service for 50 years. Because in 50 years everybody knows that all assumptions are completely invalid - environment changes, society changes, competitors change, technology changes.

It is a stretch to get a private company to look at the 7 to 10 year horizon.

Edit - and you are wrong about no tangible benefit

You are just not understanding the metrics. Insurance companies and police departments have similar metrics. They may be ambiguous, amorphous, hard to pin down - but they are demonstrable when absent.
 

Colin Parkinson

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I'd say not a relevant factor for the Military...

You can't run the Military like a business, as there is no tangible benefit.
Sure you can't point to the things they do, and what additional assets will allow to be done (or keep doing) - but they don't have a direct financial reward, so you can't extrapolate from that, or use a business case like above.
We need a better way to communicate costs to the average Canadian/voter so they can be more supportive. You think that would be a good job for our PAO's.......
 

KevinB

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We need a better way to communicate costs to the average Canadian/voter so they can be more supportive. You think that would be a good job for our PAO's.......
Based on my experience it’s not the PAO shop. They need actual data and information to frame a message.
Garbage in = Garbage out…

Same thing happens down here.
 

KevinB

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I'd say a 50 year timeline is not a relevant factor for a military. And yet those are the timelines to which the CAF is being held.

The military is a business. It hires people. It buys equipment. It provides a serviced. It uses money. It requires management. It is as much a business as a railway, a broadcaster or an insurance company. It is in every way conceivable a Security Company. The only question is whether it is a Government Agency, a Crown Corporation, an NGO, a Non-Profit, a publicly listed corporation or a private corporation.

You're right in one sense. Nobody asks CN or the CBC how much it costs them to supply a service for 50 years. Because in 50 years everybody knows that all assumptions are completely invalid - environment changes, society changes, competitors change, technology changes.

It is a stretch to get a private company to look at the 7 to 10 year horizon.

Edit - and you are wrong about no tangible benefit

You are just not understanding the metrics. Insurance companies and police departments have similar metrics. They may be ambiguous, amorphous, hard to pin down - but they are demonstrable when absent.
You would be hard pressed to show Canadian society a tangible benefit.
Most are intangibles, and yes you could come up with a weighted metric, still most in Canada would shrug and say, not my problem.

Most Canadians are fine with letting the neighbors do the lifting so they can bitch about how it was done.
 

Spencer100

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You would be hard pressed to show Canadian society a tangible benefit.
Most are intangibles, and yes you could come up with a weighted metric, still most in Canada would shrug and say, not my problem.

Most Canadians are fine with letting the neighbors do the lifting so they can bitch about how it was done.

Yes, I have always hated this about my fellow Canadians and their smug anti Americanism. I have always said to them "fine let's be neutral....but you do understand that going cost more than you can imagine?" What? they say? No way. Yes which program transfer program are you going to cut? As I show them different neutral countires around world. I would think the Medicare is the one to cut. Oh and we will have to have national service too.....

After that "grumble grumble, fine....I just the wish Americans wouldn't be so mean"....

 
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