[Recorded by Electronic Apparatus]
Thursday, May 4, 1995
.1532 
[English]
The Chair: I call our meeting to order, now that General Richardson has arrived. We now have a quorum for hearing evidence, and no doubt those who are absent without leave will turn up shortly.
Before I welcome our guests, I'd like to tell everybody in the room that we are honoured by the presence of a group of students from across the country who are visiting under the auspices of the Forum for Young Canadians. Many of us have gone to those dinners, and we'll probably go to a lot more. They are all the way from Victoria, B.C., to Chatham, Ontario, and in between - Winnipeg, and I forget where the others are from. Anyway, you're very welcome here, and I hope you can figure out what is going on, and when you figure that out, would you please let us know.
I want to welcome also our guests from the Department of National Defence and from the Royal Canadian Navy, who are here to talk about the frigate program. As is our usual custom, we will hear an opening statement and then we will ask some questions. I must warn you that when the Minister of National Defence was here, he congratulated members of the committee on their well thought out questions. So you can expect that they will perform above average today.
They're sort of like the Quebec Nordiques; they really are out to perform and even overperform.
Mr. Frazer (Saanich - Gulf Islands): And in danger of being moved.
The Chair: In danger of being moved? I hadn't thought of that, but now that you mention it....
So, welcome. I would like to call upon Mr. Lagueux, who is the Assistant Deputy Minister, Equipment Program Management. I know he has an opening statement that he wants to make. Please proceed.
Mr. M.P. Lagueux (Assistant Deputy Minister, Equipment Program Management, Department of National Defence): Thank you, Mr. Chairman and hon. members. We appreciate the invitation to talk to you this afternoon about the Canadian patrol frigate.
[Translation]
As you mentioned, my name is Pierre Lagueux and I am Assistant Deputy Minister, Equipment Program Management with National Defence since the 1st of April, 1995.
[English]
I would like to make some short introductory remarks during the next few minutes, and then we will be pleased to answer any questions you have about the frigate project.
I have with me today Rear Admiral Saker, the senior ranking engineering officer in the Canadian forces and the project leader of the CPF project; Commodore Gibson, until very recently the project manager of the Canadian patrol frigate project; and Captain Sylvester, the present project manager.
[Translation]
Also with us is Commander Thiffault, the Commanding Officer of HMCS Ville de Québec who just recently came back from NATO duties with his ship.
.1535
[English]
During the next few minutes I'll be talking about the CPF project, and I would like to cover the following things: a brief history of the project; some of the early problems we encountered getting started on this major undertaking; the success we have realized; and lastly, some specifics that have been requested about the separate contract with Unisys to provide additional trainers for the navy.
The CPF project is still one of the largest Crown acquisition projects in Canadian history. It began almost 20 years ago, in 1977, to plan, design, build and deliver operational, fully supported, multi-purpose frigates for the Canadian forces. These new ships were vital to replace the aging fleet of steam-driven destroyers.
The project was approved in two stages. In July 1983 approval was given to proceed with the design and construction of the first six ships, and this approval included support and training facilities for the ships' crews. The approved budget cost of this first phase was about $5.5 billion.
[Translation]
In December 1987, approval was given for the construction of an additional six ships. This brought the overall approved budget to $10.4 billion for all twelve ships, support facilities, spares and more.
[English]
At present, departmental estimates of the final cost, taking into account all actual figures to date and expected future costs, will be $9.05 billion. This is about $1.5 billion under the approved budget.
The project is progressing very well. The ships' performance is meeting or exceeding our expectations. Obviously, that is both a quantitative and qualitative comment, but I think the true proof of a project this size comes down to the operators of the equipment, those men and women who take the technology to sea to defend Canadian interests.
It is in that regard that we have present with us today to answer your questions the captain of a new frigate. I would encourage you to ask Commander Thiffault to speak about his personal experiences on board this ship. To that end, it might be useful for members at this time if, with your approval, Mr. Chairman, Commander Thiffault could take a few minutes now to relate some of his most recent experiences to the committee. With your permission, let me turn the floor over to him, and then I will return and continue my comments afterwards.
[Translation]
Cdr P. Thiffault (Commander of HMSC Ville de Québec, Department of National Defence): Thank you, Mr. Lagueux.
Mr. Chairman, honourable members, I have been a naval officer for 23 years now. I was around when we had steam-powered destroyers and combat systems that had long outlived their usefulness and effectiveness in the navy. That's why I'm delighted to have this opportunity to talk to you today about my pride and joy, HMCS Ville de Québec and to give you my crew's impressions of the ship's performance in combat situations and in sea manoeuvres.
[English]
To begin, I was appointed commanding officer of HMCS Ville de Québec before the ship was delivered to the navy in 1993. I have witnessed the contractor's sea trials in their entirety, and I've conducted the post-acceptance sea trials, which fully exploited the capabilities of the ship's combat and marine systems. Of course, we've yielded most impressive results all along the way.
During this time, HMCS Ville de Québec had the good fortune of relieving HMCS Annapolis, which had developed engineering difficulties while on duty enforcing the embargo against Haiti. Although HMCS Ville de Québec only spent nine days on patrol and had only completed just over half of its sea trials, the ship earned high praise from the joint task force commander for the manner in which the ship responded to the operations and contributed to the embargo itself.
[Translation]
Since the beginning of our combat preparations, the Ville de Québec has covered over 35,000 nautical miles and has fired its weapons systems on several occasions with excellent results against real targets and in quite complex tactical conditions. We have taken part in all sorts of naval exercises alongside our allies and have often received acclaim for the effectiveness and tenacity of the Canadian patrol frigate.
The Ville de Québec has just completed a 44-day cruise in the North Atlantic, which included a four-day visit in Belgium.
.1540
This also included a NATO exercise off the coast of Norway along with over 50 allied ships. Once again the Ville de Québec was up to the challenge and demonstrated a war capability superior to that of the other ships. The computerized combat system did an excellent job throughout the exercise.
For example, we had no difficulty maintaining electronic links with North American defense systems, allied ships, and Norwegian and UK air defense systems. In fact we were often the only ship able to maintain electronic links with those units.
The Ville de Québec also did very well in the rough seas of the North Atlantic. Often, we were the only ship that completed helicopter flight operations or supply operations with support ships despite gale force wind of 6, 7 or more.
[English]
In the end Ville de Québec operated flawlessly for 32 consecutive sea days, which is really testimony to the remarkable operational capability of these ships. The ships' company is simply elated with the performance of the ships in all areas of warfare and considers Ville de Québec, and her sister ships for that matter, as world-class frigates.
Over the past two years I have entertained many visits to Ville de Québec by senior naval officers from the United States, the United Kingdom, France, Belgium and many other countries, all of whom were captivated by the level of combat and machinery systems integration in the Ville de Québec. They were amazed at the capability of the ship as a whole. Canadian patrol frigates are indeed formidable warships that stand ready to serve our country for many years to come.
[Translation]
I would be pleased to answer any questions you might have about the ship's combat and operational capabilities.
[English]
Mr. Lagueux: If I may proceed, Mr. Chairman, there is no denying the fact that it has been a long process bringing these ships to where they are now.
[Translation]
There were early problems - principally with delays in the schedule while the Canadian industry and we, ourselves, learned over again what was required to design and build war ships. However, the majority of early design and production delays have been overcome and the remaining minor problems are being resolved.
[English]
You can only judge a tree by the fruit it produces. Six ships - HMCS Halifax,Vancouver, Toronto, Montréal, Ville de Québec and Regina - have completed trials, are in operational service, and have contributed to both sovereignty duties and international peacekeeping.
HMCS Fredericton, Calgary, Winnipeg and Charlottetown have been delivered. They are undergoing navy trials and will soon begin operational duties themselves.
The remaining two ships are under construction in Saint John and will be ready for delivery next year. The last ship, Ottawa, is expected to be delivered in June 1996, three months ahead of the original contract schedule.
[Translation]
Saint John Ship Building Ltd. is our prime contractor and has total responsibility for implementing all aspects of the project. These responsibilities include management, ship design, construction, quality assurance, trials, material support, training, shore facilities and many other services, in addition to satisfying an ambitious industrial benefits program.
The contract with SJSL is for $6.2 billion.
[English]
SJSL has been working with two principal subcontractors, Unisys GSG of Montreal, formerly Paramax Electronics, and Marine Industries Limited MIL de Lauzon.
The MIL ships are now complete and in service. Overall, the Saint John Shipbuilding team is doing a good job and building excellent ships, which was one of our project mandates from the beginning, to create shipbuilding expertise in Canada.
Perhaps a few short words about Unisys are appropriate, since I will refer to them later. Unisys GSG is responsible for the design, integration and delivery of the ships' combat system. They have realized the unique achievement in the computer integration of the sensors and weapons for CPF and are receiving world-wide attention.
.1545
There are also a host of other Canadian suppliers involved in CPF work, some 300 first tier suppliers alone.
The objectives of the CPF project are being, and will continue to be, met within allocated funds and with significant benefit to Canadian industry and to Canada as a whole. The fact is that the CPF design is a success story, which has now been confirmed by operational experience.
[Translation]
Canada now has, for the first time ever, a warship with a combat system and machinery system that are automatically integrated with computer control. The captain of Ville de Québec could certainly indicate what these systems add to his capability.
The CPFs are all highly flexible ships, capable of extended operations at sea under all weather conditions and over a wide range of national and international naval duties.
[English]
Cdr Thiffault: Another major consideration for building the frigates in Canada was the industrial benefits programs, which I indicated earlier.
[Translation]
The CPF project has generated significant industrial benefits.
[English]
At the height of production, the prime contractor and his principal subcontractors alone were employing over 6,000 people directly on the project. Over 70% of the project cost is spent in Canada, creating more than 50,000 person years of direct work. Direct and offset industrial benefits total some $6.9 billion, which is more than the total value of the Saint John contract.
Prior to moving on to discussing the trainer project with Unisys, I must emphasize that there have been, as expected, initial problems in the CPF project, and it was the job of the government and industry management teams to work through these issues over the 12 years this contract has been in effect. They have done their job.
I would also anticipate that new, minor problems will continue to pop up from time to time as the project winds down and as the ships continue in service, but we should consider this as normal.
When the Crown brings employment to 50,000 people and designs and builds a new state-of-the-art warship, a few problems must be expected. But project management includes recognizing the problems and knowing how to fix them, and the project management team for CPF has done, and is doing, just that.
I would like to focus, over the last few minutes, on the separate subject of the trainer contract with Unisys, one of the many ancillary projects being managed by the frigate project, in addition to the main prime contract.
[Translation]
Treasury Board approved the awarding of this sole source contract to Unisys on April 19, 1991, since they alone had the technical expertise and data on the CPF combat system technology. After all, this was a project objective.
This contract consisted of two sub-projects - to provide a combat system Maintenance Procedures Trainer or MPT and an Operations Room Team Trainer or ORTT.
[English]
These trainers became necessary to train the additional sailors needed when the CPF project was increased from six to twelve ships, since all training for operators and maintainers is conducted in the engineering test facilities.
Unisys in turn subcontracted to various companies with experience in designing and building simulation-type trainers. Unfortunately, both the MPT and ORTT trainer projects experienced delays, as both sides underestimated the developmental nature of the work involved with the computer-based simulation for training. This problem was further exacerbated by the Unisys training expertise not being as extensive as was thought or expected. As a result, milestones were not being met and Unisys as a consequence was not being paid.
Finally, a senior level review, comprising both government and Unisys personnel, was prompted in January 1993 by continued negative reports from both the project management office and the Unisys teams. This review confirmed that the projects continued to experience difficulties, which would further delay the work and increase the cost, and that responsibilities for those problems could be apportioned to both parties.
.1550
[Translation]
Three contractual options were considered at that time - continuance, termination or restructuring. After all the options were examined, it was decided to amend the contract or restructure various aspects of it.
The government on-site team was reduced in size and relocated to Ottawa in recognition of the nature of the work and the problems that had been experienced. We can discuss these decisions with you if you wish. At the time, they were very carefully explained to the management staff, not all of whom accepted that the decisions were the right ones. However, the actions taken were successful.
At present, the ORTT project is progressing through the requirements definition phase and the preliminary design specification should be complete this June at the amended cost. Full design and production will follow.
[English]
The maintenance procedures trainer project has now delivered the prototype to the fleet school in Halifax. It has undergone a highly successful evaluation and is now training sailors. It has also been demonstrated both nationally and internationally with considerable acclaim. All indications are that the prototype should form the basis for more training and trainers. A decision on the production is currently under consideration.
In summary, the requirement for these trainers remains valid and urgent, and again, both trainer projects have had problems but they have been addressed. The trainer project is within its ceiling price of $90 million and will be executed within its allocation.
Finally, we still believe that the decision to amend the two contracts in mid-1993 was the correct one and was in the best interest of the taxpayer.
[Translation]
Mr. Chairman, I appreciate the time you have given me and I do hope that I have not gone on for too long but we are all very proud of the CPF project.
[English]
Let me now turn the floor back to you. If there is anything you or your committee requires, my colleagues and I stand ready to answer your questions.
[Translation]
Thank you.
[English]
The Chair: Thank you very much.
I noticed you said Ottawa would be the last ship in the program and I just wondered why Ottawa always comes last, whether it's the national hockey league or whether it's the Canadian patrol frigate program. I'm beginning to think there really is some sort of cloud over this city.
But I should also -
Mr. Mifflin (Bonavista - Trinity - Conception): I can tell you, Mr. Chairman, Ottawa is last because St. John's is before.
The Chair: Good.
All the members around the table were on the special joint committee on the defence review, and in that capacity we travelled to ex-Yugoslavia, including the ships doing the embargo on the Adriatic, and all of us were on Halifax. As a matter of fact, Mr. Jacob was one person who did the jackstay transfer between Halifax and Preserver.
Mr. Mifflin: Jack did it, too.
The Chair: Jack did it too?
You did it too?
Mr. Mifflin: He's done it many times.
The Chair: Okay. With all that experience around the table, you can expect.... As I told you before, the minister told these people they had well thought out questions the last time he was here. So they're out to perform.
[Translation]
Mr. Jacob.
Mr. Jacob (Charlesbourg): Welcome, gentlemen. I was the one who asked for the opportunity to put questions about the frigates and about the ORTT and MPT contracts.
My first question concerns the overall budget. On 30th of November 1994 I met with Commodore Gibson and asked him about these contracts but also about the frigate contract overall. When we met, ten of the twelve frigates had been finished. I asked for an update on the overall cost of the program.
I have the notes I took at that meeting. There were two unfinished frigates and the Commodore told me that the initial costs were 10.4 billion dollars.
.1555
There is always room for discussion and doubt regarding initial costs.
I have an article here, which appeared at the time the decision was made on the frigate program. The first contract was worth $3 million for the first six frigates. A month later it had reached $3.2 billion and two months after that it had reached $3.8 billion, still for the first six frigates. As of 1987, six other frigates were added and the figures were all lumped together with the effect that the cost was going to be $10.4 million.
According to your document the total will now be $9.05 billion. I would like to know what this figure includes. According to the information I was given partly by Commodore Gibson and partly by others, this figure is way beyond figures you mentioned here. I would like to have you break down this $9 billion figure.
Mr. Lagueux: Mr. Jacob, Treasury Board approved $10.4 billion for 12 frigates, which includes the 12 frigates and, as I said in my opening remarks, all of the support systems for the 12 frigates.
At this point, we expect the completion cost for the project will be $9.05 billion which, as I indicated, is almost $1.5 billion less than the amount approved by Treasury Board.
These figures appear in the Department's forecasts and these are the official figures for the project.
Mr. Jacob: If I understand your answer, the $9.05 billion covers the entire 12 frigate program, and the last frigate will be ready by the end of the summer of 1996.
Mr. Lagueux: Exactly.
Mr. Jacob: That includes all of the integrating systems, software, radar and weapons. This amount will not be exceeded by a single cent. You confirm that? Thank you.
Mr. Lagueux: The amount is for the acquisition project.
Mr. Jacob: Simply the acquisition project. The frigate program is not just acquisition. Things were added, in terms of computers, and so on. I would like to know the exact cost of the completed frigates. It is time to stop adding on and taking away.
Mr. Lagueux: That's correct. Of course, there are maintenance and support costs once the frigates are in service, which are not included in the $9.05 billion.
Mr. Jacob: The cost of arming them is not included, except the cost of the stationary guns. The cost of all additional armaments is not included in the $9.05 billion.
Mr. Lagueux: The cost of the armaments and munitions that come with the frigates initially is included in the figure of $9.05 billion.
Mr. Jacob: The cost of the armaments is included in the cost of the frigates?
Mr. Lagueux: Yes, the cost of the initial armaments and munitions making the ship ready for sea duty and operations. All these things are included in the project and in the initial acquisition costs.
Once the frigate is in service, over the years, other munitions will obviously have to be bought, and this is not included in the initial cost. The $9 billion includes everything necessary for the frigates to assume sea duty.
Mr. Jacob: Totally.
There is one thing in your report I find very disturbing, and this is not the first time it has bothered me. I in fact asked the Minister questions in the House on the matter. Paramax and Unisys are identified as the only companies able to provide these things; when the contract was signed for maintenance and training software in 1991, we were told that the latter company, whose head office is located in the United States, had a world-wide reputation.
.1600
Is the government aware of all the problems that Unisys has had with the American Defence Department in terms of fraud and bribery? I have a memo here, which states that, in 1991, Unisys pleaded guilty to fraud and corruption in the Ill Wind scandal in connection with purchases for the American army and was sentenced to repay the American government $190 million.
We are repeatedly told that this company is established in Quebec, and yet we know very well that anything to do with the software or information is clearly directed to the United States. In terms of Unisys's operations with the Department of National Defence, and I can go on... In 1993, Unisys was sentenced to pay $70 million for fraud and embezzlement, false representation and contract breaking, and I'm told that Unisys is a fine company, in good shape.
There have been a lot of problems with the MPT and the ORTT projects. To date $26 million has been invested, with no return. We have reached the point of processing data and I have just been told quite honestly that everything is fine.
Unisys's problems in the United states and Canada are strikingly like our own, because the heads of these companies are generally former military personnel, as in the case of Unisys in Quebec.
I would like someone to tell me clearly why we are doting on Unisys, when, in terms of training, you have realized yourselves that the company lacked the necessary scope, and yet we continue to give it money.
Why are we involved in any agreement with the company?
Mr. Lagueux: Mr. Jacob, I'm not sure we can talk about doting on the company, but we certainly do have a good contractual arrangement with it. As you know, Paramax located in Montreal to guarantee Canada software integration capability, particularly for the frigate program. This was of significant industrial benefit for Canada. It enabled it to integrate complex software packages.
The training systems in the ORTT and MPT project program are based on programs set up in the frigates themselves. Paramax, which had built the real system on the ships, was best able to understand the software and to build the training and simulation systems, which were to simulate the real system on the ships. It was therefore logical to ask Paramax to provide the simulators for the real systems it had already developed and install on the frigates.
Mr. Jacob: I do not understand, since they were the only ones to provide the systems for the frigates, why they could not develop the ORTT systems. You say that a prototype has already been delivered to the Fleet School in Halifax. Was it produced by Paramax or Omicron?
The system seems very complex. After meeting with Commodore Gibson, I was more confused and I think I am even more confused now. You talk to me about Canadian firms that, in order to provide integrated simulations... There are a whole lot of Canadian companies: Éduplus, SNC-Lavalin, Litton Systems and CAE, which are capable of providing this sort of system.
I have information from firms that tell me that, as far as the separate technical data from Paramax are concerned, any supplier could provide your training and maintenance systems, when Paramax has been unable to do so. We gave them $24 million and we have got nothing back. We are continuing to give them money and we are being told that we will remain within the $90 million budget.
.1605
I would like to have some explanation on this topic, since something doesn't quite add up.
Mr. Lagueux: Mr. Jacob, I could maybe ask Admiral Saker to comment on it.
Mr. Jacob: Yes, please.
[English]
The Chair: Rear Admiral Saker, I should just point out that now that we're into electronic recording of evidence, it's important that we identify speakers on the tape.
[Translation]
Rear Admiral M. Saker (Senior Engineering Officer, Canadian Forces, Department of National Defence): I'll try to answer your question.
[English]
I think it's important to understand that the company, Paramax Electronics Inc., and the people in Montreal, in my view, are quite distinctive from the total Unisys organization. After all, Paramax was established specifically for the Canadian patrol frigate program. They had about thirty Americans come up to establish the company, but the bulk of the people in the company in Montreal are in fact Canadians. The bulk of the talent that put this project together is Canadian.
With respect to whether or not anybody else can do the job, our rationale for selecting Paramax to do the job in the first place was their intimate knowledge of the combat system, their possession of all the technical data - their creation of the technical data required in fact - for the frigate, and our belief that carries through to this day, which is that they are the best-positioned company for fulfilling the work. They do so with the assistance of other companies and they have had some subcontractors engaged with them.
You must understand that the maintenance procedures trainer in particular is a training concept that is also pushing the limits in terms of new horizons and new ways of doing things. In fact, the response from the navy has been absolutely overwhelming to this approach to training. It's too detailed to get into explaining what it is here, but everybody who has seen it has indeed praised it very highly.
So yes, we did get into some difficulties. Part of the difficulty came, in my view, because we were pushing the limits again on what we were trying to do. But I believe the product that has been developed, and those successive products that will support it, will do the job very well.
Thank you, Mr. Chairman.
[Translation]
Mr. Jacob: I have another question on the frigates project as a whole.
On July 22, 1994, the present government signed an overall agreement granting $323 million to Saint John Shipbuilding Limited, a New Brunswick company, to restructure the frigate computer systems and to resolve once and for all the many conflicts between the government, Unisys and the subcontractors.
I have a copy of this agreement. I would like to know why, in this agreement, the parties commit not to sue each other and not to use any advertisement, as a condition of the agreement.
If I understand correctly, this means that regardless of the work delivered by the subcontractors like Unisys or SJSL, the government has now no more recourse. We cannot launch legal proceedings.
I've looked into all the capital programs of the Canadian Army, but I have never seen such an agreement and I wonder why we signed it.
Is there something to hide in this program?
Mr. Lagueux: There's absolutely nothing to hide, Mr. Jacob, and I've asked again Admiral Saker, who has detailed knowledge of this issue, to answer your question.
[English]
RAdm Saker: Thank you very much.
In the course of any kind of project or major contract, disagreements will occur as time goes on. Differing opinions on what is and is not required may occur. There are two approaches to dealing with disagreements within a contract. One is to make adjustments as you go along. The other is to carry the issues with you, to agree on how you're going to approach the actual work, and to then resolve the issues at some point downstream.
.1610
In the course of dealing with this contract, which is with Saint John Shipbuilding Inc., we chose the latter course. Some of the claims or changes that were occurring as we went were therefore accumulated and were brought to a certain point in the process of the project. An agreement on settling them was then struck.
In this case one could in fact argue or gather that the total number of claims would be several millions of dollars. We sat down and negotiated these agreements with the company and came to a final settlement, which is $323 million - well less than what the total number of claims was. When you do that in a contract, it is a typical practice to then basically zero the odometer. You agree that it has settled all of the issues that preceded you.
That's what happened last summer. I'm not aware of your comment about publicity because a communiqué, a news release, was in fact issued last summer to announce that this settlement had occurred.
[Translation]
Mr. Jacob: Nine months later.
[English]
The Chair: We're going to have to move on, but we'll come back on a second round, if you like.
[Translation]
Mr. Jacob: I have other questions, but...
[English]
RAdm Saker: If I may, Mr. Chairman, the communiqué was released the day the amendment was signed. It was not nine months later.
The Chair: Thank you.
Mr. Mifflin.
Mr. Mifflin: I want to also join my colleagues in welcoming the Canadian frigate patrol group. The questions that have been asked have been very interesting.
I have what's really a follow-up on Mr. Jacob's questions, but from a different sort of perspective, I suppose. I then have another question that is really meant to perhaps shed light on how the project is managed.
Let me ask the second question first in order that you can think about it. It's easy. Mr. Lagueux, perhaps you and your team could just spend a couple of minutes telling us precisely how the project was managed in terms of how it fitted into the DND organization and what ``project management'' really means. Perhaps you could give other examples of project management and explain how this project fitted into them, both over the years and presently.
Secondly, I really would like some help here. A couple of weeks ago - I believe it was either in debate or somewhere in the House - one of Mr. Jacob's colleagues mentioned that.... I believe he said the Auditor General had said the frigate project had gone $2 billion over budget. Where does this information come from? Where do people seek out such ridiculous information to bring to the floor of the House of Commons?
Mr. Lagueux: As I said earlier, Mr. Mifflin, the costs identified in the National Defence estimates deposited in the House by the government clearly show that the approval level of the project was $10 billion to $10.5 billion. We anticipate the project will come in at $9.05 billion. Those are the official figures and the department stands by them.
I'm sorry, Mr. Mifflin, we really don't know where the extra $2 billion may come from because they are certainly not in any official documents that we would have put forward. As I said, the official documents are in the part III estimates for National Defence and clearly reflect the $9-billion estimate at completion for the CPF program, which is $1.5 billion, give or take, under the officially approved Treasury Board amount.
Mr. Mifflin: Your figures are very clear, but did the Auditor General in fact make an observation of this kind? I went to look for it and I couldn't find it.
Mr. Lagueux: As a result of having heard the question in the House, we have certainly looked to see if we can find those numbers. We have looked through past Auditor General reports and have not been able to find those numbers, Mr. Mifflin.
Mr. Mifflin: Okay. That's fine, that clears the air on that one at least.
.1615
What about project management? Perhaps you could put in perspective how this program is managed.
Mr. Lagueux: Certainly, and I think perhaps the best person to answer that question, Mr. Mifflin, is Rear Admiral Saker, who was project manager of the CPF project for many years and is currently the project leader for at least another few days before he leaves the department.
RAdm Saker: Project management within the government is a well-established process. Guidelines are set by Treasury Board. They require that we have dedicated project management personnel. In the case of a frigate there is a team of about 300 folks, consisting largely of Department of National Defence, because we are the client; people from PWGSC, who do the contract management; people from Industry Canada, who look after the industrial benefits side of it; and people from the Department of Justice, who assist PWGSC in all contractual matters to ensure that in fact we conduct our business properly.
Over and above that, the project management office is not left on its own. I am what is called the project leader. So a step above the project office, within the Department of National Defence, is a named project leader. In this case it's me. I have my colleagues in all these other departments that I just mentioned who also form what is called the Senior Project Advisory Committee. On that committee as well are members from Treasury Board, sometimes the Auditor General, who can sit in on that meeting if he wishes, Department of Finance, Foreign Affairs and the like.
We receive periodic reports from the project. We meet - in the case of the frigate, up until not too long ago, it was every three months, four months, that we would meet. We would receive a briefing from the project team. We would do an overview of the project and ensure that everything was going along satisfactorily.
In addition to that, the project is also required to, in this case twice a year, submit detailed reports to the Treasury Board. Then that goes before Treasury Board analysts who present it to ministers of the board. So there is a constant reviewing process that goes on within the project management organization. That happens for all projects, and in particular for this one.
Mr. Mifflin: When does this project management stop? At what point in the history of the project does the office disband and it goes under normal matrix management?
RAdm Saker: The office is in the process of winding down now. We're working on that.
Mr. Mifflin: You can't get away from it, can you?
RAdm Saker: Well, I will be, but some won't.
The project continues to exist until all of the disbursements are made, all of the payments are made, all of the deliverables are received. Indeed, the project office, the project team, is passing the in-service management, if you like, of the in-service ships - the ones that have been delivered - over to Commodore Gibson, who now is on the receiving end in the line organization, if you like, that looks after things downstream.
We're also going through a bit of a reorganization of the department. It's not really germane except to say that what I just described is the way we used to do it, and it's quite possible that the project team will continue in service, but of course the $9 billion runs out and we do it with normal operations and maintenance type of money.
Mr. Mifflin: So the project office will still be around after Ottawa has delivered.
RAdm Saker: It'll have to be for a while after Ottawa has delivered.
Mr. Mifflin: Because of the disbursements.
RAdm Saker: Yes. A good year, probably, following that. But it collapses down very quickly to a much smaller focus.
Mr. Mifflin: Thank you very much. I have another question and it's a question that I think has to be asked.
There was a fair amount of consternation caused by the W5 program, of course, which was clearly so far out to lunch that even the opposition members didn't ask a question about it in the House of Commons. So I just wonder how - and I thought the response was excellent. I think it addressed the issues seriously and I think it put to rest any concern that may have been caused in the minds of the Canadian public.
Rather than just in a general sense ask you to comment on the program - because you've already done that in a general sense - why would a fairly popular, reasonably responsible organization in journalism spend so much research time and energy and air time on putting together something that must have been blatantly clear was somewhat outside the bounds of judgment?
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Mr. Lagueux: As you know, Mr. Mifflin, several parties have taken objection to the W5 presentation of the CPF. Certainly the builders of the frigate have taken umbrage to that report, and I must say that we in the Department of National Defence really do not necessarily agree with all that was in that report.
As to why W5 chose to actually do this, I really have no answer for you, unfortunately. One should ask CTV W5 in terms of why they wished to do that. But clearly they chose to report on a very large project of National Defence, a project that has high visibility.
We like to think it has high visibility because the ships are good, are successful, and are performing well, and we want to portray that as much as possible. We think they are amongst the best ships in the world, a tribute to the workmanship of Canadians, and certainly a tribute to the Canadian Navy. That's the message we would like reported on by programs like W5. It was certainly disappointing to us to see the way they did choose to report, but certainly they are free to report any aspects of the project. After all, it is $9 billion of Canadian taxpayers' money that is being spent, and I think Canadians certainly are interested in that particular project.
Mr. Mifflin: Thank you very much.
Mr. Hopkins (Renfrew - Nipissing - Pembroke): Mr. Chairman, maybe we didn't cut the CBC enough. Maybe we could make some savings on all this extra time to generate these stories for the consumption of the Canadian public.
The Chair: I won't consider that a motion, but simply a suggestion.
Mr. Frazer.
Mr. Frazer: Mr. Lagueux, Rear Admiral Saker, Commodore Gibson, Captain Sylvester, Commander Thiffault, welcome.
I would like to reiterate what our chairman has said. We thoroughly enjoyed our experience on the HMCS Halifax when she was in the Adriatic.
I had a little hang-up as an airman because we had to fly from Brindisi to and from the ships by Sea King, and helicopters, as you know, are aerodynamically impossible. It's all done with smoke and mirrors. I was somewhat concerned with that, but we did manage it.
The handling of the ship was most impressive, and it was a very worthwhile exercise, I think, from our side to be able to talk with the people on board, and so on.
What I wanted to do, if I could, is explore some of the problems you had, not to poke problems at you, but to determine what happened and what has been done to resolve it. I refer specifically to what I understand are cracked connecting rods in the diesel drive engine. To query you on these, I understand they were bought from France. I'd like to know why they were bought from France, what has been done to correct the problem, and what sort of liability the engine manufacturer has borne in this.
Mr. Lagueux: Maybe I can address some of it, and I'll ask Admiral Saker to fill in some details, if you wish, Mr. Frazer.
You are correct about the engines, the Pielstick diesel engines. There was cracking discovered in the piston connecting rods and the connecting rod bolts within the engine. This was discovered after there was an engine failure in the HMCS Halifax, the lead ship. You must understand there's more than one engine aboard these ships, so the ships can continue to operate using the other engines, the gas turbines.
The engines are now being repaired by the manufacturer at no cost to the Crown, notwithstanding the warranty period, which I believe has expired. So the manufacturer of the engine, Pielstick, is extremely interested in working with us to resolve that problem as quickly as possible. We are getting excellent cooperation.
As to why we bought these particular engines, I presume that was by competition, but I would ask Admiral Saker to please add the details to that.
RAdm Saker: The selection appears to be a choice of the prime contractor, Saint John Shipbuilding, during the competitive definition phase.
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I might point out that the competing ship design, away back in 1981-82, put forward by the other consortium in fact did not have a cruising diesel engine. The cruising diesel engine was a feature of the Saint John design that allowed us to have a third engine in the ship and to be able to sail more economically when you wanted to do that sort of thing. In fact, the ship still can do that. It can still run on the diesel engines at up to 15 knots in an economic cruising mode.
So it was Saint John's choice.
Unfortunately, these things happen. I have been with this project for many years, going back to 1983, and given the complexity of a project like this and having been involved in other ship programs in the past, I fully expected that we would have more problems than we have had, quite honestly. The Pielstick is unfortunate, but it is being dealt with. In fact, the company has been extremely responsive in meeting our needs.
Mr. Frazer: Am I correct in assuming that the incident won't recur because the other ships have all been checked? Is that right? They're being repaired prior to installation and this type of thing?
RAdm Saker: We might get the project manager, except that he gets into a lot of detail.
All the ships have been checked. A corrective action has been put in.
Mr. Frazer: Was this done in every ship?
RAdm Saker: Every ship was inspected.
Were there any, Jim, that did not have a problem?
Captain (N) J. Sylvester (Present Project Manager CPF, Department of National Defence): Very few. In most ships they found the beginnings of some very fine cracks.
Mr. Frazer: So was it a design problem, or what?
Capt Sylvester: I believe the manufacturer will say that in the end. He is still investigating why these things have happened. Whether it is actually manufacturing or whether it is design, he has not come back to us and told us that. He is still in the process of testing. But I'm sure that when he will be finished he will come and tell us, ``This is what the cause of it was''.
Mr. Frazer: And is the repair to replace the defective part, or what?
Capt Sylvester: He has put replacement connecting rods in. In fact, he has come back with a slightly new con rod with a slightly changed manufacturing process and slightly changed dimensions. That is currently in some of the ships, and some of the other ships have new con rods. So he has a bit of a combination at this time, and he's still testing the actual mechanism of failure and testing his changes to the dimensional areas of that failure.
Mr. Frazer: Commander Thiffault - if I may go directly to the commander, Mr. Lagueux - could you give me - without going into too much detail, because I'm only a very dull fighter pilot - your concept of how you use your engines, the diesel versus the gas turbines, and what sort of an advantage this gives you?
Cdr Thiffault: The cruise engine is used, of course, to economize on the consumption of fuel at sea. It consumes about half as much as we would on our main engines -
Mr. Frazer: At what speed?
Cdr Thiffault: - up to a speed of 15 knots. We can essentially go across the Atlantic and back home on the propulsion diesel engine and come in yet with approximately 30% to 40% fuel. So it's a very economical means of proceeding to point A from point B. It allows us to proceed at speeds at the moment of up to 15 knots. Of course, when the repairs are made, it is hoped that the restriction will be lifted and we'll be able to carry on with speeds of up to 18 knots, which is really a range of speed that we would use in our normal operations at sea.
The main engines are very responsive. They come on line very quickly. So does the propulsion diesel engine. So when the situation dictates and we need to respond with speed, of course we have gas turbines that are available, two of which are available. One is used up to 26 knots and two for full power in excess of 28 knots. Depending on the operational scenario, we would use the gas turbines for response and the propulsion diesels for transiting at economical speeds.
Mr. Frazer: Mr. Lagueux, could I go back again to problems that you've experienced. I refer to random weapon firings, which have occurred from time to time. Could you take me through the litany of what happened, why it happened, and what has been done to correct it?
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Mr. Lagueux: I will ask Commodore Gibson perhaps to address that question. These random firings I believe were on the Ville de Québec and -
Mr. Frazer: I wasn't going to mention that.
Mr. Lagueux: -we have the captain of the ship, who can perhaps add more detail to that.
Commodore F.W. Gibson (Director General, Maritime Equipment Management, Department of National Defence): Mr. Chairman, we in fact have had two incidents that have been reported in the media as ``random firings''. One was a gun firing that occurred unexpectedly. The other one was a two-missile firing occurring when one was scheduled.
In the case of the gun firing, what the issue was attributed to was the operator choosing a mode that was incorrect. In fact, the CPF has been designed with an automatic engagement mode for those combat situations where the captain, at his discretion, at his decision, decides that the battle space is getting so restricted that he has to rely on the capability of the system. The automatic mode is there at his discretion.
In this particular case, as I've already said, the operator chose that mode inappropriately. It was during an exercise firing, so the ship was in a safe condition. When the system was put into automatic, given that there was a target in the area, the system did what it was designed to do. So the reports that have been made that the system somehow malfunctioned are in fact incorrect. The system in that particular case did exactly what it was designed to do.
As a consequence of that we have made some design changes to the software to make it more difficult for the operator to select that mode incorrectly. He now has to action this particular mode using two pushes of a button as opposed to one.
So we believe we have dealt with that particular issue. But as I say, clearly in this case the system did what it was designed to do.
In the case of the missile firing, as I've already noted, the incident as reported was that two missiles were fired when one was scheduled - again, in this particular circumstance, on an exercise range under a very controlled condition. It was during trials of the system to prove the system capability. There was an in-coming missile threat, an actual in-coming sea-skimming missile, to simulate the kind of condition that would be encountered in actual combat. The operator again had selected the automatic mode, because that was the condition of the trial. The target was inadvertently lost. The operator injected a second target into the system. The system, seeing the second target, declared that two missiles were in-coming and both were engaged.
Again, clearly in this circumstance the system did what it was designed to do. Both are in fact attributable to an operator exercising the mode of the system in an incorrect manner...as opposed to that somehow the system went into a mode it should not have. These are clearly not attributable to bad design. They were under very controlled trial conditions, with operators who were still learning the full capabilities of the system.
Mr. Frazer: Thank you. My concern was that the system itself didn't malfunction; it was a human error.
Commander Thiffault, is keelhauling still in the service, or - -
Cdr Thiffault: No, sir.
I might add to the comments provided by Commodore Gibson. First off, we were on a controlled range. The gun is never loaded until such time as we are prepared to conduct firing exercises at sea in a controlled environment. The gun was loaded once we considered all safety measures were in place, including internal and external safety precautions. Unfortunately, when the operator activated the command for the gun to fire, it was an operator error.
It was done in a training scenario, in a training environment, in a controlled environment, where safety first was dealt with. The aircraft that was towing the target was never in danger at any given time. Before we loaded the gun, we ensured the gun was tracking the target. We proceeded to load the gun and then fire on the target.
In the case of the missile, we were again in a controlled firing environment, having satisfied all safety precautions. We proceeded to remove some of the safety features built into the missile system in order to maximize on the one shoot that was occurring that day. We enabled two missiles to support the firings. Should one missile not fire, we always have another one standing by.
.1635
The cost of the targets is very high, and there were not that many available, so we wanted to maximize them in one target. Regrettably, once the system locked onto the low-flying missile, which was emulating an Exocet-type missile, it initially made a connection at a long range, then lost it only momentarily due to sea return. The operator saw the video in his system and took the initiative of entering a second target. The system, recognizing that there were two targets engaged two targets, but there was really only one and the system engaged the inbound threat with two missiles.
In real life I would certainly like my system to respond in kind in defence of the ship. I believe the system responded as it should have in both instances. The gun firing itself again is an urgent command provided to the system for the gun to engage a threat and it acted as it should.
Again, regarding safety, at no time did we endanger any personnel or aircraft that were towing targets or controlling the missile at the time.
Mr. Frazer: Is there -
The Chair: Keelhauling isn't used on this committee either, except for those who exceed their time, and so we now go to Mr. Richardson.
Mr. Richardson (Perth - Wellington - Waterloo): Thank you very much Mr. Chairman.
I also would like to welcome the group from the patrol frigate project. Mr. Lagueux, I would like to ask you a question later. I would like to say to those proud members of the navy how pleased I was to have been on the Halifax and watched it manoeuvre for us. I was impressed with the acceleration from the standing start, the ability to turn at fast speeds, to engage targets, and the efficiency with which the people in the operations room were working. I sat down and watched and I was truly impressed.
I was also impressed with the quality of life on board the ship, just as I was with the F-18s. Having been a foot soldier, you know, we didn't have those kinds of amenities around. But certainly I'm proud to see that our navy has such fine equipment and is staffed by such high quality people.
All that being said, I have a couple of questions I would like to ask you that may not...since all the exotic questions have been asked.
The interoperability question comes up now and again in our readings, and I know that it's late into the program, but in the future - and I think, Mr. Lagueux, this matter would probably come to you - when we're buying communications and computers, all three environments should probably try to come together, where possible. When we're buying computer systems and/or communications, the interoperability of those pieces of hardware would be in place, as they would be in joint operations. It's significant that all the armies and forces of the west are moving in this direction. I'd like to ask if that is in place in Canada. This is probably to you, Mr. Lagueux.
Mr. Lagueux: Thank you. You have raised a very important point in terms of interoperability and intercommunication, which is extremely important in these days of joint and combined operations. That is why within the department last year we have, as part of reorganization, developed what is known as DISO - the Defence Information Services Organization - which has responsibility for all the computer systems being developed within the Canadian forces and in the associated communications system. We are looking at precisely that - to have one organization like an umbrella over all of the Canadian Armed Forces to ensure that these projects in effect do respect interoperability and the ability to intercommunicate.
Unfortunately, as you've said, there are a lot of legacy systems already in place that perhaps don't meet that. But as we replace systems and look to the future, interoperability and the ability to communicate is certainly a very important consideration, both within the Canadian forces obviously, but also with our allies. As Commander Thiffault said in his opening remarks, certainly during the NATO exercise off Norway, the Canadian patrol frigate served as a link to several of our different allies as a communication liaison ship.
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So there is a lot of interoperability already, and it is also an important aspect within NATO itself to develop interoperability among the allies.
Mr. Richardson: Thank you very much. I'm glad you brought the allies aspect into it.
Does the Department of National Defence have the capability of developing its own training program such as subcontracted to Paramax, the training systems? Do we have the capability of doing such a thing in house, or does it have to be contracted out to private industry?
Mr. Lagueux: Let me ask Admiral Saker to comment on that.
RAdm Saker: I can comment from a general perspective, and then someone might also want to comment on the specifics.
Do we have the capability? I guess if we wanted to put the resources to it, we could do it. It's always a question of choice.
I think we have very good resources, very good ability within the department. However, as you're aware, we're in a downsizing mode, in a shrinking environment in terms of the size of the forces. For a number of years now, we have tried wherever possible to put those things that can best be done in industry, or be done in industry, into industry. Certainly, in the acquisition of equipment and the development of systems and the like, the policy of the government and of the department has been to put this out to industry.
So when it came to looking at the combat system trainer function, clearly the option was to go outside and to ask industry to do it.
We would have had to put a tremendous resource together in order to be able to do that ourselves.
That probably answers the question.
Mr. Richardson: I can understand that, but with what we're doing to the forces, we just have a narrow institution. If you've ever had to expand rapidly and to grow, you'd probably want to have that in-house capability to expand rapidly.
RAdm Saker: You're absolutely correct. One of the critical things that we're very concerned about as we downsize is maintaining a critical mass that can mobilize these kinds of resources, or indeed, as we continue to go along, can specify, manage, and control the development by industry of these kinds of resources. That in fact is really where we have been heading for a number of years, and I would submit that it is where we are today.
Most of our projects are managed by a project management team of fewer than 50 people. The bulk of the work is in industry, but our focus is to ensure that we can specify a reasonable performance requirement. We know what the operators want and are able to tell industry what the operators need. Then we make sure that industry in fact develops that.
Mr. Richardson: I don't want to overstay my welcome, but I think I have a couple of seconds left. Well, probably I'd be milking the cow too far. Thank you very much for your answers.
Mr. Mifflin: That is very generous of you.
[Translation]
Mr. Jacob: I have two short technical questions and a comment.
Canadian frigates are equipped with cooling and emission suppression systems so they cannot be detected using infrared equipment. Is that correct?
Has this same cooling system also been installed - I know for a fact it wasn't before - in generator compartments?
Mr. Lagueux: I'm afraid I can't answer your question, Mr. Jacob, but perhaps Captain Sylvester could.
[English]
Capt Sylvester: The main engines have a port system and the auxiliaries, the generators, have what is called an induction system. It is cooling, but they are done in two different ways. It uses air.
[Translation]
Mr. Jacob: So the answer is yes?
[English]
Capt Sylvester: Yes.
[Translation]
Mr. Jacob: I would like to know whether there have been any tests done to determine the potential effects on the health of crew members of micro-electric emissions from the frigate's 57 integrated systems as well as emissions from the main radar and laser-radar systems?
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[English]
Capt Sylvester: Yes, those systems were thoroughly studied. The emissions, the properties of all of the radars, all of the effects were studied and have been measured.
[Translation]
Mr. Jacob: Were any tests carried out on the ship while it was actually operating?
Cdr Thiffault: Yes, Mr. Jacob. I can assure you that radar emissions and emissions from remote control aiming systems were all thoroughly tested on board ship by representatives of the federal government who boarded the ship with their instruments for that very purpose. They measured emissions to ensure that there would be no health risks for ship personnel. Communications and radar emissions were both measured and documented, and the test results were provided to ship commanders to allow them to develop appropriate on-board safety guidelines. All of that was done and I have the documentation on board the ship to prove it.
In addition, as far as emissions from smokestacks and the generator are concerned, I have just completed a test off the coast of Scotland, where we tested our decoy systems and those used to suppress emissions from the ship's main vent and secondary vents. I can assure you that the results are extremely encouraging. Our decoy systems, which ensure passive protection of the ship, are also extremely effective. The people who were involved in the testing were quite impressed. We have all the appropriate documentation to prove their effectiveness.
M. Jacob: I would just like to make one comment. Mr. Lagueux mentioned earlier that there would be a savings of approximately 1.4 billion dollars for the frigate contract. On November 18, 1994, the honourable Minister of National Defense stated that in the case of both Canadian patrol frigates and other armed forces equipment, expenditures often exceed projections as a result of the development of new technologies.
There were problems right from the start. There were cost overuns. Perhaps you should let the Minister know that you have realized some savings. Also, if our frigates perform as well as you say they do, it would be my hope that we might one day be able to sell some to other countries, as we have attempted to before, but unfortunately without success. Thank you.
[English]
Mr. Hopkins: I'm going to move to another phase of this subject. We did indeed have the opportunity to ride on one of the ships and have a good briefing on it. It's an outstanding piece of equipment.
Could I ask you about future sales? Is there any potential for future sales of this ship? If so, where is that potential located?
Mr. Lagueux: I'll ask Admiral Saker to perhaps comment on that, Mr. Hopkins.
RAdm Saker: As you're aware, of course, Saint John Shipbuilding has been attempting to sell versions of the frigate. It most recently attempted in Saudi Arabia and was unsuccessful for whatever reasons. Certainly in the case of the frigate and the systems that are in the frigate, in all contacts we have had with other nations, other navies, they have been extremely impressed by the capability of these ships, in particular the automated combat systems and the command and control systems.
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While it's always dangerous to project what might happen in the future, my suspicion is that the various forms of technology that are currently in this ship stand a good chance of being adopted by other ship programs of other nations. That is probably the most likely way in which sales would be generated into the future. In fact, there are aspects of the frigate - for example, versions of the machinery control system for the main engines and all the equipment below decks, the system that has been designed and developed by CAE in Montreal - that have been sold overseas in a number of applications.
The damage control system that monitors all fire suppression and ventilation and the like in the ship has been very successful internationally. In fact, the fire suppression system made by Securiplex is the system used in the France-England chunnel. So some of these technology spin-offs come out in ways you would not predict when you first start out.
In terms of the interior communications system, there has been considerable interest expressed by a number of people in the ability to.... You've seen the system where you pick it up and you can call down to the laundry or you can call home if you happen to be across the ocean, depending on your preference.
So there has been a number of very significant technologies put into this ship and, if I might say this with a little bit of humility, largely driven by the Canadian Navy and the requirements it generated fifteen and sixteen years ago. It came up with these ideas.
Indeed, the concept of the totally integrated, hands-off fire control system and threat-evaluation weapons assignment system was a Canadian-pioneered development. Everybody knew it was where they would be going in the future, but it was Canada that had the guts to do it first. When people see this ship abroad, I think it is the thing that stands out in their mind. They look at it and they see that it works.
Mr. Hopkins: What ships today internationally come close to a comparison of the high technology and specialized equipment and operations of this type of ship?
RAdm Saker: The sister frigates, if you like, whether it's the British, the Dutch, the French, even the Americans, all have comparable types of technology. The one thing we have done is led the way in terms of integration.
The degree of integration of automation that exists in our frigate is ahead of anybody else's in that size of a vessel. You normally would have to go to a larger vessel to even approach this kind of integration. I would say, certainly in my assessment of the situation at the moment, that no one else has that degree of integration yet. They won't be far behind; two or three years down the road there will be other nations adopting this approach because they've seen that we can do it.
Mr. Hopkins: During our defence review hearings, we heard a lot about what the Canadian interests are. Of course, with us looking towards the Pacific and indeed around the world on trade missions - and you've had the recent experience with the fisheries problem and so on - some Canadians might ask why we need twelve frigates. I think it would be interesting to have something on the record to explain that point in simple terms.
My second part deals with personnel. Undoubtedly, on your ships you have very highly trained personnel, well educated by the Department of National Defence, which is still the largest training school we have in Canada.
How difficult is it to hang onto those well-qualified personnel now that you have the downsizing of the forces? If at some time in the future we run into a crisis, where we need additional personnel, given the type of technological world we live in today in civilian life, is it going to be easy to find people who can be enlisted in the forces to take over the jobs on these ships, given their state-of-the-art technology?
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Mr. Lagueux: Mr. Hopkins, on the first part of your question, let me ask Admiral Saker to comment. Perhaps Commander Thiffault can talk about the ship's crew and the personnel aboard ship in reference to the second part of your question.
RAdm Saker: Mr. Hopkins, you have a bunch of engineers at the table, and I know Mr. Mifflin is probably itching to try to answer this question himself.
As you're well aware, we have a very large ocean space and a very long coastline. For many decades we have had naval forces monitoring those coastlines that were able to respond to international needs and requirements around the world, as determined by the Canadian government.
Our navy is small and continues to shrink as time goes on. So our approach is to develop a multi-role, capable, frigate-sized vessel that can respond to a wide variety of needs, whether it's simple coastal surveillance using a helicopter that can cover many hundreds of thousands of square miles, or a situation like the Persian Gulf, where we had to send ships. Unfortunately, we didn't have a frigate available to go at that time. As you know, we had to bootstrap some of our existing ships to get them over there to respond to that event.
I think the Gulf situation showed that you very often don't get any warning at all. Suddenly you are required to respond in some kind of fashion, and it's what you have on the ground at the time that counts. If it had not been for the frigate and trump projects being just about ready to deliver their first ships at the time, we would not have had any of the kit available to put on the ships we ultimately sent to the Gulf. It was only because we had that kit available in our hands and contractors were in the process of putting this equipment into the frigates and the tribal class ships that we were able to divert some of it and very quickly get it on our existing ships.
I think that probably handles why we need a navy. I think your question was about the navy or frigates. It involves surface ships, it involves aircraft above the sea, and it involves undersea capability as well.
Mr. Hopkins: I think it's important to put this sort of thing on the record because people in some areas of our society don't think there is a need for it today. I think it's important to have it put on the record and repeated. It can't be repeated often enough.
RAdm Saker: Before I ask Commander Thiffault to comment on the personnel issue, let me say I was around when we first introduced gas turbine ships and non-steam driven ships and electronics back in the early 1970s with the tribal class destroyers. I can remember the anxiety we went through at the time when we questioned how our existing sailors would ever be able to cope.
I didn't hear any of that this time around. When these new frigates came into being people climbed on board after being trained and I didn't hear any of that. I was quite amazed. I was waiting for it and I didn't hear it. Quite frankly, if we were to walk out on the street and take the people who are coming out of our schools today - in particular the technical schools - they could get on board and learn how to operate and maintain these ships with very quick training. That's my view. Commander Thiffault better have a similar view. He has the firsthand experience of the crew.
Cdr Thiffault: I'd like to add to the first point that the operational imperative, in my opinion, has not changed in years. We are still stretched and meeting all the operational obligations we have. We have the longest coastline in the world on both coasts and in the Arctic. Our shelf waters are immense; they cover vast spaces. You need assets to cover those spaces and exercise presence within our own area of responsibility and contribute to world peace in a very major way in the Adriatic and everywhere else.
.1700
It's not well known, but the navy was also implicated in restoring democracy in Cambodia. We're certainly stretched with the resources we have today, but we do satisfy the requirements quite well with the assets we have.
The training system we have in place today is second to none, I believe. The young men and women who arrive at the ship at the very lowest levels of ordinary seamen and able seamen are well trained. Their career progression is well balanced, and as the time progresses they develop skills through on-the-job training and through refresher and professional training in the training centres on the base.
We no longer have a problem with retention. We have new ships and new equipment. People are just thrilled to death to have this new equipment and to work on this high-tech equipment. The repair philosophy is somewhat different as well. We no longer get down to the transistor level of repairing cards, for instance, in major components. We now replace cards, which demands less skill in a sense, but you certainly need analytical skills and technical skills to identify that problem.
Overall, I think we're going to have to downsize in due course and it's going to be difficult because not very many people want to leave the service today. We have very good morale.
I'm certainly well supported at sea. I have a crew of approximately only 200 to 220 with the air detachment embarked. The ship is 440 feet long and has over 300 spaces at sea. When one watch is turned to and the other down, it's a ghost town on board. It's a big ship and very capable because there's a lot of automation.
Certainly people are very pleased to be in the navy today and involved with these new ships.
That's pretty much the standing on that side. I don't think we have a problem with retention, and certainly the training is second to none. I don't know of any other program in place that would do better right now.
The Chair: Thank you. We've also had a very good training program in this committee, as Mr. Frazer will now demonstrate.
Mr. Frazer: I'm apprehensive about even asking questions after that introduction. I just have a couple of quick ones.
You mentioned in talking about Unisys, the training MPT and the ORTT that a prototype has been installed and is now operating in Halifax. That indicates there will be more trainers. How much will they cost? How many will there be? Where will they be located?
Mr. Lagueux: I think Commodore Gibson can address the details of that question, but yes, there is a prototype trainer in Halifax currently being used by the navy.
Cmdre Gibson: As Mr. Lagueux has indicated, the prototype is now in Halifax. The intent is now to build the other software packages, if you wish, that will run on exactly the same piece of equipment that has already been purchased.
Some additional equipment will be purchased to build the number of classroom spaces that are required, but you have to appreciate that the prototype is the backbone upon which we will then build the additional software using the lessons we learned through the prototype.
The intent at this particular time is to simulate or emulate a further 11 to 12 equipments of the frigate itself. The decision on 12 is driven by the assessment of where we have training load problems; where we need the training capability of the MPT itself. Now that we have well-proven the concept of the MPT, we are moving into that production phase to build the additional software applications to represent the equipments we feel are necessary.
Mr. Frazer: So there will be only one trainer, but you're expanding the capability of it. I inferred from what you said that there was going to be more than one trainer. Is there going to be one in the east, one in the west and one in Quebec, for instance -
The Chair: You'll have to identify the site where you -
Mr. Frazer: Esquimalt.
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Cmdre Gibson: Again, the trainer in fact has been targeted as the trainer for the Canadian patrol frigate. Maritime Command has in fact established that Halifax is the training site for Canadian patrol frigate training.
Esquimalt is the site for training for the tribal class. The trainer, you have to understand, is simply a series of training chairs. At this particular time, we have a trainer that has a 10-seat capacity. We will be procuring an additional 20 seats with the additional simulation software then to represent the 11 to 12 systems I noted.
Mr. Frazer: As I say, this was a misunderstanding on my part. I thought when you said prototype that meant there was a second or third one and I wondered where.
You didn't answer my question about how much they cost. You probably gave that to me in the briefing when I visited you, but I've forgotten.
Cmdre Gibson: The allocation to the maintenance procedures trainer portion of the combat systems trainers, of the $90 million contract, is $25 million. We have spent $12.6 million to this point and would anticipate then delivering the additional 11 to 12 systems in the difference.
Mr. Frazer: You do intend to come in on budget or under budget?
Cmdre Gibson: That's correct. The project is clearly mandated that it has a ceiling value and that's what we in fact will bring it in for, or less.
Mr. Frazer: I want to ask one last question, if I may, just before departing. Did the $9.05 billion total for the frigate program incorporate the upgrading training that you had to do to put them to sea, or is that over and above that?
Cmdre Gibson: The $9.05 billion includes everything we have done to introduce the Canadian patrol frigates into service. That includes the ships themselves, the contract with Saint John Shipbuilding Ltd. at $6.2 billion approximately, all of the spares we have bought, all of the program management cost, all of the ammunition. All of the things that were necessary to introduce the Canadian patrol frigate into service are in fact reflected in that $9.05 billion.
Mr. Frazer: That includes the crew training.
Cmdre Gibson: Yes, that includes the crew training.
Mr. Frazer: I was wondering that because that is becoming a more and more common practice, which I think is a good one to follow. You know exactly what it's going to cost you to make the thing operational.
Cmdre Gibson: As a point of clarification, again, regarding initial crew training, the ongoing crew training in fact is what the trainers are being put in place to allow MARCOM to continue on an ongoing basis.
Mr. Frazer: Thank you.
Mr. Richardson: I just want to follow up on the concept of high tech, and certainly this is what really makes the frigate program such an outstanding project in the Canadian forces.
Given the nature of high tech and its life expectancy vis-à-vis the 25 years of the ship with its mid-life refit - I have to rely on my good friend Admiral Mifflin here to give me these kinds of figures - certainly you're going to have to update the high-tech aspect of that program much more frequently than that.
Is there any way you get into the project management here and now and plan that you do stay as current and relevant as you are now? It seems to me that's a high priority for this type of weapon.
RAdm Saker: I'll answer that question, if I may. You're absolutely right. You cannot go through a ship program and consider that you're now finished and put your feet up and relax until the next requirement comes along. Equally, we have to be very prudent in what we do in the interim because there's only so much money.
We have already looked downstream for a mid-life update planning for the Canadian patrol frigates well into the next century. We have already identified some technologies that we think will be appropriate for the ship in that timeframe.
Indeed, we are engaged with some of our allies in helping develop some of those technologies that will be applicable in the future. I would suggest to you that the one thing these allies are looking to have in their next round of ships is basically the combat system architecture that we have right now.
We're starting off from an extremely good building point of view. What the future will bring is a requirement for quicker reaction, as the threats become quicker and more sophisticated, and probably a greater coverage of the electronic emissions spectrum in being able to pick things up, whether it's infrared or whatever.
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So you are absolutely right, sir. We cannot keep our guard down at all, and as we deliver these ships, a number of people in the department are focused on the next requirement.
Mr. Richardson: Thank you.
The Chair: I want to thank our guests. I want to point out how well our training program worked here today, because all of the people identified themselves before they spoke, which was what we wanted. Thank you very much for being here.
I want to say, as I did in the beginning, that whatever side of the table we're on, when we were onboard the HMCS Halifax in the Adriatic we were all very proud to be Canadian. Thank you for being with us today.
Mr. Lagueux: Thank you very much, Mr. Chairman.
The Chair: This meeting is adjourned.