NDDN Committee Report

CHAPTER 3: WAS THE PROJECT PROPERLY MANAGED?

A Complex Transition From Old to New Equipment

The transition from old and obsolete equipment to new equipment with the latest technology is one of the major challenges faced by modern armed forces. The success of the transition depends to a large extent on the timely and carefully prepared selection of the new equipment. Various factors must be considered including the military capabilities a country needs to defend itself and protect its interests, the strengths and weaknesses of the various types of equipment put forward as candidates by manufacturers or countries to replace the obsolescent machines, and the affordability of the acquisition of the new equipment and of the support it will need over its service life amid all the other demands on the defence budget. However, another important element in the transition is the training provided to the personnel who operate the new equipment. The crew members aboard new aircraft, ships or combat vehicles must have the level of proficiency required to ensure not only the effective operation of these platforms in their particular environment, whether in a combat or peacetime situation, but also a safe return to base every time the new platforms are used. They must also have the training and the experience necessary to act as a team so that all the various elements of their platform including the propulsion, sensor, and weapons systems work in a well coordinated manner. Significant improvements have been made over the last decades in reducing the workload of the crew members who have to operate and maintain all the systems of an aircraft, ship or vehicle. However, these engines, sensors, and other systems are still complex and those responsible for the operation or maintenance have to be highly trained so that they can be used efficiently in the most demanding of circumstances.

With the acquisition of the Upholder submarines from the United Kingdom, the Canadian Navy embarked on the challenging transition from old to new submarines. Although the recently constructed Upholders have basically many elements of 1980s technology, they still feature many technical advances when compared to the old Oberon submarines with their mainly 1950s and 1960s technology. Except for the propulsion system, they have many similarities with advanced nuclear-powered submarines like the British Trafalgar class. In any case, anything involving submarines, whether diesel-electric or nuclear, implies complexity over and above the already difficult task of converting from old to new equipment. Surface warships like frigates and destroyers are complicated vessels with numerous pieces of machinery including engines, generators, and pumps necessary to navigate in and to withstand the rigours of the open seas. They also have sensors and weapons systems with their own support and maintenance requirements for combat operations. Submarines have all the complexities of surface warships, but also all the requirements for safe and stealthy operations under the surface of the water including advanced hull designs and well-developed operating procedures. In short, the very nature of submarine operations requires a certain minimum level of serviceability of all the different systems and a high degree of crew training and experience.

There is little doubt that Canadian defence planners and senior naval officers realized that the conversion from the old Oberon submarines to the much more modern Upholders would be a complex task. There are too many examples in the military history of Canada and other countries where numerous bugs had to be corrected in new equipment introduced into the military inventory for anyone to believe that any transition from old to new equipment would be problem-free. As one witness pointed out, there were many articles in the media in the early 1990s about the problems experienced by the new frigates when they were introduced into operational service. The real bugs have long been corrected and the imaginary ones have long been forgotten. Thus, planners and officers likely expected some problems during the conversion from the old to the new submarines.

However, there is much evidence that defence planners and senior officers underestimated the complexity of the transition from the Oberons to the Upholders. Assumptions were made on perhaps incomplete information and sometimes overly optimistic assessments of the condition of the Victoria class submarines, in whole or in part, and of the impact of delays on training and other aspects of the transition. For example, Mr. Williams, Assistant Deputy Minister (Materiel), pointed out that the operational costs of the Canadianized Upholders were originally expected to be about the same as those experienced with the old Oberon submarines. Mr. Williams stated: “That may have been naïve on our part, but that is what we had hoped would happen, partly because one of the benefits of this class, of course, is that it requires fewer staff, or sailors, to sail the boat.”⁵⁹ The operational costs of the Canadianized Upholders are now expected to be higher than those for the Oberons, possibly some 25% over the original estimates. As a result, the May 2003 report of the Chief Review Services of the Department of National Defence suggested that the number of available operational sea days might have to be reduced unless more operational and maintenance funding could be found.⁶⁰ Thus, the availability of the submarines to fulfil the tasks for which they were acquired might be much more limited than expected because the operational costs were underestimated. Even if extra funding to cover the higher operational costs is provided, it might be obtained simply by shifting funds from one part of the Navy’s budget to another and downgrading other capabilities and the readiness of our maritime forces. Either way, this would weaken the case for acquiring the submarines because of the added capabilities they can provide to the Canadian fleet.

The effects of the long period of inactivity while the Upholders were still in the U.K. were also underestimated, as was the time necessary to correct the deficiencies identified before and after the submarines were transferred to Canada. Captain (Navy) M.F. Williamson, Project Manager of the Submarine Capability Life Extension project, told the Committee that during the preparation or reactivation of the Upholders prior to their handover to Canada, it was planned to deliver each of the four submarines at six-month intervals. However, British officials and contractors “quickly discovered that the amount of work required for the submarines to reach an acceptable standard was more substantial.” Captain (Navy) Williamson added that, with reference to British officials, the “reactivation period was longer than they would have wanted. The reactivation period was longer than we would have wanted, but we never sacrificed safety for schedule.”⁶¹ No one questions the fact that no matter how much delay this may have caused, the reactivation process had to be done properly to ensure that all the submarines and their numerous and complex systems were in good working order to allow a safe transit across the Atlantic Ocean. However, the Committee is concerned by the number of items still requiring repairs or attention that were listed in the Certificates of Acceptance signed by Canadian and British officials for each of the four Upholders when they were handed over to Canada. Some of these problems were identified in 1995 when the delegation of military and departmental officials went to the U.K. to inspect the Upholders. However, as some witnesses familiar with naval operations have pointed out, ships at sea often have various pieces of machinery or electronic equipment that are not in perfect working order. Some equipment is more vital than others to ensure the seaworthiness of a vessel or, for that matter, the airworthiness of an aircraft. Unless the report of the Board of Inquiry on the fire aboard HMCS Chicoutimi or other studies provide evidence to the contrary, it appears that the submarines could still go to sea although some issues still require eventual resolution or repairs. In any case, the Committee will examine the findings of the report of the Board of Inquiry with a critical eye. During our study, some members of the Committee expressed concerns about the objectivity of the Navy in its investigation of the incident aboard the Chicoutimi given its commitment to the submarine acquisition. As stated in the introduction, this committee may produce other reports on the submarine issue if the Board of Inquiry report is found wanting in any way.

A Training Process That Did Not Go According to Plans

Because of all the unexpected delays in reactivating the Upholders from their dormant state, the last of the four submarines to be handed over to Canada, the Chicoutimi, started its voyage across the Atlantic in October 2004, six years after the signing of the contracts in July 1998. The delays in reactivating the Upholders and starting the Canadianization process inevitably caused delays in the training of Canadian submariners. Some concerns have been raised about the level of training of Canadian submariners in the wake of the fire aboard the Chicoutimi, but some of the issues raised deal with specific periods in the conversion process. When the contracts were signed in 1998, provision was made for the training of Canadian submariners in the U.K. to learn the different systems of the Upholders and gain the experience necessary to sail the submarines across the Atlantic to the new home bases in Canada. Once in Canada, the new submarines, after Canadianization, were slated to be used to gain the at-sea experience necessary for Canadian submariners to maintain their proficiency and work up to full operational effectiveness. In the middle of all this, the various simulators used to train the Canadian submariners in the U.K., as stipulated in the contracts, were supposed to be handed over to Canada and transported to Halifax so that the training process could continue. On paper, the training plans were already quite complex and assumed an orderly flow of events. In reality, the whole training process became a long series of missed deadlines, misaligned sequences of events, and long delays.

Because of the delays in obtaining Cabinet approval for the acquisition of the Upholders, there was a decline in the number of trained and experienced Canadian submariners in the Navy during the progressive withdrawal from service of the old Oberon submarines in the late 1990s. A number of experienced submariners left the military during the longer than expected gap between the paying off of the Oberons and the arrival of the Upholders into Canadian service. New submariners had to be trained to provide the numbers expected to undertake the conversion training in the U.K. in accordance with contractual arrangements. It is in this period that some critics of the acquisition process such as Peter Kavanagh, a former submarine captain and retired member of the Canadian Forces, claim that the training of some of the new submariners was lacking, especially in terms of at-sea time.⁶² This period has been referred to by some as the dolphin giveaway, the dolphin in this case being the insignia awarded to a new submariner upon completing the required training similar to the wings given to new pilots. There are conflicting claims about the level of training at this stage of the conversion process, but Mr. Kavanagh and other observers believe that the training of submariners has improved since then. Whether or not there was a great rush to train new submariners so that they could undergo conversion training in the U.K., many of the Canadian sailors in the U.K. had to wait for months in that country after completing their training because of the delays in reactivating the Upholders. Because of the delays in the reactivation process and those caused by the time required to fix the identified deficiencies, the Canadianization of the Upholders fell behind schedule. Other factors also had an impact on the Canadianization process such as the heavy demands placed upon the navy and the fleet maintenance facilities as a result of Operation Apollo, Canada’s contribution to the war on terrorism undertaken in the wake of the September 11, 2001, attacks. The Navy deployed a number of ships to the Gulf of Oman and the Arabian Sea during this operation. The tempo of operations in the 2001-2003 period was yet another unforeseen development which caused delays. As a result, even though most of the submarines had been handed over to Canada, they were not available for as many sailing hours as expected to provide the time at sea in an operational submarine that trained submariners need to maintain their level of proficiency and that new trainees need to become submariners. It is true that the availability of the simulators makes it possible to carry out much more training at shore installations than in the days of the Oberon fleet. The Committee visited the simulators during its visit to Halifax in November 2004. The fact remains that it took more time than expected to transfer the simulators from the U.K. to Canada. Until they were finally installed and operational in Halifax, there were further delays in the training schedule.

In short, it appears that almost everything that could go wrong in the plans to provide training to new and experienced Canadian submariners did go wrong. However, there were other problems. For example, while the Canadian Navy has a long history of cooperation with the Royal Navy, Canadian planners did not fully understand the implications of the Royal Navy’s decision in 1996 to have a private British company, Flagship Training Limited, provide the training for all British sailors, not just the submariners. The conversion training given to Canadian submariners in the U.K. was provided by Flagship. According to one of the documents on training issues provided to the Committee by the Department of National Defence, the navy was used to resolving training issues with the Royal Navy on a navy-to-navy basis, but found there were fewer options available now that it was dealing with a private corporation as well as with the Royal Navy.⁶³ Other problems arose because the procedures in the Royal Navy were not all as common to those in the Canadian Navy as had been expected and because half a decade after the Upholders had been withdrawn from British operations, much of the expertise and the documentation concerning the operation and training for this class of vessel had been dispersed and was not available.⁶⁴

One of the major differences between buying new and old military equipment is that the manufacturer of the new equipment is usually still producing the items it sells to Canada and can provide by itself or in cooperation with other companies the conversion training required by Canadian military personnel to operate the new equipment. In the case of the submarines, Canada obtained the only four submarines of this class that were built and they had been inactive for some five years. While general submarine training could be provided easily because the Royal Navy still operates nuclear-powered submarines, providing training specific to the Upholders was more problematical. This does not mean that the conversion training was not adequate because the Royal Navy and the Canadian Navy have rigorous standards for submarine operations and the level of training required. However, this episode is another example of the extent to which the complexity of the conversion from the Oberon submarines to the Upholders was underestimated. One of the results of this is more delay in getting what is now called the Victoria class submarines to full operational status. The Chief of Review Services noted in his May 2003 report that due “to schedule delays and the adverse impact on the CF’s capacity to train submariners, the required manning levels for the Victoria Class submarines will not be achieved before the year 2007 — a delay of at least one year.”⁶⁵ There could be more delay given the period of inactivity of the submarines pending the findings by the Board of Inquiry into the fire aboard the Chicoutimi. The period of inactivity will likely have an impact on training because there is no operational submarine to provide the required time at-sea experience.

The May 2003 report of the Chief Review Services also noted that an individual needs six weeks training at sea on an operational submarine to qualify as a trained submariner. However, the Committee heard contradictory statements on how much time at sea is required for initial and refresher training of submariners. While simulators are a valuable training tool, they cannot completely replace time at sea. Besides, it appears to be important to pay attention as well to the training of a submarine crew as a team to ensure the effective operation of the submarine. In discussions with submariners in Halifax and elsewhere, the members of the Committee gained the impression that they are highly trained and strongly committed to their tasks. However, given the questions raised about submariner training and the lessons learned during the conversion training in the U.K. and after the submarines were transferred to Canada, the navy should carefully examine its training plans. The Committee therefore recommends that:

RECOMMENDATION 3:

The Canadian Navy undertake an immediate review of its submariner training program to ensure that it can sustain a cadre of qualified submariners and provide the required amount of at-sea experience on an operational submarine. The Chief of the Maritime Staff should provide a report on this review to the Standing Committee on National Defence and Veterans Affairs.

RECOMMENDATION 4:

The training time at sea on an operational submarine provided for initial and refresher submariner training should be maintained at the currently planned level and increased if the review of the navy’s submariner training program deems it necessary.

Given the incident onboard the Chicoutimi, there was some discussion of the firefighting training provided to naval personnel during our meetings on the submarine acquisition. While such training is no doubt provided, there were some conflicting views concerning the realism of the training. Some basic firefighting training apparently uses simulated smoke and may not illustrate enough the kind of situations naval personnel, especially submariners, can find themselves in aboard a vessel. Over the course of its history, the Navy has experienced a few incidents involving fire and the experience and courage of the crews have prevented serious fires from getting out of hand and causing the loss of a ship. Nevertheless, procedures and training should be reviewed on issues such as firefighting skills which are so important to the survival of a ship and its personnel. The Committee therefore recommends that:

RECOMMENDATION 5:

The Navy review the firefighting training provided to all naval personnel on submarines and ensure that the simulated fire situations used for training submariners are as realistic as possible to illustrate the conditions that could be encountered during a fire aboard a submarine.

The Need for Rigorous Risk Analysis

While the training process encountered its fair share of problems, it is only one of the various elements which did not go according to plans in the submarine acquisition. The complexities of the conversion from the Oberons to the Upholder submarines were recognized when Canada embarked on this acquisition. However, it is clear that all the risks involved were not taken into account. The Chief Review Services of the Department of National Defence stated it better than perhaps anyone else in his May 2003 report. He states in paragraph 2.8 that this “Project illustrates the importance of rigorous risk analysis and the articulation of corresponding mitigating strategies.”⁶⁶ The report adds in a box next to this paragraph that in future projects, an independent third-party analysis can help to better define the risks. The Committee agrees that whatever the merits or disadvantages of the submarine acquisition, the lessons learned during this project must not be ignored in future equipment projects. However, it is very unfortunate that a significant sum of government funds had to be spent to learn these lessons. Some of the problems could have been avoided if Canadian defence policy had been clearer and regularly updated during the period when the Navy considered its options concerning the replacement of its old Oberons. They would have been avoided if the complexities of the acquisition of previously owned submarines had been regularly evaluated. A can do attitude is a very commendable thing, but there should also be an objective reassessment of the pros and cons of pursuing an acquisition when there are signs that problems might become unmanageable or might create significant delays in obtaining the desired capabilities.

The submarine acquisition is only one example of the perils of undertaking major equipment projects and not taking into consideration all of the possible implications and all of the risks. Many studies by the Office of the Auditor General have identified problems with the management of major equipment acquisitions. This committee also examined the procurement process in its June 2000 report and many of the recommendations are still valid and merit the full attention of the Department of National Defence, the Department of Public Works and Government Services, which is directly involved in the acquisition process, and the government. With this and other issues in mind, we therefore recommend that:

RECOMMENDATION 6:

All major crown projects valued at more than $100 million proposed by the Department of National Defence be reported to the Standing Committee on National Defence and Veterans Affairs for possible examination, as previously recommended in this committee’s June 2000 procurement study.

RECOMMENDATION 7:

Parliament examine ways to increase the resources and the time available to the Standing Committee on National Defence and Veterans Affairs to carry out the examination of major crown projects proposed by the Department of National Defence.

RECOMMENDATION 8:

The recommendations of recent reports and updates of the Office of the Auditor General concerning the procurement process of the Department of National Defence be reviewed for potential implementation as quickly as possible and reported to this committee.

RECOMMENDATION 9:

All major equipment acquisition projects undertaken by the Department of National Defence be the subject of rigorous and detailed risk analysis, in keeping with the recommendations of the Office of the Auditor General, with a report to this committee.

RECOMMENDATION 10:

Information on the status of major military equipment acquisition projects be added as an integral part of the Part III — Plans and Priorities of the Estimates documents for the Department of National Defence, instead of just an internet link. Furthermore, the Department, in consultation with the Treasury Board, should review the possibility of adding more information on the rationale for these acquisitions in these documents.

RECOMMENDATION 11:

The Office of the Auditor General consider undertaking a review of all major updates and refits of the Victoria class submarines which may be undertaken over the course of their operational service.

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59	Evidence, Meeting No. 4, October 25, 2004.

60	Department of National Defence, Chief Review Services, Review of the Submarine Acquisition/Capability Life-Extension Program, 7050-11-33, May 2003. The report, with severances under the Access to Information Act, is available at http://www.dnd.ca/crs/rpt/reports_e.htm.

61	Evidence, Meeting No. 13, December 6, 2004.

62	Evidence, Meeting No. 17, February 3, 2005.

63	Department of National Defence document provided to the Committee by the Department: Training Timeline. Training Milestones Introducing the Victoria Class Submarine, second slide of section on Common-to-Fleet Training.

64	Ibid., slides on Training Documentation.

65	Department of National Defence, Chief Review Services, Review of the Submarine Acquisition/Capability Life-Extension Program, 7050-11-33 (CRS), May 2003, p. 19/30.

66	Ibid., p. 6/30.