Tactical Armoured Patrol Vehicle procurement builds a better relationship with suppliers

February 2013

PWGSC is engaging suppliers early and often to steer large and complex procurements, such as the Tactical Armoured Patrol Vehicles. The result is a better deal for the government and Canadians.

When the contracts for the Department of National Defence’s (DND) new Tactical Armoured Patrol Vehicle (TAPV) were awarded last summer, the unsuccessful bidders were disappointed with the result but praised Public Works and Government Services Canada (PWGSC) for engaging suppliers throughout the procurement process.

It’s a reaction that Peter Woods, who monitored the procurement process for fairness, seldom sees.

“All the unsuccessful bidders said it was a good, fair process,” said Mr. Woods, who has consulted as fairness monitor for more than a decade. “No one asked them; they just came forward.”

The two contracts, with a combined value of $801 million, including taxes, were awarded to Textron Systems Canada Inc. to provide 500 Tactical Armoured Patrol Vehicles and support services to the fleet for an initial period of five years. The support contract also contains options to provide support services for up to 25 years.

These new vehicles will be more mobile and offer a higher degree of protection to Canadian Armed Forces members than the patrol vehicles currently in inventory. The first vehicles are expected to be delivered in 2014.

The Department of National Defence described the contracts as giving the Canadian Armed Forces the tools they need while creating skilled jobs for Canadians. John Turner, Assistant Deputy Minister of Materiel at the Department of National Defence specifically recognized PWGSC’s contracting team’s “outstanding work in guiding the development and progression of the project’s complex procurement process.”

In the summer of 2009, PWGSC and DND started the three-year, multi-phase procurement process for the armoured patrol vehicles by issuing a Letter of Interest to industry seeking information on vehicle capabilities. The PWGSC and Department of National Defence team then met with each of the 15 vehicle manufacturers from around the world who had responded to the letter. These meetings, the first of four in-depth consultations, provided key insights into the industry on issues such as production rates.

“Engagement with industry was fundamental to the success of the TAPV procurement and started at the very beginning of the procurement,” said Hélène Perron, who managed the PWGSC TAPV procurement team.

In the summer of 2010, PWGSC held key early one-on-one meetings on the draft specifications for the vehicles with the seven suppliers prequalified through the TAPV Solicitation of Interest and Qualification.

“It is very important to understand industry capability to ensure that the technical requirements would be achievable by industry,” said Johanne Provencher, the director general for PWGSC’s major military procurements.

Suppliers also offered different perspectives on the specifications that could lead to savings for Canadians.

“The suppliers could comment on what was technically feasible and could suggest alternatives that would offer better value,” said Ms. Perron.

In November 2010, PWGSC and the Department of National Defence invited more than 100 representatives from the seven prequalified suppliers to Ottawa’s Government Conference Centre to discuss the draft Request for Proposal (RFP) that would be used to solicit bids. Over two days, PWGSC and the Department of National Defence met again with each of the suppliers one-on-one.

“In these confidential meetings, suppliers had the opportunity to provide in-depth feedback,” said Ms. Perron.

Bringing government departments and suppliers together early and throughout the process provides the information and the understanding needed to fuel PWGSC’s pursuit of a smarter and more informed procurement system, especially for larger complex procurements such as the TAPV.

“While Smart Procurement includes things we are already doing, it also means engaging both government and suppliers much earlier to better understand government’s needs and what the market can provide,” said the Assistant Deputy Minister for PWGSC’s Acquisitions Branch, Tom Ring. “It’s about being a better listener, about being open to what clients tell us, and about being open to suppliers’ suggestions for innovative and creative solutions.”

Smart procurement also means drawing upon third-party experts for advice, benchmarking, validation or fairness monitoring.

To ensure the integrity of its procurement process, PWGSC engages an independent third party to observe and provide an impartial opinion on the fairness, openness and transparency of the procurement.

“Vendors had a say in the process,” said Mr. Woods. “There was a good understanding among the bidders about what was required. It was very well done.”

The final comprehensive RFP was 2,000 pages long, covering technical specifications, long-term support requirements, delivery schedule, basis of payment, and industrial regional benefits.

“Previously in procurement, there was a limited relationship with the suppliers so when government released the RFP, industry had not seen it and the process would sour,” said Mr. Woods. “This level of engagement cuts off problems. The main advantage is that when the RFP is finally posted, there are no surprises.”

Lieutenant-Colonel Rob Dundon, the project manager for TAPV, said early consultation also enabled the use of extensive physical testing as part of the acquisition bid evaluation process, and the introduction of a performance-based and incentivized long-term in-service support strategy—two new thrusts being institutionalised for future use when purchasing vehicles for the Canadian Forces.

“These created unique challenges, the management of which was significantly facilitated through early and frequent industry consultation,” said Lieutenant-Colonel Dundon.

Ms. Provencher agreed that the ongoing engagement of industry created the conditions for a more competitive procurement.

“We sought and considered industry input and as a result we received four bids, which are considered a lot for a project of this complexity,” she said. “I strongly believe that engaging suppliers is a key enabler to a successful complex competitive process and leads to a best-value solution.”

As PWGSC’s Smart Procurement Initiative moves forward, Mr. Ring predicts that “engagement with clients and suppliers will be strengthened and expanded by such means as industry days, focus groups, and better use of technology like webinars and online feedback.”

Follow us on Twitter.

Return to Features >