Winnipeg Free Press - PRINT EDITION

City firm fears defence dry-up

DND's procurement revamp unlikely to help garment makers

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Public Works and Government Services Diane Finley unveils a new defence-procurement strategy in Winnipeg Monday.

WAYNE GLOWACKI / WINNIPEG FREE PRESS Enlarge Image

Public Works and Government Services Diane Finley unveils a new defence-procurement strategy in Winnipeg Monday. Photo Store

The federal government has a new defence-industry procurement strategy in place that will allow Canadian suppliers more time to ramp up to meet the requirements.

Diane Finley, the minister of public works and government services, was in Winnipeg on Monday detailing the strategy.

But the new process might still be too little, too late for at least one Winnipeg Department of National Defence supplier.

Peerless Garments, a Winnipeg garment manufacturer, has been supplying Canadian Forces as well as RCMP with winter wear and all manner of technical garments for more than 60 years.

Albert El Tassi, president of the company, said Monday he is concerned about reports he's heard that the DND has put a hold on garment acquisitions for the military for the next 11/2 to two years.

"We will be starved," El Tassi said. "When they come back to buy again we will not be around."

The DND has a strict made-in-Canada policy for all uniforms for its service people and the policy has served Peerless well for many years.

But the company, with more than 100 Winnipeg employees, relies on those contracts for close to 85 per cent of its revenue and El Tassi said completion of contracts Peerless already has with the DND are vital to its survival.

The new defence-procurement strategy has a couple of key features, including putting the word out early about upcoming requests for proposals so potential Canadian suppliers can become better prepared to make successful bids.

As well, the new strategy proposes to revamp the manner in which industrial and regional benefits (IRB) are allocated.

'We will be starved. When they come back to buy again we will not be around'

— Peerless Garments president Albert El Tassi

In the past, when foreign suppliers won contracts to supply the Canadian military, those suppliers had to agree to spend a specified amount of money with Canadian companies relative to the size of the initial contract.

But Finley said in the past there was not much scrutiny as to how that money was spent, nor was there much monitoring to ensure it was, in fact, spent.

The new strategy will place a much greater weight on the IRB side of the contracts.

In the past, submissions for major military procurement were evaluated exclusively on technical competence and price, and the IRB contribution was just checked off as either a pass or fail.

But Finley said the new system will rate the "value proposition" of the IRB as one element in determining the winner of a tender.

"Under the new defence-procurement strategy, about 10 per cent of the evaluation of the total bid will be based on what they offer as a value proposition," Finley said. "That could mean innovation, technology transfer, R & D investment, creation of jobs."

Finley said that in 2011, of the $23 billion worth of IRBs that were on the books, about 25 per cent of it has not been disbursed, nor was there much detail on how or when it would be spent.

"We'll be asking, what is the value of that going to be, how will that improve the Canadian economy, how will it create jobs, what is the lasting impact going to be, how soon will it happen, and how spread-out will it be," Finley said.

Finley said she was not familiar with the details of the Peerless Garments contracts but she said her government does not believe "in the boom-bust cycle of purchasing."

Peerless has won a number of competitive bids for various types of technical garments for a number of different units of the Canadian military over the years, including a $16.9-million contract two years ago to supply rain gear to the Royal Canadian Navy, and five years ago it won a $32.5-million contract to make the next generation of rainwear for the Canadian Army.

martin.cash@freepress.mb.ca

 

Republished from the Winnipeg Free Press print edition March 18, 2014 B3

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