Canadian media makes startling discovery - military equipment requires maintenance.
Why is it a "bombshell" when Gordon O'Connor announces an acquisition of Leopards without building in maintenance contracts, but not even newsworthy when John McCallum announces an acquisition of the Mobile Gun System with no maintenance costs attached?Scandalous! I expect the headline over tomorrow's follow-up piece will read "Mobile Gun System project costs including twenty-year maintenance contract would also have been double the announced acquisition price." Unwieldy, that. How about "Former Liberal Defence Minister hid costs of MGS, full price would have been double to $1.3 billion?" Better, but I'll never be as good as the pros slaving away in the newsrooms, will I?
As usual, there's more in the comments ;
Look at it another way: if the Conservatives had really wanted to lowball - to hide the true costs as a hedge against public opinion - as you've suggested, they wouldn't have included the price of the initial run of spare parts or the cost of the needed upgrades in the announced $650M purchase price of the Leo 2's, would they?This story is made out of thin air.
And Dave at The Galloping Beaver is full of crap on this one. The "existing allocations" doesn't mean "shifting money from other essential operations and maintenance" as he states. It means taking capital budget already set aside for the MGS and putting it towards the Leo 2's instead.
Furthermore, the announced price never included the maintenance contract, as the DND backgrounder explicitly stated, and as I pointed out in my post. Dave's wrong on that point too (it was never a "total" cost).
The G&M got it wrong when they compared this contract with the aircraft contracts. Maintenance contracts on airframes are normally negotiated up front with the manufacturer on new purchases, and so can be nailed down with the initial purchase (you don't normally want anyone other than the manufacturer doing aircraft maintenance).
The tank 2nd and 3rd line maintenance is a different beast - it can be unbundled from the purchase of the tanks since we're buying them "used." And it makes sense to unbundle the long-term maintenance contract so that we can run a competition on the contract.
Update - I can't open it on this computer, but this Lew MacKenzie interview on Mike Duffy Live is getting good reviews.











Well are we surprised that the MSM and Liberal MPs in the House aren't letting facts get in the way of a good smear?
The crap that's going on in the House makes me wish that matters of honour could be resolved the old way. A slap in the face with a glove and then either a duel or a coward turning tail. And considering the current lot of Liberals & NDP there wouldn't be anyone killed in a duel.
Maybe taliban Jack has a suggestion for a solar pannel and elect tank?
Maybe taliban Jack has a contractor for a solar paneled electric tank?
Sure, tanks cost money to run. But that's not the point. The Con's are playing a numbers game, as even Babbling Brooks from The Torch admits:
"Besides, a secondary effect of something like the C-17 announcement was to showcase how much the Conservatives were investing in the CF, and the bigger number made for better press."
So the Cons play down the costs of the tanks because they are embarassed and they know that public opinion is starting to go against the war.
I would suspect that the costs will be even greater than what we have just been told. A year of driving those tanks around in the sand and they will require either a very expensive overhaul, or they will need to be scrapped.
For another opinion:
http://thegallopingbeaver.blogspot.com/search/label/main%20battle%20tanks
Attention: Dawn Black NDP defense critic
Not only are they really, really big guns but they really really cost money to maintain
http://www.canada.com/ottawacitizen/news/story.html?id=e80496e1-3e76-4238-9dda-e7c31559280d
'Blow up' dysfunctional Senate: Tory
Liberal majority has driven chamber to all-time low, government whip says
Jack Aubry, The Ottawa Citizen
Published: Friday, May 18, 2007
A senior Conservative senator says the dysfunctional upper chamber should be "blown up" because the large Liberal majority, acting too often as judge and jury, has brought the Senate to an all-time low as a political body.
"This is an inc*stuous place which should be blown up," an exasperated Terry Stratton, who acts as whip for senators on the government side of the red chamber, said in a telephone interview from Winnipeg.
Defence Minister O'Connor can loan me one of those Leopard 2 A6M tanks and I will gladly oblige Her Majesty's government!
We'll give you democratic renewal pronto!
Hey Guy Fawkes we've got a big job for you.
Public Works is now taking applications for rubble removal.
Of course we'll give the learned Senators time to leave the building first. Instructions for evacuating the Senate before the Leopard 2 tanks arrive will be given in German: ALLES RAUS!!
The democratic temple will be destroyed and rebuilt in three days by order of:
Hans-Christian Georg Rupprecht BGS, PDP, CFP
Commander in Chief
Frankenstein Battalion
Knecht Rupprecht Division
Hans Corps
1st Saint Nicolaas Army
Army Group “True North”
set up a line of burning crosses as a defence, taliban jack and hot cross hedy fry could maintain it at minimal cost plus pension.
"Sure, tanks cost money to run. But that's not the point. The Con's are playing a numbers game"
As Kate pointed out the long term cost of maintenance has not been included in the immediate cost of purchasing other military hardware in the past, with little fan fair. Only difference here is its a Conservative gov't project not a Liberal.
Also, by retiring the current Leopard 1 tanks which are older and require more maintenance the net increase in cost of maintaining the new Leopard 2 fleet will be minimal.
We're not talking about acquiring 500 or a 1000 tanks here.Even if tanks don't fit well into the current trend toward urban terrorist combat, having a small fleet of tank is just common sense.
Iberia...
The price of the Mobile Gun System (MGS) project was 600 million dollars, and that was for a piece of equipment that the US army hadn't even got to work yet. The MGS POS, could not fire on the move, the Crew commander and gunner had no situational awareness, the automatic loader had a nasty habit of loading the Crew Commander's arm into the gun and the whole thing only carried 18 rounds of 105mm ammo.
Our 30 year old Leopard 1 tanks are still rolling along in Afghanistan of 1970's technology so how about you tell me what sort of expertise, logic or actual knowledge of tanks, tank systems or military equipment life-cycle leads you to believe that a modern Gen III main battle tank would be rendered inoperative after a year in Afghanistan?
Better yet how about you prefix every statement you make with a disclaimer, something along the lines of:
"The following is pure conjecture, I have no idea what the hell I'm talking about and you are probably better off getting your information from the National Enquirer of that weird guy that talks to himself in Tim Hortons."
lberia: "So the Cons play down the costs of the tanks because they are embarassed and they know that public opinion is starting to go against the war. I would suspect that the costs will be even greater than what we have just been told. A year of driving those tanks around in the sand and they will require either a very expensive overhaul, or they will need to be scrapped."
Can you actually back up either of these points? Your post doesn't come close to substantiating above argument.
As for cost overruns/maintenance inclusion - I recall the EH101 debate where Liberals lumped in full life cycle costs and divided it by number of helicopters for, voila, "unit costs."
Cost overruns happen with all large projects, or even snafus on total cost (yes, they should get their act together on this). When Libs announced Cyclone, did they include life cycle costs? lberia, check that one out for us will you?
Hypocrisy thy name is Liberal. Jack the Dipper is just plain stunned like the rest of his ilk.
To think the Liberals have now acquired the master of bankrupting a province, Buffalo Bob Rae, who even had to resort to Rae Days and workers had to work a day for nothing.
We gotta know anything spent on equipping the Military will be too much for those Bozos.
In their minds all we need is a Boy Scout type legion of men with merely blue berets who go pass out candy and hugs to terrorists.
Of course we could take Dawn Black along with a portable oven to bake them cookies.
God save us all!
So the Cons play down the costs of the tanks because they are embarassed and they know that public opinion is starting to go against the war.
Except that the Liberals did the same thing with the MGS, as I mentioned - no maintenance contract included in the announced purchase price.
My point was that you can make the numbers look like just about anything you want, depending on what you're going to build into your costs, and not one of them would constitute a "bombshell."
Look at it another way: if the Conservatives had really wanted to lowball - to hide the true costs as a hedge against public opinion - as you've suggested, they wouldn't have included the price of the initial run of spare parts or the cost of the needed upgrades in the announced $650M purchase price of the Leo 2's, would they?
This story is made out of thin air.
And Dave at The Galloping Beaver is full of crap on this one. The "existing allocations" doesn't mean "shifting money from other essential operations and maintenance" as he states. It means taking capital budget already set aside for the MGS and putting it towards the Leo 2's instead.
Furthermore, the announced price never included the maintenance contract, as the DND backgrounder explicitly stated, and as I pointed out in my post. Dave's wrong on that point too (it was never a "total" cost).
The G&M got it wrong when they compared this contract with the aircraft contracts. Maintenance contracts on airframes are normally negotiated up front with the manufacturer on new purchases, and so can be nailed down with the initial purchase (you don't normally want anyone other than the manufacturer doing aircraft maintenance).
The tank 2nd and 3rd line maintenance is a different beast - it can be unbundled from the purchase of the tanks since we're buying them "used." And it makes sense to unbundle the long-term maintenance contract so that we can run a competition on the contract.
A competition which hasn't yet occurred, btw, which means all the numbers flying around are nothing more than the MND's speculation. If you want to bash him for anything, bash him for throwing guesstimates around before the bids are in.
Again: the story is manufactured news.
It's understandable. These are the same idiots who don't realize that soldiers are trained to kill people, not shovel snow in Toronto.
Damian:
"It means taking capital budget already set aside for the MGS and putting it towards the Leo 2's instead."
Where did you get this information from? Do you have a link?
Iberia........if you are going to comment on military stuff like tanks guns and airpanes etc.....get you shite together and stuff you left wing degree up your left wing orfice!!
Fact: machinery (in this case tanks) need maintenance
Fact: it will cost money......cost is dependent on how the maintenance contract is written and what services are provided.
Fact: PWGSC (they are some of the bureaucrats who actually run our government/country) has the final say on who gets the maintenence contract and for how much, not the PMO or the MOD.
Have a nice day!
If the average Joe walked into his local Chevy or Toyota dealership and the sticker on the window of his new Silverado or Prius (trying to address both sides of the aisle here) included all maintenance, spare parts and insurance (and, in the case of the Prius, a really expensive battery replacement) for the next 10 years, he'd have a heart attack. Of course, he might then realize that he was already paying these types of costs on his current vehicle. He might also realize that for the first few years of ownership of his new vehicle, maintenance and parts costs will be quite low since it is new.
Military procurement is really no different - we currently have tanks, and they are very old which means a lot of maintenance (ie $$) and increasingly hard to find spare parts (more $$). The CF already has tank mechanics, and their salaries and other expenses are part of that lifecycle cost.
The upshot is, that of course the bill looks much bigger if you roll these costs in - but they are paid over 20 years and they would have to be paid anyway (or maybe even cost more) if you keep the old equipment. Look at the EH101s - when you include the cancellation penaties that were paid, and the huge maintenance expenses of keeping the Sea Kings in the air (mostly), I would bet that it was a significant portion of that scary-looking $5+ billion acquisition figure that the libs and the media kept harping on.
Where did you get this information from? Do you have a link?
I got it from folks I know at DND - people intimately involved in this. Apparently we only had about $16M unrecoverable in the MGS project, which means the vast majority of the $650M MGS budget was transferrable to the new tanks.
Here's a question for those complaining about this: how much do you figure the twenty-year maintenance contract for the MGS would have cost, and why didn't McCallum tell the public about his expectations on that count?
Glad to see the money going to the military and not some liberal scam.
Damain:
Does that mean the MGS plan was not carried out? If this is the case, why didn't O'Connor just say that the Leopard 2 lease is being funded by canceling the MGS?
Don't get me wrong...I am not defending how the Liberals did things. There was plenty wrong with how they ran the DND. However, you seem to be defending the way the Cons have handled this tank project by saying the Libs did things the same way. If it was wrong then, it is wrong now.
If this is the case, why didn't O'Connor just say that the Leopard 2 lease is being funded by canceling the MGS?
Because he's a horrible communicator, that's why.
But communication is the most important part of his job!!
lBeria...well, we don't have strykers , so figure it out..it has been noted on the military blogosphere since this purchase first came to light that this is where the money would be freed from.
It's a hell of a deal any way you slice it..do you know what a brand new leo would cost? (or a hundred?)
We should be thankful to DND for saving taxpayers money on questionable items and putting it to where it is needed..
...you seem to be defending the way the Cons have handled this tank project by saying the Libs did things the same way. If it was wrong then, it is wrong now.
I'm not the one saying it was wrong, the media and opposition are. I'm saying there's a double-standard in the reporting. Sauce for the goose should be sauce for the gander. I don't think the Conservatives have manipulated the numbers any more than any government manipulates any numbers to serve their own purposes, especially when there's no consensus on how to account for these things.
I'm not sure how I think these purchases should be disclosed. On the one hand, I don't like the idea of hidden costs that trickle out over years and years. On the other, how can you track ALL the costs (how many litres of paint will a tank take over twenty years, and have you adjusted for inflation?) without venturing into the ridiculous?
I mean, when you ask someone what they paid for their new car, do they factor in ten years of brake jobs, oil changes, car washes, bottles of wiper fluid, interest on their car loan, insurance, replacement tires, gasoline, air fresheners, etc before they answer you? And is that really a fair number, if you're comparing it to the ad you saw in the paper that doesn't include freight & delivery or taxes for a bare-bones model?
ANY number is suspect without context.
But communication is the most important part of his job!!
Perhaps that's true. Communication is certainly high on the job description.
But whether O'Connor is or isn't an effective MND isn't the point of my piece. The point of my piece is that Brewster is manufacturing news where none really exists.
Maintenance money - for the MGS or for the Leo 2's - would have had to be found regardless of which vehicle we ended up with. This isn't a doubling of the cost, since the maintenance costs would have been incurred even if we had gone ahead with the MGS plan.
Damian:
The problem is that O'Connor and the DND are in the media spotilght now (especially since the prisoner exchange issue), moreso than the Libs ever were. O'Connor's inability to communicate causing him no end of trouble.
As for expenses, I think a more pertinent comparison would be fleet purchases and maintanence, for example trucks. Organizations running fleet vehicles know fairly precisely what the costs are going to be. They have to, because these costs are factored into their budgets. Any company that doesn't have a handle on costs risks going broke.
I can just see it now Hez Coderre demanding the head of O'Connor when the HOC resumes. Liberal Spin over & over.
Lack of & wrong ill fated purchases by the 13yr wonders of truth have caused our forces to be where they are today,do yu remember the old TV commercial from Mr Transmission "you can pay me now or Pay me later" well we are Paying for it. The bright side is moral is up in the forces since we have seen to elect a government that will defend the forces. Oh & of course the mandy pandy spinners will play this to the hilt, watch the poll numbers as this is History replaying, Liberal truth always right never wrong, liberal spin 24/7 never tell the electorate what they want to hear.
And of course our Liberal freinds are so kind to our forces, the sad part is that a good man will be moved from this position i would suspect when the house ajourns for the summer.
Have a great Victoria Day Weekend all.
Iberia:
For a simple comparison the MND could simply ask for some numbers from any of his NATO allies who have Leo2s.
Further, comparison could be made by comparing the M1A1 Abrams MBT as a cost alternative.
Be that as it may, picking up the Dutch surplus tanks which were nicely warehoused, probably paid for the maintenance as compared to buying new.
The fleet experiences of other nations would be instructive in getting valid numbers for comparative purposes on a unit cost basis with and without maintenance contracts.
Per the DND website:
http://www.dnd.ca/site/newsroom/view_news_e.asp?id=2252
"Acquiring new tanks off a production line was also examined, but delivery would not occur for a few years and the individual tank cost is approximately three times as expensive as procuring and upgrading the same capability that exists on the surplus market."
In short, buying surplus and upgrading, finances the maintenance, as compared to buying new. Redeploying existing funds from MGS allocations doesn't bring in a "new" costing to the overall project of armour battle capability.
The LIEberals could have easily picked up surplus Leo 2 tanks since the end of the Cold War but chose not to act, in favour of being "entitled to their entitlements".
Iberia, you might want to consider the difference between a trucking fleet and a tank fleet in terms of use.
You can plan a maintenance schedule for a truck fleet because it doesn't get shot at, doesn't drive over mines, doesn't have to haul ass across broken ground to avoid mines and getting shot at, and etc.
Besides, consider the cost of not having them. That could get expensive in a hurry.
bryanr,
Coderre already started in on O'Connor and the Conservatives in today's QP--"arms dealer" slur and all. I've never run afoul of the law, but Coderre, the little POS that he is, is worthy of an assault charge.
Duffy is now leading with this non story, the headline flashing "Cost of Tanks to DOUBLE". Lew Mackenzie, in his straightforward way, is setting him straight.
I wonder if these tits ever change the oil in their car or get a tune up!
The Liberals make me want to pull my hair our. Why does no one mention the used British subs the Liberals bought? We lost one of our sailors because of Liberal incompetence. What is the cost of repairing those subs? I thought I read somewhere that they are irreparable. The CPC have to get their act together. They are losing to the masters of double speak and spin.
Of course it is going to be very expensive to bring the military up to a standard that is better than a boy scout troop.
Duffy didn't know if he should s#*t ,go blind or wind his watch when Mackenzie was tuning him in. I don't know how duffy keeps his job cause he sure can't control the silly little mini debates on his show.
are any of those wonderful subs the liberals bought still floating ? or are they sinking ? can they move once they sink ? if they sink will they come back up ? talk about a sinking millions of dollars .
This is just another example of the cons fudging the numbers to reflect anything but reality to voters.
If anyone captures the Duffy-McKenzie interview for youtube, let me know.
"are any of those wonderful subs the liberals bought still floating ? or are they sinking ? can they move once they sink ? if they sink will they come back up ? talk about a sinking millions of dollars"
You mean those subs that were purchased by the Liberal government? Purchased on the bad advice from the military?
http://www.ploughshares.ca/libraries/Briefings/brf981.html
"The current proposal is the second time that DND has presented the Government with plans to acquire the same four UK Upholder submarines. Although then National Defence Minister David Collenette indicated in May 1996 that the first Upholder deal would not proceed, departmental officials revived the program, stating in 1997 briefing notes to a new Minister that "the proposal has been improved"
"DND presents the "affordability" of the Upholders as a central reason for the Canadian government to purchase the submarines immediately."
Sounds like just another mistake by the military to me. The mistake the Liberals made was to listen to those who were supposed to be the experts.
How the Libs did business...
http://www.forces.gc.ca/site/newsroom/view_news_e.asp?id=892
"The Upholder - An innovative acquisition
The acquisition includes:
four modern, diesel-electric submarines in an eight-year, interest-free, lease-to-buy arrangement;
conversion training of all crew and fleet-support personnel;
four state-of-the-art shore-based simulators, and;
INITIAL spare parts and a technical data package.
The costs are:
$610 million for:
submarines;
training simulators;
initial spare parts, technical data package;
crew training.
$140 million in project related costs for:
Canadian modifications;
re-location of trainers to Canada;
project management;
contingencies.
total cost not to exceed $750 million.
The financing arrangements are:
an eight-year, interest-free, lease-to-buy arrangement;
"Bartering" of Canadian lease payments on the four submarines for the costs charged to the U.K. for continued training of British Forces in Canada at bases in Wainwright, Suffield and Goose Bay.
A nominal sum of one pound Sterling to be paid to purchase each submarine at the end of the lease;
$160 million in savings from:
retirement of five ships from the Canadian navy;
cancellation of an Oberon refit;
reductions to the navy’s operations and maintenance budget."
---------
Two (and we could spend all day on the rest) important parts of this:
1. Only initial spare parts... Some have speculated that the cost of Canada for this sweetheart deal is about $750M more...
2. Reductions to the O&M budget of the Canadian Navy. Yeah, the money the used to go towards the Oberon is saved, but there is no O&M money indicated with the "new subs."
Mr O'Connor is getting fried by the MSM for telling the full up truth. Perhaps he should have just kept his mouth shut like the Libs did.
Only one sub is still operational. It will be a few years (if ever) before the other ones will be fit for sea.
They weren't "purchased". Chretien took them because they were "free".
BTW, anyone remember the 12 nuclear subs and Polar 8 icebreaker the last Con gov't wanted to build? What started out as a bright future for the Navy ended with ships not being able to afford to go to sea and downsizing/FRP of sailor strength. This current Con spending spree keeps reminding me of what happened back then.
"They weren't "purchased". Chretien took them because they were "free".
Posted by: Kate at May 18, 2007 8:49 PM"
Fumes off the tar sands blowing your way today Kate? You’d best check your facts again.
I remember that very well lberia
Have you seen this?
"Conservative Over-Spending on Afghanistan Leaves No Funds for Critical Search-And-Rescue Equipment"
April 26, 2007
http://www.liberal.ca/story_12735_e.aspx
You're just batting a thousand today aren't Alby? What a wonderful human being you are.
What's your point Phantom, that spending for Afghanistan is more important than protecting the lives of Canadians here in Canada?
Well apparently spending on Afghanistan is far more politically important for Harper.
My point is that you wouldn't know a Leopard 2 if you got run over by one in the street. You don't know what they can do, you don't know what they are for, and you don't know why they need them in Afghanistan. Furthermore you don't care to know, your purpose is to vex and annoy.
I also observe that you have the manners of a goat. A pox upon you.
Actually Phantom I can tell Leopard tanks apart believe it or not. I've had armour recognition training.
The easiest way of telling a Leopard 1 from a Leopard 2 is the exhaust ports are found on the sides of a Leopard 1 and in the rear of the Leopard 2. The easiest way of determining you are looking at a Leopard at all is the undulating side skirts. Be careful though the Leopard 2 is often confused with the British Challenger.
Thank heavens for Lew MacKenzie spreading good sense on national television.
Hey, my Yorkies have more smarts than any number of Toronto Star or G&M journalists, and certainly have a better grip on reality than 99.99% of lefties. Of course, that's about as hard for smart terriers than rolling over and playing dead. Hey albatros39a, wannt play who's smarter than a fifth grader with my dogs? Thought not - they'd beat you paws down. Go play with the rest of the retarded kids on DailyKos.
Back to the subs for an instant they were not exactly free just no money changed hands. The Brits paid for the use of Suffield and Wainwright with the sub-par subs. About the tanks; what irked me most was the MSM stating that the cost of the Afgan mission just went up when the tanks are simply another tool in the arsenal of the armed forces. I was doing some construction work a number of years ago and needed a Hilti. Rather than rent one I bought one and have used it on many jobs since its initial purchase. The cost on that first job was lower than a one time rental when the cost of the tool is spread over the number of jobs I have used it on. If we assume that Canada will be involved in Afghanistan for another 4 years we will still have the tanks for another 16 (40?) years for use on missions around the world Maybe even Darfur, if Talijack gets his wish.