DEVELOPING A STRATEGY IN REGARD TO DEFENCE CONSTRUCTION CANADA

AUGUST 17, 2011

Union of National Defence Employees

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Purpose of Presentation

Provide background information on Defence Construction Canada (DCC)

Provide some insight as to why National Defence (DND) may use DCC

Findings and Issues discovered from site visits

Identify potential issues/challenges with the DND/DCC relationship

Identify possible strategies to protect /enhance CE/UNDE members’ positions

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Background info on DCC

Defence Construction Canada formal name is Defence Construction (1951) Ltd.

Mandate, approved by Treasury Board through DCC’s Annual Plan,

“….provide a wide variety of property-related services to support the Department of National Defence in the management of its facilities' infrastructure needs…”

Mandate last reviewed in 2001 by Minister of PWGS and was not changed

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Background info on DCC

Services & number of employees continue to grow – close to 90o people and still hiring

DCC is funded 100% by DND – no other sources of revenue

Revenue level over $ 700 million (2009/10)– All profits/losses by DCC are

returned/covered by DND as part of next year budgeting process

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DCC is an Agent Crown Corp

Reports through Minister of PWGSOwn employer but looks like a government

departmentAre encouraged to adhere to most TB Policies Must follow Financial Admin Act (Sec 32/34)Auditor General of Canada is designated

auditor for DCC

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Why DND uses DCC

Facility operations not core to DND mandateNo staffing issues for DNDNo formal contract between DND and DCC –

just a MOU for servicesPayment to DCC comes from O&M budget

and not salary budgetPerceived cost savings but no business caseBack door method of downsizing

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Site Visits and Findings

Team has visited several Bases/Support Areas; Quebec, Ontario, Saskatchewan, others to be arranged

Consistent issues found at each location Growth of DCC in all areas Limited/no hiring of CE staff Increased time for RFPs Some evidence of fraud – further investigation is

required Project charging issues DND senior staff joining DCC Where are the business cases to support use of DCC

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Problems with increasing the use of DCC

CE employees increasingly out of loop, by-passed, unable to complete assignments due to lack of resources

Quality of work, oversight of contractors, security clearances for contractors’ staff

No real consultation with existing staff/UNDE about increasing use of DCC

DND still accountable for facilities and projects but has no “organization” to carry out due diligence role

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Strategies to Consider for Protecting-Enhancing Positions

Assume DCC is not going away , UNDE National Executive to consider various strategies to approach DND Management to discuss issue

Need to be proactive in DND’s strategic review Set up UNDE/DND Committee to review DND

custodian management requirements/structure Consider expanded roles for CE employees in area of

contract management Return DCC to original role/mandate

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Next Steps

Finalize site visits and information gathering – visits can be arranged through Regional VP

Continue to examine/analyze P3 contract for CSE HQ in Ottawa – need to stop the trend

Start to “build the movie” and be ready when Parliament returns next month to demonstrate how much DCC is really costing DND and Canadians

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