Military Equipment Procurement Supplier Quality Assurance ASQ Presentation 06 November 2015 Hear about Defence Contracting for Military Equipment and the Defence approach to supplier quality assurance. The discussion will include: an overview of the military equipment procurement process; quality management system standards such as ISO 9001:2008 and clauses specified in contracts; how the Department uses risk management and a process-audit approach to conducting quality assurance services at military equipment supplier facilities; and current trends in weapon system management / long-term in-service support contracts.

Breakout Speaker Vernon Purcell Quality Assurance Manager Calgary Department of National Defence Directorate of Quality Assurance Calgary Workcentre Welcome to the Breakout session: Military Equipment Procurement - Supplier Quality Assurance My name is Vernon Purcell. I work for the Department of National Defence (DND); Directorate of Quality Assurance. I joined DND in 1982 in Halifax and was transferred to Calgary in 1998. I’ve been very fortunate to work with a wide range of suppliers across Canada – delivering quality military products and services to the Navy, Army and Air Force. Vernon Purcell is the Quality Assurance Manager in Calgary with the Department of National Defence, Directorate of Quality Assurance. He and his staff work with a number of defence industry contractors in the Southern Alberta region; providing supplier quality assurance services during the manufacture or repair of military equipment. Prior to moving to Calgary, Vernon worked in Halifax and performed supplier quality assurance services at defence industry suppliers throughout the Atlantic Region. Vernon graduated from the Nova Scotia Institute of Technology with a diploma in Mechanical Engineering Technology and also holds a business management Certificate from Henson College, Dalhousie University.

Outline Military equipment procurement process; Contract Clauses - Quality; Risk management and quality assurance at supplier facilities; and Current trends in weapon system management & long-term in-service support contracts Question period This is an outline of the topics we’ll cover. If you have questions, please ask during the presentation. There will also be time for questions at the end.

Participants Your information needs? What role do you perform in your organization? To focus on your needs and deliver information that will be beneficial to you, I’d like to learn more about you Name Organization Your Role in the organization What you would like to get from a presentation on military procurement?

Military Procurement Operations Equipment Program Management Support Navy Army Air Force Joint Deployments Navy (Maritime), Army (Land), Air Force Major Project Delivery International & Industry Programs Organization – very Generalized overview Broad Terms – Equipment In very general terms, the people involved with military equipment are organized in two groups – Commands and Equipment Program Management Sections Operations: Navy, Army, Air Force – Commands that assign people and equipment to tasks, operations, deployments, exercises, etc. Equipment Program Management Support – National Defence Headquarters (NDHQ) organization that manages the life-cycle of equipment for military operations. “cradle to grave” or “conception to disposal” Assistance Deputy Minister – Materiel. The Materiel Group is the single, central service provider and program authority for materiel for the Canadian Armed Forces (CAF) and the Department. ADM(Materiel) is accountable to the Deputy Minister (DM) for materiel’s full life cycle – from acquisition, through maintenance and support, to disposal. Navy (Maritime), Army (Land), Air Force Major Project Delivery International & Industry Programs

Military Procurement Department of National Defence buys a wide range of supplies and equipment Basic Supplies Buy direct from Industry Use Acquisition Cards, Local Purchase Orders and Standing Offers Military Equipment Spares & Supplies Within financial limit - Direct from Industry The Canadian Armed Forces purchases a wide range of equipment and supplies

Military Procurement Military Equipment over Financial Limit Equipment Program Management processes $$, Funds Approval, Technical Details, Quality Details, Supply & Logistics Details Defence creates requisition Defence sends the requisition over to Public Works & Government Services Canada (PWGSC) for the contracting process Funds budgeting, forecasting, allocation Engineering, design, development, qualification, technical data, specifications, drawings, bill of materials Quality requirements, inspection, testing, quality management system, risk identification & analysis, project management Supply & Logistics, packaging, marking, manuals, operation instructions

Military Procurement PWGSC deals with Industry Electronic “Buy and Sell” Process Requests for quotation, proposals, contract award PWGSC Web Site has very detailed information Defence needs Science and Engineering Allocation and approval of funding Technical Details (specifications, drawings, statement of work, support requirements) Government “Team” approach to getting a contract in place that will have the correct quality of product/service delivered to meet CAF user needs for the best price / value.

Military Procurement Major Defence Equipment Procurement Ships, Vehicles, Aircraft, Weapons Senior Level Strategy Canada First Defence Strategy Defence Acquisition Guide Several other Government Departments involved – Treasury Board, PWGSC, Industry Canada, Regional Agencies

Military Procurement - Summary User / Operational Need Equipment Program Management Requisition Process PWGSC Contracting Process Contract Awarded to Defence Industry Contractor Very simple view of the process from user need to contract award If QAC “Q” Quality Assurance at Source of Supply DND QA will be conducted at contractor facility

Military Procurement Any comments or questions?

Contract Clauses - Quality Contracts awarded to Canadian Industry Basic supplies subject to receipt inspection at receiving Unit or Depot Military Supplies ~ non-complex Quality Assurance Code “C” Compliance with ISO 9001:2008 Provide evidence of conformance (~ C of C) Subject to inspection & verification at receiving Unit or Depot

Contract Clauses - Quality Contracts awarded to Canadian Industry Military Supplies and Equipment ~ Complex Quality Assurance Code “Q” Subject to Quality Assurance at the contractor (or subcontractor) facility Standard Acquisition Clauses and Conditions (SACC) Manual Clauses D5510C DND QA at Source of Supply D5540C Compliance with ISO 9001:2008 others (Packaging, Marking, Delivery, C of C)

Risk Management & Quality Assurance Canadian Contracts with QAC “Q” Foreign Defence Contracts with Quality Assurance at the source of supply USA, NATO, other Nations with agreements Canadian Personnel will represent the Foreign Defence Departments No direct cost to contractor supplying products / services

Risk Management & Quality Assurance NATIONAL HQ Edmonton . The Directorate of Quality Assurance has a Headquarters in Gatineau (Ottawa). Vancouver . Quebec City Winnipeg . Mirabel Victoria Gatineau . London Calgary Halifax Montreal Kitchener Longueuil Toronto Kingston

Risk Management & Quality Assurance Government Quality Assurance Contract review and post award meeting Risk analysis Quality audit planning Quality auditing System audit, Process audit, Product audit Corrective Action Product Release / Delivery

Risk Management & Quality Assurance Follow Project Management Guidelines Product Risk Supplier (Contractor) Risk Quality Assurance Auditing ISO 9001:2008 ISO 19011 Auditing Guidelines NATO Allied Quality Assurance Publication 2070 Mutual Government QA

Risk Management & Quality Assurance Goal of DND Supplier Risk Management and Quality Assurance auditing Establish Confidence in the supplier Maintain Confidence in the Supplier Our clients “EPM” personnel, often want us to QA the equipment

Trends Longer Term Contracts Optimized Weapon System Support Contracts In-service Support Contracts Standing Offer Contracts Supply Arrangements (Basic Ordering Agreements)

Trends ISO 9001:2008 to ISO 9001:2015 Quality Management System Registration Certification not mandatory to bid Focus is on compliance to Standard Value versus Lowest Price Build longer term supplier relationships Commercial versus military specification

Trends Military use of Quality Management Systems Defence Suppliers – ISO 9001 Fleet Maintenance Facilities – ISO 9001 202 Workshop – ISO 9001 Major Supply Depots – ISO 9001 CF Recruiting – Process Manual – ISO 9001 Air Maintenance Squadrons – AF9000+ and Airworthiness Accreditation

Questions???