ISS: Future job losses ahead?

By Dave Pugliese

While companies see a potential bonanza in upcoming in-service support contracts for the Royal Canadian Navy, the union representing workers at the Department of National Defence sees future job losses.

John MacLennan, national president of the Union of National Defence Employees (UNDE), said the Navy is putting in place a system that will eventually transfer much of the maintenance and support work on its new ships to the private sector. The work is currently done by about 1,000 government employees, who are mainly situated in bases on the West and East Coasts. Other jobs, located in DND warehouses that are stocked with parts, could also be affected.
“Our fear is that the public service will be eroded through attrition and the responsibilities taken over by the contractor,” MacLennan explained.

Union representatives met with senior Navy officers on January 10 to discuss what is being called the Future of In-Service Support (FISS) initiative.

As more responsibilities for maintenance work are passed on to private contractors, the skill levels of government employees currently doing the job will suffer, MacLennan warned.

Federal employees do everything from repairing hulls, to working on sonars, radars and other on-board systems. Other public servants conduct inspections of hulls and other ship components.
Federal workers need to be regularly doing such jobs if they are to retain their skills, union representatives told Navy officers at the January 10 meeting.

MacLennan noted that the large amounts of money that are available for future in-service support contracts for the new ships have attracted intense interest from industry. But he also warned that having companies providing ISS could put too much power in the hands of specific firms.
He is not alone in that concern.

In April 2012, Department of National Defence officials outlined the risks of having a single support contract, covering 35 years, for the Arctic Offshore Patrol Ships (AOPS) and the Joint Support Ships (JSS). The deal will be structured so the winning company will provide maintenance and support for the ships for an initial eight years, with contract renewals every five years after that.

But DND officials raised concerns that once a single company was selected, the federal government could be held over a barrel on the ISS contract.

“A single ISS provider may assume a ‘take it or leave it’ attitude at the time of contract option renewal, forcing prices up,” warned the April 2012 briefing note for then DND deputy minister Robert Fonberg. The briefing was obtained through the Access to Information Act.

A dispute with the contractor could also force the Royal Canadian Navy to resort to conducting maintenance and support for the ships on a piecemeal basis, a development that would affect its operations, the briefing added.

But DND officials also maintained that a single contract would save money in the long run, according to the briefing documents. In addition, having one company handle support for the ships would provide steady work for its employees.

Naval officers and DND procurement specialists also told Fonberg that both classes of ships have nearly identical ISS requirements.

The briefing stated that the risks of hiring only one company to do support for the ships could be handled through appropriate levels of oversight on the contract and through ongoing discussions with the company.

But MacLennan believes the move to using private firms for in-service support on the new naval ships will cost taxpayers more in the long run, something he noted that the RCN did not dispute.

“The Navy acknowledges it could be more expensive, but they are getting direction from the government to proceed,” MacLennan explained. “They didn’t hold anything back at the meeting — the sense we got is that it’s (privatization) going to get bigger.”