Close Combat Vehicle cancelled

***UPDATE: The government has officially confirmed the cancellation of the Close Combat Vehicles project (James Cudmore, “Government won’t buy new $2B armoured vehicles for army,” CBC News, 20 December 2013).***

The Canadian Press is reporting that the government’s planned purchase of 108 Close Combat Vehicles (CCV) will be officially cancelled on Friday (“Canadian military set to cancel $2-billion order for armoured vehicles,” Canadian Press, 19 December 2013):

The Canadian Army is cancelling a $2-billion order for new armoured vehicles, after another lengthy, troubled procurement went wrong.

Sources tell The Canadian Press that military officials are set to announce the cancellation of an order for 108 close-combat vehicles on Friday.

Bids by three defence contractors – Nexter, BAE Systems Inc. and General Dynamics Land Systems Inc. – had been set to expire this coming Monday, and the military has decided not to pick a winner.

The CCV project has been languishing in limbo for a long time, but a week ago some observers thought a contract award was imminent (David Pugliese, “Close Combat Vehicle to Die a Slow Death?Ottawa Citizen, 16 December 2013):

Last Friday when Public Works sent out a news advisory that the PWGC Minister was going to be making a defence equipment announcement, the buzz started that maybe it would be the long awaited announcement on the CCV winner. …

Industry was disappointed when the PWGC announcement turned out to be the purchase of more truck-related equipment. …

At the news conference, Public Works Minister Diane Finley wouldn’t get into many details on what was happening with the CCV. “We continue to work the Department of National Defence on that file,” she said, dutifully reciting the media response line that she and the Defence Minister had been given.

Canadian Press noted she was non-committal when asked whether the government intended to let the bids expire, which would effectively kill the program for a second time.

Since its announcement by the Canadian government in 2009, the CCV project has faced a series of hurdles. The most recent and prominent issue has been the costs associated with the project. According to the Ottawa Citizen,

The government committee reviewing the project was told infrastructure costs, the implementation of information systems, the cost of a support contract and the absence of a training simulator represented a “high risk” to the project…

The Canadian Army reportedly attempted to cancel the project earlier, fearing that it could not afford the vehicles, but on that occasion it was overruled by the government.

The Rideau Institute and the Canadian Centre for Policy Alternatives published a report on the CCV project in September 2013. Stewart Webb and Michael Byers, the authors of the report, argued that the Army’s upgraded Light Armoured Vehicle III (LAV-III) would be capable of filling the role the CCV is being purchased to fill; they argued that the $2 billion allotted for the CCV project would be better spent on training for the Canadian Army.

Photo credit: U.S. Army

Tags: Canadian Army, Canadian Centre for Policy Alternatives, CCV, Close Combat Vehicle, Defence policy, Defence spending, LAV III, Light Armoured Vehicle III, Michael Byers, Military procurement, Rideau Institute, Stewart Webb