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FOR IMMEDIATE RELEASE                                            May 15, 2002

OTTAWA - The Public Service Alliance of Canada (PSAC) and its Union of National Defence Employees (UNDE) component say Canadians should be questioning why the federal government is handing over the military supply chain to the British firm Tibbett & Britten Group (TBG), a move that will put this essential service beyond the control and scrutiny of Canadians.

"This government’s track record with contracts is questionable at best," says PSAC Regional Executive Vice-President (National Capital Region) John Baglow, "and this contract needs serious scrutiny. Our Armed Forces depend on the military supply chain for everything from army boots to aircraft parts. The existing National Defence operation meets or exceeds industry standards. We wonder why the government is putting something that already works very well into the hands of an international company, whose only experience is warehousing in the retail industry, and whose first loyalty is to its shareholders, not the military men and women who depend on the supply chain operation."

UNDE National President John MacLennan points out that the Supply Chain Project will be given to TBG for 11 years. "Over this time, they will be able to collect the corporate knowledge necessary to ensure that they have a virtual monopoly to control vast sections of public purchasing for generations of Canadians to come. National Defence officials have admitted that even if the contract goes badly, it is unlikely they will be able to bring it back within the public sector."

"Canadians needs to ask why the federal government wants to gamble with the security of supply to our Armed Forces, says Baglow. "No assessment has ever been done on what the risk would be to frontline military personnel and to the Canadian public during an emergency. September 11^th has changed our views of what our security needs are. The Supply Chain Project ignores these important concerns and invites incidents such as the one in which the owners of the GTS Katie held Canadian strategic military supplies until they received payment. Our Armed Forces don’t need more uncertainty."

According to MacLennan, "there is also no evidence to support repeated claims by National Defence Minister Art Eggleton that $70-million will be saved. The original business case forecast savings from $20 to $74-million, based on reducing the number of military and civilian personnel involved, handing over facilities to the contractor, less freight and fewer vehicles. The majority of the savings assumed that the contractor would employ only 70% of civilian employees and pay them 80% of 1999 wage rates.

"Since then, TBG has indicated that 100% of employees will be employed, at 100% of salary, at least in the short run, and they’ve indicated that they won’t be assuming responsibility for DND facilities. In addition, the initial assumptions regarding avoidable freight charges ignored the high rate of competitive contracting that is already in place with the existing supply chain. Minister Eggleton’s savings are an illusion."

"There are escape clauses built into the contract," indicates Baglow. "In the interests of the Canadian Forces and all Canadians, we urge the federal government to take advantage of these clauses and keep the supply chain in military hands, where it belongs."

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For information:

John Baglow, PSAC Regional Vice-President (National Capital Region) (613) 560-4380
John MacLennan, UNDE National President, (613) 594-4505, #15

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