Your Future -- Your Workplace

Fact Sheet: Privatization in the Department of National Defence - A No Holds Barred Agenda

The Supply Chain Project is based on a contracting approach called Benefits-Driven Procurement. Essentially, contractors bid to have the right to partner with the government to write the terms and conditions of the contract. This project will privatize most civilian positions performing logistics functions at DND. It will be affecting approximately 1400 indeterminate civilian employees, most of who are lower-paid labour, trades, supply, traffic, purchasing, data management, clerk and administrative workers.

In the past decade, the civilian workforce has been reduced from 33,000 civilian employees to 19,000 civilian employees. This process of de-civilianization will continue through a variety of Alternate Service Delivery (ASD) initiatives until the majority of civilian employees at DND are privatized.

• Most of the companies competing to write the contract are transnationals. They include Raytheon, Honeywell, Tibbet and Britten, SNC Lavallin/TNT and Atco/Frontec.

• Ironically, by embracing "global competition" the DND privatization plans will create private monopolies in Canada. The contract for the Supply Chain project is for a possible 11 years. If purchasing is included in the contract, once the contractor collaborates with DND to write it, smaller Canadian companies that now enjoy equal access to government purchasing will no longer have guaranteed access

• Although other privatization projects in the Defence Department contain provisions that retain continued public service delivery as an option through

• what has been called the "Most Efficient Operation" process, the anticipated success of the Supply Chain privatization project makes the public service option more unlikely.

• The Request for Proposal for the Supply Chain privatization project actually invites potential private providers to consider taking action to access more public services. "If it is to the advantage of the government to do so, other Canadian government departments may avail themselves of any DND-administered contract resulting from this RFP."

• Transnationals competing for DND public service work have expressed interest in expanding their services to other DND functions, to other federal government departments and to provincial and municipal governments as well.

• Even if an internal public service option was favoured by DND it is unlikely that the government could choose it. If national treatment rights in services are included in the FTAA, all public services at all levels of government would have to be opened up for competition from foreign for-profit service corporations. Under the FTAA, for the first time in any international trade agreement, transnational service corporations will gain competitive rights to the full range of government service provisions and will have the right to sue any government that resists for financial compensation. The FTAA includes all of the worst aspects of the MAI and GATS.

• The Public Service Alliance of Canada and the Union of National Defence Employees are actively pursuing all avenues to ensure that union members who are transferred to transnationals will retain full employment security and union rights. The FTAA and recent anti-union legislation in the United States could threaten existing Canadian legislation and policies that ensure a continued unionized workforce.

Privatization at DND threatens the continued livelihood of PSAC/UNDE members. This is a source of grave concern. The privatization initiatives at DND are of concern for other reasons also.

The partnership and contracting models used here will be a prototype for further privatization of public services. The cancer will not stop at Federal Public Services. The intent of both the Federal government and the transnationals that take over Federal government services is to see the privatization spread to all levels of government.

Other major ASD initiatives include

1. Site Support Review

2. Suffield Efficiency Exercise

3. German Army at Shilo

4. 202 Workshop Montreal

The Federal government has made the decision to sacrifice public services in Canada so that Canadian transnationals can profit internationally. Unfortunately it will be the Canadian public and the Canadian worker who will pay the price for their success.