North Bay's NORAD problems cited by Auditor General

Completion of a new air surveillance and control system at NORAD's Canadian Air Defence Sector Air Operations Centre in North Bay is taking longer and costing more than the Department of National Defence planned.

The Auditor General of Canada, Sheila Fraser, pointed to the modernization project's problems in her 2007 Auditor General's Report, tabled today in the House of Commons.

The project began 10 years ago when Canada and the U.S. agreed to update the system used by the NORAD (North American Aerospace Defence) partners.

NORAD's primary mission includes surveillance, detection, monitoring and warnings of air attacks against North America. NORAD command and control is based at the Cheyenne Mountain Operations Center in Colorado Springs, Colorado. The Canadian NORAD Region (CANR) headquarters is in Winnipeg. The North Bay site provides tactical command and control for Canadian airspace.

Critical information generated is forwarded to Winnipeg and Colorado Springs.

The Canadian government originally allocated about $93 million for the modernization venture.

Canada's responsibilities included defining requirements, system development and building an above-ground structure in North Bay to house the new system.

Officials believed closing the centre's underground complex would lead to annual savings of $16 million a year through reduced personnel and operating costs.

Overall costs to date are about $125 million, and another $31 million will be needed to finish the job.

The current anticipated total cost of around $156 million is nearly double the original commitment.

Fraser said that the difficulties stem from problems with system development and project management.

The newly installed air surveillance and control system, which began operating in 2006, represented the National Defence's third attempt at updating over 12 years.

"There were several signs that this project was in trouble," said Fraser.

"The cost escalations and delays should have prompted more rigorous reporting and oversight."

The audit found that neither National Defence nor the government made appropriate use of mechanisms available for managing large, high-risk projects like this one.

The report notes that at the time of the audit, there were still questions about the security of the new building and actions needed before it could be fully used as planned.

As a result, the department has had to keep some operations in the underground complex.

Expected savings have not materialized.

"National Defence intends to continue with upgrades to the new system. But first, it needs to resolve the problems we found in this audit," said Ms. Fraser.

"The government also needs to ensure that these large, high-risk projects are subject to better oversight."

To read the Auditor General's full report on NORAD modernization, click here.