‘Unprecedented’ speed of procurement still complicated by bureaucracy, say observers as DIA head reportedly eyes exit
Defence Investment Agency CEO Doug Guzman’s alleged "frustration" with the pace of procurement is "not at all a surprise," but feds should replace him quickly as to not "lose momentum" on the "unprecedented" track the government is on.
The Globe and Mail reported on Aug. 31 that Doug Guzman, the chief executive officer of the Defence Investment Agency (DIA), is expected to depart from his role, as he's “frustrated by the slow pace of government bureaucracy in getting defence procurement projects moving and approved.”
Prime Minister Mark Carney’s office (Nepean, Ont.) and the DIA did not respond to The Hill Times’ questions about Guzman's status at the agency, or whether he's asked to leave.
David Perry, president of the Canadian Global Affairs Institute and a defence procurement expert, told The Hill Times that if Guzman is in fact “frustrated” with the slow pace of government procurement, “that’s not at all a surprise” considering his business background.
Guzman—a former Royal Bank of Canada deputy chair who has expertise in delivering major projects, and who has worked in global banking, wealth management, and financial services—was appointed to the role on Nov. 12, 2025, for a three-year term.
The DIA was officially launched on Oct. 2, 2025, as a “special operating agency” under Public Services and Procurement Canada (PSPC) to fast-track military and Coast Guard procurements worth more than $100-million, and overhaul this country’s defence procurement system that has been plagued with delays and major cost overruns. Secretary of State for Defence Procurement Stephen Fuhr (Kelowna, B.C.) oversees the agency, and Guzman reports to PSPC deputy minister Arianne Reza. His responsibilities include providing strategic direction and making sure performance targets are achieved.
Former Liberal MP John McKay, ex-chair of the House Defence Committee which studied the government’s defence procurement woes in the previous Parliament, echoed Perry's view saying he is “not entirely surprised” to hear that Guzman might be leaving given the government is “an exceptionally challenging environment” for an outsider.
McKay said this country's procurement system “undoubtedly moves too slowly” and that it is “fundamentally risk-averse and structured around process rather than results.” However, he said the larger question is whether the system is capable of responding to the new urgency Carney in which pushing.
“My concern is that the emphasis on process makes meaningful acceleration extremely difficult ... Ultimately, accountability is ministerial. In this case, however, the agency structure complicates that because the [DIA] reports to the minister,” he said.
While Perry acknowledged that defence procurement projects have been moving much quicker over the last year, that does not necessarily mean it would move fast enough for somebody who does not have previous experience working in the federal bureaucracy, he said.
“The government does not work the way that the private sector does for a whole host of different reasons … If you came from outside of that world, you could definitely see it being incredibly frustrating trying to adapt to a different pace, different set of standards, different set of considerations. I think working for the DIA would have been very unlike working for the Royal Bank of Canada,” Perry said.
He added that government departments and agencies are “never going to work like a business” as they serve different objectives and considerations, and handle consequences differently. He argued that agencies like Invest Canada, Build Canada Homes, and the Major Projects Office have tried to work around the federal bureaucracy in some instances, recognizing its limitations. But there are also limits to how much a government can work around the bureaucratic apparatus of a country like Canada, he said.
“You can only bypass it so much. You need to change the way it works if you really want to make really substantial reform,” Perry said.
When asked about Guzman’s job performance so far, Perry said the feedback he's heard from industry partners is “pretty variable” as Guzman was seemingly “engaged with some people more than others.”
“At a minimum, [Guzman] certainly seemed like a very capable person and somebody that the prime minister had confidence in. Now we have to see what happens to the role, who replaces him … But, particularly with a brand-new organization having a lost leadership at the top, I think it's very difficult to think that it's anything other than a setback in terms of getting that organization fully up and running,” Perry said.
Getting the organization up and running, and selecting the preferred supplier for Canada’s new submarine fleet, and negotiating for the $5-billion purchase of GlobalEye Airborne Early Warning and Control from Swedish manufacturer Saab were some of DIA’s successful and faster moves under Guzman, Perry said.
Perry underlined that if Guzman does leave his post, the government should appoint someone to fill that vacancy quickly. “Otherwise, I’d be worried the organization loses some momentum,” he said.
If Guzman is in fact leaving his role at the DIA, the reason why will be important for the public to know, Craig Stone, emeritus associate professor of defence studies at the Canadian Forces College, told The Hill Times
“If he voices frustration with the public service, that's a totally different issue in terms of the bureaucracy.”
Because if he's just moving on to another job, and the government is going to quickly appoint someone in his place, then the “machine will just carry on,” according to Stone.
“But if there's some confrontation around why he's leaving, that could delay stuff just because it'll end up in the House of Commons during Question Period and in the media, and so there'll be some friction. In theory, the bureaucracy will keep doing what it's doing … We'll see,” he said.
Guzman already 'moved the needle,' says one expert
Clem Srour, a retired public servant who's been involved in delivering major defence procurement projects, also said he's not surprised to hear Guzman might be experiencing frustrations with the procurement system, telling The Hill Times that the public should recognize that Ottawa has “moved very quickly on key decisions” with files like the submarine purchase under Guzman’s watch.
“We went from five bidders to one in under a year. This is completely unprecedented. So even if he is frustrated, he has already moved the needle,” Srour said.
On July 6, Canada chose Germany’s ThyssenKrupp Marine Systems working in partnership with Norway, over South Korea’s Hanwha Ocean to build Canada’s next submarine fleet after a two-year competition, which marks a record pace compared to any other major military acquisitions.
“Decisions have been made around a number of military capabilities by the prime minister in terms of the announcements, but there's still a whole process to actually finalize contracts, define requirements. So in some cases, yeah, it's moving faster than it used to because there's a focus, and because the prime minister's engaged, and that's the real driver,” Stone said.
Regardless of the pace, "we exist in a democracy where spending vast sums of money always implies checks and balances,” Srour said, adding that no democratic country has fully mastered procurement.
The government introduced Bill C-31, the implementation act for the Budget on May 6—which is at second reading in the House of Commons—which establishes the Defence Investment Agency as a standalone agency. This agency would be run by a “new minister,” who is expected to be appointed once that legislation passes.
The legislation says the minister “shall conduct a competitive procurement process,” but adds they “may dispense with conducting a competitive procurement process with respect to a contract.” It expands the scope of reasons why the minister would be allowed to bypass competition beyond what is outlined in the existing Defence Production Act, which currently include urgent operational requirements, national and economic security, sensitive technology, research, development, or innovation.
However, that does not mean the DIA can replace the government's procurement oversight mechanisms, as the Treasury Board’s regulations will continue to apply.
The pending legislation provides greater authorities than ever before to do procurement quickly, Srour said, explaining the expansion of exceptions to sole-source or non-competitive procurements alone will make it much easier for the government to make a decision “almost overnight.”
According to Stone, another reason behind a slower pace than the private sector is the fact that the new agency was built by moving around public servants from other government departments.
“That doesn't mean that they're going to change their approach to stuff unless they're forced to do it. So you’ve got some friction [and] they haven't actually got the authorities they need to do with the bureaucratic risk aversion that existed in the previous process," Stone said.
McKay and senior public servants previously told The Hill Times that a bureaucratic shuffle where public servants from multiple departments transferred to staff the new DIA won’t fix Ottawa’s procurement woes.
Guzman told the House Government Operations and Estimates Committee during a Feb. 10 meeting that the agency currently has 85 full-time staff who have moved to the DIA from PSPC; Innovation, Science, and Economic Development Canada; and the Department of National Defence, along with the files they have been following, and that the “full complement” of the agency is expected to reach about 400 employees.
“For the moment I’m the only outside employee today. The rest of it has been a transfer of existing employees from the government,” Guzman said at the time, adding that DIA still lacks quality control officers, and cost analysis and risk management advisers—with those functions are provided by PSPC in the interim.
The 2025 budget earmarked $30.8-million for the DIA over four years, starting in 2026-27, with $7.7-million ongoing.
The Hill Times