Statement of Capability Deficiency (SCD)

A Statement of Capability Deficiency (SCD) is a Department of National Defence (DND) statement that identifies the capability gap, or the problem, that acquired equipment or services must resolve. It sits at the start of Canadian defence acquisition, before requirements are written and before a solicitation reaches the market.

The term comes from DND's capability-development and equipment-acquisition process, not from a general federal procurement rule. It is mainly an internal government instrument. Suppliers see its effects in the projects and requirements that DND later brings to market.

How DND defines a capability deficiency

DND's thematic evaluation of equipment acquisition effectiveness defines a capability deficiency as the problem that needs to be resolved by the acquired equipment. The same material describes a capability as the ability to deal with risks identified in scenarios or risks associated with actual operations. The DND evaluation states that the project sponsor defines the capability deficiency.

Once defined, the deficiency is broken down into High-Level Mandatory Requirements (HLMRs). These are foundational statements of the specific capabilities the Canadian Armed Forces need to meet defence-policy objectives. They set the project's high-level capability objectives.

A deficiency does not always lead to a single purchase. A DND evaluation report states that capability deficiencies may be addressed fully by one project or in combination with other equipment projects.

Where the SCD fits in the defence purchasing process

DND's defence purchases and upgrades process requires the Canadian Army, Royal Canadian Navy, Royal Canadian Air Force or Canadian Special Operations Forces Command to demonstrate a deficiency or emerging requirement in current capabilities before proposing new equipment or services. Project teams then identify the deficiency, develop the capabilities the proposed equipment or service must deliver, and prepare a preliminary statement of operational requirement and a business-case analysis.

The Statement of Operational Requirement (SOR) is the requirements document prepared to address the identified deficiency. The deficiency states the problem. The SOR describes what the solution must do.

Statements of Operational Capability Deficiency in the RCAF

DND's evaluation of air and space force development uses a closely related expression, Statement of Operational Capability Deficiency (SOCD). The evaluation says the RCAF identifies capability gaps through several mechanisms, including SOCDs.

These statements are reviewed and prioritized operationally. Selected major capital projects move to the appropriate capability-development authority, while the RCAF addresses minor capital projects itself.

The SCD in the CanadaBuys responsibility matrix

The CanadaBuys matrix of DND and PSPC procurement responsibilities lists the activity "Define essential characteristics" with the document named as a Statement of Capability Deficiency or Statement of Requirement. This places the SCD inside the procurement-related process, at the stage where the essential characteristics of the need are set.

What an SCD means for a supplier

Suppliers responding to a DND solicitation must address the requirements and evaluation criteria stated in that solicitation. Suppliers are not generally required to create or submit an SCD, because it is a government capability-definition document.

Do not confuse it with the statement of capabilities in an Advanced Contract Award Notice. In that case, CanadaBuys asks interested businesses to submit a statement showing how they meet the procurement requirements and evaluation criteria. That is a supplier document. The SCD is a DND document.

For bid teams, the practical value of the SCD is context. Reading a requirement as the answer to a defined capability problem helps you see what DND is trying to resolve, and why mandatory requirements are framed as they are.