All war­ship project bid­ders fail to meet some tar­gets

Kingston Whig-Standard - - ONTARIO NEWS - DAVID PUGLIESE

Canada’s quest for a new fleet of war­ships is off to a rocky start with all bid­ders fail­ing to meet some of the fed­eral gov­ern­ment’s re­quire­ments.

Pro­cure­ment of­fi­cials are now try­ing to re­group on the $60-bil­lion project and fig­ure out ways that bid­ders might be able to change their pro­pos­als to make them ac­cept­able, a num­ber of de­fence in­dus­try ex­ec­u­tives pointed out.

The prob­lems cen­tre around tech­ni­cal is­sues. Some are mi­nor but in other cases there is a view among de­fence in­dus­try of­fi­cials that Canada is ask­ing for too much in some ar­eas such as radar, which may be caus­ing prob­lems with meet­ing re­quire­ments.

Pub­lic Ser­vices and Pro­cure­ment Canada spokes­woman Michèle LaRose said the three bids re­ceived for the Cana­dian Sur­face Com­bat­ant project have not been dis­qual­i­fied. The fed­eral gov­ern­ment and Irving Ship­build­ing are still eval­u­at­ing the pro­pos­als, she added. LaRose pointed out that the eval­u­a­tion is at the sec­ond stage in the process.

Gov­ern­ment of­fi­cials say that in­volves what is known as “the cure process” in which bid­ders will be given de­tails of how their pro­pos­als have failed to meet the stated cri­te­ria. They will then be given only one op­por­tu­nity to fix is­sues with their bids.

If they are still con­sid­ered “non­com­pli­ant” af­ter the cure pe­riod they “will be elim­i­nated from the com­pe­ti­tion,” ac­cord­ing to the fed­eral gov­ern­ment.

Tech­ni­cal spec­i­fi­ca­tions are now be­ing eval­u­ated by the gov­ern­ment. Later this year, the com­pa­nies will pro­vide the fi­nan­cial in­for­ma­tion re­lated to their bids.

War­ship builders sub­mit­ted their bids on Nov. 30. A win­ning bid is ex­pected to be se­lected some­time this year.

Irving Ship­build­ing will be­gin con­struc­tion of the first ship in the early 2020s and de­liv­ery of the first ves­sel is ex­pected in the mid-2020s, ac­cord­ing to the fed­eral gov­ern­ment.

But the project has been plagued with de­lays and con­tro­versy.

The fi­nal cost of the ships is still un­known. In 2008 the gov­ern­ment es­ti­mated the to­tal cost of the project to be about $26 bil­lion.

But in 2015 navy com­man­der Vice Ad­mi­ral Mark Nor­man voiced con­cern that tax­pay­ers may not have been given all rel­e­vant in­for­ma­tion, and pub­licly pre­dicted the cost for the ships alone would be around $30 bil­lion.

Cost es­ti­mates for the project are now be­tween $55 bil­lion and $60 bil­lion.

About half of the cost is for sys­tems and equip­ment that will go on the 15 ships, ac­cord­ing to fed­eral doc­u­ments ob­tained by Post­media through the Ac­cess to In­for­ma­tion law. “Ap­prox­i­mately one-half of the CSC build cost is com­prised of labour in the (Irving ’s) Hal­i­fax yard and ma­te­ri­als,” the doc­u­ments added.

Last year, Jean-De­nis Fréchette, the par­lia­men­tary bud­get of­fi­cer, es­ti­mated the CSC pro­gram would cost $61.82 bil­lion. He also warned that ev­ery year the award­ing of the con­tract is de­layed be­yond 2018, tax­pay­ers will spend an ex­tra $3 bil­lion be­cause of in­fla­tion.

The sur­face com­bat­ant will be the back­bone of the fu­ture Royal Cana­dian Navy.

In Novem­ber in a sur­prise twist a French-Ital­ian con­sor­tium de­clined to for­mally submit a bid and in­stead of­fered Canada a fleet of ves­sels at half the price.

Of­fi­cials with Fin­cantieri of Italy and Naval Group of France said they don’t be­lieve the pro­cure­ment process as it is cur­rently de­signed will be suc­cess­ful.

In­stead they pro­vided the Cana­dian gov­ern­ment with a di­rect pro­posal that Irving Ship­build­ing on the east coast con­struct 15 ships based on the con­sor­tium’s FREMM frigate de­sign, which is proven and is cur­rently in op­er­a­tion with the French and Ital­ian navies. They are guar­an­tee­ing the cost of the ships at a fixed price of $30 bil­lion.

The deal would have also fo­cused on us­ing Cana­dian tech­nol­ogy on board the ships and in­cluded tech­nol­ogy trans­fer to Cana­dian firms, so they could be in­volved in fu­ture sales of the FREMM ves­sels on the in­ter­na­tional mar­ket.

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