French firm secures ship maintenance deal

A subsidiary of French defence giant Thales has been selected for a $5-billion contract to maintain Canada’s new Arctic patrol vessels and supply ships, but according to documents obtained by the Ottawa Citizen, the Canadian government had earlier been warned by some officials at the Department of National Defence that its strategy of having one firm do maintenance for both fleets could cost taxpayers more money in the long run.

Pierre-Alain Bujold, a spokesman for Public Services and Procurement Canada, said Friday that all the bids received for the maintenance contract have been evaluated and the government will now enter into negotiations with the highest-ranked bidder. Despite the Liberal government’s vow of openness and transparency, the department declined to name the winning bid, citing reasons of commercial confidentiality.

But multiple industry sources say Thales Canada was told in late December it had won the $5.2-billion project.

The deal would see the firm provide in-service support for an initial period of eight years, with options to extend services up to 35 years. Bujold said the actual contract is expected to be awarded in the fall of 2017. “If the parties cannot reach an agreement on the financial aspects of the contract within an allocated 45 calendar days, the GoC will invite the next highest ranked bidder to enter into negotiation,” he added.

The first Arctic Offshore Patrol Ship is being built by Irving on the east coast and is expected in 2018. Construction has yet to start on the two new Joint Support Ships. The first of those supply ships, to be built by Seaspan in Vancouver, is expected in 2021.

Thales Canada did not respond to requests for comment.

The Canadian government announced in July it was seeking bids from companies to repair and maintain the two new fleets over a 35-year period.

Last year, the government said the competition to pick one firm to provide in-service support, including refit, repair and maintenance and training for the two fleets, would benefit Canadian industry and the public. “By combining the Arctic Offshore Patrol Ships and Joint Support Ships In-Service Support into one contract, we ensure the effective maintenance and support of these fleets over their operational lives,” Judy Foote, the Minister of Public Services and Procurement, said at the time.

Industry sources say there is no need for the intense secrecy about Thales being the top bidder since the news has circulated over the last couple of weeks among various companies. They warn that there is a growing pattern of secrecy over defence purchases at Public Services and Procurement Canada.

ANDREW VAUGHAN / THE CANADIAN PRESS FILES Industry sources say Thales Canada, a subsidiary of the French defence giant, was told in late December that it had won the $5.2-billion ship maintenance contract.