Off the Shelf or New De­sign?

RCN News - - Contents - by David Rudd

David Rudd is a strate­gic an­a­lyst with De­fence Re­search and De­vel­op­ment Canada (Cen­tre for Op­er­a­tional Re­search and Anal­y­sis) in Ottawa. He is cur­rently work­ing within the Direc­torate of Naval Strat­egy. Mr. Rudd is for­merly pres­i­dent and ex­ec­u­tive di­rec­tor of the Cana­dian In­sti­tute of Strate­gic Stud­ies, and he holds a Mas­ter’s de­gree in In­ter­na­tional Re­la­tions from Dal­housie Univer­sity.


The costs as­so­ci­ated with build­ing a new gen­er­a­tion of naval ves­sels is a mat­ter of deep con­cern for the Gov­ern­ment of Canada (GoC) and the Royal Cana­dian Navy (RCN). While the 2008 Cana­dian First De­fence Strat­egy (CFDS) calls for the re­newal of the RCN’s sur­face fleet, con­cerns have been re­cently raised about the fea­si­bil­ity of these plans given ex­pected re­sources.2 In the case of the $26.2-bil­lion Cana­dian Sur­face Com­bat­ant (CSC) – a pro­gram in­tended to re­place the cur­rent fleet of de­stroy­ers and frigates – a once-in-a-gen­er­a­tion pro­cure­ment will put tremen­dous pres­sure on stake­hold­ers to agree on an achiev­able list of op­er­a­tional re­quire­ments and de­liver them on time and within strict bud­getary pa­ram­e­ters. The process is fur­ther com­pli­cated by the par­tic­u­lar com­pet­i­tive en­vi­ron­ment cre­ated by the Na­tional Ship­build­ing Pro­cure­ment Strat­egy (NSPS), the need for rein­dus­tri­al­iza­tion of Canada’s ship­build­ing sec­tor, and by the de­sire of the GoC to avoid the neg­a­tive pub­lic­ity of an­other de­fence mega-project that fails to de­liver.

This CSC pro­gram de­mands a rig­or­ous anal­y­sis of pro­cure­ment op­tions to de­ter­mine how the RCN can best ful­fil its re­quire­ments. Although this is not the de­ci­sive fac­tor in how a ship should be pro­cured (elec­toral pol­i­tics and in­dus­trial pol­icy are other driv­ers) it raises the ques­tion of whether an op­ti­mum bal­ance be­tween cost, ca­pa­bil­ity, and risk is best achieved by pur­chas­ing ex­ist­ing ship de­signs – per­haps with some mod­i­fi­ca­tions – or pur­su­ing a new de­sign cus­tom­ized to the RCN’s par­tic­u­lar re­quire­ments. Although the new Lib­eral gov­ern­ment has not pro­nounced on the CSC pro­gram, there are in­di­ca­tions that the mo­men­tum is mov­ing to­ward the adop­tion of an ex­tant de­sign – per­haps of Euro­pean ori­gin.

This ar­ti­cle will con­trib­ute to a broader un­der­stand­ing of naval pro­cure­ment by defin­ing and dis­cussing mil­i­tary-off-theshelf (MOTS) as a pro­cure­ment op­tion for a ma­jor naval plat­form. A non-ex­haus­tive list of ad­van­tages and dis­ad­van­tages will be ex­am­ined, along with a brief ex­plo­ration of al­lied ex­pe­ri­ences, all with a view to en­hanc­ing the abil­ity of de­ci­sion-mak­ers to as­sess the suit­abil­ity of this op­tion for the CSC pro­gram. It will be shown that de­spite the many at­trac­tions of ex­tant de­signs for bud­get­minded navies, un­der­stand­ing MOTS is not a straight­for­ward mat­ter, and pur­su­ing it is far from risk-free.

MOTS: Def­i­ni­tion and Dis­cus­sion

An ‘off-the-shelf’ so­lu­tion refers to the im­ple­men­ta­tion of read­ily avail­able and ma­ture tech­nolo­gies/sys­tems for ap­pli­ca­tions which have tra­di­tion­ally been han­dled by cus­tomer-unique or cus­tom­ized sys­tems. A con­cise def­i­ni­tion of the mil­i­tary vari­ant of off-the-shelf – or MOTS – is some­what elu­sive, although gen­eral char­ac­ter­is­tics of MOTS equip­ment in­clude that which: is al­ready es­tab­lished in-ser­vice with the armed forces of an­other coun­try or [the buyer’s]; it is not a new de­sign;3 is sourced from an es­tab­lished pro­duc­tion fa­cil­ity; has mi­nor mod­i­fi­ca­tions to de­liver in­ter­op­er­abil­ity with ex­ist­ing [buyer’s] and/or al­lied as­sets4

And yet, this def­i­ni­tion may be too re­stric­tive. In the world of naval plat­forms, MOTS can ar­guably en­com­pass ‘mod­u­lar’ de­signs whereby the on-board sys­tems vary ac­cord­ing to cus­tomer re­quire­ments, but the ship’s size, shape and dis­place­ment are broadly sim­i­lar to the ves­sel of ori­gin. The Ger­man ‘Mer­hzweck-Kom­bi­na­tion’ (MEKO) 200 series of gen­er­alpur­pose frigates were orig­i­nally built for Turkey as the Yavuz class, but were sub­se­quently or­dered by other al­lied navies with slightly dif­fer­ent weapons/sen­sor pack­ages. At the time of writ­ing 25 of these units were in ser­vice. This at­tests to the sound­ness and longevity of the de­sign, and speaks well to its af­ford­abil­ity over the 15-year span of the build pro­grams.

An even more ex­pan­sive un­der­stand­ing of the MOTS ap­proach can be found in the prac­tice of ac­quir­ing ves­sels sec­ond­hand, rather than through new-build pro­grams. Royal Navy Type 22/23 frigates, as well as ex-Royal Nether­lands Navy M-class frigates have found sec­ond homes in the navies of Chile, Romania, and Bel­gium, to name but a few. These ships are de­liv­ered largely ‘as-is,’ and are ideal for coun­tries look­ing for proven ca­pa­bil­ity with­out the need for ex­ten­sive mod­i­fi­ca­tions, al­beit at the pos­si­ble cost of long-term sup­port­a­bil­ity and ear­lier ca­pa­bil­ity ob­so­les­cence.

MOTS does not en­com­pass projects where a num­ber of off-the-shelf com­po­nents are in­te­grated to­gether for the first time. Thus, the Cana­dian Pa­trol Fri­gate pro­gram of the 1980s/1990s, em­ploy­ing an other­wise-proven suite of sen­sors and ef­fec­tors, would not have qual­i­fied as MOTS, un­der even this ex­pan­sive def­i­ni­tion.

The Com­plex­ity of Ships

As noted by a RAND Cor­po­ra­tion study, the ac­qui­si­tion of naval ves­sels is fun­da­men­tally dif­fer­ent from land or air sys­tems – par­tic­u­larly if the for­mer are con­structed for/by the buyer, rather than ac­quired sec­ond-hand.5 Sys­tems such as ar­moured ve­hi­cles or fighter air­craft may be built in their hun­dreds. By con­trast, naval ves­sels are typ­i­cally built at low pro­duc­tion rates, rang­ing from a hand­ful to a few dozen. Land and air sys­tems are de­vel­oped dif­fer­ently; both go through pro­to­type phases. For navies, there are no pre-pro­duc­tion or pro­to­type ships; each hull is ex­pected to en­ter ser­vice, and so, pres­sure to en­sure that the lead ves­sel is per­fect (or near-per­fect) is par­tic­u­larly in­tense.

Mil­i­tary air­craft tend not to be of­fered à la carte, or in the mod­u­lar for­mat of some naval ves­sels such as the MEKO fri­gate de­sign; they come with a more fixed ar­chi­tec­ture – a given size, a given pow­er­plant, and a given sen­sor suite (if ap­pli­ca­ble). Be­yond com­mu­ni­ca­tions gear and mi­nor al­ter­ations to sat­isfy na­tional air wor­thi­ness re­quire­ments (known as ‘non-dis­cre­tionary mod­i­fi­ca­tions’), there may be rather lit­tle for a buyer to cus­tom­ize. Thus there is less chance of a buyer at­tempt­ing to take the de­sign in di­rec­tions that may re­sult in tech­ni­cal fail­ure. (The speed and suc­cess of the air force’s C-17 and C-130J ac­qui­si­tion pro­grams at­test to this.) Sim­i­larly, most land sys­tems are also pur­chased largely

‘as-is.’ Even the most com­plex sys­tems such as ar­moured ve­hi­cles may of­fer choice of ar­ma­ment or de­fen­sive aids, but lit­tle else. Ships, on the other hand, are more com­plex. With a much greater num­ber of sys­tems (and there­fore sys­tem in­ter - de­pen­dency), they will typ­i­cally take longer to de­sign and to build.

This lat­ter point – the de­gree of de­sign com­plex­ity – is rel­e­vant in that a com­bat­ant ship is a true ‘sys­tem of sys­tems.’ It boasts the widest va­ri­ety of sen­sors, ef­fec­tors, and com­mand/ plat­form man­age­ment sys­tems of any sin­gle mil­i­tary plat­form, sourced from a po­ten­tially wide va­ri­ety of man­u­fac­tur­ers.6 More­over, the com­plex­ity of any given de­sign is not nec­es­sar­ily fixed. While a buyer may set­tle on a for­eign de­sign, he may also want cer­tain mod­i­fi­ca­tions or sys­tem sub­sti­tu­tions to sat­isfy his par­tic­u­lar op­er­a­tional, reg­u­la­tory, and in­dus­trial re­quire­ments.7 The MOTS ap­proach to naval con­struc­tion thus rep­re­sents an ap­prox­i­mate, or ‘best fit’ so­lu­tion to a naval ca­pa­bil­ity de­fi­ciency. The ap­proach yields, ac­cord­ing to one study, “ca­pa­bil­i­ties that are close to what is de­sired… they in­evitably leave some de­sired re­quire­ments un­ful­filled. To close this gap there is a need to mod­ify the tech­nol­ogy.”8

In view of this, it is clear that the ac­qui­si­tion of a com­bat­ant ves­sel presents unique chal­lenges. It is not a ques­tion of choos­ing either an off-the-shelf so­lu­tion or an orig­i­nal de­sign. In­deed, MOTS may be a mat­ter of de­gree; a de­sign may fall along a con­tin­uum in which it is tai­lored to cus­tomer needs, with the buyer re­quir­ing (due to op­er­a­tional, in­dus­trial, or en­vi­ron­men­tal di­rec­tives) cer­tain sys­tems in lieu of those on the orig­i­nal de­sign. De­pend­ing on the de­gree of cus­tomiza­tion, the re­sult may be a ‘MOTS+’ or ‘MOTS++’ de­sign that is eas­ily iden­ti­fied as a cousin of the orig­i­nal but may in fact in­cor­po­rate sig­nif­i­cant in­ter­nal or ex­ter­nal de­sign changes (the ‘+’ or ‘++’ re­fer­ring to the de­gree of de­vi­a­tion from the par­ent de­sign.) To il­lus­trate this, a con­cep­tual de­sign con­tin­uum is found in Ta­ble 1. Ta­ble 1: Gen­eral cat­e­gories of sur­face com­bat­ant de­signs. The main chal­lenge posed by cus­tomiza­tion is to pro­gram risk – de­fined as the like­li­hood of fail­ing to achieve de­sign func­tion­al­ity and man­u­fac­tura­bil­ity within given bud­getary and time lim­its.

The­o­ret­i­cally, ad­her­ence to an orig­i­nal de­sign will min­i­mize pro­gram risk, while in­tro­duc­ing mod­i­fi­ca­tions will, again the­o­ret­i­cally, heighten the chances that de­lays and/or cost over­runs will oc­cur. Hav­ing said this, Ta­ble 1 may not ac­cu­rately il­lus­trate the pro­gres­sion of risk in all cases. While the ‘clean sheet’ op­tion is sit­u­ated to the right of the con­tin­uum, seem­ingly to present the high­est de­gree of risk by virtue of the orig­i­nal­ity of the de­sign and the de­sire to push the tech­no­log­i­cal thresh­old, it is pos­si­ble that the MOTS++ op­tion may in fact pose greater risk to bud­gets and sched­ule be­cause an other­wise func­tional de­sign is be­ing sig­nif­i­cantly al­tered and the ad­di­tional re­quire­ments may not be served by the orig­i­nal de­sign.9 If a cost/ca­pa­bil­ity trade-off is im­prop­erly per­formed, if a buyer fix­ates on an es­tab­lished de­sign but cal­cu­lates that it can (and must) be changed to suit his par­tic­u­lar re­quire­ments, the re­sult may be a hy­brid de­sign that is more costly and/or com­plex than one that is de­vel­oped from scratch.10 Thus, po­ten­tial buy­ers should not au­to­mat­i­cally con­clude that an orig­i­nal de­sign is the least palat­able route to naval re-cap­i­tal­iza­tion. It may de­pend upon the project at hand.

How far can a de­sign be mod­i­fied to ac­com­mo­date buyer’s ca­pa­bil­ity re­quire­ments with­out ex­ceed­ing cost/risk lim­its? To be sure, ‘dis­cre­tionary mod­i­fi­ca­tions’ will in­crease ten­sion be­tween the need to de­liver on time and the de­sire to squeeze the last drop of per­for­mance out of an ex­ist­ing so­lu­tion. Al­ter­ing a de­sign cre­ates nu­mer­ous tech­ni­cal and op­er­a­tional chal­lenges such as man­u­fac­tura­bil­ity, sys­tem per­for­mance, test­ing, op­er­a­tor work­load, and mis­sion ac­com­plish­ment. These is­sues are al­most cer­tain to crop up in a ship-de­sign/build pro­gram where a fi­nan­cially-con­strained buyer con­cludes, per­haps too hastily, that an other­wise at­trac­tive ex­tant de­sign can be eas­ily (and sig­nif­i­cantly) adapted for his own use.

The im­pli­ca­tions of even a ‘slightly’ mod­i­fied de­sign are il­lus­trated by a con­cep­tual diagram de­vel­oped by the Aus­tralian De­fence Man­age­ment Or­ga­ni­za­tion. Fig­ure 1 shows how even a small amount of cus­tomiza­tion (‘Aus­tralian­i­sa­tion’) can push the cost and sched­ule of an ac­qui­si­tion to un­ex­pected lev­els.

Thus, not­with­stand­ing the point made ear­lier that heav­ily mod­i­fied de­signs may ex­ceed the com­plex­ity of ‘clean sheet’ de­signs, it is ev­i­dent that mod­i­fi­ca­tions of what­ever de­gree

have the ca­pac­ity to in­crease pro­gram risk.

To il­lus­trate the point fur­ther, an anal­y­sis of the Royal Aus­tralian Navy’s (RAN) fu­ture sur­face com­bat­ant re­quire­ments pos­tu­lated that the Ho­bart-class air war­fare de­stroyer (AWD) could act as the ba­sis for an anti-sub­ma­rine war­fare (ASW) fri­gate. But ac­cord­ing to An­drew Davies of the Aus­tralian Strate­gic Pol­icy In­sti­tute, such a MOTS-based plan, while fea­si­ble, is fraught with dif­fi­cul­ties:

At the very least, the [Ho­bart’s] Aegis air de­fence sys­tem will be re­placed, mean­ing that the ships will need a new radar and com­bat sys­tem. As well, they would greatly ben­e­fit from a sec­ond he­li­copter, re­quir­ing some re­design in their su­per­struc­ture. The sonar sys­tems fit­ted to the AWDs should be quite ca­pa­ble, but mightn’t be the best so­lu­tion for a ded­i­cated ASW ship. All these changes are doable, but ex­pe­ri­ence should teach us not to take any re­design and in­te­gra­tion work for granted. There are also some en­gi­neer­ing ques­tions to be asked about the suit­abil­ity of the AWD hull and propul­sion sys­tems for the ASW task, for which re­duced ra­di­ated noise from heavy machin­ery and flow around the hull is re­quired to re­duce the de­tec­tion range of the ves­sel by a hos­tile sub­ma­rine. It might be the case that a mod­i­fied AWD isn’t as ef­fec­tive in the role as a dif­fer­ent de­sign and the level of com­pro­mise would have to be looked at care­fully.12

Davies goes on to point out that Bri­tain’s Royal Navy (RN) also con­sid­ered a MOTS-based so­lu­tion for a suc­ces­sor to the Type 23 gen­eral-pur­pose fri­gate. Look­ing to adapt Type 45 Dar­ing­class AWD to achieve economies of scale and re­duced fleet run­ning costs, the con­cept of an ASW vari­ant of theDar­ing class was sub­se­quently shelved as the costs and risks of the mod­i­fi­ca­tions re­quired were found to out­weigh the ben­e­fits.13 The RN has now opted for a new gen­eral-pur­pose de­sign – the Type 26 Global Com­bat Ship. Both the Aus­tralian and Bri­tish ex­pe­ri­ences may in­form RCN at­tempts to rec­on­cile AAW with ASW into an iden­ti­cal (or neari­den­ti­cal) class of sur­face com­bat­ant. This is not to say that the task is im­pos­si­ble. The Royal Dan­ish Navy’s Iver Huit­feldt-class aird­e­fence frigates may be viewed as a MOTS+/++ de­riv­a­tive of the less costly Ab­sa­lon-class pa­trol/com­mand fri­gate (although the lat­ter does not have a par­tic­u­larly strong ASW ca­pa­bil­ity). The main dif­fer­ences in­clude a more pow­er­ful radar suite, propul­sion sys­tem, main gun and mis­sile ar­ma­ment, and the dele­tion of the flex­i­ble deck in the air de­fence vari­ant. How­ever, the rar­ity of this ap­proach to naval re­cap­i­tal­iza­tion sug­gests that al­lied navies are wary of at­tempts to de­rive a ‘fam­ily’ of ships from a par­ent de­sign. Were Canada to se­lect an ex­ist­ing de­sign as the ba­sis for CSC, it would do so know­ing that the de­sign was meant for only either AAW or ASW – not both. It is note­wor­thy that the Dan­ish pro­gram achieved the suc­cess that it did by opt­ing for an orig­i­nal de­sign so­lu­tion!

MOTS Ad­van­tages & Dis­ad­van­tages

A num­ber of con­sid­er­a­tions need to be weighed be­fore choos­ing whether to build to a new or es­tab­lished de­sign, or a vari­a­tion of the lat­ter. These in­clude ini­tial de­vel­op­ment costs, the sat­is­fac­tion of op­er­a­tional re­quire­ments, the ease of man­u­fac­ture,14 in-ser­vice date, and long-term sus­tain­ment/ca­pa­bil­ity en­hance­ment. Seen through this lens, buy­ing a naval ves­sel off-the-shelf holds a num­ber of po­ten­tial ben­e­fits, in­clud­ing: more timely de­liv­ery re­sult­ing from a gen­er­ally shorter ac­qui­si­tion sched­ule;15 re­duced de­vel­op­ment risk – all MOTS ships were once clean­sheet de­signs for the par­ent navy, so a high de­gree of (tech­ni­cal) risk mit­i­ga­tion has al­ready taken place and the com­plex ‘sys­tem of sys­tems’ has reached a level of ma­tu­rity/func­tion­al­ity that should leave few sur­prises to po­ten­tial buy­ers; if built con­cur­rently or in tan­dem with par­ent navy, larger pro­duc­tion quan­tity may re­sult in sav­ings; large user base may un­cover de­sign de­fects early and more read­ily iden­tify up­grade op­por­tu­ni­ties; ex­ist­ing de­sign may help the buyer gain a bet­ter un­der­stand­ing of ini­tial project costs.16

On the sur­face, and ex­clud­ing con­sid­er­a­tions re­lat­ing to in­dus­trial de­vel­op­ment, MOTS po­ten­tially rep­re­sents the most at­trac­tive pro­cure­ment op­tion for bud­get-con­scious navies. The is­sue of timely de­liv­ery is peren­nial con­cern and has caused many in Canada’s naval com­mu­nity to ar­gue for se­lect­ing an ex­tant de­sign and build­ing it be­fore the cur­rent fleet ob­so­lesces.17

MOTS may also be at­trac­tive for po­lit­i­cal de­ci­sion-mak­ers ea­ger to avoid pro­cure­ment ‘de­ba­cles’ char­ac­ter­ized by slow de­liv­ery and/or cost over­runs. In­deed, where there is low risk-tol­er­ance, where the po­lit­i­cal ground is in­fer­tile for even the per­cep­tion of mis­man­age­ment, choos­ing an ex­tant de­sign may pro­vide a de­gree of psy­cho­log­i­cal re­as­sur­ance to stake­hold­ers that an un­proven de­sign can­not. As MOTS does not ex­clude the pos­si­bil­ity of do­mes­tic pro­duc­tion, the gov­ern­ment of the day may see it as the best of both worlds – a way to man­age com­plex­ity, sched­ule and cost while gen­er­at­ing sig­nif­i­cant em­ploy­ment.

These con­sid­er­a­tions must be bal­anced by the many short­and long-term draw­backs of buy­ing a ma­ture de­sign. The fol­low­ing rep­re­sents non-ex­haus­tive list of con­cerns: over­all project cost may be dif­fi­cult to dis­cern due to dif­fer­ences in labour rates/ef­fi­ciency be­tween the OEM and do­mes­tic builder; if a build pro­gram is not large enough, the buyer may not have suf­fi­cient mar­ket power to ne­go­ti­ate the most favourable terms with the orig­i­nal equip­ment man­u­fac­turer (OEM) – more so if the de­sign is idio­syn­crat­i­cally tai­lored to lo­cal needs (i.e., buyer’s mar­itime ge­og­ra­phy, hab­it­abil­ity/en­vi­ron­men­tal/safety standards, or crew­ing con­cepts);18 the buyer might have to pay a sig­nif­i­cant pre­mium to se­cure the in­tel­lec­tual prop­erty re­quired for in-ser­vice sup­port and mid-life up­grades; even with an ex­ist­ing or mod­i­fied de­sign, the man­u­fac­tur­ing process may need to be al­tered to suit lo­cal in­dus­trial ca­pa­bil­ity, thereby adding time and cost;19 pos­si­ble in­com­pat­i­bil­ity with other MOTS sys­tems that are ac­quired con­cur­rently; the MOTS de­sign may not be back­ward-com­pat­i­ble with in­ser­vice equip­ment or sup­port­ing in­fra­struc­ture, ne­ces­si­tat­ing (costly) changes to the lat­ter to en­sure com­pat­i­bil­ity; the OEM might in­sist on re­tain­ing sole right to ex­port to other na­tions, even if mod­i­fi­ca­tions re­sulted in a new sub-class of ship; (pre­ma­ture) re­tire­ment of MOTS ship by the par­ent navy may re­sult in loss of economies of scale stem­ming from a nar­rower sup­ply chain; if the buyer’s de­fence in­dus­trial pol­icy seeks tech­nol­ogy or skills trans­fer, older MOTS so­lu­tions may have less to con­trib­ute than a new de­sign; ma­ture de­signs may bring for­ward the date of class ob­so­les­cence un­less a clear mar­gin for tech­no­log­i­cal growth is ev­i­dent.

Taken sep­a­rately, none of these po­ten­tial dis­ad­van­tages are sig­nif­i­cant enough to ex­clude MOTS as an ac­qui­si­tion op­tion. Since the ma­jor­ity of a ship’s cost is not in its de­sign and con­struc­tion but in the fol­low­ing decades of op­er­a­tions and main­te­nance, ini­tial in­dus­trial/man­u­fac­tur­ing chal­lenges may be of less im­por­tance to the buyer.20 In­deed, they may be viewed as ac­cept­able costs of mov­ing the project along. And nei­ther es­tab­lished nor cus­tom de­signs are de­ci­sively ad­van­ta­geous in pre­vent­ing change or dis­rup­tion to a pur­chaser’s train­ing syl­labus – par­tic­u­larly when the pro­gram seeks new-gen­er­a­tion tech­nolo­gies. Whether a buyer chooses MOTS or an orig­i­nal de­sign, he will need to adopt new tac­tics that will al­low him to ex­ploit more ca­pa­ble on­board sys­tems. (In­deed, the new sys­tems must be sub­stan­tially more ad­vanced else they will not pro­vide the cus­tomer with a gen­er­a­tion’s worth of ca­pa­bil­ity.) In some cases these changes may hap­pen for rea­sons that have lit­tle to do with the ship it­self. For ex­am­ple, the ad­vent of ship-based un­manned air sys­tems for in­tel­li­gence, sur­veil­lance, and re­con­nais­sance has opened up op­por­tu­ni­ties for vir­tu­ally all fleets, re­gard­less of the prove­nance of their de­signs.

The point here is that which­ever route Canada takes to the re-cap­i­tal­iza­tion of the RCN sur­face com­bat­ant fleet, it will have to con­front a host of po­ten­tial pit­falls – some tech­ni­cal, some op­er­a­tional, some in­dus­trial, oth­ers po­lit­i­cal. Many of these will be­fall DND/RCN, even if al­legedly ‘safer’ ex­ist­ing de­signs are con­sid­ered. But the chal­lenges may deepen de­pend­ing on the de­gree to which the RCN in­sists on al­ter­ing a MOTS de­sign to suit its par­tic­u­lar op­er­a­tional, reg­u­la­tory and in­dus­trial re­quire­ments (see Fig­ure 1). Thus the choice of which pro­cure­ment route to take is not as clear as some might sus­pect. 

MOTS for Canada: Non-op­er­a­tional con­sid­er­a­tions

Aside from cost, de­sign longevity, mar­ketabil­ity, etc., other high-level con­sid­er­a­tions stem from Canada’ s par­tic­u­lar de­fence-in­dus­trial land­scape and are sum­ma­rized in Ta­ble 2. The GoC’s Na­tional Ship­build­ing Pro­cure­ment Strat­egy has des­ig­nated a builder for the CSC pro­gram. If a for­eign de­sign is cho­sen, who will be the all-im­por­tant sin­gle point of ac­count­abil­ity an­swer­able to the Crown? Irv­ing Ship­build­ing has now been des­ig­nated the prime con­trac­tor, but the ship de­sign and com­bat sys­tems in­te­gra­tor are still un­known. If a com­pletely new de­sign is cho­sen (pre­sum­ably from an ex­pe­ri­enced de­sign house), one may as­sume that the client - server ar­range­ment that char­ac­ter­ized the Hal­i­fax-class build will pre­vail – i.e., the builder will also be the prime con­trac­tor. This may be a more at­trac­tive model than one in­volv­ing a for­eign OEM of­fer­ing a MOTS or MOTS+/++ de­sign through its Cana­dian build part­ner and then hav­ing to deal with a lo­cal com­bat sys­tems in­te­gra­tor who is un­fa­mil­iar the orig­i­nal de­sign and may not of­fer sys­tems to fit that par­tic­u­lar ship con­fig­u­ra­tion.

As the GoC’s nascent De­fence Pro­cure­ment Strat­egy seeks to max­i­mize the in­dus­trial and tech­no­log­i­cal ben­e­fits of large pro­cure­ments for the Cana­dian econ­omy, is there any ad­van­tage to choos­ing one pro­cure­ment op­tion over an­other? As­sum­ing that the RCN is not con­tem­plat­ing re­cy­cling ex­ist­ing all sen­sors and ef­fec­tors from ex­ist­ing and re­tired ves­sels, these will be sourced ex­ter­nall y, re­gard­less of which path is cho­sen. The com­bat man­age­ment and cer­tain plat­form man­age­ment sys­tems may like­wise be sourced from a for­eign man­u­fac­turer, although the in­te­gra­tion may be en­trusted to a do­mes­tic firm. These trans­ac­tions would like­wise take place if either a MOTS(+/++) or de­signed-in-Canada so­lu­tion was cho­sen. Steel and most fit­tings would be sourced lo­cally to the great­est de­gree pos­si­ble. Again, this would be the case ir­re­spec­tive of the fi­nal choice. If MOTS(+/++) is the pre­ferred route, but pol­icy de­mands that cer­tain sys tems on the par­ent de­sign may be re­placed by Cana­dian-made prod­ucts wher­ever pos­si­ble, plan­ners will have to de­ter­mine what pre­mium (if any) wi ll be paid for im­port sub­sti­tu­tion.

If Canada’s de­fence-in­dus­trial pol­icy ever en­vi­sions the ex­port of com­plete sys­tems, it will likely have to ne­go­ti­ate terms with those who re­tain in­tel­lec­tual prop­erty rights over the orig­i­nal de­sign (in the case of MOTS vari­a­tions) or the var­i­ous in­di­vid­ual s ys­tems that go into a ship’s hull (in the case of an indigenous de­sign). There is no clear ad­van­tage here; either pro­cure­ment op­tion could re­sult in a mar­ketable prod­uct. How­ever, if a MOTS-based ap­proach is taken, the ex­port laws in the coun­try of ori­gin could be a sig­nif­i­cant fac­tor in whether the com­plete ship could be sold to third par­ties.

If, on the other hand, a unique de­sign is pur­sued, there will need to be at least one ex­pe­ri­enced pri­vate -sec­tor de­sign house in Canada or abroad. It would re­quire time and money to come up with a new de­sign, since a large en­gi­neer­ing team would need to be asse mbled. But with a cus­tom de­sign, Canada might have more lat­i­tude over the choice of on-board sys­tems and the method of their in­te­gra­tion. Crit­i­cally, the cus­tomer would own the in­tel­lec­tual prop­erty so crit­i­cal to in-ser­vice sup­port, mid-life up­grades, and pos­si­ble for­eign sales.

The other key part of the in­dus­trial base – the ship­yard work­force – will have to as­cend a steep learn­ing curve re­gard­less of which ac­qui­si­tion route is taken. Whether the ship de­sign is indigenous or con­tracted from a for­eign party, the chal­lenge fac­ing th e yard will be to over­come ini­tial un­fa­mil­iar­ity with the de­sign and grad­u­ally in­crease the ef­fi­ciency with which it as­sem­bles the new class. As there is no clear ad­van­tage, it might be pre­ma­ture to con­clude that MOTS pro­vides the path of least re­sis­tance.


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