YEARS BEHIND SCHED­ULE, TENS OF BIL­LIONS OF DOL­LARS OVER BUD­GET,

THE PRO­GRAM THAT WAS SUP­POSED TO SHOW­CASE LESSONS LEARNED FROM PRE­VI­OUS PRO­CURE­MENT DIS­AS­TERS IS FAST TURN­ING INTO ONE IT­SELF.

Windsor Star - - NP - AN­DREW COYNE Na­tional Post

The Na­tional Ship­build­ing Strat­egy, they called it: a $38 bil­lion, multi-year plan to sup­ply new ves­sels to the Coast Guard and Royal Cana­dian Navy out of ship­yards in Hal­i­fax and Van­cou­ver. Seven years later, the na­tional part is con­sumed by provin­cial in­fight­ing, no ships have been built and God knows what’s left of the strat­egy.

Years behind sched­ule, tens of bil­lions of dol­lars over bud­get, the pro­gram that was sup­posed to show­case lessons learned from pre­vi­ous pro­cure­ment dis­as­ters — he­li­copters, sub­marines, fighter jets, you name it — is fast turn­ing into one it­self. The rea­son is the same as ever: be­cause pro­cure­ment in this coun­try is never about pro­cure­ment, that is, ob­tain­ing the best equip­ment at the low­est price. It is about re­gional de­vel­op­ment, and bu­reau­cratic em­pire-build­ing, and jobs for the boys. The mil­i­tary comes last.

The most re­cent, and spec­tac­u­lar, in­stal­ment in this long-run­ning se­ries of fi­as­cos came with last week’s close of bid­ding on the Strat­egy’s largest sin­gle com­po­nent, the purchase of 15 frigates to re­place the Navy’s cur­rent fleet. Orig­i­nally bud­geted at $26 bil­lion, the project is now es­ti­mated to cost at least $62 bil­lion, de­pend­ing on how much fur­ther it is de­layed. This, even af­ter the in­com­ing Lib­eral gov­ern­ment an­nounced it would no longer in­sist on cus­tom-de­sign­ing the frigates from scratch, but would buy de­signs off the shelf.

At the last minute, a Franco-Ital­ian con­sor­tium pitched a pro­posal di­rectly to the de­fence min­is­ter, cir­cum­vent­ing the usual bid­ding process. It would build the frigates for a guar­an­teed price of $30 bil­lion — po­ten­tially saving the tax­payer $32 bil­lion, as Post­media’s David Pugliese first re­ported. More­over, the con­sor­tium, in­volv­ing two of the world’s largest ship­builders, France’s Naval Group and Italy’s Fin­cantieri, claimed to be able to start de­liv­ery in 2019, rather than the 2021 start date cur­rently en­vis­aged. The catch: the first three ships would be built in Europe, then re­fined and repli­cated at Irv­ing Ship­build­ing’s yard in Hal­i­fax.

The de­part­ment — not De­fence, but Pub­lic Ser­vices, which took over pro­cure­ment from De­fence af­ter the F-35 de­ba­cle — was hav­ing none of it. The rea­son? Get this: fair­ness. “The sub­mis­sion of an un­so­licited pro­posal at the fi­nal hour un­der­mines the fair and com­pet­i­tive na­ture of this pro­cure­ment,” the de­part­ment said. “Ac­cep­tance of such a pro­posal would break faith with the bid­ders who in­vested time and ef­fort to par­tic­i­pate in the com­pet­i­tive process.”

This sort of rules-are-rules punc­til­ious­ness would be more be­liev­able were the de­part­ment not al­ready widely sus­pected of hav­ing skewed the bid­ding process in favour of a ri­val pro­posal from Lock­heed Martin Canada and Bri­tain’s BAE — a time­worn prac­tice in­her­ited from De­fence. But when the po­ten­tial sav­ings are as large as that, it seems pre­pos­ter­ous to re­ject the Fin­cantieri-Naval Group pro­posal out of hand, merely be­cause the proper forms were not filled out.

The de­part­ment is skep­ti­cal of the con­sor­tium’s claims, which is fair enough. But it hardly has a ster­ling track record it­self. Vir­tu­ally ev­ery other part of the Strat­egy is in trou­ble. Nei­ther of the two sup­ply ships com­mis­sioned un­der the Joint Sup­port Ship Project, to be built by Van­cou­ver-based Sea­s­pan, has even be­gun con­struc­tion, in part be­cause the ship­yard is still wrestling with the four fish­eries pa­trol ves­sels it is sup­posed to de­liver to the Coast Guard.

A navy is not much use with­out sup­ply ships, so as a stop­gap the gov­ern­ment asked Que­bec’s Davie Ship­yard to re­fit a com­mer­cial ves­sel for the pur­pose. That hav­ing been ac­com­plished, the com­pany wants to be given the con­tract for an­other, with the in­creas­ingly vo­cal sup­port of Que­bec’s po­lit­i­cal class.

At a rally last week, the premier, Philippe Couil­lard, de­manded that Davie be given a larger share of fed­eral ship­build­ing work. “We’re ask­ing for equal­ity,” he said. “We are ask­ing for jus­tice. We’re not ask­ing for char­ity, we’re just ask­ing for our fair share.” But all of the work on the Na­tional Ship­build­ing Strat­egy was con­tracted to the two coastal yards (at the time, Davie was es­sen­tially bank­rupt.) So ei­ther some of that work would have to be taken away from them and given to Que­bec — good luck with that — or the fed­eral gov­ern­ment would have to come up with a rea­son to build still more ships.

So far the feds ap­pear to be hold­ing firm. “We can­not ar­ti­fi­cially cre­ate a need that does not ex­ist,” fed­eral Trans­port Min­is­ter Marc Garneau was heard to ex­plain the other day. But of course they can, and do. If the fed­eral gov­ern­ment were not in the busi­ness of ar­ti­fi­cially cre­at­ing pro­cure­ment needs, it would not in­sist on build­ing all new ships, all in Canada, rather than ei­ther re­fit­ting ex­ist­ing ships, as in the Davie ex­am­ple, or buy­ing or even rent­ing them from abroad: all demon­stra­bly cheaper al­ter­na­tives, and quicker, too.

But that as­sumes that kit­ting out the mil­i­tary is the gov­ern­ment’s first pri­or­ity, rather than keep­ing Cana­dian ship­yard work­ers em­ployed. It isn’t only Davie that is grum­bling. Fac­ing a bit of down­time be­tween build­ing the third and fourth Coast Guard ves­sel, Sea­s­pan is pub­licly so­lic­it­ing the feds to pro­vide it with new work. Irv­ing, like­wise, is near­ing com­ple­tion of six Arc­tic off­shore pa­trol ships (though stay tuned: the union has just voted to give its lead­ers a strike man­date) and has noth­ing else in the pipe­line un­til the frigate project be­gins. Which may ex­plain the gov­ern­ment’s re­luc­tance to wait for three demo mod­els to be built over­seas.

All three ship­yards are warn­ing of lay­offs if Ot­tawa doesn’t keep them con­stantly sup­plied with new projects, even as ex­ist­ing projects lag behind sched­ule. The mil­i­tary, once again, comes last.

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