$60B naval contract on hold
A federal trade tribunal has ordered Ottawa to put a $60-billion program to buy a new fleet of warships on hold while it investigates claims the vessel selected doesn’t meet the military’s needs.
Last month, the federal government and Irving Shipbuilding selected Lockheed Martin Canada as the preferred bidder for the Canadian Surface Combatant program. Lockheed Martin had teamed with British firm BAE to propose providing Canada with 15 of BAE’s Type 26 frigates.
But Alion, a U.S. firm that also submitted a bid on the project, contends the Type 26 can’t meet the Canadian navy’s stated requirements and filed a complaint with the Canadian International Trade Tribunal (CITT).
On Tuesday, the CITT issued an order for the government to “postpone the award of any contract in connection with the procurement until the Canadian International Trade Tribunal determines the validity of the complaint.” It is unclear how long that will take, but Irving and the federal government were hoping to have negotiations wrapped up with Lockheed Martin Canada by early next year.
Alion has also filed a legal challenge in Federal Court, asking for a judicial review of the decision. In that challenge, Alion argues the Type 26 cannot meet the stated mandatory requirements, including speed, that Canada set out for the new warship and should therefore be disqualified.
It also noted in that challenge that the requirements and other parameters of the surface combatant project were altered 88 times during the process in a way that diluted the requirements for the warship, allowing the government and Irving to pick what it calls “an unproven design platform.”
Alion had offered Canada the Dutch De Zeven Provinciën Air Defence and Command frigate, which the firm claimed meets all of Canada’s requirements.
Rania Haddad, a spokeswoman for Public Services and Procurement Canada, said the government is committed to a fair and transparent procurement process. “As this matter is the subject of a complaint which has just been accepted for inquiry by the Canadian International Trade Tribunal and is also the subject of litigation in the Federal Court, comments cannot be provided at this time,” she said in an email.
The BAE Type 26 frigate’s entry in the competition was controversial from the start.
The Liberal government had said previously it would only accept bids featuring mature existing designs or designs of ships already in service with other navies, on the grounds they could be built faster and would be less risky. But those criteria were changed, and the government and Irving accepted the BAE design into the process even though it existed only on the drawing board at the time. Construction began on the first Type 26 frigate in the summer of 2017, for Britain’s Royal Navy, but it has not been completed.