Back to news

May 9, 2019 | Local, Naval

Federal bureaucrats considering proposal to award Irving contracts for more Arctic coast guard ships

David Pugliese, Ottawa Citizen

Federal officials are setting the stage to award Irving Shipbuilding contracts to build two more Arctic and offshore patrol ships but the vessels will be delivered to the Canadian Coast Guard instead of the navy.

Irving has been warning the Liberal government it might have to lay off employees at its Halifax shipyard if it doesn't get more shipbuilding work. Industry and defence sources say to deal with that issue a proposal is being put together that would see the construction of two more Arctic and Offshore Patrol Ships, known as AOPS.

Irving is currently building six AOPS for the Royal Canadian Navy.

But under this new plan, described by government officials as being at a “pre-decision” level, the vessels would be turned over to the coast guard.

The additional ships would help head off any layoffs at Irving and allow the Liberal government to head into the federal election in the fall claiming it was delivering on its promise to rebuild the coast guard.

The Liberals have yet to sign off on the plan, the sources added.

Ashley Michnowski, a spokeswoman for Procurement Minister Carla Qualtrough, said the national shipbuilding strategy or NSS is designed as a “made-in-Canada plan” to meet federal shipbuilding requirements. “Additional AOPS are currently not included in the NSS,” she added.

Irving Shipbuilding did not respond to a request for comment.

The NSS was supposed to prevent the boom and bust in the country's shipbuilding industry by providing Seaspan on the West Coast and Irving on the East Coast with continual work.

But that hasn't happened. Even though the government is proceeding with the ships outlined in the NSS, both Seaspan and Irving have complained they might have to let employees go because of gaps in construction schedules.

Irving has said it needs addition work to deal with a downturn that comes after the end of construction of AOPS and the start of work on a new fleet of surface combatant ships.

The Arctic and Offshore Patrol Ships project was for the construction of five vessels. A sixth ship would be built only if Irving could find savings in the construction process, according to the federal government. That, however, didn't happen.

In November the Liberal government announced it would award Irving a contract for a sixth AOPS as part of its efforts to stop layoffs. That $800-million initiative is double the usual cost of a single AOPS as there are hefty fees associated with stretching out the production of the fleet.

It is unclear how much extra a plan to build two more AOPS would cost.

If the plan does proceed there would have to be changes made to the design of the ship as the AOPS are outfitted with weapons and a combat management system for the navy.

The AOPS program has made headlines over the years. The first Arctic Offshore Patrol Ship was supposed to be delivered in 2013 but the program has faced delays, and it is now expected to be delivered to the navy this summer.

In March, Postmedia sent Procurement Canada questions about potential issues with welds on the ships. But the department immediately warned Irving that the news organization was asking questions. Department officials also provided Irving with personal information about the journalist inquiring about the welds.

Procurement Canada never did answer the questions but a short time later Irving Shipbuilding threatened a lawsuit against Postmedia if an article was published claiming there were substantial problems with welds on the ships.

The Department of National Defence later confirmed to the news chain there were issues with welds but they were minor.

https://nationalpost.com/news/federal-bureaucrats-considering-proposal-to-award-irving-contracts-for-more-arctic-coast-guard-ships

On the same subject

  • General Dynamics to Establish Centre of Excellence for Remotely Piloted Aircraft Systems Technologies in Québec

    August 24, 2021 | Local, Aerospace

    General Dynamics to Establish Centre of Excellence for Remotely Piloted Aircraft Systems Technologies in Québec

    /CNW/ - General Dynamics Mission Systems–Canada announced today the establishment of a Centre of Excellence in Sherbrooke for remotely piloted aircraft systems...

  • What AIAC’s Vision 2025 could mean for smaller sized enterprises

    January 6, 2020 | Local, Aerospace, Naval, Land, C4ISR, Security

    What AIAC’s Vision 2025 could mean for smaller sized enterprises

    by Chris Thatcher; Skies Magazine Posted on December 24, 2019 When the Aerospace Industries Association of Canada in June released its blueprint for the next five years, Vision 2025: Charting a New Course, support for small- and medium-sized enterprises (SMEs) was one of its core themes. Small companies make up over 90 per cent of the sector and the report argued for greater government support to help them scale up, generate more jobs, and enhance their global competitiveness. That could include new funding to pursue digital business transformation, a reduction in the complexity of government contracting, and greater priority in the value propositions of prime contractors chasing defence procurements. “If our small- and mid-sized companies are left at risk, the negative impacts will be felt across Canada's aerospace industry as a whole,” according to the report, prepared by Jean Charest, a former premier of Quebec and deputy prime minister of Canada. Small companies are viewed as the prime creators of aerospace jobs and, in a sector buffeted by changing technology and new players, many may be more agile and better able to adapt than larger counterparts that must answer to corporate headquarters outside of Canada. But support from original equipment manufacturers (OEMs) and governments is essential to their survival, according to a panel of SMEs at the Canadian Aerospace Summit in November. There is no one-size-fits-all to helping SMEs scale up. Companies at different stages of growth require different types of support, they noted. But help with skilled labour shortages and easier access to government programs are common challenges for all. A solid position on a major platform is critical to initial success, but long-term growth requires diversification, observed Barney Bangs, chief executive officer of Tulmar Safety Systems. Located between Ottawa and Montreal in the small community of Hawkesbury, Ont., the company manufactures protective and safety equipment, associated components and in-flight training products. Traditionally, its focus has been 80 per cent defence — Tulmar has been a supplier to a military platform for over 25 years and benefitted from a strong aftermarket. In recent years, though, the company has sought a better balance between military and commercial customers. “As of last year, we were 65 per cent defence and 35 per cent (civilian) aerospace,” he said. Tulmar has also become more of what he called “a solution provider,” integrating components from other suppliers to provide an OEM with a final, certified piece of equipment such as an aircraft seat rather than just the safety harness or seatbelt. “We are doing more in-house and saving customer-costs for the OEM,” said Bangs. Diversification has also been a priority for Apex Industries, a machining, components, subassembly and structures manufacturer in Moncton, N.B. Twelve years ago, its aerospace business was five per cent defence and 95 per cent civil, much of it geared to Bell Helicopter and Bombardier. “We made a conscious effort to diversify into the military side a lot more,” said vice-president Keith Donaldson. “We are very conscious of not allowing our sales to go too high on one platform or with one customer.” Challenged by cost-savings pressures in commercial aviation contracts, military platforms offer a company like APEX “good visibility,” he said. However, militaries have long been trading quantity for technological superiority, meaning fewer platforms and a relatively short production cycle. And ramping up quickly with people and equipment to meet tight delivery schedules is a challenge for small businesses that need other options to justify and sustain the investment when the contract ends. “It is very tough for a SME like ourselves to invest.” However, defence procurement and government programs can go a long way to supporting the scale-up of SMEs, said Patrick Mann, president of Patlon Aircraft & Industries, a technical sales force for global manufacturers of custom components and systems. The scale-up program must be run by single entity within government committed to the Canadian SME community that would be “funded, independent and have the authority to make decisions.” Mann suggested coping what has worked well in other jurisdictions, noting the success of the United States Small Business Administration's set-aside program. “Within that, there is a small business innovation research program which has been highly successful in scaling up SMEs,” he said. The Vision 2025 report called for a federal scale-up program to “provide advice, coaching, networking, value proposition development and consortium-building support to incentivize growth and build capacity–helping firms expand their global footprints and giving them the means and maturity to support OEMs effectively.” The report recommended the Office of Small and Medium Enterprises (OSME) within Public Services and Procurement Canada shoulder that responsibility. “Having OSME at the table as a contributor to the development of government procurement strategies and as a champion of small and medium-sized business interests will help ensure government policies and programs recognize the unique characteristics of small firms,” it stated. “We are a pretty good example of a scale-up of an SME using competitive bid government procurement as a mechanism,” said Mann. However, developments over the past 10 years such as single point of accountability and bundling, where multiple small contracts are combined in one larger procurement that is awarded to one contractor, have been “devasting” to smaller suppliers. “It has been a real issue for us. Again, it is an issue where (OSME) can play a role.” OEMs can bolster government programs by mentoring small companies within their supplier base on management and production processes, especially around digitization, added Donaldson. “OEMs have a lot of that knowledge ... [but] I don't think [they] do enough of that.” He and Bangs both cautioned that the ability to scale up will be contingent on resolving talent shortages. Developing and attracting skilled labour is a chronic problem affecting the entire sector, but it is particularly acute for SMEs in more remote locations that don't have the resources to recruit as widely or navigate the immigration system. “Before we launch a scale-up program with support for financing and working capital, we have to make sure we have our skills done first,” said Donaldson. However the Liberal government opts to respond to the Vision 2025 report, the value of investing in SMEs should be clear. Viking Air, KF Aerospace or IMP Aerospace & Defence were once small companies and are “now thriving global participants,” said Mann. “That is the reason why todays SMEs are an important part of our industry.”

  • See what IDEaS has been up to!

    January 7, 2020 | Local, Aerospace, Naval, Land, C4ISR, Security

    See what IDEaS has been up to!

    Over the past months, over 30 projects from the Competitive Projects' first Call for Proposals have advanced to Component 1b and signed $1M dollar contracts with IDEaS. In the upcoming weeks, many more are going to be posted on our web page. Competitive Projects Funding Recipients (as of December 2019) Additionally, Innovation Networks have signed 12 contribution agreements valued at nearly $18M to fund small research networks, or Micro-nets. These research communities will increase Canadian scientific capacity in a number of areas like advanced materials (detection avoidance and physical protection), and autonomous systems (trust and barriers to adoption). See the all newly signed recipients: Innovation Networks – Recently Funded Micro-Nets Corrosion Sandbox: Rust Never Sleeps Test your best technologies to find corrosion trouble spots for the Royal Canadian Navy (RCN). The next IDEaS sandbox will take place at the Centre for Ocean Ventures & Entrepreneurship (COVE) facility in Dartmouth, Nova Scotia and will focus on corrosion detection on naval vessels. COVE is a collaborative facility for applied innovation in the ocean sector. Participants will get the opportunity to showcase their products on realistic simulations, with successful demonstrations resulting in access to an actual RCN vessel to demonstrate their solution in a real world environment. Watch for the Call for Applicants in January 2020. Thank you, The IDEaS Team

All news