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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.

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