October 18, 2018 | Local, Naval
OTTAWA — Canada's most expensive military project is entering a critical new phase as the government is on the verge of picking its top design for the country's $60-billion fleet of new warships.
Defence insiders say the government wants to select a design by the end of the month from among three options submitted by several of the largest defence and shipbuilding companies in the world.
After that the government and Halifax-based Irving Shipbuilding, which will actually build the 15 new warships, will sit down with the selected bidder to hammer out the final cost and other details.
The stakes will be high for both sides, with hundreds of millions of dollars in play.
There will also be pressure to make up for lost time on a project already running behind schedule even though whatever decisions are taken could have ramifications on the navy — and taxpayers — for decades to come.
"That's part of the tension between moving quickly and making the right choice," said defence analyst David Perry of the Canadian Global Affairs Institute.
The new warships will replace the navy's 12 frigates and three destroyers, the latter of which have already been retired. They will be used for most of this century.
Launched in late 2016, the design competition has been the subject of rampant lobbying and complaints by defence industry players, with numerous revisions to the original request for bids and several deadline extensions.
That was despite defence officials and Irving having previously warned that time is of the essence when it comes to starting construction, and that they want to shave 18 to 24 months off the project.
There have also been questions about Irving's role in the competition, and anger from some companies that British firm BAE was allowed to enter its Type 26 vessel despite the ship having never been built.
BAE and U.S.-based defence giant Lockheed Martin partnered together to propose the Type 26 for the design competition, which is up against separate proposals from Dutch firm Alion and Spanish shipbuilder Navantia.
A joint French-Italian design was disqualified because Paris-based Naval Group and Italian firm Fincantieri, who promised to build the warships faster and for less than anyone else, did not follow the established process for submitting proposals.
One of the big questions heading into the negotiations will be how much the selected design needs to be changed to reflect the navy's needs and how much the navy will have to shift its requirements because changing the design will take more time and money.
Irving has warned that it could be forced to lay off hundreds of employees because of a production gap if work on the warships isn't ready to start by the time it finishes building the navy's new Arctic patrol ships in 2021 or 2022.
Government negotiators are also facing a battle over the amount of intellectual property that the top bidder will be required to hand over, which Ottawa wants so it can operate and maintain the vessels on its own after they are built.
Companies had originally been told that the winner would be required to turn over the full blueprints, but after significant resistance, the two sides agreed that the matter would be negotiated before a contract is awarded.
The government however warned that if the winning ship designer drives too hard a bargain on the intellectual property front they face the risk of officials pulling the plug on talks and moving on to the next company.
Perry said that while there are many challenges ahead before a deal for a design is signed — and before any of the new warships actually get into the water — this is a critical step forward.
"You can't dance until you pick a dance partner," he said.
— Follow @leeberthiaume on Twitter.
Lee Berthiaume, The Canadian Press
June 30, 2022 | Local, Aerospace, Naval, Land, C4ISR, Security
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May 8, 2019 | Local, Aerospace
By: David Pugliese VICTORIA, British Columbia — The U.S. is threatening to pull the F-35 from Canada's fighter jet competitionif the ally to the north doesn't change requirements for the winning bidder to stipulate specific industrial benefits for domestic firms. The U.S. government is arguing that since Canada is a partner in the F-35 program it cannot request guaranteed industrial benefits for its companies. Canada has pre-qualified four aircraft for its fighter jet project worth up to 19 billion Canadian dollars (U.S. $14 billion): the Lockheed Martin F-35, Boeing Super Hornet, Eurofighter Typhoon and the Saab Gripen. The Canadian government plans to purchase 88 new jets to replace its aging CF-18 fighter aircraft fleet. Canada will require that a robust package of guaranteed industrial benefits or offsets be provided by the winning bidder, government officials have said. But the U.S. government has objected to that, as Canada is still a partner in the F-35 program, which does not guarantee participating nations a set number of contracts. Work on the F-35 program is based on best value and price. U.S. Navy Vice Adm. Mathias Winter, program executive officer for the Joint Strike Fighter, wrote Canadian procurement officials Dec. 18, 2018, pointing out that the F-35 agreement prohibits partners from imposing requirements for industrial benefits. “We cannot participate in an offer of the F-35 weapon system where requirements do not align with the F-35 Partnership," he noted in his letter. Winter's letter was leaked this week to defencs analysts and the Canadian journalists. The letter has prompted ongoing discussions between Canadian and U.S. procurement officials in an effort to work out some kind of solution, multiple industry and government sources told Defense News. But the Canadian government will also respect any decision by the U.S. to not bid the F-35 if an agreement can't be reached, sources added. The Canadian government is putting the final touches on the bid requirements for new fighter jet project. That bid package is expected to be issued sometime this year. Asked about the U.S. ultimatum, Ashley Michnowski, spokeswoman for Procurement Minister Carla Qualtrough, said feedback from aircraft suppliers is continuing to be collected by the Canadian government. That process has yet to be finished and a final request for bids is expected to be released soon, she added. Michnowski said Canada continues to be a member of the Joint Strike Fighter program, giving the country “the option to buy aircraft through the program, should the F-35 be successful in the competitive process for the future fleet.” Lockheed Martin Canada noted in a statement that Canadian firms have earned more than $1.2 billion in work on the program, resulting in hundreds of domestic jobs. “We continue to provide our feedback to the U.S. government, which leads all government-to-government discussions related to the Canadian fighter replacement competition,” the statement added. Email: dpugliese@defensenews.com https://www.defensenews.com/air/2019/05/08/us-canada-talks-underway-to-decide-if-the-f-35-will-be-pulled-from-canadas-fighter-competition/
March 10, 2021 | Local, Naval
The mid-shore coast guard patrol vessel CCGS G. Peddle is expected back in service by late summer. The ship was forced to tie up in June 2020 after engine failures.