August 10, 2020 | International, Naval
David Pugliese, Ottawa Citizen, Postmedia News (dpugliese@ottawacitizen.com)
Published: Aug 07 at 6:31 p.m.
Updated: a day ago
The $60 billion price tag of Canada's proposed new fleet of warships will come under the scrutiny of the Parliamentary Budget Officer, who will also examine other less costly similar projects underway in other countries.
The House of Commons government operations committee requested that Parliamentary Budget Officer Yves Giroux examine the cost of the Canadian Surface Combatant project and take a look at the cost of two other types of warships: the FREMM and the Type 31.
PBO spokeswoman Sloane Mask said the analysis would be presented to the committee by Oct. 22. “The analytical work is currently underway,” she added.
Last year the Liberal government signed an initial deal that is expected to lead to the eventual construction of 15 warships in the largest single government purchase in Canadian history. Lockheed Martin offered Canada the Type 26 warship designed by BAE in the United Kingdom. Irving is the prime contractor and the vessels will be built at its east coast shipyard.
Construction of the first ship isn't expected to begin until the early 2020s.
But the Canadian Surface Combatant (CSC) program has already faced rising costs. In 2008, the then-Conservative government estimated the project would cost roughly $26 billion. But in 2015, Vice-Admiral Mark Norman, then commander of the navy, voiced concern that taxpayers may not have been given all the information about the program, publicly predicting the cost for the warships alone would approach $30 billion.
The overall project is currently estimated to cost around $60 billion. “Approximately one-half of the CSC build cost is comprised of labour in the (Irving) Halifax yard and materials,” according to federal government documents obtained by this newspaper through the Access to Information law.
But some members of parliament and industry representatives have privately questioned whether the CSC cost is too high. There have been suggestions that Canada could dump the Type 26 design and go for a cheaper alternative since the CSC project is still in early stages and costs to withdraw could be covered by savings from a less expensive ship.
Canada had already been pitched on alternatives. In December 2017, the French and Italian governments proposed a plan in which Canada could build the FREMM frigate at Irving. Those governments offered to guarantee the cost of the 15 ships at a fixed $30 billion, but that was rejected by the Canadian government.
Earlier this year, the U.S. Navy selected the FREMM design for its newest fleet of warships. The estimated cost is around $1.3 billion per ship.
The other type of warship the PBO will look at is the Type 31, which is to be built for the Royal Navy in the United Kingdom. Those ships are to cost less than $500 million each.
In 2017, then Parliamentary Budget Officer Jean-Denis Fréchette estimated the CSC program would cost $61.82 billion.
The entry of the BAE Type 26 warship in the Canadian competition was controversial from the start and sparked complaints that the procurement process was skewed to favour that vessel. Previously the Liberal government had said only mature existing designs or designs of ships already in service with other navies would be accepted on the grounds they could be built faster and would be less risky. Unproven designs can face challenges if problems are found once the vessel is in the water and operating.
But the criteria was changed and the government and Irving accepted the BAE design, though at the time it existed only on the drawing board. Construction began on the first Type 26 frigate in the summer of 2017 for Britain's Royal Navy.
Copyright Postmedia Network Inc., 2020
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ARMY Southwest Valley Constructors, Albuquerque, New Mexico, was awarded a $524,000,000 modification (P00011) to contract W912PL-19-C-0015 for design build of the Tucson sector barrier wall replacement project. Work will be performed in Tucson, Arizona, with an estimated completion date of Sept. 7, 2021. Fiscal 2020 operations and maintenance, Army funds in the amount of $524,000,000 were obligated at the time of the award. The U.S. Army Corps of Engineers, Phoenix, Arizona, is the contracting activity. BAE Systems Land & Armaments L.P., York, Pennsylvania, was awarded a $339,131,639 modification (P00050) to contract W56HZV-17-C-0001 for 48 vehicle sets of self-propelled howitzer and carrier, ammunition, tracked vehicles and associated support. Work will be performed in York, Pennsylvania, with an estimated completion date of Jan. 31, 2023. Fiscal 2018, 2019 and 2020 other procurement, Army funds in the amount of $339,131,639 were obligated at the time of the award. U.S. Army Contracting Command, Detroit Arsenal, Michigan, is the contracting activity. SGS LLC,* Yukon, Oklahoma, was awarded a $19,940,157 firm-fixed-price contract for design-build construction of a fire rescue center. Bids were solicited via the internet with nine received. Work will be performed in Altus, Oklahoma, with an estimated completion date of April 21, 2022. Fiscal 2020 military construction, Army funds in the amount of $19,940,157 were obligated at the time of the award. U.S. Army Corps of Engineers, Tulsa, Oklahoma, is the contracting activity (W912BV-20-C-0005). PD Systems Inc.,* Springfield, Virginia, was awarded a $14,829,404 firm-fixed-price contract to maintain and sustain equipment assigned to the 63rd Army Reserve Readiness Division. Bids were solicited via the internet with two received. Work locations and funding will be determined with each order, with an estimated completion date of March 29, 2025. The 419th Contracting Support Brigade, Fort McCoy, Wisconsin, is the contracting activity (W911SA-20-D-3000). SAWTST LLC,* Newnan, Georgia, was awarded a $10,842,921 firm-fixed-price contract to maintain and sustain equipment assigned to the 63rd Army Reserve Readiness Division. Bids were solicited via the internet with seven received. Work locations and funding will be determined with each order, with an estimated completion date of March 29, 2025. The 419th Contracting Support Brigade, Fort McCoy, Wisconsin, is the contracting activity (W911SA-20-D-3001). CORRECTION: The $14,143,940 firm-fixed-price contract announced on March 20, 2020, to Stantec Consulting Services Inc., New Orleans, Louisiana (W912P8-20-D-00004), for the design of pump stations and drainage structures was actually awarded today, March 23, 2020. NAVY Pratt and Whitney, a United Technologies Corp. company, Hartford, Connecticut, is awarded a $193,780,323 cost-plus-incentive-fee, fixed-price-incentive-firm contract for the procurement of long lead materials for the production of low rate initial production of propulsion systems (Lot 15 F135) for the Air Force, Navy, Marine Corps, non-Department of Defense (DoD) participants and Foreign Military Sales (FMS) customers. Work will be performed in East Hartford, Connecticut (56%); North Berwick, Maine (13%); Indianapolis, Indiana (10%); Jupiter, Florida (7%); Windsor Locks, Connecticut (5%); Bristol, United Kingdom (4%); Rockford, Illinois (2%); Santa Isabel, Puerto Rico (2%); and Phoenix, Arizona (1%), and is expected to be complete by December 2023. Fiscal 2020 aircraft procurement (Air Force) funds in the amount of $66,446,810; fiscal 2020 aircraft procurement (Navy) funds in the amount of $61,396,328; non-DoD participants funds in the amount of $52,153,031; and FMS funds in the amount of $13,784,154 will be obligated at time of award, none of which will expire at the end of the current fiscal year. This contract combines purchases for the Air Force ($66,446,810; 34.3%); Navy ($30,788,105; 15.9%); Marine Corps ($30,608,223; 15.8%); non-DoD participants ($52,153,031; 26.9%); and FMS customers ($13,784,154; 7.1%). This contract was not competitively procured pursuant to U.S. Code 2304(c)(1). The Naval Air Systems Command, Patuxent River, Maryland, is the contracting activity (N00019-20-C-0011). Sabre Systems Inc., Warrington, Pennsylvania, is awarded $77,733,927 for a cost-plus-fixed-fee, indefinite-delivery/indefinite-quantity contract. Work will be performed in Patuxent River, Maryland, and is expected to be complete by May 2025. This contract provides digital transformation planning and execution; enterprise alignment; technology exploration; acceleration and integration; digital/information technology (IT) consultation business intelligence; application portfolio management; system integration; enterprise architecture; design and management; web management; Navy Marine Corps Intranet/Next Generation Enterprise Network program management; IT operations; cybersecurity; information assurance; cloud services; maintenance functions; network security; automated data processing support services; digital modeling and virtual environment support; talent change management; data analytics and integration; and business process management and improvement in support for the Naval Air Systems Command Digital Group. No funds will be obligated at the time of award. Funds will be obligated on individual orders as they are issued. This contract was competitively procured via an electronic request for proposal; three offers were received. The Naval Air Warfare Center Aircraft Division, Patuxent River, Maryland, is the contracting activity (N00421-20-D-0072). Lockheed Martin Rotary and Mission Systems, Manassas, Virginia, is awarded a $29,647,813 cost-plus-incentive-fee and cost-only modification to a previously-awarded contract (N00024-18-C-5218) for program management office and engineering services in support of the Surface Ship Undersea Warfare System model AN/SQQ-89(V). Work will be performed in Manassas, Virginia (78%); Syracuse, New York (12%); Lemont Furnace, Pennsylvania (6%); and Liverpool, New York (4%), and is expected to be complete by March 2021. This contract combines purchases for the Navy (90%); and the government of Australia (10%) under the Foreign Military Sales (FMS) program. Fiscal 2016 - 2020 shipbuilding and conversion (Navy); 2018 – 2019 other procurement (Navy); 2020 research, development, test and evaluation (Navy); and FMS Commonwealth of Australia funding in the amount $23,075,308 will be obligated at the time of award. Funds in the amount of $14,387 will expire at the end of the current fiscal year. The Naval Sea Systems Command, Washington, District of Columbia, is the contracting activity. Pave-Tech Inc., Vista, California, is awarded $15,189,633 for a firm-fixed-price task order (N62473-20-F-4372) under a multiple award construction contract for repairs to Taxiway Bravo and Taxiway Golf at Naval Air Station, Fallon, Nevada. Work will be performed in Fallon, Nevada, and is expected to be complete by January 2022. The work will provide for the repair and replacement of deteriorated taxiway conditions, shoulders and associated surfaces. This project will also repair damaged 5kV airfield wire, lighting and ancillary parts and devices associated with Taxiways Bravo and Golf. All airfield lighting and electrical infrastructures shall be repaired to a state that complies with current Naval Air Systems Command, Unified Facilities Criteria and Federal Aviation Administration Airfield Regulations. Fiscal 2020 operations and maintenance (Navy) contract funds in the amount of $15,189,633 are obligated on this award and will not expire at the end of the current fiscal year. Three proposals were received for this task order. The Naval Facilities Engineering Command Southwest, San Diego, California, is the contracting activity (N62473-19-D-2440). Lockheed Martin Corp., Rotary and Mission Systems, Liverpool, New York, is awarded a $8,800,000 firm-fixed-price modification to a previously-awarded contract (N00024-20-C-5503) to increase quantities for the full-rate production of the Surface Electronic Warfare Improvement Program and the AN/SLQ-32(V)6, a combat system that provides a full range of undersea warfare functions. Work will be performed in Liverpool, New York (78%); and Lansdale, Pennsylvania (22%), and is expected to be complete by April 2022. Fiscal 2019 shipbuilding and conversion (Navy) funding in the amount of $8,800,000 will be obligated at time of award and will not expire at the end of the current fiscal year. The Naval Sea Systems Command, Washington, District of Columbia, is the contracting activity. (Awarded March 20, 2020) KJS Support Services JV LLC,* Fort Worth, Texas, is awarded an $8,594,573 firm-fixed-price, indefinite-delivery/indefinite-quantity modification for the exercise of the first option under the contract for base operating support services at the Naval Air Facility El Centro, California. Work will be performed in El Centro, California, and the option performance period is from April 1, 2020, to March 31, 2021. The work provides for labor, supervision, materials, equipment, tools, parts, supplies and transportation to be used for various base operating support service functions as follows: grounds electronics; airfield facilities; passenger terminal and cargo holding; supply; morale, welfare, and recreation; facility management and investment; janitorial services; pest control services; swimming pools operation and maintenance; grounds maintenance; street sweeping; electrical; gas; wastewater; water; base support vehicles and equipment; and environmental response. After the award of this option, the maximum dollar value including the base period, seven option years and one six-month option will be $74,821,438. No funds will be obligated at time of award of the modification. Fiscal 2020 operations and maintenance (O&M) (Navy); fiscal 2020 Defense Health Program; fiscal 2020 Defense Commissary Agency account; fiscal 2020 family housing (O&M) (Navy); and fiscal 2020 non-appropriated funds in the amount of $5,594,573 for recurring work will be obligated on individual task orders issued during the option period. Naval Facilities Engineering Command Southwest, San Diego, California, is the contracting activity (N62473-18-D-5606). AIR FORCE The FlightSafety Services Corp., Centennial, Colorado, has been awarded a not-to-exceed $25,000,000 firm-fixed-price, indefinite-delivery/indefinite-quantity, single-award contract for a multi-country KC-46 aircrew and maintenance simulator training. The contractor will provide KC-46 aircrew and maintenance training to support the U.S. government and Air Force Security Assistance Training international partners' mission objectives. Work will be performed at Altus Air Force Base, Oklahoma, and is expected to be completed September 2026. This is a sole-source requirement as the FlightSafety Corp., in accordance with 10 U.S. Code 2304 (c)(1), as implemented by Federal Acquisition Regulation 6.302-1, only one responsible source and no other supplies or services will satisfy agency requirements. Security and Cooperation funds in the amount of $2,500 are being obligated at the time of award. The Air Force Installation Contracting Agency, 338th Specialized Contracting Squadron, Joint Base San Antonio-Randolph, Texas, is the contracting activity (FA3002-20-D-0005). (Awarded March 19, 2020) *Small business https://www.defense.gov/Newsroom/Contracts/Contract/Article/2122344/source/GovDelivery/