November 28, 2018 | Local, Naval
The Canadian Press, Lee Berthiaume
OTTAWA — The $60-billion effort to build new warships for Canada's navy is facing another delay after a trade tribunal ordered the federal government to postpone a final contract for the vessels' design.
The federal government announced last month that U.S. defence giant Lockheed Martin beat out two rivals in the long and extremely sensitive competition to design replacements for the navy's frigates and destroyers.
Lockheed's design was based on a brand-new class of frigates for the British navy called the Type 26. The company is now negotiating a final contract with the government and Halifax-based Irving Shipbuilding, which will build the ships.
But one of the other two bidders, Alion Science and Technology of Virginia, has asked the Canadian International Trade Tribunal and the Federal Court to quash the government's decision.
It says Lockheed's design did not meet the navy's stated requirements and should have been disqualified. Two of those requirements related to the ship's speed, Alion alleged, while the third related to the number of crew berths
Late Tuesday, the tribunal released a one-page statement ordering the government to “postpone the awarding of any contract ... until the Tribunal determines the validity of the herein complaint.”
Alion has argued that the rules of the competition required the federal procurement department and Irving, which helped evaluate the bids, to reject Lockheed's bid because of its non-compliance. Instead, they selected it as the preferred design.
The company also maintains that its own proposed design, which is based on a Dutch frigate, met the navy's requirements. It has said that it has received no information about why Lockheed's bid was selected over its own, despite requests for answers.
Lockheed Martin and Public Services and Procurement Canada declined to comment because the matter is before the tribunal and federal court. The third company in the competition, Spanish firm Navantia, has remained largely silent on Lockheed's successful bid.
The government is planning to build 15 new warships starting in the next three or four years, which will replace Canada's aging Halifax-class frigates and retired Iroquois-class destroyers. They're to be the navy's backbone for most of the century.
The bid by Lockheed, which also builds the F-35 stealth fighter and other military equipment, was contentious from the moment the design competition was launched in October 2016.
The federal government had originally said it wanted a “mature design” for its new warship fleet, which was widely interpreted as meaning a vessel that has already been built and used by another navy.
But the first Type 26 frigates are only now being built by the British government and the design has not yet been tested in full operation.
There were also complaints from industry that the deck was stacked in the Type 26's favour because of Irving's connections with British shipbuilder BAE, which originally designed the Type 26 and partnered with Lockheed to offer the ship to Canada.
Irving also worked with BAE in 2016 on an ultimately unsuccessful bid to maintain the Canadian navy's new Arctic patrol vessels and supply ships.
Irving and the federal government have repeatedly rejected such complaints, saying they conducted numerous consultations with industry and used a variety of firewalls and safeguards to ensure the choice was completely fair.
But industry insiders had long warned that Lockheed's selection as the top bidder, combined with numerous changes to the requirements and competition terms after it was launched — including a number of deadline extensions — would spark lawsuits.
Government officials acknowledged last month the threat of legal action, which has become a favourite tactic for companies that lose defence contracts, but expressed confidence that they would be able to defend against such an attack.
December 17, 2023 | Local, Security
Today, the Honourable Bill Blair, Minister of National Defence, accompanied by General Wayne Eyre, Chief of the Defence Staff, are visiting Latvia – home to Canada’s largest foreign military deployment
January 6, 2020 | Local, Aerospace, Naval, Land, C4ISR, Security
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.”
October 16, 2018 | Local, Naval
DAVID PUGLIESE, OTTAWA CITIZEN Efforts are underway by Irving Shipbuilding to convince the federal government to build two more Arctic and Offshore Patrol Ships at its Halifax yard. Irving also wants all Halifax-class frigate maintenance work to remain with the yard in Nova Scotia. The federal government is looking at splitting up maintenance work on the Canadian navy's frigates between Irving and Davie in Quebec. It is facing objections from Irving and its workers. The Irving employees warn the change will mean lost jobs in Nova Scotia. There are seven frigates that will need maintenance on the east coast over a five-year period. But military and Department of National Defence officials are concerned the Irving yard in Halifax won't be able to handle all the work as it will also be in the midst of building the new fleet of Canadian Surface Combatant warships. There are concerns that the navy's capabilities could suffer if the work isn't split up between Davie and Irving yards. Each of the aging Halifax-class frigates will require about a year of maintenance work, and in 2020 the navy expects maintenance will be needed on two frigates at the same time. Irving argues it needs all the Halifax-class work and the construction of two more AOPS so it doesn't face any downturn in activity at the yard. “ We are hopeful that the Government of Canada will continue the work at Halifax Shipyard,” Irving spokesman Sean Lewis said of the frigate maintenance. Asked about the need for two more AOPS, Lewis stated the following: “We continue to work closely with the Government of Canada to explore the overall transition between the Arctic and Offshore Patrol Ship (AOPS) and Canadian Surface Combatant (CSC) programs. The construction of additional AOPS for Canada or international export opportunities is being considered and various options pursued. At this time it is premature to comment further.” In response to Irving's push, Davie official Frédérik Boisvert has noted that while Irving has $ 65 billion in contracts from the federal government and 1900 workers, Davie has received less than $ 1billion in contracts and has less than 200 people working and 1400 laid off workers, waiting to be recalled. “If they (Irving) are concerned about Nova Scotian jobs, they should explain to their union workers why they are building their own tugs in Eastern Europe,” Boisvert added. https://lfpress.com/news/national/defence-watch/irving-shipbuilding-pushing-for-two-more-arctic-offshore-patrol-ships-all-halifax-class-work/