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  6 juillet 2020 | Local, Naval

  DND denies misjudging supply ship cost even though price tag jumped to $4.1 billion

  DAVID PUGLIESE, OTTAWA CITIZEN Updated: July 2, 2020 The defence department denies it ever misjudged the cost of a project to buy new naval ships even though the price tag jumped from $2.3 billion to $4.1 billion in less than two years. And DND admits the cost to taxpayers for the vessels could rise even more in the coming years. The Liberal government acknowledged on June 15 that the cost of the project to buy two Joint Support Ships has increased to $4.1 billion. The vessels are needed by the Royal Canadian Navy as they would provide fuel, ammunition and other supplies to warships at sea. But the $4.1 billion price tag is just the latest in a series of steadily increasing cost figures. In June 2018, the government acknowledged the cost of the ship project had, at that time, jumped from $2.3 billion to $3.4 billion. But Seaspan, the Vancouver shipyard that is to build the vessels, provided a new set of numbers in October 2019 and by February 2020 government approval was received for a new budget of $4.1 billion, DND confirmed in an email to this newspaper. “As with any large-scale procurement project, all project values are best estimates that are based on the data and figures available at the time,” the email added. There has been no misjudging of costs on the JSS project, the department noted. In 2013, the Parliamentary Budget Officer questioned DND's JSS cost estimates and warned that the project would require $4.13 billion. DND stated in its email to this newspaper that taxpayers can be assured they are getting value for money on JSS and that those working on the shipbuilding project in both the department and Public Services and Procurement Canada are top notch. “The Department of National Defence and the Canadian Armed Forces, along with our counterparts at PSPC, have a first-rate cadre of experienced, professional procurement officers, subject matter experts and financial administrators who take great pride in their work and in their accomplishments,” DND said in an email. “Our team has – and will continue to – ensure that Canadians get value from their investments in the Armed Forces.” But DND also acknowledged costs could continue to rise. “While the total project budget includes contingency funding for these types of reasons, some events may happen unexpectedly and thus excel what the contingency funding allowed for,” the DND email noted. “As a result, it's possible that cost estimates may change for a variety of reasons that can't be controlled or predicted.” Conservative MP Kelly McCauley said DND's claim that project costs weren't misjudged is “BS.” “I don't even have faith in their latest cost of $4.1 billion,” added McCauley, who is behind the effort to get the Parliamentary Budget Officer to do a new report looking at JSS. “It's going to go up.” McCauley said the JSS design is based on the Berlin-class, an existing and proven German Navy ship. But he noted that DND and PSPC keep making changes to the ship, driving up costs and adding delays. DND noted that, “it's not uncommon for the cost estimate to change throughout the duration of a project, especially for a first-of-class ship.” DND also pointed out the construction contract with Seaspan may be changed throughout the duration of the project but added that does not necessarily mean the project budget will increase. The Standing Committee on Government Operations and Estimates recently passed McCauley's motion to request the Office of the Parliamentary Budget Officer undertake a costing analysis of building the JSS in Canada as well as the leasing of Asterix, a commercial ship converted into a supply vessel for the Royal Canadian Navy to use. The PBO report will be presented to the committee by Oct. 15. The Asterix, converted by Davie shipyards in Quebec, was at the centre of the two-year legal battle Vice Adm. Mark Norman found himself in when the RCMP charged him with breach of trust. The police force alleged Norman had tipped off Davie that the Liberal government was planning to delay its Asterix deal. The legal case against Norman collapsed in 2019, forcing the federal government to pay the naval officer an undisclosed financial settlement as well as prompting questions about whether the charge had been politically motivated. The Asterix turned out to be a procurement success and since 2018 has been used to refuel and resupply Royal Canadian Navy and allied warships. The Liberal government tried to derail the Asterix project shortly after being elected in the fall of 2015. The move came after cabinet ministers, including Scott Brison and defence minister Harjit Sajjan, received a letter from the Irving family with a complaint that the Irving proposal for a similar supply ship was not examined properly. Irving has denied any suggestion it was involved in political meddling. But after receiving the letter from the Irvings, the Liberals decided to put Asterix on hold. The government, however, had to back off that plan after news of its decision leaked out to the news media. Shortly after, the RCMP began investigating Norman. https://o.canada.com/news/national/defence-watch/dnd-denies-misjudging-supply-ship-cost-even-though-price-tag-jumped-to-4-1-billion/wcm/6743dc85-efb0-457c-90b9-be1b2d204868

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  3 décembre 2023 | Local, Aérospatial

  South Korea launches first spy satellite after North Korea does same

  Since last year, North Korea has conducted about 100 ballistic missile tests, part of efforts to modernize weapons targeting South Korea and the U.S.

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  31 juillet 2020 | Local, Aérospatial

  Companies highlight jobs, economic spinoffs as fighter-jet competition closes

  OTTAWA — Fighter-jet makers are leading with promises of jobs and other economic spinoffs as they make their final pitches for why Canada should buy their planes to replace the military's aging CF-18 fleet. Friday marks the deadline for U.S. aerospace companies Lockheed Martin and Boeing, as well as Swedish firm Saab, to submit their bids in the current fighter-jet competition, which will see Canada spend up to $19 billion on 88 new planes. The closing of the competition marks a major milestone in Canada's decade-long effort to buy new fighter jets for the Royal Canadian Air Force, which has been plagued by government mismanagement and political controversy. While the combat capability of each of the three competing planes — Lockheed Martin's F-35, Boeing's Super Hornet and Saab's Gripen — will be the main focus as the government evaluates each bid, there will also be a lot of focus on the economic benefits of buying each plane. To that end, Lockheed Martin commissioned a report in February that found up to 4,200 jobs will be created or sustained each year if Canada buys its F-35 stealth fighter, which the company equated to more than 150,000 new jobs over the life of the plane. The analysis provided to The Canadian Press, which was compiled by Toronto-based OMX, also predicted the Canadian economy will see roughly $15 billion in additional activity between now and 2058 if the F-35 is selected to succeed the CF-18 as Canada's primary fighter jet. That is in addition to the $2 billion in economic benefits that Canada has already received since 2007 as one of nine partner countries in the development of the F-35, which lets Canadian companies compete for work associated with the stealth fighter. Canada has contributed US$541 million since 1997 to be a partner in the F-35 program. "Lockheed Martin has prepared a comprehensive proposal," the company said in a statement on Thursday. "The F-35 is the most capable, best-value fighter to strengthen defence, enhance ally partnerships and contribute to economic growth in Canada with significant, long-term industrial opportunities." Lockheed Martin isn't the first to toot its own horn on the potential economic benefits of its fighter. Boeing last month released its own commissioned report showing its existing operations in Canada created $5.3 billion in economic spinoffs last year and supported 20,000 jobs. Boeing says the numbers will go up if the Super Hornet wins, though it has not revealed its exact estimates. The emphasis on jobs and money — rather than combat capability — comes as Canada's economy has been battered by the COVID-19 pandemic, forcing the federal government to spend tens of billions in financial support for Canadians. Defence analyst David Perry of the Canadian Global Affairs Institute said it makes sense for companies to highlight the potential economic benefits of their bids. He said it helps to make the cost more palatable to the public and is also important in determining the winner. "In any competition like this, you're always looking for any potential partial point that you can get," Perry said. "Companies, if they're going to invest this significant time and significant amount of money preparing a bid like this, then they don't leave anything to chance. You make sure you try to wring every single last partial point you can get out of your proposal." This report by The Canadian Press was first published July 30, 2020. Lee Berthiaume, The Canadian Press