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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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  10 mai 2019 | Local, Aérospatial

  Feds look to ease requirements for fighter-jet makers after U.S. complaints

  By Lee Berthiaume, The Canadian Press OTTAWA — The federal government is planning to loosen its industrial requirements for fighter-jet makers in the $19-billion competition to replace Canada's aging CF-18s. The planned modification follows recent U.S. complaints that the previous criteria violated Canada's obligations as one of nine partner countries in the development of the F-35, one of the small handful of planes expected in the competition. Yet the proposed change has sparked complaints from some of the companies whose planes will be competing against the F-35, who say the new approach goes too far in the other direction. Canada has long required companies bidding on major defence contracts to commit to re-investing back into the country, with those unable to make such a contractual commitment seeing their bids tossed out. But in a presentation to companies on Thursday, the government said it plans to allow bids missing such a commitment in the fighter-jet competition — they will be just docked points in the assessment. The plan is intended to maximize the number of bids in the competition to buy 88 new jets while still aiming for the largest-possible economic spinoffs, a senior government official told The Canadian Press. The U.S. had threatened not to enter the F-35 into the competition if the requirement wasn't changed, noting that under the partnership agreement signed in 2006, companies in each member country instead compete for work. The threat was contained in a letter sent to the government from the head of the Pentagon's F-35 office in December and published in a report from the Macdonald-Laurier Institute think tank on Monday. Canada has contributed roughly $500 million over the past 20 years toward developing the F-35, while Canadian companies have won nearly $1.5 billion in contracts associated with the stealth fighter. Canada will also be able to buy the plane for less than non-members. The proposed new process will see the government evaluate bids on a scale, with 60 per cent of the points based on the plane's capability, 20 per cent on its full lifetime costs and the remaining 20 per cent on industrial benefits to Canada. Bidders can still guarantee that they will re-invest back into Canada if their jet wins the competition and get all 20 points - which is the likely approach for Boeing's Super Hornet, Eurofighter's Typhoon and Saab's Gripen. But those that can't make such a commitment will be asked to establish "industrial targets," lay out a plan for achieving those targets and sign a non-binding agreement promising to make all efforts to achieve them. The government will study those plans and assign points based on risk. This is the likely approach for Lockheed Martin and the F-35, which the U.S. has said could provide Canadian companies with billions in work over the next 50 years. The planned new approach has already stirred complaints from some of Lockheed Martin's competitors, who question why the F-35 should get points if the company can't guarantee re-investment back into Canada. There are also concerns about how the government will decide how risky plans to achieve "industrial targets" actually are, with one industry source saying that question is entirely subjective. Bidders were also told Thursday that the actual launch of the competition has been delayed until mid-July. Government officials had previously said they hoped the starting gun would be fired by the end of the month. Lee Berthiaume, The Canadian Press https://www.nationalnewswatch.com/2019/05/09/feds-ease-industrial-requirements-for-fighter-jet-makers-after-u-s-complaints/

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  30 août 2018 | Local, Naval

  Canada's first Arctic Offshore Patrol Ship expected in October

  DAVID PUGLIESE, OTTAWA CITIZEN The first Arctic Offshore Patrol Ship is expected to be delivered the first week of October, according to Department of National Defence officials. The ship was originally supposed to be delivered this summer. The ship will undergo various tests in the months following delivery. The formal acceptance of the vessel by the Royal Canadian Navy won't take place until early next year. The first vessel, HMCS Harry DeWolf, is expected to be ready for operations starting in the summer of 2019, according to DND officials. Subsequent ships are to be delivered approximately every nine months, according to documents obtained by Postmedia using the Access to Information law. The Arctic and Offshore Patrol Ship project will deliver five ships, with an option for a sixth, if affordable. The ships are designated as the Harry DeWolf Class, after Canadian wartime naval hero Vice-Admiral Harry DeWolf. The official RCN ship's class designation will be Arctic and Offshore Patrol Vessel or AOPV. The AOPV will be capable of armed sea-borne surveillance of Canada's waters, including the Arctic, providing government situational awareness of activities and events in these regions, and cooperating with other government departments to assert and enforce Canadian sovereignty, according to the DND. Construction of the first AOPV began in 2015 with HMCS Harry DeWolf. https://ottawacitizen.com/news/national/defence-watch/first-arctic-offshore-patrol-ship-expected-in-october