National Shipbuilding Procurement Strategy

The National Shipbuilding Procurement Strategy is a Government of Canada program operated by the Department of Public Works and Government Services. The National Shipbuilding Procurement Strategy (NSPS) was developed by the Conservative Stephen Harper government in an effort to renew the fleets of the Royal Canadian Navy (RCN) and the Canadian Coast Guard (CCG). The strategy was broken into three sections; the combat package, the non-combat package and the smaller vessel package. The smaller vessel package was not able to bid on by those companies who won one of larger ship packages.[1]

The National Shipbuilding Procurement Strategy was launched on 3 June 2010 and the results for the two larger packages were made public on 19 October 2011.[2] Contracts for smaller vessels under the NSPS were announced as they were awarded.[3]

Work

The NSPS program was charged with selecting Canadian shipyards capable of rebuilding the fleets of the RCN and the CCG through two large packages of work (the projects), valued at about $38 billion. Another package of work for smaller vessels was separate but part of the overall strategy.

Proponents

A "Solicitation of Interest and Qualification" was issued by the Department of Public Works and Government Services on 20 September 2010 and closed on 8 October 2010. Five Canadian shipyards were short-listed to build the large vessels:

Between October 2010 and January 2011, the short-listed shipyards were consulted on the content of the "Request for Proposals" (RFP), the umbrella agreements, the proposed schedule, and the evaluation methodology.

The RFP was released on 7 February 2011, and closed on 21 July 2011. Five proposals were received from three bidders:

Two of the proposals received were for the combat work package and three were for the non-combat work package.

Evaluation

An evaluation organization composed of Canadian Forces and Canadian Coast Guard personnel, as well as public servants from the departments involved (Public Works and Government Services Canada, Industry Canada, National Defence, and Fisheries and Oceans Canada) evaluated the proposals. An independent fairness monitor oversaw the process. The shipyards were evaluated on a combination of mandatory and rated requirements.

During the final evaluation period, one of the proponents, Davie Yards, underwent a corporate restructuring which was accepted by the NSPS governance on 27 July 2011. Davie Yards Inc. was changed to 7731299 Canada Incorporated which was a consortium between Davie Yards Incorporated, Seaway Marine and Industrial and Daewoo Shipbuilding & Marine Engineering.

Result

On 19 October 2011 the Government of Canada selected Irving Shipbuilding Inc. for the $25 billion combat work package and Seaspan Marine Corp. for the $8 billion non-combat work package.[5][6] In 2012, the two companies negotiated the contracts for the first projects of each package.[6]

On 16 January 2015, the Government of Canada finalized the contract for the construction of the Arctic Patrol Ship Project. Initially slated to cost $3.1 billion to build eight ships, the budget was increased to $3.5 billion for five ships, possibly six if no cost overruns on the first five.[7] Construction started on the first ship in September 2015.[8]

The search for the two main subcontractors on Irving's Surface Combatant package began in June 2015. In 2017, the Government of Canada will make its choice for two main subcontractors; one for combat systems integration (gun, missile, radar, sonar, communications) and the other for the design of the ship.[9] The list of those pre-qualified candidates which applied for the Surface Combatant subcontractor positions was released on 18 November 2015.[10]

In September 2015, reports emerged that climbing costs would lead to a reduction in the number of Surface Combatants the Canadian government would receive.[4] Problems were reported to have emerged from the Seaspan-apportioned part of the contract. In order to get the contract, Seaspan's yard had to be upgraded, which was only completed in November 2014. According to the agreement signed in 2012, the yard was to be ready to build by January 2015, but missed that date.[11] Construction only started on the first Coast Guard ships in June 2015,[12] leading to fears that the Joint Support Ships could be delayed.[11][12]

In November 2015, reports of climbing costs associated with the NSPS, reportedly up to 181%, has led to possible cancellations within the program. The entire program is set to be reviewed by the newly-elected Liberal Justin Trudeau government after they were told by government officials that the funding estimates outlined in the original plan had always been too low for what was demanded.[13][14] However, the new government also simultaneously committed itself to retaining the NSPS.

See also

References

  1. ↑ Public Works and Government Services Canada (14 July 2015). "Construction of small vessels". Government of Canada. Retrieved 29 November 2015.
  2. ↑ Public Works and Government Services Canada (18 November 2015). "National Shipbuilding Procurement Strategy (NSPS)". Government of Canada. Retrieved 29 November 2015.
  3. ↑ Public Works and Government Services Canada (10 July 2015). "Harper Government Announces Two High-Value Contracts Under NSPS" (Press release). Government of Canada. Retrieved 29 November 2015.
  4. 1 2 "Canada's biggest-ever military procurement at 'very high risk,' documents suggest". CTV News. 20 September 2015. Retrieved 29 November 2015.
  5. ↑ "National Shipbuilding Procurement Strategy". Government of Canada. Retrieved 29 November 2015.
  6. 1 2 Payton, Laura (19 October 2011). "Halifax, B.C. yards win shipbuilding work". CBC News. Retrieved 29 November 2015.
  7. ↑ Cudmore, James (16 January 2015). "Canada's navy to get 5 or 6 Arctic ships, not 8". CBC News. Retrieved 29 January 2015.
  8. ↑ Pugliese, David (3 September 2015). "Work has begun on Arctic Offshore Patrol Ships – first ship to be operational in four years". Ottawa Citizen. Retrieved 29 November 2015.
  9. ↑ Withers, Paul (1 May 2015). "Ottawa says Irving Shipbuilding will build up to 15 combat ships". CBC News. Retrieved 29 November 2015.
  10. ↑ Public Works and Government Services Canada (18 November 2015). "Results of pre-qualification process for Canadian Surface Combatant". Government of Canada. Retrieved 29 November 2015.
  11. 1 2 Den Tandt, Michael (14 May 2015). "Conservatives’ in dilemma over shipbuilding program as election approaches". National Post. Retrieved 29 November 2015.
  12. 1 2 Seyd, Jane (22 May 2015). "Shipyards on track, Seaspan says". North Shore News. Retrieved 29 November 2015.
  13. ↑ Cudmore, James (25 November 2015). "Shipbuilding strategy needs work to get ballooning costs under control, ministers told". CBC News. Retrieved 29 November 2015.
  14. ↑ Gunn, Andrea (26 November 2015). "Hints of shipbuilding shortfall". Chronicle Herald. Retrieved 29 November 2015.

External links

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