Federal warship procurement on course as at least three firms vie for contract
by Lee Berthiaume, The Canadian Press
Construction on 15 new frigates and destroyers is expected to start in 2021, but the competition has been plagued with concerns from the start
OTTAWA—Federal procurement officials say several companies are participating in a competition to design new warships for the navy—proof that Canada’s largest planned military purchase remains on course.
The federal government launched a competition last fall asking some of the world’s largest defence and shipbuilding firms to design a potential replacement for the navy’s frigates and destroyers.
The design competition is the most recent—and arguably most sensitive—phase in the entire $60-billion plan to build 15 new warships, construction of which is expected to begin in 2021.
Yet the competition has been plagued with questions and concerns from the start, including the fact officials have not set a new deadline for bids after extending the competition a second time in May.
Some industry representatives had said the issues were so bad that most of the firms asked to participate would steer clear of the competition, rather than waste millions preparing a bid.
But in an interview with The Canadian Press late last week, senior procurement officials revealed that at least three companies have submitted draft bids to make sure they are on the right track.
Officials would not reveal the exact number of draft bids, but said the fact so many companies have asked for feedback is a good sign—and sets the stage for a strong finish to the competition.
“We’ve got good competition,” said Lisa Campbell, head of military procurement at Public Services and Procurement Canada.
“The standard for that is typically at least three bids, and we’ve received more than three draft bids.”
Those drafts are now being reviewed, she added, after which a date will be set for firms to make final submissions. The new date will be at least four weeks after the draft review is over.
Companies were originally given until mid-April to submit their bids, but the government extended the competition to June before backing off that date as well.
Some experts have worried the government has opened itself up to lawsuits from losing firms by moving the deadline twice, while others say it points to underlying weaknesses in the competition.
Scott Leslie, director general of the large combat ship construction sector at Public Services and Procurement Canada, said steps have been taken to protect the government from legal action.
“We work very closely with our Justice Canada colleagues in developing these (competitions),” he said.
“And I can also tell you that from our point of view, the most important thing is that we say what we’re going to do, and then we do it.”
The missing deadline isn’t the only concern raised about the design competition, being run jointly by the government and Halifax-based Irving Shipyards, which will build the warships.
Some have questioned Irving’s role in the competition, while many companies are angry that British firm BAE could enter its Type 26 vessel despite the ship having never been built.
Defence officials and Irving have also previously warned that time is of the essence when it comes to starting construction, and that they are trying to shave 18 to 24 months off the project.
And some companies have privately railed against the amount of valuable intellectual property they are being asked to hand over to the government and Irving as part of their bids.
Campbell defended the intellectual property requirements, saying the government was only asking for what it needed to “design, build, operate, maintain and ultimately dispose” of the ships.
And she maintained the government is in charge of the competition, despite Irving’s involvement.
“Canada is leading the procurement,” she said. “We define the requirement. We helped develop the evaluation criteria and process. We signed off on it. And we’re overseeing everything Irving does.”