Feds expected to launch a multibillion-dollar competition for navy warships
OTTAWA—The federal government is expected to launch a multibillion-dollar competition to design the navy’s newest warships this week. Here are five things to know about the project:
1. The future of Canada’s navy. Whatever ship is chosen will replace the navy’s 12 frigates and three destroyers, forming the backbone of the country’s naval might for the next 40 years. At last check, the estimated cost was upwards of $40 billion—big stakes for a country that has limited money for defence, but which also boasts the world’s longest coastline and is heavily dependent on the oceans for trade.
2. Plucking numbers from the air. The original plan announced in 2010 was for 15 ships at a cost of $26 billion. That turned out to be a fantasy built on poor planning and an unrealistic military procurement process that essentially forces officials to guess a project’s cost before any work is done. Naval officials revealed late last year that the actual cost for 15 ships is probably closer to $40 billion. Procurement Minister Judy Foote has since said she won’t discuss costs until more work is done. She also won’t talk about the number of ships, though naval officials keep pressing for 15.
3. Scratch building from scratch. The Liberal government announced in June that Canada would buy a pre-existing warship design from a foreign company rather than designing one from scratch in Canada. The new approach is designed to save time and money. But it has opened up other problems, including how to ensure Canadian industry benefits from the project. Companies have also pushed back against the government’s demands that it be given unlimited access to the blueprints of whatever design wins. That sets up an important debate between national security and intellectual property rights, which still hasn’t been fully resolved.
4. Rules of the game. The competition to choose a warship design is actually being run by Irving Shipbuilding in Halifax, which is responsible for ultimately building the vessels. Some potential bidders have quietly alleged that Irving will stack the deck in favour of British company BAE. The fact BAE will be allowed to enter its Type 26 frigate into the competition despite the ship still only being in development has not helped matters. But Irving and the government have pushed back on suggestions they will favour BAE or any other competitor. They say an independent fairness monitor has approved the bidding process, and that the navy will be watching over Irving’s shoulder every step of the way.
5. On the clock. Bidders will have six months to submit their designs and then it will be up to Irving and the government to decide a winner. Even then, there will be a series of negotiations before a contract is awarded. The aim is to start cutting steel in 2020. That date is important because that is when Irving is expected to finish building the navy’s new Arctic patrol vessels. Any gap between the two projects will cost money as workers and equipment sit idle. It would also delay delivery of the first ship, currently scheduled for 2024. The warships are already badly needed as the navy recently retired the last of its destroyers. A delay past 2024 would put pressure on the navy’s current fleet of frigates.