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Liberals alter course on frigate replacement

Defence contractors were given details of the proposal, which is subject to industry feedback and final approval


February 24, 2016
by The Canadian Press

OTTAWA—The Trudeau government has quietly revised the framework for the navy’s planned frigate replacement program, opting for a proven foreign design over a custom domestic blueprint.

Defence contractors were given details of the proposal, which is subject to industry feedback and final approval, expected later this year.

Lisa Campbell, the assistant deputy minister in the acquisitions branch at Public Services and Procurement Canada, said an evaluation has determined that there are existing warship designs that would meet Canadian needs and deciding to go in that direction “was a big step for us.”

Commodore Art MacDonald said the navy has also refined its requirements for the advanced warships, on which Irving Shipbuilding in Halifax is expected to begin construction some time around 2020.

In addition, the federal government will run only one competition for building both the ship and installing the sophisticated electronics, instead of doing it separately, as originally planned.

Campbell said those decisions will help not only speed up the shipbuilding process, which has been proceeding at a glacial pace, but could help control costs down the road.

When originally conceived, the Harper government estimated the cost of building 15 warships would be in the range of $26 billion, but internal documents and published reports last fall suggested the price tag could go as high as $40 billion.

Relying on a proven, off-the-shelf warship design from another country takes a lot of the uncertainty out of the planning process, Campbell said.

“We don’t know the actual cost per ship yet,” she said in an interview. “We’re not talking about a custom build anymore. We’re talking about existing designs….and in our view that is likely to have an impact on diminishing all sorts of risks.”

There would be, however, some modifications to the design to suit unique Canadian requirements. The process is not unlike the one followed when the Harper government selected a German design for the navy’s soon-to-be-built joint supply ships.

Naval buffs will likely mourn the design decision.

It had always been a point of pride within National Defence and the navy in particular that Canada has for generations designed its own warships to suit its unique northern needs.

The current fleet of 12 patrol frigates, completed in the 1990s, is a prime example.

But the customized designs have proven to be budget-busters, as witnessed in 2008 when the Conservative government halted the supply ship program because each of the estimated bids exceeded what they were willing to spend.

The Dutch, however, were so impressed with the Canadian design for support vessels that they used if for their own ships.

Mary Keith, a spokeswoman for Irving said the company fully supports the federal government’s plan.

“In selecting a ship to meet the requirements of the Royal Canadian Navy, an existing warship design versus developing a completely custom combat system may represent significant savings and overall cost certainty, and will allow the execution of the program in a timely manner,” she said in a statement.

There have been reports that a special federal cabinet committee was reviewing the shipbuilding program, which was initiated over four years ago but has yet to produce a single ship.

Some officials in the defence industry bristle at that suggestion and say critics don’t take into account that the two shipyards—Irving and Seaspan in Vancouver—have spent hundreds of millions of dollars overhauling their facilities and preparing designs—things that take time.

There have also been public questions raised about designating Irving as the coveted prime contractor on the frigate replacement.

Campbell confirmed that the government review will not involve any change to the prime contractor, a powerful position given the money involved. It allows the company a say in designating sub-contractors, including those doing the design and installation of weapons systems.

As many as 80 Canadian companies could potentially provide equipment for the frigate replacements.

Irving is the prime contractor on the Arctic offshore patrols ships, on which construction began in its yard last September.