A couple of days ago I commented on the potential costs of even further delays in the production of the new Canadian Surface Combatant (CSC) warships.
Now, a new article, by David Pugliese in the National Post, says that “Canada’s multibillion-dollar project to buy a replacement for its frigates is so poorly structured that one of the world’s largest shipbuilders has warned the Liberal government it won’t bid unless changes are made … [and] … A number of other ship designers are also considering backing out because of the problems plaguing the project to spend more than $26 billion on a new fleet of Canadian Surface Combatants.“
“Italian shipbuilder Fincantieri,” designer and builder of the Italian variant (Bergamini class) of the well regarded FREMM (‘European multi-purpose frigate’ or Frégate européenne multi-mission) class of frigates, “sent Procurement Minister Judy Foote a detailed outline of why the acquisition process is in trouble, warning that, “Canada is exposed to unnecessary cost uncertainty,” according to Mr Pugliese.
Now, I have no doubt that part of this is what Murray Brewster called, in an earlier CBC News report, “the discord among the notoriously cutthroat contenders,” but another part of it might also be that the project is:
- Not as well structured as it might be; and
- Subject to continued bureaucratic and political meddling.
Thus, for example, the original program ~ the design of which is NOT the Liberal government’s fault ~ said that only proven designs will be considered, but this, new, government (under pressure from the Royal Canadian Navy? or the Ottawa bureaucrats? or from British trade negotiators?) have decided to allow the “unproven” Type 26 frigate to be considered. I need to point out that I have NO informed opinion about which ship is better for Canada. My concern is that we get enough ships that are good enough ships ~ that meet the Navy’s minimum, validated, operational requirements, not too few of the best, or, worse, too few of the not good enough because we dithered and delayed while costs mounted.
“Preparing a bid for the Canadian Surface Combatant or CSC will cost companies between $10 million and $20 million,” David Pugliese says, “If they see their chances of winning a contract as slim, firms could decide not to enter the competition, further narrowing the choices for the Liberals on a new vessel for the navy … [and] … The government announced Oct. 27, 2016, that Irving Shipbuilding, its prime contractor, had issued a request for bids from companies on the design of the new ships … [and, further] … The firms have until April 27 to provide those bids, which must not only include the design but details of teaming arrangements with Canadian firms.“
In my (limited and dated) experience, in the “big picture” of multi-billion dollar contracts a $10 to $20 million expense for responding to the RFP (request for proposal) is both “chicken feed” and a normal, routine cost of doing business. I have always disagreed with making Irving the government’s prime contractor. In my opinion ~ and that’s all it is, an opinion ~ the government (senior procurement bureaucrats with Navy advice) should choose the winning bid and then instruct the successful bidder to select Canadian partners. But we must remember that the National Shipbuilding Procurement Strategy (NSPS), put in place by a Conservative government, was never about building warships (or icebreakers); it was always and only about subdidizing some Canadian shipyards, Irving amongst them. The NSPS is building ships for the Navy and Coast Guard because there is a broad loophole in international trade law where national security is concerned. Our government can, legitimately, give money to our shipyards in ways that would, normally, violate international trade rules, IF that money is earmarked for or covered by military/coast guard projects. On that basis it makes political sense but it is being too cute by half … in my opinion.
With costs predicted to be between $25 billion to $40+ billion this is just about as big a deal as the Government of Canada will, eventually, sign in the first quarter of this century, and it has important strategic, industrial and military consequences for Canada. I agree with Fincantieri, the Italian shipbuilder, that the project is poorly structured; I think I understand why that is so. I believe it is too late to restructure it ~ unless we are going to run a simultaneous major (multi-billion dollar) life extension programme for our 12 Halifax class frigates and wait even longer for a new surface combatant. I am still not convinced that this, or any other government will put up enough money to buy as many of the big, highly capable CSC ships as the RCN says it needs and we may have to settle for a mixed fleet of CSCs and corvettes which may, of necessity, mean more ships to make up with numbers what we lack in capability, but then, I am on record, as favouring just such a mixed fleet.
It must also be borne in mind that the four to eight (I’m unclear as to how many will be built) DeWolfe class Arctic Offshore Patrol Ships (AOPS) are, despite their size, not interchangeable with the CSCs; they are too lightly armed and have too few sensors, etc. They are, essentially, “constabulary” duty ships, not first rate warships, and, in a perfect world, where money is not a problem, we would have eight of them and they, and their helicopters, would be in a revitalized Royal Canadian Mounted Police marine division, but that’s another issue.