Wednesday, November 28, 2018

CSC Fleet In Limbo as Trade Tribunal Investigates Alion Claims

By: Murray Brewster, CBC News 

The federal government's plan to award a group of companies led by Lockheed Martin Canada the contract to design and support the construction of the Navy's new frigates was dealt another setback late Tuesday by the Canadian International Trade Tribunal, CBC News has learned.

The agency said it intends to investigate a complaint by one of the other bidders, Alion Science and Technology Corp., and its subsidiary Alion Canada.

The tribunal ordered the Liberal government to suspend negotiations with Lockheed Martin, which was selected last month by Public Services and Procurement Canada as the preferred bidder on the $60 billion program.

An artist's rendering of the British Type 26 frigate, which Lockheed Martin submitted for consideration as the replacement for Canada's patrol frigates. (BAE Systems Inc./Lockheed Martin Canada)
"You are hereby ordered to postpone the award of any contract in connection with the above-mentioned procurement until the Canadian International Trade Tribunal determines the validity of the complaint," said a copy of the letter that was obtained late Tuesday by CBC News.

Alion asked the CITT last week to investigate the procurement deal, saying the preferred warship design will need substantial changes and that it doesn't meet the Navy's requirements as spelt out in the government tender.

Last week, the company asked the Federal Court in a separate filing for a judicial review of the long-awaited decision.

Three companies were in the running to design the next generation of warships to replace the navy's aging Halifax-class frigates. Navantia, a Spanish-based company, was the other bidder in the competition.

Alion proposed its De Zeven Provinciƫn Air Defence and Command (LCF) frigate, a Dutch-designed warship, for the Canadian competition. The ship is already in service in other countries.

No one from the trade tribunal, nor the federal government was immediately available for comment late Tuesday.

A program already behind schedule:

Experts had warned the trade challenge and the court case might delay the program, which is already behind schedule.

The design competition stretched for almost two years as public services officials and executives at the federal government's go-to shipyard for combat vessel construction, Irving Shipbuilding of Halifax, worked with bidders to ensure a fair competition and to avoid post-decision court fights.

Public Services and Procurement Canada declined to comment when the court challenge was launched last week. But a senior federal official, speaking on the background at the time, said the federal government has up to 20 days to respond in Federal Court.

The official — who was not authorized to speak on the record because of the sensitivity of the file — said there is flexibility built into the timeline and the government is optimistic it can meet its goal of an early 2019 contract signing.

The substance of the Alion complaint is that the Lockheed Martin Canada-led bid should have been disqualified from the outset because it allegedly doesn't meet the Navy's criteria in terms of speed and crew space.

The Liberal government said it wanted to go with a proven warship design, rather than starting from scratch because it would be faster and cheaper.

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