Wednesday, December 12, 2018

Government Gets OK to award $60B Shipbuilding Contract to Lockheed Martin Canada

By: David Pugliese, The National Post

A federal trade tribunal has rescinded its order preventing the federal government from awarding a contract to Lockheed Martin Canada for a new fleet of warships for the Canadian navy.

The Canadian International Trade Tribunal ordered the government on Nov. 27 to postpone the awarding of the contract for the $60 billion Canadian Surface Combatant project while it investigated claims that Lockheed Martin’s proposed vessel doesn’t meet the military’s needs.

The firm is offering Canada the Type 26 warship designed by BAE in the United Kingdom.

Alion, one of the companies that submitted a bid on the project, filed a complaint with the trade tribunal alleging the process was flawed and that BAE’s Type 26 can’t meet Canadian requirements. Alion has also filed a legal challenge in federal court, asking for a judicial review of the decision by Irving and the government to select the BAE design. Alion argues the Type 26 cannot meet the stated mandatory requirements, including speed, that Canada set out for the new warship, so it should be disqualified.

But on Monday the CITT lifted its order, even though it has determined it will examine the Alion complaint. Mélanie Lalonde, CITT’s deputy director of communications, said Tuesday that the tribunal cannot comment on ongoing proceedings.

A delay in awarding contracts would be contrary to the public interest

But the decision came after Andre Fillion, an assistant deputy minister at Public Services and Procurement Canada, wrote to request the order be removed. He noted that “the procurement of goods and services to which the Alion Complaint pertains is urgent, and that a delay in awarding contracts would be contrary to the public interest.”

Alion’s legal team objected, noting that “no reasons, nor any justifications, are provided to support this claim.”

The CSC program, the largest single government purchase in Canadian history, will see the eventual construction of 15 warships at Irving Shipbuilding in Halifax. Lockheed Martin Canada says the Type 26 will meet all of Canada’s requirements. The government hopes to be in a position to have a contract ready for signature by early next year.
The Irving Shipbuilding facility is seen in Halifax on June 14, 2018. Andrew Vaughan/The Canadian Press

The CITT hearings into the Alion complaint could take as long as 90 days.

Alion had offered Canada the Dutch De Zeven Provinciën Air Defence and Command frigate, which the firm says meets all of Canada’s requirements. It also noted in its court application that the requirements and other parameters of the surface combatant project were altered 88 times during the process and that the changes diluted the requirements for a new warship, allowing the government and Irving to pick “an unproven design platform.”

The entry of the BAE Type 26 warship in the competition was controversial from the start. Previously, the government had said only mature existing designs or designs of ships already in service with other navies would be accepted for the bidding process, on the grounds they could be built faster and would be less risky — unproven designs can face challenges as problems are found once the vessel is in the water and operating.

But that criteria was changed and the Liberal government and Irving accepted the BAE design in the process, though at the time it existed only on the drawing board. Construction began on the first Type 26 frigate in the summer of 2017 for Britain’s Royal Navy, but it has not been completed.

Company claims about what the Type 26 ship can do, including how fast it can go, are based on simulations or projections.

The two other bidders in the surface combatant program have ships actually in service with other navies so their capabilities are known.

No comments:

Post a Comment