RCN Supply Ship Cost Increases by $1.1 Billion; Now over $3 Billion

By: David Pugliese, National Post 

At one point, the first ship was supposed to arrive in 2012. That date has changed a number of times. DND is now hoping for delivery in 2022 or 2023

Taxpayers will have to spend an additional $1.1 billion to build two new supply ships for the Royal Canadian Navy, the federal government has revealed.

The cost of building the Joint Support Ships, or JSS, had been pegged at $2.3 billion. However, the government ordered a review of that figure and in an email to Postmedia procurement minister Carla Qualtrough’s office confirmed the cost is now expected to be $3.4 billion.

Of the $3.4 billion price tag, the actual cost of building the two ships accounts for a little more than 60 per cent, Finn said. Pat Finn, the head of procurement at the Department of National Defence, said the new price tag includes items the government had not previously included. In some cases equipment for the ship has been purchased, so the government has a more accurate understanding of what it actually cost, Finn said in an interview Monday. The inflated figure also takes into account new infrastructure and delays with the program which have driven up its price as the cost of materials has increased over the years.

“The build period has changed quite dramatically,” Finn acknowledged.

Workers watch as the main girder of a new 300-tonne gantry crane is lifted into place at Seaspan Vancouver Shipyards in North Vancouver, B.C., on Wednesday April 2, 2014. Darryl Dyck/Canadian Press

At one point, the first ship was supposed to arrive in 2012. That date has changed a number of times with the government later hoping for a 2018 delivery and then a 2019 arrival for the first vessel.

DND is now hoping for the delivery of the first ship in 2022 or 2023. Construction of some initial portions of the vessels will begin at Seaspan Shipyards in Vancouver this summer, Finn said, which it hopes will head off any potential layoffs of skilled employees at the shipyard.

Finn said the new costing model for the JSS is more akin to the one used by the parliamentary budget office. That office had an even higher estimate for JSS when it concluded in 2013 that the final tally for taxpayers would be $4.13 billion.

The Joint Support Ships are seen as being critical for the navy, as they will provide fuel and supplies for warships at sea.

The navy retired its last two aging supply ships years ago, one after being damaged beyond repair in a fire, the other because of excessive corrosion. After their retirement the Canadian military had been relying on the Spanish and Chilean navies to provide it with supply vessels for short periods of time.

Because of the delays to the JSS program, the previous Conservative government entered into agreement with Davie Shipyards in Quebec to lease a commercial vessel converted into a supply ship. That ship, the MV Asterix, is at the heart of the federal government’s case against Vice-Admiral Mark Norman.

In March, the Norman was charged with a single count of breach of trust. The RCMP accused Norman of warning Davie in the fall of 2015 that Liberal cabinet ministers wanted to derail the Asterix project. When word of the Liberal plan leaked to the media, the resulting embarrassment forced the Trudeau government to back down on its plans and the conversion of Asterix proceeded.

Norman was put under investigation and Prime Minister Justin Trudeau predicted on two occasions the officer would ultimately end up in court.

Norman denies the charge and has said he looks forward to clearing his name. A date for the trial has not yet been set.

Asterix is considered a rare achievement in Canadian military procurement in that it was delivered on time and on budget. The supply ship is now at sea with Royal Canadian Navy and is headed to a major military exercise to begin later this month.

Final Cost for RCN Joint-Support-Ships Still Unknown as Work Begins

By: Lee Berthiaume, The Canadian Press 

OTTAWA -- The cutting of steel for the navy's long overdue support ships will begin next month in Vancouver, even though the federal government doesn't know how much the two vessels will ultimately cost.

Federal procurement minister Carla Qualtrough confirmed plans for an early start to work on the supply ships during a breakfast address Thursday at the Cansec defence show in Ottawa.

Seaspan Shipyards will receive $66 million to work on several dozen components of the so-called joint support ships during a lull in the building of two other Canadian Coast Guard vessels.

The government is hoping that advance work will shave about a year off the expected delivery time for the first support vessel, which is currently slated to hit the water in 2023.

It will also ensure Seaspan continues to have work for its employees during what would otherwise be a dead zone between construction of the last of three coast guard fisheries vessels and a new coast guard ocean science ship.

"These support ships will deliver fuel and other vital supplies to vessels at sea," Qualtrough said, "ensuring our women and men of the Canadian Armed Forces are able to carry out their missions for decades to come."

The navy has been without a permanent support ship since retiring its last two in 2015 because of an unexpected fire and excessive corrosion, and is currently relying on a converted civilian vessel to fill the gap.

The first new vessel, originally proposed by the Conservative as the Queenston-Class, now rebranded by the Trudeau Government as the Protecteur-Class was originally supposed to be delivered in 2019, but the project has been plagued with delays. The ships will be modeled after the German Navy's Berlin-Class Supply ships. 

The EVG Berlin, the flagship of The Berlin-Class. 

Even as work is set to begin, however, Qualtrough conceded later that the government still doesn't have a concrete estimate of how much the two joint support ships are going to cost.

"It's too early to speculate on what the (support ships) will ultimately cost," she said.

The previous Conservative government set a budget of $2.3 billion for the vessels back in 2011, but that number has been under review for nearly two years.

The parliamentary budget office pegged the full cost of two support ships back in 2013 at $4.13 billion, while the government's new defence investment plan, released this week, said it could cost up to $4.99 billion.

"There are a lot of things happening on (the support ships)," said Andre Fillion, head of military procurement at Public Services and Procurement Canada.

"The acquisition of long lead items, the start of the (early work) and also a lot of engineering work."

Seaspan vice-president Tim Page told The Canadian Press that the shipbuilder is in negotiations with the government, but remains committed to delivering the support ships to the navy.

Starting work early is a reasonable solution to what would otherwise be a troublesome lull in work at Seaspan, said defence analyst David Perry of the Canadian Global Affairs Institute.

But the government still doesn't have an approved design for the support ships, he said, and the whole point of the federal government's multibillion-dollar shipbuilding strategy was to prevent such production gaps.

"It's a solution to an immediate problem," Perry said, "but it's not by any means an ideal scenario."

RCN and Irving Look to Sell AOPS Internationally to Fill Construction Gap

By: David Pugliese, National Post

The gap between the building of new ships for the navy could be as much as 18 months, opening the possibility of east coast shipyard employees to be laid off.

But the Defence department’s top equipment official says changes to the shipbuilding procurement process will reduce some, but not all, of that gap. Workers that could be affected would be blue-collar shipyard employees at Irving Shipbuilding.

The 18-month gap between finishing construction of the fleet of Arctic Offshore Patrol Ships or AOPS and starting the new Canadian Surface Combatant vessels at Irving shipyards in Halifax is outlined in documents obtained by Postmedia through the Access to Information law.

“We are still concerned about a gap,” Pat Finn, assistant deputy minister for materiel at the Department of National Defence, acknowledged in a recent interview.

The engineering workforce in the Irving yard is about to ramp up dramatically, he added, so there are no concerns there. “The issue is on what we call the blue‑collar workforce, and particularly (in) the early stages of construction,” Finn explained. “Those are the people that, once you’ve finished cutting steel in the last AOPS, ideally the next day you start cutting steel on the first surface combatant. Well, right now we’re not lined up to do that.”

Construction of the first surface combatants isn’t scheduled to begin until the early 2020s.

The first AOPS will be in the water in the summer and the other vessels are expected to follow fairly quickly.

“The gap is still a few years away, but clearly if we’re going to make sure there’s continuous flow of work, we’ve got to be dealing with that now,” Finn said.

He said the Royal Canadian Navy is lending its support to help promote the AOPS to international customers in the hopes of drumming up more work to shrink the size of the construction gap.

Procurement Minister Carla Qualtrough has also said she is open to the idea of additional AOPS being purchased for Canada.

Irving spokesman Sean Lewis said Wednesday that the company, the federal government and a third-party expert continue to look at the issue. “The construction of additional AOPS for Canada or international export opportunities is being considered and various options pursued,” he explained. “At this time it is premature to comment further.”

It’s way too early to talk about layoffs

In November federal government and Irving officials acknowledged their worry that highly skilled employees and their expertise could be lost in any potential gap between construction of AOPS and the surface combatants. “It’s way too early to talk about layoffs,” Irving Shipbuilding president Kevin McCoy said at the time.

The same problem has emerged in the federal shipbuilding program on the west coast and unions there warn that layoffs are coming. Seaspan Shipyards in Vancouver acknowledges there will be a gap between the construction of coast guard vessels, a situation it is trying to deal with by drumming up more work from the federal government or from the commercial marketplace.

Such gaps were supposed to be prevented by the federal government’s national shipbuilding strategy, which called for the continuous build of vessels, ensuring steady employment for a skilled labour force.

The Canadian Surface Combatant program will cost between $55 billion and $60 billion. Fifteen ships will be eventually built. Three consortiums have bid on the program.

Artits Rendering of the BAE Type-26 Global Combat Ship; which many believe is the frontrunner in the CSC Fleet Proposal.

Finn said a contract is expected to be awarded by the end of the year.

About half of the cost of the surface combatants is for systems and equipment that will go on the 15 ships, according to federal documents obtained by Postmedia through the Access the Information law. “Approximately one-half of the CSC build cost is comprised of labour in the (Irving’s) Halifax yard and materials,” the documents added.

Last year, Jean-Denis Fréchette, the Parliamentary Budget Officer, estimated the CSC program would cost $61.82 billion. He also warned that every year the awarding of the contract is delayed beyond 2018, taxpayers will spend an extra $3 billion because of inflation.

Navy Supply Ships Delayed...Again

By: David Pugliese, The National Post 

Construction of the navy’s supply ships won’t start until 2019, the federal government says, yet another delay in outfitting the maritime service with a critical capability.

Work on the first Joint Support Ship at Seaspan shipyards in Vancouver was supposed to begin this year, but federal officials recently refused to outline to parliamentarians the building and delivery schedule for those vessels.

However, in the newly released update on the progress on the government’s shipbuilding strategy, the Liberals report that construction will begin in 2019.

The update, which covers progress made throughout 2016, is a mix of old and new information and includes an introduction by Procurement Minister Carla Qualtrough. Design work is continuing on a number of vessels, including the supply ships, writes Qualtrough, who took over the portfolio from Judy Foote in August.

Yet another delay for the Joint Support Ships cements the need for the leased supply ship, MV Asterix, which was acquired as a stop-gap measure so Canadian warships could be refuelled and resupplied at sea, navy officers privately say.

The Asterix, a commercial ship converted by Davie shipyards to perform a military supply role, is at the heart of the federal government’s case against Vice Admiral Mark Norman.

Norman has been accused by the RCMP of warning Davie that Liberal cabinet ministers wanted to derail the Asterix project.
Man overboard: Inside the fall of Vice-Admiral Mark Norman
Supply ship project delay means DND postpones $20-million payment
Two years after Liberals were accused of trying to scuttle it, new supply ship arrives in Halifax for navy training

That development leaked out to the news media and the resulting embarrassment forced the Liberal government to back down on its plans and Asterix proceeded. Royal Canadian Navy sailors are currently training on the ship on the East Coast and Asterix will be available in the coming months to resupply the navy’s vessels.

Norman, who was suspended from his job by Chief of the Defence Staff Gen. Jon Vance more than a year ago, has denied any wrongdoing. No charges have been laid against Norman and the claims made against him by the RCMP are so far unproven.

Norman had at times warned parliamentarians about the need to deal with the gap in supply ships because of his concerns that construction of the Joint Support Ships had fallen behind schedule.

The navy had hoped to get the first ship in 2021 and the second in 2022. The update issued by Qualtrough and posted to her department’s website on Dec. 17 still uses those dates. Industry officials, however, have said that those delivery dates are highly unlikely.

Last week Postmedia reported the Department of National Defence was holding off on spending $20 million on the Joint Support Ships because of ongoing delays but the department did not issue details about the timeframe. In an email, the DND noted the money would not be spent this year “due to delays in project approvals and contract awards, delay in construction of ships.”

Taxpayers will eventually spend $2.3 billion on the ships once the project is fully underway.

In late November, the federal government told MPs it can’t provide them with a schedule for the delivery of the new ships or the coast guard’s Polar-class icebreaker because it deems such information secret.

The refusal to provide such basic details to MPs on shipbuilding programs that are costing billions of dollars was a warning construction of the vessels had fallen further behind schedule, said industry representatives and Conservative MP Todd Doherty.

Qualtrough’s press secretary, Ashley Michnowski, noted the Liberal government has made a commitment to be transparent in communicating the progress on the national shipbuilding program. “Pulling together data and information for this first annual report was complex as it involved input from multiple departments and companies,” she noted. “We are now in a better position to provide more timely reporting moving forward.”

The update contains details of maintenance contracts for the Victoria-class submarines.

It also highlighted the work to convert Asterix, noting that 700 people are employed at Davie by the program.

But neither the submarines nor Asterix is part of the national shipbuilding program. In addition, Davie has laid off many of those workers since the Liberal government has refused to proceed with the conversion of a second supply ship and has rejected other ship proposals from the company.

Resolve iAOR to be Unveiled July 20

By: David Pugliese, Defence Watch 

Chantier Davie has issued invitations for the unveiling of the Resolve-class interim Auxiliary Oiler Replenishment (AOR) ship. That will happen July 20. All members of the public are welcome according to the invitation.

In November 2015, the Liberal government tried to derail the $669 million project for the supply ship but backed down after their attempt became public.

Project Resolve was approved by the previous Conservative government and involved Davie shipyards in Quebec quickly converting a commercial vessel into an AOR. The ship had already been delivered to Davie to begin the conversion process when James D. Irving, co-chief executive officer of Davie’s rival, Irving Shipbuilding, wrote a letter on Nov. 17, 2015, to then procurement minister Judy Foote and Defence Minister Harjit Sajjan. Irving requested its proposal for a similar vessel, already rejected by the Conservative government, be examined.

After receiving Irving’s letter the Liberal government put Project Resolve on hold.

Details about the Liberals’ decision to put Project Resolve on hold, as well as Irving’s letter and details of cabinet discussions about the matter, were leaked to the CBC in November 2015. The leak embarrassed the new Trudeau government and sparked outrage in Quebec about the potential loss of hundreds of jobs if Davie were to lose the ship deal. The Liberals beat a quick retreat and shortly afterwards, Project Resolve went ahead.

The RCMP has claimed that Vice Admiral Mark Norman was involved in leaking information on Project Resolve to Davie officials. Norman denies any wrongdoing. The RCMP have not laid any charges against the vice admiral who was suspended from his job in January by Chief of the Defence Staff Gen. Jon Vance. Norman’s supporters have raised questions about how the respected officer has been treated.

The ship will be leased to the Canadian government, which has an option to buy the vessel if so desired.

Davie has issued these photos of the vessel:

National Shipbuilding Behind Schedule

By: Lee Berthiaume, The Canadian Press

Reports reveal construction of supply ships, polar icebreaker is behind schedule.

OTTAWA—The federal shipbuilding program has hit another setback, as government documents show more delays in the construction of the navy’s new supply ships and the Canadian Coast Guard’s highly anticipated polar icebreaker.

The delays, revealed in departmental reports recently tabled in the House of Commons, are expected to cost taxpayers as the navy and coast guard are forced to rely even more heavily on stop-gap measures to address their needs.

The two supply ships, which together will cost $2.6 billion, and the $1.3-billion polar icebreaker, dubbed the John G. Diefenbaker, are to be constructed one after the other in Vancouver by shipbuilding company Seaspan.

A replacement for the 50-year-old icebreaker Louis S. St-Laurent will be delayed until at least 2022. (JONATHAN HAYWARD / THE CANADIAN PRESS)

All three vessels are desperately needed as technical problems recently forced the navy’s two existing supply ships into early retirement, while the coast guard’s 50-year-old Louis St-Laurent heavy icebreaker was supposed to retire next year.

National Defence and the Department of Fisheries and Oceans reported last year that the first new supply ship would enter the water in 2020, while the Diefenbaker would arrive in 2021 or 2022.

But the departments’ most recent timetable says construction of the first supply ship won’t be finished until at least 2021, with completion of the Diefenbaker similarly delayed until 2022 or 2023.

When the federal government’s $35-billion national shipbuilding plan, which includes construction of new Arctic patrol vessels and a fleet of warships in Halifax, was first announced in 2010, it was expected the supply ships and icebreaker would all be finished by 2018.

National Defence spokesman Evan Koronewski blamed “challenges associated with completing the detailed design and organizing the entire supply chain” for the delay in the supply ship schedule.

Those challenges were also responsible for pushing back construction of the Diefenbaker, as work on the icebreaker can’t start until the supply ships are finished.

The federal government has already committed millions of dollars in recent years to extend the lives of the current icebreaker fleet.

But the new delays help explain why the coast guard started looking last month at whether it can lease between one and five icebreakers from the private sector for the foreseeable future.

They also mean that the navy will be forced to rely more on allies as well as a converted civilian cargo ship to provide fuel, food and other supplies to Canadian naval ships at sea.

There have been questions over the years about Seaspan’s ability to construct complex military vessels, given that its previous shipbuilding experience has largely revolved around ferries and tugboats.

The company referred questions to the government.

But defence analyst David Perry of the Canadian Global Affairs Institute suggested bad planning is to blame, as government officials were overly optimistic — or wholly unrealistic — about the shipbuilding plan’s various timelines.

“The whole enterprise is very behind schedule,” he said.

HMCS Preserver paid off after 46 years of service

DND Press Release

HMCS Preserver concluded its service to the Royal Canadian Navy (RCN) on Friday. The Auxiliary Oilier Replenishment (AOR) was officially "paid off", receiving a final salute from current and former sailors, soldiers, airmen, and airwomen during a ceremony at HMC Dockyard Halifax. The paying-off ceremony signals the end of the ship’s service to the Royal Canadian Navy.

According to RAdm J. Newton, Commander of Maritime Forces Atlantic, the Protecteur-class ships set the standard in modern navies for safe and expedient replenishment at sea. The essential but inherently difficult and dangerous task of resupplying ships at sea with food, fuel, munitions, and spare parts was executed by Preserver, and sister ship Protecteur, for 46 years. To accomplish this task, the ships travelled in the North Atlantic, across the wide Pacific, and into Canada’s Arctic waters.

First of class, HMCS Protecteur was commissioned in 1969, and HMCS Preserver was commissioned a year later in August 1970. The RCN intended to operate the ships until 2017. Protecteur suffered a serious engine room fire in 2014 and was sold for scrap metal in 2015, and corrosion problems were identified on Preserver, which contributed to her early retirement and today's paying off ceremony.

Canada intends to build two new auxilliary vessels, the Queenston-class joint support ship, at Seaspan shipyards in the Vancouver area, however, those will not be complete before 2019.

In a stop-gap measure, the RCN’s replenishment requirements are currently being addressed through leasing arrangements with Spain and Chile. The Spanish replenishment ship ESPS Patino is currently supporting the Atlantic Fleet.

In another answer to the serious capability gap left by the Protecteur-class AORs, the Government of Canada signed a contract in August 2015 (Project Resolve) with Davie Shipyard of Quebec to convert a German commercial container ship (built in 2010) to take on the resupply role for the RCN. The conversion was expected to be completed and the ship active in service by 2017.

Quick Facts

The term “paying off” refers to the British age-of-sail practice of paying a crew their wages once a ship has completed its voyage. In the RCN, the tradition continues with the term paying off referring to the formal ceremony where the naval jack, ensign, and commissioning pennant are hauled down, the crew departs a ship for the last time, and the ship is then no longer referred to as HMCS (Her Majesty's Canadian Ship).

HMCS Preserver has participated in numerous missions and operations, including the United Nations peacekeeping effort in Cyprus and the enforcing of sanctions on the former Yugoslavia, as well as Operations DELIVERANCE, APPOLLO, CARIBBE, among others.

Over the course of HMCS Preserver’s 46 years of service, it is estimated that more than 8,000 sailors have been part of its crew.

Over the course of its lifespan, Preserver has used/delivered over 800,000,000 litres of fuel since commissioning or 800,000 m3. This is equal to filling up a standard car 13.5 million times.

HMCS Preserver is 546 feet long, 76 feet wide, and displaces 22,100 tons. Engine power is 21,000 SHP and the maximum speed is 20 knots. It normally has a complement of 270 officers and non-commissioned members.

The disposal method for HMCS Preserver will be determined in due course, with careful attention paid to environmental, safety, and financial considerations. Disposal options include selling or donating the vessel, or dismantling it for scrap material.

Davie Applauds Irving's Pitch for Maritime Support Ship

By: David Pugliese, Defence Watch 

These are interesting days indeed in the defence industry. On Tuesday I reported in the National Post/Ottawa Citizen about Irving Shipbuilding’s new proposal to construct a ship specifically designed to aid in a humanitarian crisis.

The Nova Scotia-based shipyard would take a commercial roll-on/roll off vessel and convert it to carry a hospital, medical supplies and emergency equipment to respond to a variety of missions ranging from earthquake relief to providing aid to refugees.

Irving submitted the proposal Friday to the officials coordinating the Liberal government’s defence review.

The Liberal government has yet to respond to the proposal.

The firm is hoping to take advantage of the government’s interest in having the Canadian military play more of a role in humanitarian operations.

Irving president Kevin McCoy told the Ottawa Citizen it would take about one year to convert a commercial vessel into what the company is calling a maritime support ship.

“This is not an unsolicited proposal,” he said. “It’s in response to several of the key questions raised by the government’s Defence Review.”

The vessel would be offered to Canada for a five-year lease. The cost, under $300 million, would include the leasing of the ship, conversion of the vessel for its humanitarian role, a 30-member civilian crew to operate the vessel and maintenance for the lease period.

McCoy said the proposal would not undercut the government’s current shipbuilding strategy, which calls for the building of two Joint Support Ships. Construction of the first of those ships is expected to proceed in 2018 at Seaspan shipyards in Vancouver. The first of those ships would be ready in 2020.

Davie shipyards in Quebec is also converting a commercial vessel for the navy. That ship will be used on an interim basis to handle at-sea refueling for the navy’s warships.

Davie has also promoted the vessel’s ability to be of use during a humanitarian crisis.

What was interesting was the reaction from Davie. It took a “more the merrier” approach.

Davie issued a news release Tuesday commending Irving Shipbuilding on “taking a positive and innovative approach to solving some of the major capability gaps facing the Royal Canadian Navy and Canadian Coast Guard with regards to the current federal shipbuilding programs.”

“Realizing this, East coast shipyards in Canada’s key shipbuilding hubs in Nova Scotia and Quebec have pro-actively provided alternative, cost-efficient and innovative ways to convert existing commercial vessels to fill gaps in Canada’s non-combat fleet,” the firm noted.

Speaking at the CANSEC in Ottawa, Alex Vicefield, Davie’s chairman, said Irving Shipbuilding’s proposal “is confirming what has been universally recognized over the past months, including by the Government of Canada in the Canada Transportation Act review. That there are several classes of ship which Canada urgently needs and the current shipbuilding program is not capable of delivering. This is a great initiative from Irving Shipbuilding – these kind of unsolicited proposals where industry takes what it has learnt in how to provide fast-track, cost-efficient solutions to address critical operational gaps, is exactly what is needed right now.”

Vicefield said “these kind of interim and supplementary programs to ensure that we can close the capability gaps” are needed.

Harper government funded Seaspan Shipyard to help with Contract

BY MARIE-DANIELLE SMITH

OTTAWA — The former Conservative government quietly helped fund improvements for a Vancouver shipyard that was scrambling to get ready for shipbuilding, despite saying it would not do so.

Seaspan’s Vancouver Shipyards received about $40 million in 2014-15 to get its engineering systems up to speed as it prepared to build non-combat vessels for the Canadian Coast Guard, documents suggest.

But one of the premises underlying the Conservative government’s enormous National Shipbuilding Procurement Strategy (NSPS) — lauded by prime minister Stephen Harper’s government as the biggest defence program in Canadian history — is that shipyards would have to fund improvements to their shipbuilding infrastructure at no cost to Ottawa.

The existence of a government-funded program to help Seaspan, an association of western Canadian marine transportation companies, was revealed at a House of Commons committee meeting in December 2014.

Marty Muldoon, assistant deputy minister and chief financial officer at Fisheries and Oceans, told committee members $9.5 million of his department’s money was going to the “horizontal engineering program plan,” an initiative shared with the Department of National Defence.

That money was to help Seaspan “hit full stride in manufacturing capability or construction capability for our vessels,” he said.

“Basically, what we’re doing is investing in the shipyard’s capability to get itself up to capacity, to start churning out vessels.”

(Seaspan) went from a very small shipyard to a very large shipyard in a very short amount of time.

Though Public Services and Procurement Canada admits the contract is being used to help Seaspan create “material, engineering and production standards” for its yard, making systems consistent across “multiple projects,” it says this doesn’t count as the type of shipyard improvement forbidden under the agreement governing NSPS.

Jessica Kingsbury, a spokeswoman for PSPC, said this contract is “clearly distinguished” from capital investments Seaspan made to ready its yard for shipbuilding.

The horizontal engineering program plan is “in no way related to the criteria which the shipyards were required to meet, at their own cost, to achieve target-state,” she added.

Rather, it aims to co-ordinate and manage Seaspan’s non-combat package “more strategically,” through building a “program management capability.”

All three bids for NSPS contracts — from Halifax-based Irving, Seaspan and Quebec-based Davie — orginally included the guarantee that Ottawa wouldn’t pay to help the shipyards get ready for shipbuilding. Federal money would only go towards the shipbuilding projects.

But successful bidders Irving and Seaspan lacked capacity to start building ships when umbrella agreements were announced in 2011. Both negotiated to include clauses in the agreements, saying Ottawa would reimburse them for shipyard infrastructure if it decided to spend less than promised on new ships.

Irving and Seaspan also went to the provinces for money. Irving got a $304-million loan from Nova Scotia, $260 million of it forgivable, while Seaspan got only $40 million, for training from British Columbia.

No federal money was officially announced for either shipyard.

The agreement between Ottawa and Seaspan, dated Feb. 14, 2012, obtained by the National Post, says Seaspan agreed any improvements to shipyard capacity would be “paid for by the company entirely at its own expense” — unless Canada reneged on its commitments.

In November 2014, Seaspan announced a two-year, $170-million project to modernize its shipyard had finished “ahead of schedule and under-budget,” according to its website.

Still, recent job postings show it has continued hiring people to work on the “horizontal engineering program plan.”

The plan does not include improvements to physical infrastructure, but focuses on improving engineering systems, technical programs and management, says a consultant who worked for Seaspan from April to October 2014.

“It covered the whole spectrum of trying to stand up an engineering organization that was robust enough to support the overall shipbuilding objectives,” said Matt von Ruden, now director of vessels at Washington State Ferries.

Employees believed Ottawa was helping fund this work, he confirmed. “The government understood the need for this program, as far as I understand,” he said.

“(Seaspan) went from a very small shipyard to a very large shipyard in a very short amount of time.”

The fact government money was used for “systems” and “programs,” not physical infrastructure, may have made this a grey area under NSPS guidelines.

Several unusual contracts posted on the government’s Buy and Sell website from June 2014 to October 2015 appear to show money flowing into such programs.

For example, Public Services and Procurement Canada sourced just under $40 million in “engineering services” from the Vancouver shipyard.

Contracts are labelled as noncompetitive, representing the “best interests” and “value” to government. They differ from other contracts held by Seaspan, which are usually identified as being tied to a shipbuilding project.

The NSPS has an official budget of $39 billion, with $8 billion set aside for non-combat vessels.

Construction is expected to take at least 20 to 30 years, says the procurement department.

Seaspan began building the first of three offshore fisheries science vessels in June 2015 and the second in March. The three vessels, the first NSPS ships to come out of the improved Vancouver shipyard, are scheduled to be delivered by the end of 2017.

• Email: mdsmith@postmedia.com |
© Copyright (c) National Post

RCN Announces Names of its 3 Possible AORs

Written by David Pugliese, Defence Watch 

It will be several more years before the Royal Canadian Navy’s Joint Support Ships are in the water (2020-2021 are estimated times of arrival, although some argue that is optimistic since construction of the ships hasn’t even begun yet).

The RCN has selected the names of the two ships; HMCS Queenston and HMCS Chateauguay.

The RCN focused on a War of 1812 theme for the JSS names (required by the Conservative government of the day which was highlighting that conflict in a national public relations effort). The names reflect battles of that war.

There is an option for a third Joint Support Ship, although a number of folks in the RCN question whether the JSS project will have enough funds to produce more than two vessels.

But if a third JSS is built, the name selected for that ship is HMCS Crysler’s Farm, according to Canadian Forces documents obtained by Defence Watch and David Pugliese.

The battle of Crysler’s Farm was a key event during the War of 1812, in which British forces defeated an American army that had plans to march on Montreal.

An Artists rendering of the Queenston-Class AOR vessels for the Royal Canadian Navy: Photo: RCN

According to the Royal Canadian Navy: 

The two planned Queenston-class Joint Support Ships (JSS) will replace the Royal Canadian Navy’s Auxiliary Oiler Replenishment vessels. The new ships will provide core replenishment, limited sealift capabilities, and support to operations ashore. The JSS will be one of the first of the Royal Canadian Navy’s ships to be built by one of the competitively selected Canadian shipyards, as part of the National Shipbuilding Procurement Strategy.

The JSS are a critical component for achieving success in both international and domestic CAF missions, as laid out in the Canada First Defence Strategy. The ships constitute a vital and strategic national asset. The presence of replenishment ships increases the range and endurance of a Naval Task Group, permitting it to remain at sea for significant periods of time without going to shore for replenishment.

The original announced names of the Queenston-class ships are:

• HMCS Queenston
• HMCS Châteauguay

Ship Capabilities

The JSS project will procure two ships with an option for a third with capabilities such as:
Underway Support to Naval Task Groups: Underway support is the term that describes the transfer of liquids and solids between ships at sea. This underway support also includes the operation and maintenance of helicopters, as well as task group medical and dental facilities;
Limited Sealift: To meet a range of possibilities in an uncertain future security environment, JSS will be capable of delivering a limited amount of cargo ashore; and
Limited Support to Operations Ashore: The JSS will leverage to the maximum extent possible its onboard facilities.

The JSS will replace the core capabilities of the Auxiliary Oiler Replenishment ships, including: provision of fuel, ammunition, spare parts, food, and water, and other supplies; modern medical and dental care facilities, including an operating room; repair facilities and expertise to keep helicopters and other equipment functioning; and basic self-defence functions.
Construction

On January 12, 2012, Prime Minister Stephen Harper announced that the Government of Canada has reached agreements with Irving Shipbuilding Inc. and Vancouver Shipyards Co. Ltd. This charts the course for construction of Canada’s combat and non-combat surface fleets under the National Shipbuilding Procurement Strategy.

The strategic sourcing arrangements, called umbrella agreements, with each of the selected shipyards have been signed. Individual ship construction contracts will now be negotiated with the respective shipyards.

The building of the first Joint Support Ship is expected to start in the 2016-2017 timeframe, in keeping with the existing schedule. This means that the first ship would be anticipated in 2019, assuming no further delays in the schedule.

The Joint Support Ship project is currently conducting the Initial Design Review contract. This will enable Vancouver Shipyards Co. Ltd. to fully review the proven, off-the-shelf ship design from ThyssenKrupp Marine Systems Canada, selected in June 2013. The contract negotiation and design preparation work will take place in 2015/2016, in order to bring the Joint Support Ship Design to a production ready state."

Naming

On October 25, 2013, the Honourable Rob Nicholson, P.C., Q.C., M.P. for Niagara Falls, Minister of National Defence, announced the names of the Royal Canadian Navy’s (RCN) new Joint Support Ships (JSS), which will be built by Vancouver Shipyards Co. Ltd. in North Vancouver, B.C. The two Joint Support Ships (JSS) will be named Her Majesty’s Canadian Ship (HMCS) Queenston and HMCS Châteauguay in recognition of the significant battles of Queenston Heights and Châteauguay during the War of 1812.

“The names recognize the achievements and sacrifices of those early Canadian soldiers who fought and died in these critical battles during the War of 1812,” said Minister Nicholson. “The War of 1812 was a defining moment in our nation’s history that contributed to shaping our identity as Canadians and ultimately our existence as a country.”

“Canada’s rich military history is a source of inspiration for the men and women who currently serve in the Royal Canadian Navy,” said Vice-Admiral Mark Norman, Commander Royal Canadian Navy. “The events surrounding the War of 1812 remind us of the sacrifices of soldiers and sailors who fought for their country during a pivotal moment in Canadian history.”

Traditionally, the name of a class of warship is derived from the name of the first vessel in this class to be constructed. HMCS Queenston will be built first, therefore, the two JSS will be known as the Queenston-class.

Setting a New Course for the National Ship Strategy

BY MARK ROMANOW
© 2016 FrontLine Defence (Vol 13, No 2)

At the turn of the 21st century, the Royal Canadian Navy (RCN) was well on its way to becoming a potent, well-balanced navy...

The combat fleet included 12 recently commissioned multipurpose Halifax-class patrol frigates with Anti-Submarine Warfare (ASW), Anti-Surface Warfare (ASuW), and point Area Air Defence (AAD) capabilities, and carrying a Maritime Helicopter (MH). Also just commissioned were 12 moderately-capable Kingston-class Maritime Coastal Defence Vessels (MCDV) with limited Mine Counter-Measures capabilities. They joined the four recently (1987-94) modernized and upgraded Iroquois- or Tribal-class ASW destroyers, which now fielded Long-Range (LR)-AAD capability.

With the older Provider-class Auxiliary Oiler Replenishment (AOR) ship having been paid off in 1998, the surface fleet was still ably supported by two ageing single-hulled Protecteur-class AORs that had been commissioned in 1969 and 1970.

And most promisingly, the RCN was set to be joined by four Victoria-class (ex-Royal Navy Upholder-class) diesel submarines (SSKs) considered to be the quietest in service anywhere, which just been acquired (after unexpectedly harsh defence cuts in Britain) from the UK Ministry of Defence in 1998 for a quarter of their build cost.

... and then the current changed.

Feb 2016 – HMCS Fredericton transits into Souda Bay, Greece for a fuel stop during Operation Reassurance. (DND Photo: Cpl Anthony Chand)

Overworked and Neglected

Throughout the 90s and the first decade of the new century, the RCN’s surface fleet was constantly over-tasked and in-demand, and the subject of many a Department of National Defence (DND) news release praising their ‘front line’ role in various conflicts or missions, from the 1991 Gulf War through to their ‘role’ fighting the Taliban (wait... they have a navy?). Unfortunately, while quick to praise their efforts and garner the political laurels, the various political parties forming the Government of Canada over the past 25 years basically let the RCN surface fleet rust out through lack of any timely replacements. Various programs to replace capability have suffered from both a lack of funding and a serious lack of procurement acumen.

Only too late, after many good shipyards that had previously built RCN ships closed through lack of orders, and the industrial knowledge base drifted away, has there been any political realization that the shipbuilding industry needs steady orders to produce navy vessels in a timely and affordable fashion. This has, belatedly, been slowly addressed through the tortuous National Shipbuilding Procurement Strategy, however, the NSPS (now apparently being shortened by PSPC to drop the “procurement” out of the shipbuilding strategy) seems more geared towards ‘built in Canada at an outdated fixed cost’, and ensuring various regional entities get their piece of the procurement pie – first Industrial Regional Benefits then Industrial and Technological Benefits – than in meeting RCN/national requirements for the right equipment to adequately protect our maritime sovereignty. Will this latest name contraction to the National Shipbuilding Strategy signal a shift from the “longer timeframe for less capability and more cost” scenario te NSPS was being criticized for?

Surface warships

The centrepiece of the RCN, HMCS Athabaskan is the lone surviving Iroquois-class destroyer (slated to be paid off in 2017 after 45 years of service) and was already experiencing engine and maintenance issues in 2015 from being pushed well-past the regular 35-year warship service life.HMCS Huron was paid off in 2005 due to personnel shortages, and sunk as a target in 2007 (just 13 years after the expensive upgrades). Both Iroquois and Algonquin were paid off in 2015 after experiencing age and non-economically repairable damage-related issues.

Even though RCN Commander Vice-Admiral Mark Norman noted to FrontLine (issue #1, 2015) that “Athabaskan has been kept in service, so we’ve kept that legacy [Long Range, Area Air Defence] capability alive”, from 2017 through to 2025-26 when the first LR-AAD configured Canadian Surface Combatant (CSC) is hopefully commissioned, the RCN will face a ‘significant’ gap for nearly a decade – and additionally loose its current skill-set for intercept as point-AAD drills just can’t replicate LR-AAD challenges and live training exercises.

As for the Kingston-class vessels, their low speed (15kts max) suggests they may not be the most effective patrol vessels. Originally 100% reserve-crewed and -operated, they had not been fully utilized until, as cuts took their toll, these vessels began to receive extensive taskings.

The limited number of remotely operated modular payloads, which were always meant to be supplemented during the mid-life refit, have obviously limited their performance. A C$100 million mid-life refit of the nearly 20-year-old vessels was deemed unwarranted, and some or all will likely be retired once the Arctic Offshore Patrol Ships (AOPS) start entering service.

Jan 2016 – Fredericton’s Naval Boarding Party participates in a boarding exercise during Op Reassurance. (DND Photo: Cpl Anthony Chand)

The premature retirement of HMCS Iroquois and Algonquin enabled a revised 60/40 regular/reserve force crewing model for the MCDVs to continue sea opportunities for the displaced crews, and the RCN Commander acknowledged “we are running them flat out now and that’s paying enormous dividends and really working well.” The MCDVs are also being tasked for limited Northern Arctic operations during the short ice-free summer . The max 17kt speed of the Arctic Offshore Patrol Ships (AOPS) will present many of the same limitations as the slow MCDV.

The core of the RCN surface fleet, the Halifax-class are currently in the middle of a C$4.3 billion modernization and Frigate Life Extension (HCM-FELEX) program that is designed to replace and upgrade systems by 2018 “to ensure the frigates remain effective throughout their service life” and reflect an increasing emphasis on combined littoral operations. Additionally, to ameliorate the lost flagship capabilities of divesting the Iroquois-class, the RCN Commander noted “we made a decision to enhance the first four of the modernized Halifax-class with some extra space [minor structural reconfiguration] and some monitors and extra accommodation space – so we could bridge the gap in the command and control function.”

As the upgrades are relatively on time and within approved budget, one would think that FELEX is a good RCN success story. But, one look at the Defence Acquisition Guide (DAG) 2015 raises serious questions over the possibility of additional C$410-890 million in post-FELEX Halifax-specific upgrades. In fact, the 2015 Guide lists nine Halifax-specific projects for implementation out to 2035, which is well past the expected 2027-2031 service life of the Halifax-class ships.

Two of these projects are scheduled for completion within a few years. The Multi Role Boat project is looking for new faster, larger Rigid Hull Inflatable Boats (RHIBs) to provide multi-functional and improved systems. The Maritime Satellite Communications Upgrade will improve allied interoperability. The reasonable preliminary estimates of C$50-100 million each, plus the fact that such capabilities can be ported to the new CSC when the time comes, makes these projects easily justifiable.

The other seven Halifax-specific projects (StrongBow; Maritime Next Generation Communications Suite; Maritime Tactical Command and Control; Naval Electronic Attack Recapitalization; Naval Electronic Warfare System Surface; Virtual Integrated Shipboard Information Networks and Underwater Warfare (Sensor) Suite Upgrade), are a different story. Valued at an estimated C$310-690 million over the 2024 to 2035 time frame, they only make sense if the RCN and DND expect the NSS to fail and not deliver new CSC ships until 2035 onwards!

DAG 2015 seemingly indicates a lack of communication and understanding between the RCN, DND and the government when looking at the interrelationship between FELEX and the CSC project. Most Halifax-specific projects in DAG 2015 are not scheduled for completion until 2024/2025, and two not until 2035, which seems to indicate the RCN and DND are moving the CSC goal posts 10 years to the right. Or, in other words, the left hand is not talking to the right hand, and vice versa, and the centre just does not have a clue. As a CGAI report by Stewart Webb and Chris Murray (January 2016) notes, “Disturbingly, none of these preparations seem to address the elephant in the room, neglected hull maintenance to extend the frigates beyond” the 2027-2031 time frame. Does this portend a Halifax-class hull-driven retirement debacle (à la Iroquois-class and Protecteur-class) in the making?

March 2016 – HMCS Edmonton, an MCDV, approaches the harbour of Ensanada, Mexico, during ­Operation Caribbe. While on patrol in the Caribbean Sea and the eastern Pacific Ocean during March 2016 for Operation Caribbe, Canadian MCDVs Summerside and Saskatoon assisted the USCG in two interceptions that resulted in the seizure 26 bales of cocaine. (Photo: DND)

NSS Procurement Update

The much touted, agonizingly slow, NSPS was recently pegged at over C$42 billion. Noting his acquisition experience in the UK, the hiring of retired Rear-Admiral Steve Brunton of the Royal Navy as an expert shipbuilding advisor for the Surface Combatant project, may be a step in the right direction.

Clearly, the (new) NSS should not be artificially constrained by outdated budget figures, rather by the ‘best value’ solution best suited for the requirement. Let the competitive selection for an in-service or final development stage design that best meets each requirement be the cost driver, while keeping the penchant for innumerable Canadian-specific modifications to a minimum. If the budget needs a slight top-up to obtain the proper equipment – so be it!

As we put our RCN and Coast Guard personnel in harms way, surely it is incumbent on the GoC to provide them with the right tools for the task. The Auditor General of Canada confirmed this important point: “Cost/capability trade-offs need to be monitored and revisions made to project budgets, if necessary, to make sure that Canada gets the military ships it needs to protect Canadian interests and sovereignty.”

At the heart of the early NSPS delay was the state of Canada’s shipyards. Without a continuous source of contracts for sophisticated navy vessels, all three of Canada’s formerly impressive shipyards had lost most if not all of their navy-specific expertise and had been scrambling for small upgrade and repair contracts to keep at least a few people employed.

NSS Combatants

The first ‘combatants’ preceding the CSC build, the minimally-armed (short-range 25mm gun) constabulary AOPS are a politically-driven procurement foisted on the RCN by the previous government. There seems to be little drive to protect Canada’s vast and perennially neglected (except by every other country), Arctic Ocean maritime space, with its increasingly accessible natural resources. Even the UK is building a £200 million Polar Research Ship capable of 60-day operation in sea ice. Polling has indicated that Canadians want the government to assert our northern sovereignty.

The current AOPS is watered-down from the 2005 election promise of three armed naval icebreakers with full Polar-1 classification capable of year-round operation in all ice states.

Ideally, three armed Coast Guard (CG) Polar-1 rated icebreakers, instead of the currently planned six AOPS with barely adequate Polar-4/5 classification and one lone, unarmed, Polar-2 rated icebreaker, would have been more efficient for asserting sovereignty in our increasingly accessible Northwest passage shipping route through the Canadian Arctic. While the Americans have two heavy icebreakers to our lone remaining ship commissioned in 1969, the Russians have 12 heavy Polar-1 icebreakers (half of which are nuclear-powered for extended operation), plus dozens of smaller vessels whose operations have often extended into Canada’s Arctic region. If politicians seriously care about our Arctic, this Polar-1 icebreaker capability gap should be cause for serious concern.

Canadian Coast Guard medium icebreaker Henry Larsen participated in Operation Nanook, in 2010. At the time, ­Liberal Senator Colin Kenny said the Conservative’s Arctic ship plan should be sunk and replaced real icebreakers. (Photo: Sean Kilpatrick, THE CANADIAN PRESS)

As the Liberals review the old NSPS, there may still be time to increase CG funding and modify the icebreaker design, which is still in its initial design phase, and add a Polar-1 derivative. Better use of all three shipyards (Irving on the East coast; Davie in Quebec; and Seaspan on the West coast) could allow a speedier replacement of the ancient Louis S. St Laurent and the three 35-year old R-class icebreakers. Armed Polar-1 and Polar-2 rated Coast Guard icebreakers – utilizing RCN-crewed refurbished 76mm guns, fire control radar and basic Combat Management Systems from the paid off Iroquois-class or post-FELEX Halifax-class ships to keep costs to a minimum – would provide a very useful capability. These would allow a reduced number of constabulary reservist-crewed AOPS for asserting a northern Arctic sovereignty presence during the summer. The government would then have scalable options, available all seasons, to respond to the increasing likelihood of incursions of our Northern waters by unwanted commercial shipping or by cruise ships needing assistance.

CSC Update

The Canadian Surface Combatant project had become a weak link in the old NSPS, with many complaints. The early strategy of choosing between Most Capable Design (MCD) and Most Qualified Team (MQT) was quietly abandoned after MQT was identified by multiple press sources as clearly being written to favour only one team: Irving / Lockheed. A change to “Most Competitive Procurement Strategy” was announced in May 2015.

Another problem with the CSC procurement model was the separate Warship Designer (WD) and Combat Systems Integrator (CSI) streams, which greatly increased potential for unforeseen system integration issues while at the same time obscuring authority and therefore accountability. A recentFrontLine article and graphic by former ADM(Mat) Alan Williams illustrated the lack of transparency in that model. Two weeks after the article was published online, the current Liberal government announced it was combining WD/CSI streams. Assistant deputy minister at Public Services and Procurement Canada Lisa Campbell asserted this “was a big step for us [as it will help rein in costs, and] we’re not talking about a custom build anymore. We’re talking about existing designs [which were determined to meet Canadian needs] ... and in our view that is likely to have an impact on diminishing all sorts of risks,” and helps speed up the process. The change is still subject to industry feedback and final Cabinet approval and, of course, there will still be some modifications to suit Canadian requirements, as in every large so-called “off-the-shelf” procurement to date.

Based on the short-list of pre-qualified WD/CSI firms on the NSPS website, we can further narrow this down to companies with a Design Reference Point LR-AAD design that is robust enough to defeat both missile saturation attacks as well as simpler ASW requirements.

Defence Review Implications

With the ongoing Liberal review of military capabilities, its re-evaluation of major procurement projects, plus the recent budgetary shift of C$3.72 billion in capital procurement funds five years into the future, it would seem that sorely needed ship replacements are slipping further into the future. By better utilizing Canada’s third major shipyard (which admittedly had been facing financial hardship in previous years), some of the scheduling problems could be ameliorated.

With the new NSS, will the roadblocks be lifted to end further delay? It is hoped that the marine industry will not be abandoned by the Canadian defence procurement process once again, and that accountability will be restored to procurement processes.

===
Mark Romanow is an independent defence analyst/writer based in Edmonton, Alberta.

Spanish AOR Supporting RCN Returns to Spain

Written by David Pugliese, The Ottawa Citizen 

The Spanish Navy’s auxiliary oiler and replenishment ship Patiño has returned to Spain and arrived in port today, according to reports.

Patiño traveled to Canada in mid-February to provide supply and logistics support services to the Royal Canadian Navy on the east coast.

The Spanish Navy noted that the ship was used to train 63 RCN sailors in replenishment at sea techniques and other skills.

A second Spanish supply ship, Cantabria, is expected to travel to Canada in the fall to conduct similar support and training.

Canada is facing a supply ship gap as the new Joint Support Ships are not expected in the water until 2020/2021. Davie is working on converting a container ship into an interim refueller for the RCN. That is expected to be ready in late 2017.

Last summer Canada made arrangements with Chile’s navy to have a supply ship available on the west coast.

Irving President fires back at Davie CEO of NSPS

Originally Published  by the Chronicle Herald on March 17, 2016.

Irving president Kevin McCoy is firing back at the CEO of Davie shipyard’s parent company for criticisms over Canada’s National Shipbuilding Procurement strategy.

In an interview with CBC, Alex Vicefield, CEO of Inocea, an international shipping conglomerate that owns Quebec’s Davie Chantier shipyard, called the NSPS a “national embarrassment” because of cost overruns and delays.

Speaking with the CBC from Inocea’s Monaco headquarters, Vicefield slammed the government for using a cost-plus approach that ensures profits based on a percentage of the cost incurred instead of fixed-price contracts, which he said are the international norm, and encourage builders to keep costs low.

In the interview Vicefield said in his entire career working in the international marine industry he had never witnessed a country so willing to spend money unnecessarily. He also called out the contractors for failing to deliver a single ship since the program was announced five years ago.


In a statement issued Thursday, McCoy said his company, which was selected as the prime contractor for largest portion of the NSPS, rejects the “outrageous” claims made by Vicefield and defended the program as being a “widely recognized as a robust, open and fair procurement strategy.”

McCoy then slammed Vicefield for spreading what he called baseless claims about exorbitant prices and incorrect information about cost incentives for the program.

“Irving Shipbuilding is incentivized to reduce costs. If costs go up, our profit goes down,” McCoy said. “All cost estimates have been vetted and accepted by independent third parties. It appears that Vicefield has little experience in complex military shipbuilding programs and his comments are uninformed.”

McCoy also defended timelines for the project, and boasted that since being selected as prime contractor for the Arctic Offshore Patrol Vessels and Canada’s new fleet of surface combatants Irving has finished ships that were under construction at the time, demolished their old shipyard and built a new one, hired and trained 600 employees and finished the design for the patrol ships.

The spitting match comes after reports last week that Davie had presented the government with an unsolicited bid offering a Polar Class 3 icebreaker, three smaller River-class icebreakers and two multi-purpose research, border control and search and rescue ships. Due to the slowdown in oil prices, Davie claimed it could deliver the ships for a fraction of the price of the current set of non-combat vessels being built by Seaspan in Vancouver as part of the NSPS and in under 18 months.

The bid was criticized by both Irving and Nova Scotia Premier Stephen McNeil at the time, and the federal government has since said it does not intend to respond.

Davie and Irving also butted heads late last year when the Liberals decided to go ahead with a sole-sourced $700 million proposal — originally accepted by the previous Conservative government — to convert a civilian cargo ship into a badly needed interim supply vessel for the navy while Seaspan completes construction on two new supply ships as part of the shipbuilding strategy.

McCoy accused Davie Thursday of trying to continually undermine the NSPS.

Though it is now solvent, Davie, the largest shipyard in Canada, was in bankruptcy when Seaspan and Irving were chosen as the contractors for the $39 billion NSPS in 2011.

Seaspan's gets $65M to build Navy AOR and Science Vessels

Written by: Lisa Johnson, CBCNews 

Seaspan's Vancouver Shipyards will receive $65.4-million in federal money to start building two non-combat vessels for oceanographic research and navy supply, the procurement minister announced today.

This is the latest injection of federal dollars for the North Vancouver shipyard, which in 2011 won the $8-billion contract for seven non-combat vessels, including these two, as part of the government's 30-year National Shipbuilding Strategy.

So, today's announcement is no surprise but does allow the company to start buying steel, motors, propellers, shafts and scientific equipment for the ships.
Halifax and Vancouver yards win shipbuilding work

"Canada needs a well-equipped navy and Coast Guard, and we are committed as a government to making this happen," said Minister of Public Services and Procurement Judy Foote in North Vancouver.

Replacing Canada's oldest science vessel


Up to $30-million of the money announced today will go toward building a new offshore oceanographic science vessel, which will replace the CCGS Hudson, Canada's oldest science vessel, Foote said.

The Hudson, which has its own Facebook fan page, "has put in over half a century of service for our country and is desperately in need of being replaced," she said.
Scientific ship's replacement delayed

The new vessel is estimated to cost $144.4-million and will be used to conduct geological surveys, fish habitat studies and other research into the biology and chemistry of the ocean.

"Evidence and research are vital to our country's environment and to the fishery on which so many coastal communities depend for their well-being," said Foote, who represents the riding of Bonavista-Burin-Trinity in Newfoundland and Labrador.


The famed research vessel, CCGS Hudson, has been in service since 1962. (John Darrell David/Facebook)

Naval supply ship

The other $35-million of today's announcement is for one of two joint support ships, which will help supply Royal Canadian Navy ships to let them stay at sea longer without returning to port.

The two vessels are estimated to cost a total of $2.3-billion.

"I am pleased we are now one step closer to ... delivering on a critical capability needed by the brave naval men and women of our Royal Canadian Navy," said Minister of National Defence Harjit Sajjan in a statement.

The North Vancouver shipyard has already started building one of three offshore fisheries science vessels, and will also build a polar icebreaker.


An artist's rendering of the Offshore Fisheries Science Vessel, another one of the seven non-combat vessels being built by Seaspan's Vancouver Shipyards. (Seaspan Shipyards)

HMCS Protecteur Leaving CFB Esquimalt Wednesday to be Dismantled

It is almost the end of the line for HMCS Protecteur. The Royal Canadian Navy's AOR that has was in service between August of 1969 to May of 2015 is getting ready for its final voyage.

David Pugliese of the Ottawa Citizen reported this morning that HMCS Protecteur is on its way to be dismantled. 

Here is the rest of his article:

Crews worked over the weekend at CFB Esquimalt to ensure HMCS Protecteur is ready to be towed to the east coast where it will be dismantled.

HMCS Protecteur is now expected to be towed starting Wednesday after a few delays meant that the ship could not leave on its originally planned date of Monday, February 22, 2016, Royal Canadian Navy officials toldDefence Watch.

In January Defence Watch reported that R.J. MacIsaac Construction of Antigonish, NS. had won a $39 million contract to dispose of HMCS Algonquin and HMCS Protecteur. Both ships are now paid off/decommissioned and at CFB Esquimalt, BC.

The plan is to tow the vessels to the east coast where they will be dismantled. The operation will involve towing the ships through the Panama Canal, according to officials. No details were available on the cost to tow the ships from the west coast to the east coast.

Christopher Clarke, mayor of Queens Regional Municipality in Nova Scotia where much of the work is expected to be done, had earlier told Halifax’s Chronicle Herald that HMCS Protecteur would arrive on the east coast around April 1. HMCS Algonquin will arrive in early July to be dismantled, according to government officials.

RCN Welcomes Spanish AOR on East Coast

DND Press Release 

February 12, 2016

Rear Admiral John Newton, Commander of Maritime Forces Atlantic, issued the following statement February 12, 2016, regarding the arrival of SPS Patiño:

“It is my great pleasure to welcome the Spanish replenishment ship SPS Patiño to Canada and to Halifax, Nova Scotia, today.

SPS Patiño will operate at sea, February through March, with the Canadian Atlantic Fleet, conducting replenishment and combat serials that will test all levels of ship and fleet readiness. SPS Patiño’s involvement with the Royal Canadian Navy highlights a special relationship developed and perfected through decades of operating together as enduring NATO Allies in coalitions and operations around the world. Just as HMCS Protecteur refuelled Spanish warships during operations to liberate Kuwait 25 years ago this month, SPS Patiño will now play an important role in support of the Royal Canadian Navy by helping my sailors retain the expertise necessary to work with replenishment ships in the demanding conditions of the wintertime North Atlantic.

I look forward to meeting with the command team and crew of SPS Patiño, and learning from their operational experiences, tactics and technologies in the best traditions of our trans-Atlantic security alliance." 

The Spanish AOR - SPS Patiño in Halifax on February 12, 2016.

RCN to Lease Two Spanish AORs during 2016

By: Esteban Villarejo, Defense News 

MADRID — The Spanish Navy will deploy two auxiliary oiler and replenishment (AOR) vessels in 2016 to "cover the Canadian Navy's temporary need for logistic support vessels in the North Atlantic," military sources told Defense News.

Both replenishment ships — Patiño and Cantabria — will support training for the Royal Canadian Navy's Atlantic fleet in two different time periods: Patiño will operate between February and March, and Cantabria between mid-September and November.

"This support is based on NATO’s principle of solidarity among its allies, by which a country provides a capability that the other does not have," a Spanish military source said. "The deployment will not have additional costs and will not have an impact in our capabilities."

The main mission of a combat-replenishment ship and hospital is to supply fuel, fresh water, ammunition, provisions, spare parts, military equipment, uniforms, medicines and medical assistance to other combat units at sea.

The Cantabria deployed with the Royal Australian Navy in 2013. The government of Australia paid the expenses of that deployment during the year.

This year Canada chose the German Navy’s Berlin-class design to replace its two Protecteur-class supply ships, which have been removed from service.

On Wednesday,, December 8, 2915 the RCN confirmed the Defense News report.

LCdr Alain Blondin, the RCN’s Deputy-Head of Public Affairs, told  the Ottawa Citizen's Defence Watch:

“We can confirm that the RCN is continuing the process of developing a Mutual Logistic Support Arrangement (MLSA) with the Spanish Navy where we will receive services from two separate Spanish vessels in 2016 to fulfill replenishment responsibilities and facilitate training in support of Maritime Forces Atlantic training and exercise activities. The current plan is for the first vessel, the Spanish Navy Ship Patino, to arrive in late January to March, and the second is planned for the fall of 2016. The exact dates are yet to be negotiated. Full details are still to come as negotiations are still ongoing and the MLSA is not yet finalized.”

Villarejo wrote that the Cantabria will be on Canada’s east coast between mid-September and November.

Some RCN sailors are already familiar with the Patiño. In 2014 HMCS Toronto conducted five replenishment-at-sea “evolutions” with both French supply ship Marne and the Patiño, the RCN website noted.

As readers know, Canada is facing a supply ship gap as the new Joint Support Ships are not expected in the water until 2020/2021. Davie is working on converting a container ship into an interim refueller (iAOR) for the RCN. That is expected to be ready in late 2017.

Last summer Canada made arrangements with Chile’s navy to have a supply ship available on the west coast.

Project Resolve: Navy's iAOR on HOLD

According to CBC's James Cudmore - the Liberal government has chosen to delay approval for the final contract to Davie Shipbuilding for the Asterix boxship to be fully converted into an Interim Auxiliary Oil Replenishment Vessel.

According to the CBC, the potential 7-year lease is estimated at $700 million, where the RCN will be given the option to purchase the Asterix at the en of the lease agreemnt.

The Liberal Cabinet commitee decided to delay the decision on whether or not top proceed with with the Project - a delay of possibly 2 months - all while Davie is already doing work.

If the government does not sign the final contract before November 30th, they will owe Davie $89 Million - as it was written into the original offer of intent signed by the Conservative Government.

Davie has already purchased the Asterix and had it delivered to its shipyard in Levis, Quebec earlier this year, and has already begun work.

The big question is whether or not the delay will scuttle the project - and leave the RCN without AOR capabilities until beyond 2021.

The Shipbuilding Association of Canada announced that they are surprised and disappointed in the delay being caused by the Government - saying the delay will only cause more cost to Canadians (as per the $89 million owed to Davie on December 1st if the final contract is not signed, and the potential legal ramifications if the government withdraws from the project - Davie has planned to invest close to $400 million.

According to Davie  they are still moving forward. Project Revolve released this statement:

"The[initial] agreement enabled Davie to commence the build program while the final details of a services agreement (relating to when the vessel enters service following the build) were being concluded and several independent auditors were engaged to assist the Government of Canada with its due diligence.

"We have now agreed all terms and conditions, all audits have been successfully completed and we expect the services contract to be signed before the end of this month.

"In the meantime, work continues onboard m/v Asterix"

CBC sources indicate that Irving Shipyards is to blame for the delay - sending letters to the Liberal Government - asking it to reconsider their initial options for iAORs for the RCN.

There are also allegations from different high-level sources in those same corners that Irving Shipbuilding Inc., a longtime competitor of Davie, meddled in the decision by sending letters to several cabinet ministers about the deal, an event that in the words of one defence source "tipped over the apple cart."

Davie, based in Lévis, Que., has long done government work, but was frozen out of the government's $39-billion National Shipbuilding Procurement Strategy. Irving was that strategy's key beneficiary, winning the lion's share of the work available. The lesser portion of the work, the so-called non-combat package, was awarded to Seaspan in Vancouver.

New supply ships are part of that deal, but none are expected to be operational until 2020 at the earliest, leaving Canada with a significant gap in capability.
Liberal ministers were warned Thursday that without guaranteed access to a supply ship, Canada will have "dramatically diminished capabilities to defend Canada" and to go abroad in support of coalition operations, or to aid in natural disaster or support humanitarian missions, CBC News has also learned.

Davie created the idea of the interim supply ship deal in 2014 and pitched unsolicited to government.

Several sources say the idea was viewed with suspicion by bureaucrats inside the government's shipbuilding offices who worried the proposal would undermine or threaten the National Shipbuilding Procurement Strategy.

The Irving and Seaspan yards subsequently offered their own interim proposals, leading to the bizarre situation of NSPS shipyards offering to build an interim supply ship for Canada that was only necessary because the NSPS program had yet to deliver supply ships.

Whatever those yards offered, the Davie deal appeared to win the Conservative government's favour.
Irving letter to ministers

It's that decision that the Irving team complained about in its letter, obtained by CBC News, and addressed to new Defence Minister Harjit Sajjan and Minister of Public Services and Procurement Judy Foote. The letter was also sent to President of the Treasury Board Scott Brison and Finance Minister Bill Morneau.

In his letter dated Tuesday, James D. Irving, the firm's co-chief executive officer, accused the government of pursuing a sole-source contract with Davie, despite an offer from Irving and Maersk Lines to provide a lower-cost option.

"This was done on a non-competitive basis without transparency and without a full evaluation of cost, delivery schedule, capability and risk associated with the Irving-Maersk proposal.

Irving requested its proposal be evaluated once more, before the government signs off on the Davie deal.

Emails to several Irving staff went unanswered Thursday.

The Davie deal is, indeed, a sole-source arrangement as Irving complained. But cabinet was told Thursday the deal had won an exemption to the government's contracting regulations and that there was little risk it could be successfully challenged.

Davie has already bought the ship it is to convert and has brought it to its yard on the St. Lawrence River near Quebec City.

In a statement, Davie said it had an agreement with the government.

"All audits have been successfully completed and we expect the services contract to be signed before the end of this month."

Project Resolve: DRS Technologies Selected for iAOR

DRS Technologies Canada will be providing integrated communications systems to Chantier Davie Canada and Project Resolve Inc. for the Royal Canadian Navy’s (RCN) Auxiliary Oiler Replenishment (AOR) ship program.

The AOR ship program is an important interim capability to supply at-sea Canadian naval forces with fuel, ammunition, water, spare parts and food. The DRS integrated communications system will include all internal tactical and secure voice switching systems and terminals; communication systems required under Safety of Life at Sea regulations; the entertainment, broadcast and alarms systems; and the networks system.

It leverages the DRS Shipboard Integrated Communications system, SHINCOM 3100, developed in Canada and currently operating on the RCN’s Halifax-class Frigates and other multi-national naval ships.

“This is a tremendous opportunity for DRS to deliver the SHINCOM 3100 system to the Royal Canadian Navy leveraging the existing installed base with the Canadian Halifax-class, Royal Australian Navy, Royal New Zealand Navy and United States Navy,” said Steve Zuber, vice president and general manager of DRS Technologies Canada Ltd. “This program will facilitate interoperability and the ability to share technology and applications, ensuring that SHINCOM 3100 remains the premier internal communications system for years to come, and a fleet standard,” Zuber said.

“Project Resolve will provide the RCN with an urgently needed and essential replenishment at-sea capability,” said Spencer Fraser, chief executive officer of Project Resolve Inc. “We are extremely proud to have assembled an impressive pan-Canadian supply chain that will feature ‘best-of-breed’ naval technologies developed and produced here at home by Canadian personnel. DRS Technologies Canada Ltd. is a trusted partner with an outstanding pedigree of providing and supporting the RCN and exporting Canadian secure naval communications technology worldwide. The company will be bringing a very modern and proven capability to our AOR solution.”

RCN In Talks To Lease Spanish AOR in 2016

By David Pugliese and Esteban Villarejo of defensenews.com 

Spain and Canada are negotiating a mutual logistic arrangement (MLSA) to deploy a Spanish replenishment ship with the Canadian fleet in the North Atlantic, both navies confirmed.

The ship deployed "during some periods of 2016" could be the auxiliary oiler and replenishment ship (AOR) Cantabria or Patiño, Spanish Navy sources said. The logistic arrangement is "to cover the Canadian navy's temporary need of logistic support vessels."

The Spanih AOR Cantabria Photo: Spanish Navy

The Cantabria or Patiño would support training for the Royal Canadian Navy’s Atlantic fleet starting in January. "No end date for the use of that support ship has been established," said Royal Canadian Navy spokeswoman Lt. Linda Coleman. “Negotiations are still ongoing and the MLSA is not yet finalized.”

But starting on Oct. 18, Royal Canadian Navy sailors will be serving on the Spanish Navy supply ship Cantabria. Navy spokesman Lt. Len Hickey said 28 sailors will be on the ship to conduct training during NATO's TRIDENT JUNCTURE 15 exercise. Hickey said the training is focused on replenishment-at-sea activities as well as familiarity of engineering systems on the ship. The Canadians will be on the ship until Nov. 10, Hickey said.

The Spanish AOR Cantabria deployed with the Royal Australian Navy in 2013. The government of Australia paid the expenses of that deployment during the year. The Spanish Ministry of Defense is expected to reach a similar arrangement with the Royal Canadian Navy.

This year Canada selected the German Navy's Berlin-class design to replace its two Protecteur-class supply ships, which have been removed from service.