Davie to Convert Three Icebreakers for Coast Guard

By: David Pugliese, Ottawa Citizen

The Canadian government intends to enter into a deal with Davie Shipyards of Quebec to provide three medium icebreakers, Public Services and Procurement Canada announced Friday.

The vessels will be acquired for the Canadian Coast Guard. The ships would provide the interim capability for the coast guard, while replacement vessels are built later under the government’s National Shipbuilding Strategy. The icebreakers are seen as essential to ensuring that Canadian ports remain open during winter months, according to the federal government.

The deal will see the purchasing a class of three existing Anchor Handling Tug Supply icebreakers. Those vessels will be used by the coast guard while its other ships undergo maintenance, refit and vessel life extension.

Artist Rendition courtesy of Davie Inc. 

The ships will be used for icebreaking duties during the winter and sent to the Arctic as needed during the summer. The first ship will be put to immediate use for icebreaking during the upcoming 2018-2019 season, Public Services and Procurement Canada stated in their news release.

The department has issued an Advanced Contract Award Notice to Chantier Davie of Lévis, Quebec, for the acquisition and conversion of three medium commercial icebreakers.

Other companies will have 15 business days to signal their interest in bidding for the contract, by submitting a “statement of capabilities” that meets the requirements laid out in the ACAN, the government noted.

Industry representatives, however, pointed out that an ACAN is usually designed so the company named in the notice is the only one capable of fulfilling the stated requirements.

No other details of the deal were released. It is unclear what the arrangement will cost taxpayers.

Quick facts

• This acquisition will consist of purchasing a class of three existing anchor-handling tug supply (AHTS) icebreakers.
• These ships will be used to backfill for Canadian Coast Guard vessels while they are undergoing maintenance, refit and vessel life extension.
• These ships will conduct critical icebreaking duties for the southern wintertime program and are to be deployed as needed in support of Arctic summertime programs.
• The first ship will be put to immediate use for icebreaking during the upcoming 2018-2019 season.

DND Needs $54M in Additional Funds to Evaluate CSC Fleet Proposals

By: David Pugliese, The National Post

The Department of National Defence needs an extra $54 million just so it can examine the bids from companies hoping to build it a new fleet of warships — an indication of the growing expense of a program that has more than tripled in cost over the years.

HMCS Ottawa, one of the Royal Canadian Navy's Halifax-class frigates that will be replaced by the eventual arrival of the Canadian Surfance Combatant Fleet. Roslan Rahman/AFP/Getty Images

The funds are not earmarked for anything to do with the actual construction of the ships, but instead to fund DND’s evaluation of the the bids this year — and they would be in addition to the $39 million the department has already received to review the bids, according to defence sources.

The cost of the new Canadian Surface Combatants, which will replace the existing Halifax-class frigates, has steadily been climbing. The 15 ships were originally estimated to cost $15 billion. That increased to $24 billion before DND came out with a new estimate of around $40 billion. That too has since changed, and the project is now estimated to cost between $55 billion and $60 billion — and even then, the federal government acknowledges it doesn’t know what the program’s final cost will be to taxpayers. Parliamentary budget officer Jean-Denis Fréchette estimated last year the CSC program would cost $61.82 billion, and warned that every year the awarding of the contract is delayed beyond 2018, taxpayers will spend an extra $3 billion because of inflation.

Despite the Liberal government’s repeated statements about openness and transparency, it took Postmedia more than three months to get basic information from DND about its request for new funding, and even then, the details provided are limited.

“These funds will permit the project to maintain the Project Management Office and to continue work under the Definition Support Contract with Irving Shipbuilding Inc. for the remainder of this fiscal year,” the DND said in an email. “This funding will primarily support the Request for Proposal, bid evaluation and preparations for the design services contract.”

The money will cover salaries and benefits for the 135 military and civilian staff at the DND who are assigned to the project office, the department said, and will also be used to train staff and upgrade their offices.

Prospective builders of the new warships submitted their bids on Nov. 30, and a winning bid is expected to be selected sometime this year. Halifax-based Irving Shipbuilding will begin construction of the first ship in the early 2020s and delivery of the first vessel is expected in the mid-2020s, according to the federal government.

Artists rendering of a BAE Type-26 Global Combat Ship with the Royal Canadian Navy Ensign - a proposed design for the Canadian Surface Combatant Fleet. 

Defence analyst Martin Shadwick said that without more detail of how the funds will be spent it’s hard to determine whether taxpayers are getting value for money. “But it seems a very high cost to run a project office for a one-year period and to evaluate bids,” added Shadwick, a strategic studies professor at York University in Toronto.

The surface combatant project, intended to provide the backbone of the future Royal Canadian Navy, has long been controversial.

In a surprise twist in November, a French-Italian consortium declined to formally submit a bid, instead offering Canada a fleet of vessels at half the price. Fincantieri of Italy and Naval Group of France don’t believe the established procurement process for the surface combatant program, already beset with delays and increasing costs, will be successful.

They instead proposed that Irving Shipbuilding construct 15 ships based on the consortium’s proven FREMM frigate design, currently in operation in both the French and Italian navies, among others, and guaranteed a fixed price of $30 billion. Thier proposal also focused on using Canadian technology on board the ships, and would have transferred technology to Canadian firms so they could be involved in future sales of the FREMM vessels on the international market. Under the plan, Irving would have been able to start building the warships almost immediately.

The Canadian government, however, rejected the offer.

Italian Navy Alpino FREMM Frigate. Italy ordered 10 FREMM Frigates. The FREMM is currently operated by the Italian Navy, the French Navy, the Egyptian Navy, and the Royal Moroccan Navy. 

Warship Project At Risk as Shipbuilders Threaten to Withdraw from Bidding

By: David Pugliese, The National Post 

Canada’s multibillion-dollar project to buy a replacement for its frigates is so poorly structured that Italian shipbuilder Fincantieri, one of the world’s largest shipbuilders, has warned the Liberal government it won’t bid unless changes are made.

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 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 the Oct. 24, 2016, letter obtained by Postmedia.

There is also a belief in industry circles that the federal government is favouring a design from the British firm BAE, which is offering the Royal Canadian Navy the Type 26 warship.

Foote had previously said only proven warship designs would be considered to reduce the risk of problems. But the Liberal government retreated on that and will now accept a Type 26 bid, even though the vessel has not been built yet, which is causing other shipbuilders to reconsider their bids.

Preparing a bid for the Canadian Surface Combatant or CSC will cost companies between $10 million and $20 million. 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.

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.

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.

Irving Shipbuilding Inc.A keel unit of an Arctic Patrol Ship is lowered into place at Irving Shipbuilding’s Halifax Shipyard in an undated photo.

In its letter to Foote, Fincantieri pointed out that the current structure of the procurement limits the role of the warship designers to simply providing engineering and design services to Irving, which will then build the vessels. In return for that small role, the companies are being asked to provide valuable intellectual property to their designs, access to their established supply chains and transfer technology to Irving and Canada.

In addition, the warship designers have to provide a warranty on the integration of technology into their designs, even though they are not responsible for buying that equipment.

The project as it is structured now leaves little incentive for warship designers and builders such as Fincantieri, which has designed and constructed ships for the navies of Italy, the United Arab Emirates, India, Iraq, Malta and Malaysia.

“If the current proposed procurement approach is retained, then it will be very difficult for Fincantieri to obtain approval to bid from its board,” the company warned Foote.

Fincantieri declined to comment on the letter.

Fincantieri instead proposed to Foote that a fixed-price competition be held, with the winning shipyard building the first three warships, complete with Canadian systems, and delivering those to Irving. The ships would then be run through evaluations and after any technical issues were worked out, Irving would begin to build the remaining 12 vessels.

That way work on the new ships could get underway faster, the vessels will be fully tested, and the risk to the Canadian taxpayer significantly reduced. The “winning team can be held accountable for the overall performance of the finished ship,” Fincantieri added.

“Companies are also given incentive to make long-term investment in Canada because they can expect to get a fair return from the greater value of their work responsibility,” Foote was told.

The minister responded by suggesting Fincantieri approach Irving with its concerns. Foote’s response further worried the Italian shipbuilder as it had believed the Canadian government and its ministers were ultimately responsible for the program and the spending of billions of tax dollars.

Related
Irving Shipbuilding’s $26-billion warship procurement deal under review, senior source says
Irving accused of conflict as it teams with company bidding on Canada’s multibillion-dollar warship program

Foote’s spokeswoman Annie Trépanier did not comment specifically on Fincantieri’s letter but repeated previous government comments about how industry was consulted extensively and those shaped the final documentation used to solicit bids. An independent fairness monitor is also involved in the process, she added.

Irving spokesman Sean Lewis said the contract for the CSC design will be awarded to an existing warship design that best fits the requirements of Canada’s navy. “I can assure you that the procurement process is being conducted in a way that ensures that all bidders are treated equally, with no unfair advantage given to any individual bidder, and under observation of an independent fairness monitor,” he added.

The surface combatants will be the backbone of the Royal Canadian Navy’s future fleet. The project has seen repeated delays, with the navy at one time expecting the ships by 2015. The first vessel is now planned for sometime in the early 2020s.

Initial cost estimates for the project were set at $26 billion. But that could potentially rise to more than $40 billion, depending on the number of ships constructed.

Suspended vice-admiral being investigated for alleged leak of classified shipbuilding data

By: Murray Brewster · Defence and security · CBC News

An allegation that Canada's second-highest ranked military commander leaked classified technical information related to the country's shipbuilding program is being investigated by the RCMP, CBC News has confirmed.

Mystery still shrouds the sudden removal of Vice-Admiral Mark Norman, but sources say the Mounties became involved after it was determined an investigation of the accusations by military police would constitute a conflict of interest.

As the vice-chief of defence staff, Norman has been responsible for the Canadian Forces National Investigation Service, which includes military police.

The RCMP are conducting a full-fledged investigation, the sources told CBC News.

Norman, who was pegged as a possible successor to Chief of Defence Staff Gen. Jonathan Vance, was relieved of his duties on Monday. The move was characterized as "temporary" by Vance's office, which has refused to answer questions about the circumstances.

The Globe and Mail reported Monday that Norman's removal was related to the possible leak of classified information.

Sources tell CBC News that the classified information involved technical information about the navy's shipbuilding requirements and expectations.

Defence sources, speaking to CBC News on the condition of anonymity, say the allegation predates Norman's appointment as vice-chief last summer and likely extends back to his time as commander of the navy.

None of the sources were able to say how serious the breach might have been, but insisted that neither the media nor a foreign power received the information.
Shipbuilding link

It has been suggested inside National Defence that the alleged leak involved the defence industry, which has been engaged in cutthroat competition over the planned multibillion-dollar frigate replacement program.

While in charge of the navy, Norman was intimately involved over several years in the development of requirements for the new warships. Those requirements are partly developed using intelligence and threat assessments of the capabilities of potential enemies, now and into the future.

A French navy frigate rests at berth in Halifax in 2013. Canada is in the process of selecting a design contractor for its frigate replacement program. (Andrew Vaughan/Canadian Press)

Before a request for proposals goes out to potential contractors, most of the military's classified annexes are removed.

Defence sources say a leak of data would likely have involved portions of those classified addenda.

Ken Hansen, a retired navy planner and defence analyst, said it would be a serious breach if that kind of data made its way into the defence industry.

"A competitor that saw the classified data would have a really good insight into what the Canadian government and what the navy itself thinks is most needed in going forward for future warships," he said.

"If this breach took place, it is a very serious compromise of intelligence information that should not be shared with unqualified people, and it could be an international incident depending on what the source of that intelligence was."

Bidders were recently asked to submit proposed warship designs to the federal government's go-to shipyard, Irving Shipbuilding in Halifax.

During his tenure as navy commander, Norman was also at the forefront of the decision by the former Conservative government to sole-source the lease of a navy replenishment ship from Federal Fleet Services Inc., which runs the Davie Shipyard in Levi, Que.
Probe began under Tories

The investigation into the alleged leak has been underway for some time and pre-dates the current Liberal government, according to one well-placed source.

Asked for comment, the RCMP said it "does not generally confirm or deny who or who may not be subject of an investigation."

"This is done to protect the integrity of an investigation, the evidence obtained and the privacy of those involved," Sgt. Julie Gagnon said in an email.

Military police said Monday they have not conducted a probe into Norman's activities, nor were they co-operating with an outside law enforcement agency, which has been the practice in previous national security cases.

Although the RCMP are apparently not bound by law to inform the military that one of their own was under investigation, the Mounties have served notice as courtesy in the past.

Additionally, whenever National Defence — or other federal departments — suspect a leak, an internal review is carried out by the department's security officer. There is no indication whether that took place in this instance.
High stakes

Dave Perry, an analyst at the Canadian Global Affairs Institute, said the stakes are high for Canada, particularly among its allies that share information with the federal government.

He said they'll need to be reassured, but cautioned the investigation needs to take its course.

"I think our allies will be asking us what's going on and basically they'll want to see what happens with the actual investigation that's underway," he said.

Late Tuesday, Vance, who is overseas in military meetings, attempted to address the growing controversy.

"I understand there is a great deal of speculation surrounding the circumstances that led to my decision with regards to Vice-Admiral Mark Norman," he said in a statement. "For privacy considerations I am unable to provide further information."

Prime Minister Justin Trudeau was asked about the controversy on Tuesday during his town hall in the Maritimes. He refused to discuss specifics, but said he backed the military's decision to suspend Norman.

"The chief of defence staff took a decision and this government supports Gen. Vance in the decision that he took, and I have nothing further to say on this at this time," Trudeau said.

Public Safety Minister Ralph Goodale was similarly reticent.

"I really can't make a comment at all," Goodale told CBC's Power & Politics.

On Monday, Norman, who was appointed to the post of vice-chief of defence staff last summer, was suspended but not stripped of his command.
National Defence remains silent

There has been no official explanation from National Defence for the unprecedented move.

No military commander in recent memory, at such a senior a level, has been told to relinquish his duties, according to several defence experts.

Officials in the chief of defence staff's office put out a statement characterizing Norman's removal as "temporary" and that his successor at the helm of the navy — Vice-Admiral Ron Lloyd — would step in on an interim basis and serve as vice-chief "effective immediately."

Under Defence Department procedures, Norman would have been given a letter detailing the allegations against him and he would have had 48 hours to respond.

The letter was apparently served to him Monday morning, but the internal directive ordering that he hand over his post was signed and dated on Friday.
Removal shocks colleagues

Sources say Norman was not in the office during the latter half of last week. The official explanation was that he was "working on a special project," but it is now believed that the crisis came to a head internally around that time.

His removal caught many at National Defence headquarters by surprise, with several key staff finding out news via media or social media.

Norman has a reputation as a no-nonsense straight-shooter.

He is overseeing an investigation into suicides and harassment at the Royal Military College in Kingston, Ont.

And in 2014, he led a crackdown on heavy drinking and partying by sailors during off-duty hours following a spate of embarrassing incidents.

Liberals select Thales for $5.2-billion AOPS Maintenance Program

By: David Pugliese, The Ottawa Citizen 

A subsidiary of French defence giant Thales has been selected for a $5-billion contract to maintain Canada’s new Arctic patrol vessels and supply ships, but according to documents obtained by the Ottawa Citizen, the Canadian government had earlier been warned by some officials at the Department of National Defence that its strategy of having one firm do maintenance for both fleets could cost taxpayers more money in the long run.

Pierre-Alain Bujold, a spokesman for Public Services and Procurement Canada, said Friday that all the bids received for the maintenance contract have been evaluated and the government will now enter into negotiations with the highest-ranked bidder. Despite the Liberal government’s vow of openness and transparency, the department declined to name the winning bid, citing reasons of commercial confidentiality.

But multiple industry sources say Thales Canada and was told in late December it had won the $5.2-billion project.

The deal would see the firm provide in-service support for an initial period of eight years, with options to extend services up to 35 years. Bujold said the actual contract is expected to be awarded in the fall of 2017. “If the parties cannot reach an agreement on the financial aspects of the contract within an allocated 45 calendar days, the GoC will invite the next highest ranked bidder to enter into negotiation,” he added.

The first Arctic Offshore Patrol Ship is being built by Irving on the east coast and is expected in 2018. Construction has yet to start on the two new Joint Support Ships. The first of those supply ships, to be built by Seaspan in Vancouver, is expected in 2021.

Thales Canada did not respond to requests for comment.

The Canadian government announced in July it was seeking bids from companies to repair and maintain the two new fleets over a 35-year period.

But some Department of National Defence officials warned the government years ago that selecting one company for a single in-service support (ISS) contract covering two types of ships could give one firm too much control and end up being more costly. “A single ISS provider may assume a ‘take it or leave it’ attitude at the time of contract option renewal, forcing prices up,” warned an April 2012 DND briefing note for then-deputy minister Robert Fonberg.

A dispute with the contractor could also force the Royal Canadian Navy to resort to conducting maintenance and support for the ships on a piecemeal basis, a development that would affect its operations, added the briefing obtained by the Citizen.

DND also warned that not all companies would be happy with such a strategy as it would take a significant amount of business out of competition for a long time. Other DND officials, however, argued that the single contract strategy would work and any risks could be handled by increasing the level of oversight on the deal.

Last year, the government said the competition to pick one firm to provide in-service support, including refit, repair and maintenance and training for the two fleets, would benefit Canadian industry and the public. “By combining the Arctic Offshore Patrol Ships and Joint Support Ships In-Service Support into one contract, we ensure the effective maintenance and support of these fleets over their operational lives,” Judy Foote, the Minister of Public Services and Procurement, said at the time.

The federal government also noted, “that combining the contracts for the AOPS and JSS In-Service Support under a single contractor will benefit industry by increasing workforce stability and benefit Canadians by reducing costs through economies of scale.”

Industry sources say there is no need for the intense secrecy about Thales being the top bidder since the news has circulated over the last couple of weeks among various companies. They warn that there is a growing pattern of secrecy over defence purchases at Public Services and Procurement Canada.

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.

The Dismal State of Canada’s Navy

By: Claudia Nieroda, The NATO Association of Canada 

Canada’s navy is in deep, troubled waters. With the nation’s last destroyer retiring in 2017, we will be left without any large warships capable of defending and resupplying the remains of our naval fleet. The wear and tear, in addition to soaring replacement costs, has seen many ships decommissioned without timely replacements. The rusted decades-old ships that have persevered are prone to frequent mechanical breakdowns. Consequently, the Royal Canadian Navy today is ranked by Ken Hansen on the Canadian Naval Review as on the same level as Bangladesh’s maritime forces.

The National Shipbuilding Procurement Strategy (NSPS) was launched in June 2010 by the Harper Government in an attempt to restore the navy to its former glory. Following World War II, Canada had the fifth largest navy, but years of neglect left it in a disintegrated state. There remain a total of 29 warships, meaning vessels equipped with missiles and military weapons designed for combat and defense purposes. Canada’s last destroyer, the HMCS Athabaskan, is scheduled to retire in 2017, with no plans for another destroyer to replace it. With the largest coastline in the world and three oceans to patrol, the lack of naval armada is alarming.

The NSPS is meant to build, repair, and maintain the federal fleet. However, it does not appear that it is living up to its promise to bridge the significant gap that has been formed in Canada’s navy. Constant delays, budget cuts, and increasing production costs keep the NSPS from carrying out what it planned to do according to the original timeline.

Only six out of thirteen current icebreakers are capable of polar operations, but none are able to travel far in the Northern seas during the winter months. The NSPS commissioned the construction of a new icebreaker, the CCGS John G. Diefenbaker, which was initially expected to be in service by 2017, but a series of delays will now have the ship joining the fleet in 2022. The government has issued an order for new Arctic/ Offshore Patrol Ships, such the HMCS Harry DeWolf, but the first of these will not be delivered until 2018. This means that the Arctic passages, such as the Northwestern Passage, will continue to be unsupervised and isolated during the winter season.

Budget cuts have led to what was supposed to be an Arctic deep-water port in Nanisivik, Nunavut, turned from a naval base into a refueling station. This refueling station will only be accessible during the few summer months and closed during the rest of the year. When the HMCS Harry DeWolf is ready to enter service, it will not have an Arctic base to operate from.

Currently, the navy is ill-equipped to meet the various treaty commitments with Canadian allies. It is unreasonable to assume foreign countries would be willing to protect Canada if it is common knowledge that the nation’s navy will be unable to come to their defense. This reputation may be detrimental to Canada’s security.

The importance of the navy is not just fundamental in the ability to defend freedom. While that is a crucial factor in today’s erratic global affairs, it is important that Canada’s navy be prepared to respond to natural disasters and humanitarian crises. For instance, if any civilian ship, such as the ferries that move passengers between Labrador and Newfoundland or Vancouver and Victoria, were to signal a distress call, the lack of naval units might lead Canada to depend on the U.S. Navy Coast Guard to back up the Canadian Coast Guard. If an earthquake struck one of the islands off of British Colombia, such as Haida Gwaii, similar problems might arise.

The navy is simply not equipped to respond to multiple crises at home, never mind additional crises abroad. The Canadian government would be hard pressed to fulfill the agreements with their treaty partners and allies in the defense capability, nor in humanitarian aid. It is crucial that Canadians do not take the reputation as a “peaceful” country for granted as geopolitical security can never be guaranteed. The NSPS needs to focus on the present state of the navy and how to expedite the planned improvements. We cannot simply wait 10 years for ships to be constructed; we need them now.

----
 Nieroda Claudia Nieroda graduated from the University of Guelph with an Honours Bachelor of Arts in Political Science. Throughout her undergrad career, she participated in an exchange at the National University of Singapore, taking courses extensively in the field of International Relations. In her final year, she successfully wrote and defended a thesis paper exploring the advantages of soft-authoritarian regimes in South East Asia in terms of political and economic development. Claudia loves adventure and travel, visiting over 35 countries and 5 continents, and is currently pursuing a career in the field of international relations.

Irving facing significant challenges in building Arctic Offshore Patrol Ships

By: David Pugliese, Defence Watch with The Canadian Press

Assembly of Canada’s first Arctic offshore patrol ship on time and within budget is proving to be a “significant challenge” for the Irving Shipyard, though its top executive says a promised deadline will be met, the Canadian Press writes.

Here is the rest of the Canadian Press article:

Kevin McCoy said Wednesday his firm still plans to deliver the first of the ships designed to steam off Canada’s northern coasts in 2018, as originally announced.

However, he told reporters at a defence industry conference in Halifax that his firm’s efforts to create North America’s most modern shipyard from the ground up hasn’t been easy.

“Now I’ll tell you, starting a shipyard up from scratch … all new software, new training, over 700 new procedures in place, establishing a supply chain for shipbuilding in Canada, all of that is a significant challenge,” he said.

He also said he realizes that the new Liberal government is observing his company’s progress on the offshore patrol ships as precursor to the yet-to-be finalized contracts for the replacements for Canada’s aging warships.

That project could sustain the yard for the next two decades.

“Clearly it’s a confidence builder for the Canadian government. The Arctic ships are a great warmup to the Canadian surface combatant,” said McCoy, standing before a model of the ships conceived of by the Harper government.

Observers of the procurement process say the Liberal government has been looking for ways to curb costs on the Arctic patrol vessel program.

Michael Byers, a professor of political science at the University of British Columbia, says Ottawa will likely have to scale back on promises to create six to eight of the Arctic patrol vessels and 15 warships to replace much of Canada’s bluewater fleet.

The original 2011 shipbuilding strategy announced by the Harper government was an umbrella agreement that designated the Irving shipyard in Halifax and the Seaspan shipyard in British Columbia as the two locations.

However, the specific deals on how many ships will be completed is the subject of contracts being worked out between the yards and the Trudeau government.

Byers, who closely follows defence procurement, says the resurrection of the Davie shipyard in Levis, Que., has given National Defence a possible alternative where some of the shipbuilding work could be shared out – putting some pressure on the prime contractors to fulfil timelines and stay on budget.

Original projections put the cost of building 15 new vessels at $26 billion, but internal documents and reports published last fall suggest the bill could run as high as $40 billion, with the federal public works minister recently declining to provide updated figures.

Byers says the Arctic patrol ships are challenging because the Harper government chose to create a new type of vessel that no other country had built, which can lead to design challenges and delays.

“There will be real pressures to compromise on capabilities to keep costs down. The federal cabinet will be scrutinizing all of this closely,” he said.

Still, McCoy announced during his speech that the shipyard currently has 50 of the 64 modular pieces of the first Arctic patrol vessel, HMCS Harry Dewolf, in its facility, and it cut steel last month for the second vessel, HMCS Margaret Brooke.

The company has been trying to build public awareness of shipbuilding’s importance to the Canadian economy, billing itself as being the key to a sustainable national shipbuilding industry that will avoid previous boom and bust cycles.

The company handed out a glossy brochure Wednesday that highlights that the company has hired over 1,300 employees, and said the magazine will be distributed to every household in Halifax to increase awareness of progress at the yard.

Harper announced his plans for Arctic vessels during the 2006 federal election campaign, saying the Tories would build three armed icebreakers.

This promise was later transformed to six to eight Arctic offshore patrol vessels and a refueling berth in the Arctic.

(the above was written by the Canadian Press)

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.

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

Davie shipyard submits unsolicited $1B bid on Liberals to build icebreakers

The battle over building Canada's future Navy, Coast Guard, and Icebreakers just got even uglier. Davie, who is currently converting the Asterix into a Resolve-Class AOR for the Navy, says it can do the same for the Coast Guard, and Icebreakers that Canada needs, for $1 billion - nearly $1 billion cheaper than currently awarded to Seaspan. 

Here is the rest of the article. 

By: Murray Brewster, The National Post

OTTAWA — An unsolicited bid — potentially worth up to $1 billion — to provide icebreakers and multi-purpose ships for the coast guard was submitted to the Trudeau government late last month, The Canadian Press has learned.

The proposal by Quebec-based Chantier Davie Canada Inc. has the potential to undercut one pillar of the national shipbuilding strategy, which delegates the construction of civilian ships to Vancouver’s Seaspan shipyard.

In a presentation to Public Services and Procurement Canada, Davie is partially reviving a pitch made to the former Conservative government in 2013, where it offered to a construct a Polar Class 3 icebreaker and deliver it in 18 months.

The latest bid offers not only that, but three smaller so-called River-class icebreakers and two multi-purpose ships, which could be used for scientific research, border patrol of search and rescue.


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The pitch involves converting three different types of vessels which Davie already has under construction — or can be obtained on the international market “at highly affordable prices.”

Some of the ships were being built for the offshore oil and gas sector, but the collapse in energy prices has led to their cancellation.

“This is a fast-track solution providing enhanced capabilities at a fraction of the newbuilding (sic) price,” said the proposal.

Davie says its ships can be delivered at 60 per cent of the cost of the current program with Seaspan and gives the federal government the option of either buying or leasing the vessels.

The prices are blacked out from a copy of the Feb. 24 cover letter to Public Services and Procurement Minister Judy Foote, which was obtained by The Canadian Press. But officials, speaking on background because they’re not authorized to talk to the media, say the pitch adds up to at least $1 billion, depending on the options chosen.

Alex Vicefield, CEO of Davie’s parent company, said the pitch “has been very well received,” but would not go into detail.

Public services and procurement spokesman Pierre-Alain Bujold would not confirm receipt of the proposal but did say the government has not issued a request for proposals for icebreakers and reaffirmed the department’s commitment to the overall shipbuilding program.

Vicefield said there is a business opportunity but also an important public policy issue at stake.

“We come from the international marine industry where we have to be innovative and lean to compete,” he said Wednesday.

“When we see a situation which is clearly facing all kinds of problems and we have solutions which can save our client many hundreds of millions of dollars and receive an even better product faster, it would not be in anyone’s interest to hold back.”

Davie used a similar approach to the federal government when it pitched — and won — a multimillion-dollar contract to provide the navy with a temporary supply ship. The former Harper government had to amend cabinet rules in order to allow the sole-sourced contract to go through.

Both Seaspan and Halifax-based Irving Shipyards, the other company in the national shipbuilding program, protested and the Liberals, shortly after being elected last fall, temporarily put the plan on hold. They relented and Davie has already begun the modifications for the leased ship.


The worst thing we could do is to stop, alter or otherwise change the (National Shipbuilding Procurement Strategy) before it’s actually really gotten underway

Jonathan Whitworth, the CEO of Seaspan, said the new bid is an attempt to undermine the shipbuilding program, where the fundamental premise was to establish only two go-to shipyards in the country — one for combat, the other for civilian vessels.

“The worst thing we could do is to stop, alter or otherwise change the (National Shipbuilding Procurement Strategy) before it’s actually really gotten underway,” he said in an interview Wednesday.

One of the biggest criticisms of the program, which was launched in 2011, is that it has yet to produce a single ship, something the Davie proposal plays on in its presentation by referencing the age of the current decades-old fleet.

“What has become increasingly evident is that it would be considerably more cost-effective and considerably better for the men and women of the Canadian Coast Guard to fully replace these over-aged vessels,” said the presentation.

Whitworth would not discuss the potential legal ramifications of the Liberals running with the Davie proposal. But he said if the federal government was looking for stop-gap ships until Seaspan delivered, then it should allow an open competition among all the shipyards in Canada rather than a “sole-source gift” as the previous government did with the navy supply ship.