Originally Published by David Pugliese,
Now this statement was issued Monday by the Shipbuilding Association of Canada after Irving put out a statement that suggested it would have been in a position to build the interim supply ship:
In December 2014, Canada sought proposals for the provision of At-Sea Support Services. These were published on the government’s procurement portal, where the entire Canadian and international marine industry were invited to offer solutions to Canada’s urgent operational requirement for an interim Auxiliary Oiler Replenishment ship service.
Subsequently, the Royal Canadian Navy, the Department of National Defence, and Public Works and Government Services Canada issued a detailed set of requirements from which bidders would present their proposals. Multiple Canadian and international proposals were received. Following an extensive consultation period lasting for six months and subsequent evaluations by those departments, Canada selected the Davie proposal on its merits ahead of other domestic and international bids.
The Resolve-Class AOR design will provide a full replacement of the legacy Protecteur-class AORs. At a reported build cost of around $400m, the Resolve-Class AOR represents great value-for-money compared to a new ship at around $1.5bn. Davie’s pan-Canadian supply chain provides significant economic benefits for the entire shipbuilding industry, including Aecon Pictou, a first tier subcontractor who will build multiple sections of the ship in Nova Scotia.
This was a fair process open to all industry, which followed common sense and resulted in one of the most successful shipbuilding procurements for decades. It demonstrated that Canada is indeed able to fast-track programs when vital for national security. The urgency of the situation required the Department of National Defence and Public Works and Government Services Canada to react expeditiously, efficiently and fairly which they did during the six months of deliberations and evaluations prior to contract award.
The Shipbuilding Association of Canada is surprised and disappointed at claims emanating from certain shipyards – which claim to be at maximum capacity with their federal shipbuilding programs – that they could in some form contribute to the solution in a timely manner and which would not impact further their existing programs.
With claims of being at maximum capacity, Seaspan Ferries placed an order for two ferries for use in Canadian waters, to be built in Istanbul, Turkey. Similarly, Atlantic Towing – a JD Irving company – has recently resorted to building their own ships, for use in Canada, in Galati, Romania.
The association strongly recommends that the government do not delay the signing of the contract for this urgent operational requirement. It has been awarded fairly and with due process.
The association is encouraged by statements from the new government of Canada, late on Friday, that there would be no delay and a positive outcome is expected according to the relevant agreement.
Showing posts with label iAOR on HOLD. Show all posts
Showing posts with label iAOR on HOLD. Show all posts
Monday, November 23, 2015
Project Resolve: Irving Claims to have Cheaper/Faster Solution for iAOR
In the drawn out saga-drama that has been the Royal Canadian Navy's attempt top build a new surface fleet - we have hit yet another delay.
Irving was awarded the billion dollar contract to build the Canadian Surface Combatant (CSC) Fleet, the new Arctic Offshore Patrol Ships, and new Coast Guard Ice Breakers - yet they are upset that they were not chosen to build the interim Auxiliary oil replenishment vessel (iAOR) for the RCN.
The new Queenston-Class AORs are not set to be complete (being built by Irving) until 2021/22. Until then the RCN has no AOR capability and has been leasing Spanish and Chilean AORs to fill the role.
Davie Shipbuilding in Levis, Quebec; one of Canada's largest shipbuilding companies (who built most of the previous RCN fleet) was selected to convert a boxship into an AOR for the Navy. Davie would maintain ownership of the vessel and lease it to the RCN for a period believed to be 7 years, at a cost of $700 million.
Irving sent a letter to the new Liberal cabinet last week and asked them to stop the program and review it. Here is what Irving said:
The letter, obtained by the National Post, is dated Nov. 17. It asks for a pause and review. Two days later, last Thursday, cabinet ordered the pause and review.”In October 2014 Irving Shipbuilding was asked by the Royal Canadian Navy to propose an interim refueling and resupply capability. We assembled an international team of naval and commercial shipping experts to tackle the problem. This included my own experience as a former Vice Admiral in the United States Navy responsible for all ship design, construction, maintenance and conversion in a Navy of almost 300 ships and submarines.
"Our focus was on providing maximum capability with minimum risk, cost, and completion schedule by limiting the amount of conversion required for an existing ship. Early on, we rejected a container ship as too expensive and too risky to convert especially in the relatively short time requested by the government for rapid reconfiguration to meet the immediate needs of the Royal Canadian Navy. The Roll On–Roll Off (RORO) ship selected by Irving Shipbuilding for conversation starts with the right ship to provide tremendous capability, adaptability, and best value to Canada.
"Our proposal includes the ability to refuel two ships simultaneously; land, refuel and maintain helicopters; resupply dry stores and ammunition at sea; and supports modular medical, command and control, and berthing capability. Most importantly, we provide tremendous additional capability that is already inherent in our RORO ship that allows numerous large trucks, military vehicles, and emergency response vehicles to rapidly roll on and roll off via a large stern ramp and vehicle bays. This allows rapid response to humanitarian assistance and disaster relief emergencies at home and abroad, and provides logistics support to military forces ashore. A large open payload volume also already exists to allow for rapid, low cost reconfiguration of the ship to meet future mission needs.
"Our request has and continues to be for an open, merit-based evaluation of all proposals to ensure the best solution for the Navy and best value to Canadians."
Irving was awarded the billion dollar contract to build the Canadian Surface Combatant (CSC) Fleet, the new Arctic Offshore Patrol Ships, and new Coast Guard Ice Breakers - yet they are upset that they were not chosen to build the interim Auxiliary oil replenishment vessel (iAOR) for the RCN.
The new Queenston-Class AORs are not set to be complete (being built by Irving) until 2021/22. Until then the RCN has no AOR capability and has been leasing Spanish and Chilean AORs to fill the role.
Davie Shipbuilding in Levis, Quebec; one of Canada's largest shipbuilding companies (who built most of the previous RCN fleet) was selected to convert a boxship into an AOR for the Navy. Davie would maintain ownership of the vessel and lease it to the RCN for a period believed to be 7 years, at a cost of $700 million.
Irving sent a letter to the new Liberal cabinet last week and asked them to stop the program and review it. Here is what Irving said:
"Our focus was on providing maximum capability with minimum risk, cost, and completion schedule by limiting the amount of conversion required for an existing ship. Early on, we rejected a container ship as too expensive and too risky to convert especially in the relatively short time requested by the government for rapid reconfiguration to meet the immediate needs of the Royal Canadian Navy. The Roll On–Roll Off (RORO) ship selected by Irving Shipbuilding for conversation starts with the right ship to provide tremendous capability, adaptability, and best value to Canada.
"Our proposal includes the ability to refuel two ships simultaneously; land, refuel and maintain helicopters; resupply dry stores and ammunition at sea; and supports modular medical, command and control, and berthing capability. Most importantly, we provide tremendous additional capability that is already inherent in our RORO ship that allows numerous large trucks, military vehicles, and emergency response vehicles to rapidly roll on and roll off via a large stern ramp and vehicle bays. This allows rapid response to humanitarian assistance and disaster relief emergencies at home and abroad, and provides logistics support to military forces ashore. A large open payload volume also already exists to allow for rapid, low cost reconfiguration of the ship to meet future mission needs.
"Our request has and continues to be for an open, merit-based evaluation of all proposals to ensure the best solution for the Navy and best value to Canadians."
It sounds to me like Irving is upset that it did not get the additional $700 million when it already received the $26.2 Billion contract for the CSC Fleet. In my opinion, if the Queenston-Class AORs are not going to be ready until 2021 why would you further delay them buy building iAORs first? Irving should just get a move on building the Queenston-Class AORs.
Project Revolve is officially on hold at the government level, but Davie is still working on converting the Asterix into an AOR - and will be owed $89 Million on December 1st if the final contract is not signed; as the previous government entered into an initial agreement, which allowed Davie to begin working while the final contract was finalized.
Sunday, November 22, 2015
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."
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."
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