For immediate release
GATINEAU, Québec, April 21, 2008 - The Minister of Public Works and Government Services, Michael M. Fortier, and the Minister of National Defence and Minister of the Atlantic Canada Opportunities Agency, Peter Gordon MacKay, today announced that the Government of Canada has awarded two contracts, one to Halifax Shipyards, Nova Scotia, with a value of $549 million, and the other to Victoria Shipyards Company Limited, British Columbia, with a value of $351 million, for the on-going maintenance and refit of Canada's 12 frigates.
"These contracts, which are the result of an open, fair and transparent procurement process begun in April 2007, will create many local jobs and help stimulate the economies of the Pacific and Atlantic regions," said Minister Fortier, adding, "They will reinforce a centre of excellence for the frigates on each coast and reduce the risk of relying on foreign shipyards. Canada depends on a qualified work force to repair vessels."
The contract to Halifax Shipyards is for the on-going maintenance and repair of seven frigates on the east coast of Canada. At its peak, it is expected to maintain and create up to 600 local jobs.
The contract to Victoria Shipyards Company Limited is for the on-going maintenance and refit of five ships on the west coast. It is expected to create up to 110 local jobs and to help maintain an additional 450 jobs.
"The modernization of the Halifax Class frigates will ensure the Navy maintains its operational capability," said the Honourable Peter Gordon MacKay, Minister of National Defence and Minister of the Atlantic Canada Opportunities Agency. "It will also ensure Canadian sailors have the best available equipment to continue ensuring the safety of our waters and ongoing cooperation with our allies."
Each contract is valid for a period of 12 years from the date the contract is awarded. If the refit options are exercised, both shipyards will need to complete the refit work of each vessel within a 12-month operational window allotted to that vessel.
The Halifax Class frigates were built in early 1990 and now require upgrades and systems modernization, particularly in the areas of marine engineering, command, control and combat systems.
Both Victoria Shipyards and Halifax Shipyards will be required to provide Industrial Benefits equal to 100 per cent of the total value of their respective contracts.
"Through the industrial benefits policy, we are ensuring that every contract dollar awarded is invested back into the Canadian economy," said Minister Fortier. "The contractors have committed to generating high-quality, lasting economic activity in the Canadian economy."
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For further information, please contact:
Frédéric Baril
Press Secretary
Office of Minister Fortier
613-868-1128
Jay Paxton
Press Secretary
Office of Minister MacKay
613-996-3100
Media Relations
Public Works and Government Services Canada
819-956-2315
Media Liaison Office
Department of National Defence
613-996-2353/2354
PWGSC news releases are also available on our Internet site at: www.tpsgc-pwgsc.gc.ca/medias-media/index-eng.html.
The Halifax Class Modernization Frigate Life Extension (HCM/FELEX) Project is a program (estimated at about $3.1 billion) aimed at the mid-life modernization of the 12 Halifax Class frigates. The frigates were built in early 1990 and now require upgrades and systems modernization, particularly in the areas of marine engineering, command, control and combat systems.
The HCM/FELEX project involves frigates located on both coasts (seven on the east coast and five on the west coast). There are five major contract elements that are essential to its success:
- Two Multi-ship Refit contracts being announced today (one awarded to Victoria Shipyards and one awarded to Halifax Shipyards). These contracts will involve the on-going maintenance and refit of Canada's 12 frigates. The first contract, awarded to Halifax Shipyards, Nova Scotia, has a total estimated value, including options, of $549 million. The second contract, awarded to Victoria Shipyards Company Limited, British Columbia, has a total estimated value, including options, of $351 million.
- These two contracts, related to the frigates will be awarded later this year.
- A Combat Systems Integrator (CSI) contract estimated at $1.1 billion. The contract will involve the upgrade of the command and control system of the 12 frigates, a redesign of the operations room and reconfiguration of the ships' mast to accommodate a new radar suite. A Request for Proposal (RFP) for this contract was issued in February 2008, with a contract award expected in fall 2008.
- A separate contract estimated at $300 million for the provision of long-term in-service support for the Command & Control System (CCS). The RFP for this contract was incorporated in the same CSI RFP (see information above) issued in February 2008, with a contract award expected in fall 2008.
- The fifth contract is a Platform System Design Agent Contract valued at $150 million. This contract, awarded to Fleetway Incorporated in October 2006, is for the provision of numerous system engineering and technical documentation management services for the Halifax Class frigates.
The multi-ship refit contract will involve upgrading and modernizing the systems of Canada's 12 Halifax Class frigates in three phases.
- The initial phase consists of regularly scheduled maintenance and repairs to the frigates.
- The second phase involves the mid-life refit of the ships, which will be conducted in conjunction with the Combat System Integrator component.
- The third phase is the ships' regular maintenance and repairs following the refits until the end of each vessel's life expectancy.
The decision to proceed with each subsequent phase will be based on Canada receiving best value for each preceding phase.
On March 17, 2008, Victoria Shipyards Company Limited of British Columbia was awarded a contract for the on-going maintenance and refit of five frigates on the west coast. The contract has a total estimated value including options of $351 million. It is expected to create up to 110 local jobs and to help maintain an additional 450 jobs.
On March 31, 2008, Halifax Shipyards of Nova Scotia was awarded a contract for the on-going maintenance and refit of seven frigates on Canada's east coast. The contract has a total estimated value, including options, of $549 million. At its peak, it is expected to maintain and create up to 600 jobs.
Each contract will be valid for a period of twelve years from the date they are awarded.
As part of the RFP, Victoria Shipyards Co. Ltd and Halifax Shipyards each submitted a proposal confirming their compliance with the mandatory requirements and other criteria, including commitments for the provision of Industrial Benefits (IRB), equal to 100% of their respective contract values.
If the options are exercised, the shipyards will need to complete the refit work of each vessel within a 12-month operational window allotted to that vessel.
The award of the frigate maintenance and refit contracts follows a Solicitation of Interest and Qualification (SOIQ) issued on MERX, the government's electronic tendering process, in April 2007. Two companies, Halifax Shipyards and Victoria Shipyards, submitted responses that were evaluated to be in accordance with the mandatory requirements listed in the SOIQ. A Request for Proposal (RFP) was subsequently issued to both shipyards. Both companies submitted proposals in response to this RFP that were found to be compliant with the project's mandatory requirements and other criteria.
