Defence and Marine Procurement: General accomplishments—Committees of the Whole—July 8, 2020

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Context

Suggested responses and background information is provided on defence and marine procurement accomplishments.

Note

Questions on defence procurement delays or the Department of National Defence (DND) order paper questions should be directed to the minister of National Defence.

Suggested response

• Canada’s defence policy: Strong, Secure, Engaged, reaffirms the government’s commitment to ensure that Canada has an agile, multi-purpose military and that members of the Canadian Armed Forces are well equipped. We are delivering on this commitment
• Over the last 18 months, significant progress has been achieved on major defence and marine procurement projects and activities

This includes:

• in February 2019, through our National Shipbuilding Strategy, Lockheed Martin Canada was selected for the design of 15 new Canadian surface combatants that will be built at Irving Shipbuilding’s Halifax Shipyard
• in May 2019, we announced a $15.7 billion investment to renew the Canadian Coast Guard (CCG) fleet, which will include 16 multi-purpose vessels and 2 Arctic and offshore patrol ships
• on July 23, 2019, Public Services and Procurement Canada (PSPC) released the formal request for proposal (RFP) to eligible suppliers. Suppliers have until July 31, 2020 to submit their proposal
• in summer 2019, contracts worth a combined total of $1.5 billion were awarded to Chantier Davie, Seaspan’s Victoria Shipyards and Irving Shipbuilding for the maintenance work on the 12 Halifax-class frigates until the replacement Canadian surface combatant ships are delivered
• in September 2019, we awarded a contract to acquire 360 armoured combat support vehicles that will integrate with and support the existing platform currently in use by the Canadian Armed Forces
• in December 2019, the first CC295 search and rescue aircraft was accepted in Seville, Spain and remained in Spain for qualification testing
• in December 2019, Chantier Davie pre-qualified to become the third strategic partner under the National Shipbuilding Strategy. The selected shipyard will build 6 new program icebreakers for the CCG
• the first 2 offshore fisheries science vessels, the CCGS Sir John Franklin and the CCGS Capt. Jacques Cartier, were delivered to the Coast Guard in 2019
• in June 2020, the joint support ship build contract was awarded. This contract will allow the construction, testing, commissioning and delivery of two Joint Support Ships
• in June 2020, we announced the award of an in-service support contract to Fleetway Inc. of Halifax, Nova Scotia. Valued at $72.6 million for the first 6 years, with options to extend for up to 22 years, this contract will provide a full range of technical data management and systems engineering support services for the Royal Canadian Navy’s fleet of Halifax-class ships
• on June 30 and July 3 2020, the 2 new challengers were accepted in Montreal, Quebec

If pressed on delays in defence procurement projects:

• over two thirds of projects under Strong, Secure, Engaged are in the implementation phase, near completion, or completed
• for example National Defence has provided the Canadian Army with medium support vehicle systems which are currently deployed in Latvia
• additionally, the Royal Canadian Navy’s Halifax-class frigates have been modernized and deployed overseas

Background

Major progress on defence and marine procurements over the last 18-months include:

• design selection for Canadian surface combatant:
  • the Canadian surface combatant (CSC) project is the largest, most complex procurement undertaken by the Government of Canada, with a total estimated project budget of $56 billion to $60 billion
  • in February 2019, the Government of Canada and Irving Shipbuilding selected Lockheed Martin Canada for the design of 15 new CSCs that will be built at Irving Shipbuilding’s Halifax Shipyard. The CSC design will be based on BAE’s type 26 global combat ship
  • the Government of Australia has also selected the type 26 design as the basis for its Hunter class warships
  • in early November 2019, Irving Shipbuilding and Lockheed Martin Canada were authorized to progress to the preliminary design phase of the design process. Preliminary design is the second of the 4 design phases
• acquisition of 360 light armoured vehicles:
  • on August 16, 2019, in support of Canada’s defence policy Strong, Secure, Engaged, the Government of Canada announced its intention to acquire up to 360 armoured combat support vehicles (ACSVs) and that it was in the advanced stages of negotiating a contract, through a non-competitive process
  • on September 5, 2019, Public Services and Procurement Canada (PSPC), on behalf of National Defence, awarded a contract to General Dynamics Land Systems—Canada (GDLS-C) valued at approximately $2 billion for 360 ACSVs, initial spare parts, technical manuals, and training
• release of the RFP for the future fighter capability project:
  • this procurement is a once in a generation opportunity to support the growth of Canada’s aerospace and defence industries for decades to come
  • the government has delivered on its promise to launch an open and transparent competition to replace Canada’s fighter fleet and continues to make progress on its purchase of 88 advanced jets
  • on July 23, 2019, Public Services and Procurement Canada (PSPC) released the formal RFP to eligible suppliers. Suppliers have until July 31, 2020 to submit their initial proposals
  • a contract award is anticipated in 2022, and the first replacement aircraft delivered as early as 2025
• two Transport Canada ferries to be built at Chantier Davie:
  • an advance contract award notice (ACAN) was issued on May 22, 2019, signalling the Government of Canada’s intention to enter into a contract with Chantier Davie for the construction of two new ferries for Transport Canada. Other interested suppliers had 15 calendar days to submit a statement of capabilities to show they met the requirements laid out in the ACAN. None were submitted
  • the contract value and construction timelines will be determined once negotiations with the shipyard are completed
  • on June 19, 2019, the Government of Canada announced that it was entering into contract negotiations with Chantier Davie of Lévis, Quebec, for the construction of the vessels
  • on November 14, 2019, Lengkeek Vessel Engineering Inc. and Knud E. Hansen A/S Naval Architects (joint venture) were awarded a $3.1 million contract to provide expert advice and technical oversight to Transport Canada throughout the project leading to and including the construction
  • on November 26, 2019, the Government of Canada awarded a contract to Chantier Davie, estimated at $1 million, for initial project work related to the construction. This includes, but is not limited to, establishing a project management office and initiating various engineering studies to support design and construction of the new vessels
• interim ferry:
  • on July 2, 2020, the Government of Canada issued an advance contract award notice (ACAN), signalling its intention to purchase the Motor Vessel Villa de Teror as an interim measure to replace the Motor Vessel Madeleine until the new vessel being built at Davie is ready for service. Recent inspections on the Motor Vessel (MV) Madeleine showed substantial investments and repairs would be required to keep the vessel in service. The interim solution is required to ensure continued reliable, predictable, and safe ferry service to the residents of Îles-de-la-Madeleine
• selection of a third Canadian shipyard under the National Shipbuilding Strategy to build 6 program icebreakers for the Canadian Coast Guard (CCG):
  • in order to respond to evolving federal shipbuilding requirements, PSPC is carrying out a process to select a third strategic partner shipyard under the National Shipbuilding Strategy (NSS). The selected shipyard will build 6 new program icebreakers for the CCG
  • in December 2019, Chantier Davie pre-qualified in the first stage of the process to become the third strategic partner under the NSS. Chantier Davie has moved on to the RFP and evaluation stage. This will include a third-party assessment of the shipyard’s infrastructure, submission of a formal proposal, and a due diligence process to ensure the shipyard is financially capable of performing the work and making any necessary upgrades to its infrastructure
  • an umbrella agreement is expected to be in place with a third shipyard in early 2021
• 16 multi-purpose vessels for the CCG to be built at Vancouver Shipyards:
  • on May 22, 2019, the Government of Canada announced a $15.7 billion investment to renew the Canadian Coast Guard fleet, in order to ensure capacity to deliver important services for Canadians. This includes building up to 16 multi-purpose vessels (MPVs)
  • construction of the MPVs is expected to start in the mid-2020s, following the completion of the second joint support ship
  • a run of up to 16 vessels will provide an opportunity for Vancouver Shipyards to generate efficiencies and economies of scale, as well as ensure greater workforce stability and minimize gaps in production
• seventh and eighth arctic and offshore patrol ships for the CCG:
  • on May 22, 2019, the Government of Canada announced a $15.7 billion investment to renew the Canadian Coast Guard fleet, in order to ensure capacity to deliver important services for Canadians. This includes building 2 arctic and offshore patrol ships (AOPS) for the CCG
  • the 2 new AOPS (7&8), to be built by Irving Shipbuilding, will be adapted for the CCG to perform a range of critical missions, including Northwest Atlantic Fisheries Organization patrols
• resequencing of the non-combat package:
  • the Government of Canada has made a decision to re-sequence construction of the joint support ships (JSS) and offshore oceanographic science vessel (OOSV) at Seaspan’s Vancouver Shipyards
  • under the revised sequencing, Seaspan will complete construction on JSS 1, followed by the OOSV and then JSS 2. This will allow for uninterrupted transition from early block construction to full production on JSS 1
  • given the complexity of this build, this change in sequencing will ensure focused engineering resources on each of the projects, while allowing for time between construction of the first and second JSS to incorporate lessons learned. Moreover, this allows for uninterrupted work at the shipyard, mitigating the risk of potential layoffs. This is a prime example of how the NSS allows us to be flexible in meeting Royal Canadian Navy and CCG requirements, while finding efficiencies at shipyards
• acquisition and conversion of 3 medium icebreakers for the CCG:
  • on December 14, 2018, the CCG accepted into service the first of the 3 medium icebreakers being refit by Chantier Davie, the CCGS Molly Kool
  • the second and third vessels will be in service in 2020. The names of the second and third icebreakers were announced on April 30, 2019: the CCGS Jean Goodwill and the CCGS Vincent Massey
• invitation to qualify (ITQ) for the Future Aircrew Training Program:
  • through an open and transparent competition, the Government of Canada is taking the necessary steps to renew its existing aircrew training services
  • the Future Aircrew Training (FAcT) Program has been put in place to develop and implement a new and cohesive training program that replaces the Canadian Armed Forces’ current pilot, air combat systems officer (ACSO), and airborne electronic sensor operator (AES Op) training systems
  • in December 2018, Canada established a list of qualified suppliers that demonstrated their ability to meet Canada’s needs, as defined in the ITQ
  • A draft RFP is expected to be released in fall 2020
  • the formal RFP is expected to be released in spring 2021
  • industry engagement will continue until release of the final RFP
• ITQ for the Victoria-class in-service support contract II:
  • through an open and transparent competition, the Government of Canada is renewing the in-service support contract for the Royal Canadian Navy’s Victoria class submarine fleet
  • Canada has a fleet of 4 submarines that were purchased, used, from the UK in the early 2000’s
  • an ITQ closed January 8, 2020 and we are evaluating the responses received. Successful ITQ respondents will be part of the industry consultation group that will lead to the finalization of the RFPs
  • Babcock Canada Inc. is the current prime contractor and the current contract will remain in place until June 2023, if all option years are exercised. Victoria Shipyards Limited of Victoria, British Columbia is one of the principal subcontractors to Babcock
• ITQ for remotely piloted aircraft systems:
  • through an open and transparent competition, the Government of Canada is taking the necessary steps to procure an armed medium altitude long endurance remotely piloted aircraft system (RPAS)
  • this new capability will provide intelligence, surveillance, target acquisition, reconnaissance and precision strike capabilities to the Canadian Armed Forces in support of operations domestically and abroad
  • in May 2019, Canada established a list of qualified suppliers that demonstrated their ability to meet Canada’s needs, as defined in the ITQ
  • industry engagement will continue until summer 2021 to refine the requirements
  • a draft RFP is expected in fall 2020
  • the formal RFP is expected in winter 2021
• ITQ for logistics vehicle modernization project:
  • through an open and transparent competition, the Government of Canada is taking the necessary steps to revitalize and replace Canada’s light and heavy logistics vehicle capabilities 
  • in July 2019, Canada established a list of qualified suppliers that demonstrated their ability to meet Canada’s needs, as defined in the ITQ
  • industry engagement will continue until summer 2021 to refine the requirements
  • a draft RFP is expected in summer 2020
  • the formal RFP is expected in summer 2021
• delivery of offshore fisheries science vessels:
  • the first 2 offshore fisheries science vessels, the CCGS Sir John Franklin and CCGS Capt. Jacques Cartier, were delivered to CCG in 2019. Delivery of the third vessel is expected in summer 2020
• Halifax-class frigates work period contracts awarded:
  • the Royal Canadian Navy currently operates 12 Halifax-class ships:
    • 7 ships are assigned to Maritime Forces Atlantic
    • 5 are assigned to Maritime Forces Pacific. The Navy intends to continue operating these ships for approximately another 2 decades, until the Canadian surface combatants are delivered
  • in 2016, extensive industry engagements, along with market survey processes, identified 3 Canadian shipyards capable of performing the level of maintenance services needed to support the frigates through to the end of life
  • advance contract award notices were issued to Irving Shipbuilding, Chantier Davie, and Seaspan’s Victoria Shipyards in November 2018
  • in July 2019, 2 contracts totalling $1 billion were awarded to Victoria Shipyards and Chantier Davie. In August 2019, a $500 million contract was awarded to Irving Shipbuilding. The contracts are expected to rise in value to over $7.5 billion as additional work packages are added
  • work is planned to begin in August 2020, when Chantier Davie will commence maintenance work on the Ville de Quebec
  • in June 2020, Canada announced the award of an in-service support contract to Fleetway Inc. of Halifax, Nova Scotia. Valued at $72.6 million for the first 6 years, with options to extend for up to 22 years, this contract will provide a full range of technical data management and systems engineering support services for the Royal Canadian Navy’s fleet of Halifax-class ships
• award of joint support ship build contract:
  • the JSS project will deliver 2 support vessels to the Royal Canadian Navy to supply other ships with fuel, ammunition, spare parts, food and water. These ships, which are being built by Seaspan’s Vancouver Shipyards, will also provide a home base for maintenance and operation of helicopters, a limited sealift capability, and support to forces deployed ashore
  • award of the JSS build contract was announced on June 15, 2020. This contract will allow the construction, testing, commissioning and delivery of the 2 JSS
  • construction of early blocks for the first JSS is underway. Delivery of the first ship is expected in 2023. The second ship will begin construction after the offshore oceanographic science vessel, and delivery is expected in 2025

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