Defence procurement: Committee of the Whole—August 12, 2020

Document navigation for "Committee of the Whole: August 12, 2020"

• Previous page
• Table of contents
• Next page

Defence and Marine Procurement: General accomplishments

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 31, 2020, Canada received proposals from all 3 eligible suppliers for the Future Fighter Capability Project
• 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. The contracts are expected to rise in value to over $7.5 billion as additional work packages are added
• 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 CCG in 2019
• in June 2020, the joint support ship build contract was awarded. This contract will allow the construction, testing, commissioning and delivery of 2 joint support ships (JSS)
• 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
• on July 31, the second and third fixed-wing search and rescue (FWSAR) CC295 aircraft were accepted in Seville, Spain
• on July 31, 2020, the first Arctic and offshore patrol ship was delivered and accepted by the Royal Canadian Navy

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
• proposal receipt from eligible suppliers 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, PSPC released the formal request for proposals to eligible suppliers. On July 31, 2020, Canada received proposals from the 3 eligible suppliers and entered into the evaluation phase of the procurement process
  • a contract award is anticipated in 2022, and the first replacement aircraft delivered as early as 2025
• 2 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 2 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, 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
  • the ACAN closed on July 20, 2020 and negotiations with the seller are ongoing
• 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 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 request for proposal (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
  • the final RFP was sent to Chantier Davie on July 29, 2020
  • 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
• 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 and 2021 respectively. 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 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 invitation to qualify
  • a draft request for proposal (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
• invitation to qualify 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 invitation to qualify 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 request for proposals (RFP)
  • 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 (BC)is one of the principal subcontractors to Babcock
• invitation to qualify 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 invitation to qualify
  • industry engagement will continue until spring 2021 to refine the requirements
  • a draft RFP is expected in fall 2020
  • the formal RFP is expected in spring 2021
• invitation to qualify 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 invitation to qualify
  • industry engagement will continue until summer 2021 to refine the requirements
  • a draft will be released in 2 phases: phase 1 in July/August and phase 2 in late fall 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 fall 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

Status of defence procurement projects

Context

Due to COVID-19, several defence procurement projects have halted or slowed, including the construction and maintenance of ships.

Note

All questions related to challenger jets will be referred to the minister of National Defence.

Suggested response

• Our government is taking strong action to protect our economy, jobs, and the health and safety of Canadians during the global COVID-19 outbreak
• Canada will continue to monitor the situation, analyze potential impacts and explore all possible financial measures available to support the defence and marine industry and protect Canada’s long term national security interests
• We are currently assessing the impact of COVID-19 on the delivery of ongoing and future major procurement projects
• We urge all employers during this critical time to follow the recommendations of public health officials, so that workers are kept safe in this extraordinary situation

If pressed on the budget, delays and impact:

• given the uncertainties associated with the duration of COVID-19 and related strategies, it is premature to assess the overall schedule impact to projects
• that said, we recognize that COVID-19 has impacted the defence sector, and we will work closely with industry to mitigate budgetary and schedule impacts of existing procurements

If pressed on the Future Fighter Capability Project:

• Canada has received proposals from all 3 eligible suppliers on July 31, 2020 in response to the request for proposal released in 2019
• Canada is conducting the evaluation remotely in the wake of COVID-19 restrictions to minimize impact on the project schedule

If pressed on challengers:

• on June 5, 2020, Public Services and Procurement Canada (PSPC) awarded a $75 million US (plus applicable taxes) non-competitive contract to Bombardier Inc. for the acquisition of 2 new challenger 650 aircrafts including initial training, publications, maintenance equipment, spare parts to sustain 3 years of in-service support, and additional operational equipment. The contract does not include options to support the aircraft’s full life-cycle costs or any additional scope that would increase the value of the contract in the future
• these aircrafts will replace the Royal Canadian Air Force’s (RCAF’s) 2 oldest challenger jets, which are facing obsolescence. Procured in the early 1980s, they served multiple purposes for the Government of Canada, such as medical evacuation, and military transportation, and have assisted on multiple humanitarian relief and disaster assistance operations
• following changes to international airspace regulations that began in January 2020, these 2 older aircraft are no longer compliant with certain regulations. As such, operation of these aircraft outside of Canada requires additional efforts to seek exemptions or reroute flights

If pressed on the challenger contract:

• the challenger 650 aircraft were acquired on a non-competitive basis. Factors considered in this decision included commonality with the existing fleet, timeliness in delivery and operational readiness of the challenger fleet
• to ensure that Canada obtains value for money, PSPC conducted a thorough cost analysis using supporting information from Bombardier as well as a third party market analysis

If pressed on the sale of light armoured vehicles (LAVs) to Saudi Arabia:

• Canada has taken firm action to strengthen our export controls system by passing legislation that enshrines the United Nations Arms Trade Treaty assessment criteria, including human rights, into our export laws
• experts from across the Government of Canada evaluate every export permit application on a case-by-case basis to determine what the goods or technology will be used for, where they will be used and by whom, among other factors
• permits will not be issued where the minister of Foreign Affairs determines there to be substantial risk that they could be used to commit or to facilitate serious violations of international humanitarian law, international human rights law, or serious acts of gender-based violence

If pressed on the third yard:

• Chantier Davie has pre-qualified to become the third strategic partner under the National Shipbuilding Strategy
• Chantier Davie is now going through the next steps of the process which 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
• subject to successful negotiations, Canada intends to enter into an umbrella agreement with the third yard in early 2021
• the third yard will build 6 program icebreakers for the Canadian Coast Guard
• the entire invitation to qualify process was overseen by an independent fairness monitor

If pressed on ‘excusable delay’ requests:

• in order for Canada to consider a delay excusable, certain factors set out in the contracts must be met, including a requirement for contractors to notify Canada and to submit a work around plan
• therefore, in the specific context of COVID-19, contractors wishing to submit an Excusable delay claim to Canada should review their contracts and proceed in accordance with the requirements they contain
• industry may review their own specific contract and submit an excusable delay request according to the provisions of their respective contract

Background

A number of Canadian defence suppliers have reached out to government officials identifying the need for urgent support, as they are experiencing serious cash flow difficulties resulting from reduced activities in light of the COVID-19 pandemic situation. In collaboration with other government organizations and central agencies, PSPC is currently exploring measures to support the defence industry.

Irving Shipbuilding

In response to COVID-19, Irving Shipbuilding Inc. (ISI) suspended most industrial operations as of March 20, 2020, with special measures for working from home or within ISI’s offices implemented where possible. ISI has since commenced a gradual return-to-work, with a large proportion of production employees now in the shipyard while also ensuring physical distancing. COVID-19 safety measures have been implemented, including temperature screening for all individuals entering the site.

Construction of the Arctic and offshore patrol ships (AOPS) has gradually resumed since mid-April, while design work for the Canadian surface combatant (CSC) has not been significantly impacted and continues to progress. On July 31, 2020, the first AOPS was delivered and accepted by the Royal Canadian Navy.

Vancouver Shipyards

Operations at Vancouver Shipyards (VSY) continue during COVID-19 but are being closely monitored. Staff not in direct support of production are working from home, although return to work planning has begun, while around 95% of tradespeople are working in shifts at the shipyard. Measures being taken include following self-isolation guidelines, additional social distancing measures, cancelling large gatherings and increased cleaning. VSY has been working closely with WorkSafeBC in implementing these practices, and has adjusted and escalated actions in response to new regulations and guidance.

This approach has allowed VSY to continue construction of the first joint support ship (JSS) and final offshore fisheries science vessel (OFSV), albeit at a reduced rate of production.

Current status on joint support ships

The JSS build contract was awarded on June 10, 2020 and announced on June 15, 2020. It allows for the transition to full-rate construction of the first ship (the construction of the early block began in June 2018), and then the second ship.

The impact of COVID-19 on the JSS project has thus far been minimal. Construction of the first vessel has continued throughout the pandemic.

Chantier Davie

On March 24, 2020, in response to COVID-19, the Quebec Government published a list of essential industrial sectors, under which Chantier Davie qualified. Chantier Davie has conducted on-site training for dealing with COVID-19, implemented a set of strict directives, and negotiated with their union to maintain intact squads instead of rotating employees through different teams. Nonetheless the workforce numbers and capacity have diminished to accommodate the social distancing measures implemented.

Challengers

To ensure that Canada obtains value for money, PSPC conducted a thorough cost analysis using supporting information from Bombardier as well as a third party market analysis. The price was deemed to be fair and reasonable.

Acceptance and title transfer of the aircraft occurred on June 30, 2020, and July 3, 2020. Both aircraft will undergo 2 post-delivery retrofit period, the first in mid-July to mid-August 2020 and the second in December 2020 and January 2021. The RCAF will be able to operate the aircraft starting mid-August 2020.

National Shipbuilding Strategy

Context

The National Shipbuilding Strategy (NSS) is a long-term commitment to renew the vessel fleets of the Royal Canadian Navy (RCN) and Canadian Coast Guard (CCG), create a sustainable marine sector, and generate economic benefits for Canadians.

Suggested response

• The government is delivering on its commitment to continue to renew the RCN and the CCG fleets, revitalize the shipbuilding industry across Canada, create middle-class jobs, and ensure Canada’s marine services have the modern ships that they need

Progress on current work

• At Seaspan’s Vancouver Shipyards, the first 2 offshore fisheries science vessels have been delivered to the CCG, with delivery of the third vessel expected this fall. Work is ongoing on the first joint support ship (JSS)
• At Irving Shipbuilding, the first Arctic and offshore patrol ship was delivered and accepted by the RCN on July 31, 2020. Three other vessels are currently under construction. Design work on the Canadian surface combatant is advancing

Third yard

• Chantier Davie has pre-qualified to become the third strategic partner under the NSS
• Chantier Davie is now going through the next steps of the process which 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
• Subject to successful negotiations, Canada intends to enter into an umbrella agreement with the third yard in early 2021
• The third yard will build 6 program icebreakers for the CCG
• The entire invitation to qualify process was overseen by an independent fairness monitor

Opportunities for other yards / Chantier Davie

• Across the country, opportunities exist for Canadian shipyards and businesses to win contracts for small vessel construction, repair, refit and maintenance
• On July 21, 2020 the St-John’s Frigate arrived at Chantier Davie for repair and maintenance. It is the first vessel to be re-furbished under 1 of the 3 Halifax class docking work period contracts awarded to Chantier Davie (1 of the 3 shipyard selected for the work) in July 2019
• Since 2012, Chantier Davie has been awarded $2.1 billion in NSS contracts. They are presently converting 2 icebreakers for the CCG, and are undergoing a process to become the third shipyard under the NSS

If pressed on the polar icebreaker:

• the government is exploring procurement options for construction of the polar icebreaker. No decisions have been taken
• a request for information was issued on February 28, 2020 to obtain information on domestic shipyard capability and capacity to build a polar icebreaker which closed on March 13, 2020

If pressed on the Chantier Davie National Icebreaker Center:

• The Government of Canada is not involved with the Chantier Davie National Icebreaker Center, and the center is not a part of the NSS

If pressed on Interim icebreaker capacity for CCG:

• The government awarded $834 million in contracts to Chantier Davie for the acquisition of 3 medium commercial icebreakers and conversion work. The first vessel began operations in December 2018, with the second vessel CCGS Jean Goodwill and third vessel CCGS Vincent Massey to be available by fall 2020 and spring 2021 respectively

Background

Contracts under the National Shipbuilding Strategy

From 2012 to the end of 2019, the government signed approximately $13.78 billion in new NSS contracts throughout the country. These contracts are estimated to contribute over $17.04 billion ($1.54 billion annually) to gross domestic product (GDP), and create or maintain more than 15,521 jobs annually, through the marine industry and its Canadian suppliers between 2012 and 2022.

Future Fighter Capability Project

Context

As part of the Government of Canada’s reaffirmed commitment to invest in Canada’s military, as announced in the 2017 defence policy: Strong, Secure, Engaged, the government launched an open and transparent competition in December 2017 to permanently replace Canada’s fighter fleet with 88 advanced jets—the Future Fighter Capability Project.

Notes

• All questions related to capability gap, security and interoperability requirements, costs, and Canada’s participation in the Joint Strike Fighter Program should be answered by the minister of National Defence
• All questions related to the Industrial and Technological Benefits Policy and the assessment of bidders’ impact on Canada’s economic interests should be answered by the minister of Innovation, Science and Economic Development (ISED)
• All questions related to trade issues should be answered by the minister of Foreign Affairs

Suggested response

• The government is committed to ensuring that members of the Canadian Armed Forces have the equipment they need to do their jobs and protect Canadians, while maximizing economic benefits for the country
• The government delivered on its promise to launch an open and transparent competition to replace Canada's fighter fleet with 88 advanced jets, and we are making great progress
• [Redacted]
• We continue to anticipate awarding a contract in 2022, with delivery of the first replacement aircraft as early as 2025

Background

In June 2017, Canada’s defence policy confirmed a fleet size of 88 advanced fighter aircrafts to replace the current CF-18s. The government launched a procurement process for the future fighter aircraft in December 2017. Officials conducted extensive industry engagement with suppliers to maximize the likelihood that Canada receives competitive proposals, and with Canadian industry to ensure that they are well positioned to participate in the procurement. 

In November 2018, France-Dassault Aviation officially withdrew from the competitive process.

In July 2019, the request for proposal was shared with the eligible suppliers.

In August 2019, United Kingdom (UK)-Airbus also withdrew from the competition.

On October 4, 2019, Canada received preliminary security offers from the remaining 3 eligible suppliers, outlining how the suppliers intend to meet Canada’s security and interoperability requirements. Canada has completed the first security acceptability assessment on the offers and provided significant feedback to suppliers on January 31, 2020. The feedback will help suppliers to understand the scope of information that is required in their proposals in order to submit an acceptable security offer to Canada.

Next steps

A dialogue phase may be conducted with 2 or more compliant bidders in 2021 so they can address, in revised proposals, any issues and risks that are identified during the evaluation phase. Canada will finalize the contract terms with the preferred bidder prior to contract award which is anticipated in 2022.

Officials are actively planning for proposal evaluation during the pandemic to minimize any impact to the project schedule. [Redacted]

Polar icebreaker

Context

The Government of Canada is exploring procurement options for construction of the polar icebreaker. No decision has been taken.

Suggested response

• The Government of Canada is committed to the National Shipbuilding Strategy (NSS) and getting the women and men of the Royal Canadian Navy and the Canadian Coast Guard (CCG) the equipment they need to do their jobs protecting and serving Canadians
• The government is currently exploring options to ensure the polar icebreaker is built in the most timely and efficient manner
• On February 28, the Government of Canada issued a request for information (RFI), open to all Canadian shipyards, seeking information on domestic shipyard capability and capacity to construct and deliver a polar-class icebreaker
• The RFI closed on March 13, 2020 and Public Services and Procurement Canada (PSPC) has received 4 responses
• No decision has been taken at this point

If pressed on the Davie National Icebreaker Center:

• the Government of Canada is not involved with the Chantier Davie National Icebreaker Center, and the center is not a part of the NSS

If pressed on procurement practices:

• this approach follows standard procurement practices and the information gathered through this RFI will help the government determine how best to proceed so that the polar icebreaker is delivered in the most timely and efficient manner

Background

Vancouver Shipyards’ non-combat package is a challenging program of work, which was made even more challenging by the inclusion of the large, one-off polar icebreaker. In 2019, Canada made the decision to substitute the 1 polar icebreaker with a long run of 16 multi-purpose vessels (MPVs). Adding a long production run of up to 16 MPVs will provide Vancouver Shipyards with a longer program horizon than a one-off polar icebreaker, helping to break the cycle of short production runs and provide an opportunity to generate greater efficiencies.

On February 28, 2020, the Government of Canada issued a RFI, open to all Canadian shipyards, seeking information on domestic shipyard capability and capacity to construct and deliver a polar-class icebreaker. The RFI closed on March 13, 2020, and PSPC received 4 responses for evaluation.

On June 9, 2020, Seaspan’s Vancouver Shipyards and Ontario-based Heddle Shipyards announced they will work together if they are awarded the contract to build the polar icebreaker.

Another process is also underway to select a third shipyard under the NSS to build 6 program icebreakers for the CCG. Chantier Davie has pre-qualified as part of this process, which was overseen by an independent fairness monitor. The yard is now going through the next steps which 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. On July 29, 2020 the final request for proposal was sent to Chantier Davie.

Document navigation for "Committee of the Whole: August 12, 2020"

• Previous page
• Table of contents
• Next page