In The Media

Federal government to launch competition for Canada's next warship design

by Lee Berthiaume (feat. David Perry)

CTV News
Oct 25, 2016

OTTAWA -- The federal government is poised to fire the starting gun on the long-awaited, multibillion-dollar race to design and build the navy's newest warships.

The competition, which involves 12 of the largest defence and shipbuilding companies in the world, is expected to be launched on Thursday after years of debate, delays and hand-wringing.

Companies will be given six months to submit designs for a new warship which will replace the navy's 12 frigates and its three recently retired destroyers.

The winning design, pegged by one source as worth upwards of $10 billion out of a project that's expected to cost between $26 billion and $40 billion, will be built by Irving Shipyards in Halifax, with the first ship scheduled to hit the water in 2024.

"This is the product of close to a decade of hard work to get to this point, which is hopefully going to lead in short order to actually cutting steel on warships for Canada," said defence analyst David Perry of the Canadian Global Affairs Institute.

But some companies have already been grumbling about the process, raising fears the competition could hit rocky waters and produce further delays and problems.

Among the complaints is the role of Irving Shipyards, which is actually running the competition.

That has sparked allegations the competition will be biased in favour of designs put forward by companies with which Irving has a pre-existing relationship.

Irving and the government have pushed back against such allegations, saying the navy will be watching over Irving's shoulder and that the entire process has been approved by an independent fairness monitor.

There has also been unhappiness about the government letting a British company compete even though its design is still only on paper. Some have drawn comparisons to the F-35 stealth fighter.

It's hoped that some other potential stumbling blocks have been resolved, though that won't become clear until all the bids are in six months from now.

Those include balancing the government's decision to buy a pre-existing design from another country with its desire to include Canadian-made components and equipment.

Companies also pushed back on the government's demand to have the full blueprints for whatever ship design it chooses.

The two sides have instead agreed that whatever company has the top design will enter into negotiations with the government over intellectual property rights before a contract is awarded.

If an agreement can't be reached, the government can go to the next company.

Even after the competition is over and a design is chosen, there are questions over how many ships will actually be built and what the cost will be.

The previous Conservative government had promised 15 ships for $26 billion when it announced the warship project in 2010, but naval officials pegged the cost last year at closer to $40 billion.

The Liberal government has since said it will not decide on a budget or number of ships until later.

"This isn't the end of things," Perry said of the design competition. "This is just the next critical step."

The warship project, known in government and military circles as the Canadian Surface Combatant, is the backbone of the federal government's national shipbuilding procurement strategy.

The strategy, launched by the Conservatives in 2010 and originally earmarked at $35 billion, was intended to provide the navy and coast guard with new fleets while building up a sustainable shipbuilding industry on the east and west coasts. But it has since been buffeted by delays and cost overruns.

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