A third of the companies involved in a $26-billion project to build a new fleet of warships for Canada have asked the Liberal government to delay bidding as problems continue to mount for the program.
On Monday, the Ottawa Citizen reported that one of the world’s largest shipbuilders — Fincantieri — had told Procurement Minister Judy Foote the project was so poorly structured it had doubts whether it would bid.
Canada has pre-approved 12 firms to bid on various aspects of the program, which would see Irving Shipbuilding construct a fleet of new ships for the Royal Canadian Navy.
“Canada and Irving Shipbuilding Inc. are considering the extension requests,” Jean-François Létourneau, a spokesman for Public Services and Procurement Canada, noted in an email. He did not identify the companies requesting the delay.
The Liberal government announced on Oct. 27 that Irving had issued a request for proposals from companies on the design of the new warships.
The firms have until April 27 to provide those bids, which must not only include the design but details of teaming arrangements with Canadian firms.
Allowing only six months to compile bids for one of the largest procurements in Canadian history doesn’t make sense, say representatives of some of the companies. The extent of the technical data and other information the Canadian government requires is overwhelming.
Fincantieri’s letter to Foote provided a detailed outline of other problems with the acquisition process, warning that “Canada is exposed to unnecessary cost uncertainty.”
There is also the belief in industry circles that the Liberals favour the design from the British firm BAE, which is offering the navy the Type 26 warship.
Foote had previously said only proven warship designs would be considered, to reduce the risk of problems. But the Liberals retreated on that, and will now accept a Type 26 bid, even though the vessel has not been built yet.
Over the last several months, various firms have highlighted their serious concerns about the project but are frustrated Foote has not acted to deal with those, industry sources added.
But Foote’s spokeswoman, Annie Trépanier, said industry has been repeatedly consulted on the project and an independent fairness monitor is involved in the process.
Irving spokesman Sean Lewis said the contract for the design would be awarded to an existing warship design that best fits the requirements of Canada’s navy. All bidders are being treated equally and no one bidder has an unfair advantage, he added.
Industry officials aren’t the only ones raising concerns. In December 2015, Vice Admiral Mark Norman told CBC journalist James Cudmore the Canadian public had not been given accurate information about the growing price of the ships. Norman warned the project, originally budgeted at $26 billion, could end up costing taxpayers $42 billion.
Cudmore is now a procurement adviser for Defence Minister Harjit Sajjan.
Norman was temporarily removed from his job as vice chief of the defence staff on Jan. 13 by Chief of the Defence Staff Gen. Jon Vance. The government and military have declined to provide a reason for the decision.