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Canadian Shipbuilding  –  Government Procurement Policy  –  June 2010 The Government's National Shipbuilding Procurement Strategy The Government of  Canada  unveiled its National Shipbuilding Procurement Strategy at CANSEC, the annual defence industry 'dog-and-pony' show in Ottawa.  Critics quickly attacked  NSPS as being long on promises and short on specifics  –  particularly on when orders would be placed for delayed projects, and  how many hulls of each type were to be ordered  ( NSPS lumps naval and CCG orders together but budget and hull numbers do not match earlier promises ). Ministers like Rona Ambrose (PWGSC) may have dodged hull specifics but the CDS made pretty clear that the wispy Canadian Surface Combatant now tops DND's list of wants. Perhaps DND simply assumes that stalled projects (like the Joint Support Ship and AOPS) are in the bag and planners are 'moving forward'. That's all supposition, of course, because NDHQ feels little need to debate its choices with Canadian taxpayers. Instead, we are to content ourselves with PaffO spin for the smallest of successes and tight-lipped silence whenever DND/PWGSC procurement efforts perform a  face-plant. The person at DND in charge of procurement, ADM Material Dan Ross, assures us  that said procurement is working  just fine with all projects progressing. What Ross really means is that 'Project Management Offices' exist at NDHQ. Aside from ACANs and  UORs, 'big ticket' procurement ground to a halt long ago. If  that weren't the case, and  Dan Ross was correct, why would we need the National Shipbuilding Procurement Strategy in the first place? The original 03 June 2010  DND/CF Backgrounder  follows  –  in a slightly edited form. DND and the Government of Canada's National Shipbuilding Procurement Strategy BG–10.012 - June 3, 2010 The historic National Shipbuilding Procurement Strategy (NSPS) charts the course for Canada and Canada's shipbuilding industry in preparation for the [Canadian] Navy's second century of service. The strategy guides the Government,  the Canadian Navy, and the shipbuilding industry in fulfilling the commitments made in the Canada First Defence Strategy (CFDS). The strategy meets the [ 03 March ] 2010  Speech from the Throne commitment to support sustainable development of a robust domestic ship- building industry through a long-term approach to federal procurement. The Government will invest heavily in new Navy ships by commissioning work over the long term. This will enable the shipbuilding industry to effectively manage work flows and make investments in infrastructure and skilled personnel. History The Government has not placed any new substantial build orders for ships since the mid-1990s. The national shipbuilding capacity, once enhanced by the construction of the Canadian Patrol Frigates and Maritime Coastal Defence Vessels, has substantially eroded. Several Canadian shipyards have either closed or converted to more general- ized industrial pursuits. The erosion of  Canada's shipbuilding capacity, combined with worldwide increases in shipbuilding costs, could severely hinder Canada's ability to build complex ships cost-effectively, resulting in delays to federal fleet renewal. The time has come to launch a new approach to ship procurement for the Navy. The NSPS will create and maintain an effective and efficient long-term shipyard capability in Canada. Its development involves a multi-departmental approach in close partnership with key marine industry stakeholders. The Strategy The NSPS represents a [...] shift in shipbuilding procurement, moving from a project- by-project basis to a long-term approach. This approach will generate enhanced regional and industrial benefits and engage Canada's world-class industrial skill-base. The Navy's fleet needs renewal to ensure operations can continue in Canadian, Arctic, and international waters. Our current fleet is aging, with some vessels entering their fifth decade of operation, some of which were designed for operations in the North. The Government's objectives with respect to security, sovereignty and the North, as articulated in the CFDS, the Northern Strategy, and Advantage Canada, will be better served by a renewed fleet. Two shipyards will be selected to build the large vessels (1000 tonnes displacement or more), through a fair, transparent and competitive process. This selection process, led by Public Works and Government Services Canada (PWGSC), will consider the experi- ence, capability, and performance of shipyards. It will result in the signing of formal agreements establishing a long-term relationship between each yard and the [GoC]. The negotiation and signing of umbrella agreements with the successful shipyards is expected to occur in the 2011-2012 timeframe. One shipyard will be selected to build combat vessels. This will enable procurement of the Canadian Surface Combatant (CSC) and Arctic/Offshore Patrol Ships (AOPS). The [CSC] project will renew the Navy's surface fleet by replacing various warfare capabili- ties of the destroyers (Iroquois-class) and multi-role patrol frigate (Halifax-class). The primary tasks of [AOPS] will be to: conduct sea-borne surveillance operations in Canada's Economic Exclusion Zones (EEZs), including the Arctic; provide awareness of activities and events to various departments; and cooperate with other elements of the Canadian Forces and other federal government departments to assert and enforce Canadian sovereignty, whenever and wherever necessary. Another competitively selected shipyard will build non-combat vessels, such as the Joint Support Ships (JSS). The capabilities required of these ships are crucial to the Canadian Forces. The Joint Support Ship increases the range and sustainment of a Naval Task Group, permitting it to remain at sea for significant periods of time without going alongside for replenishment. These vessels will also provide capacity for sealift and support to troops ashore. Shipyards among those not selected for the building of large vessels may be engaged in the building and support (maintenance, refit, and repair) of the approximately 100 smaller vessels [mostly CCG with some naval auxiliaries] included within the strategy. Maintenance, refit, and repair of the Navy's fleet represent some $500 million annually. The NSPS also represents substantial benefits to the broader marine industry in Canada. The competitively selected shipyards will require parts, sub-assemblies, specialized services and other equipment to renew the federal fleet. This will help build sustainable supply chains with second and third tier companies, benefiting many Canadian firms, including small and medium enterprises. It is in Canada's interest to have a vibrant and progressive marine and shipbuilding sector. Shipyards equipped with modern infrastructure will be well positioned to make productivity improvements to deliver federal fleet renewal in a cost effective manner. Just as a large number of companies within Canada's marine sector will be involved in the procurement strategy, its implementation will also require a whole-of-government approach. DND and the Department of Fisheries and Oceans (responsible for the Canadian Coast Guard) will ensure that the vessels meet their operational require- ments. PWGSC will ensure that [GoC] contracting regulations and processes are followed, while Industry Canada will oversee the implementation of the Industrial and Regional Benefits [IRBs] resulting from the NSPS. Canada is a maritime nation with the longest coastline of any country in the world. The shipbuilding strategy establishes strategic relationships with Canada's marine indust- ry to deliver modern, multi-purpose Navy and Coast Guard fleets. This is essential to sustaining Canada's sovereignty and prosperity by safeguarding international trade, as well as enforcing Canadian law and authority.