Canada: The Government’s NSPS Could Disappoint

Over the previous 20 years, the Conservative government has committed $35 billion to the largest and most extensive overhaul of Canada’s navy and Coast Guard.

Massive investment will hopefully once again present Canada as a global shipbuilding power by transforming Halifax and Vancouver shipyard into world-class production centres, reports timescolonist.com.

While the government has held up the National Shipbuilding Procurement Strategy (NSPS) as the saving point of the shipbuilding industry, major problems could ruin it.

An important issue is the military’s desire to acquire as many state-of-the-art vessels as possible against the government-imposed Defence Department budget cuts. A number of delays have already been announced; one ship’s delivery has been postponed by three years. There are also some indications that the total number of ships to be built will be reduced.

University of Ottawa military procurement expert Philippe Lagasse stated: “The costs to industry and government and the Canadian Forces are so enormous. This has huge implications.”

The National Shipbuilding Procurement Strategy is a blessing for the navy and the Coast Guard, which operate fleets of destroyers, icebreakers, frigates and other vessels that are nearing the end of their lifespans and must be replaced.

The navy’s deputy commander, Rear Admiral Mark Norman, said: “We’re at a moment of strategic renewal. An opportunity that is all but unprecedented in the 110-year history of the Royal Canadian Navy.”

For Irving Shipyards in Halifax, Seaspan Marine in Vancouver and their respective communities, this strategy will also be very useful. In October these companies had been selected as the main production centres for $33 billion in work, with the other $2 billion worth of work divided between other shipyards.

The shipbuilding strategy is seen as an important success for military procurement. However, in May it was obvious that the majority of the shipbuilding projects under the strategy are facing various delays. But even though Irving Shipyards and Seaspan Marine were selected in October for the majority of the work associated with the NSPS, the actual contracts were not awarded.

Terry Williston, who headed the group of senior bureaucrats managing the process that selected Irving and Seaspan said: “There’s this understanding, or sometimes it’s reported in the media, that we’ve awarded contracts worth $33 billion.”

“We haven’t awarded any contracts yet. We’ve selected the two shipyards with which Canada will engage in negotiations for the contracts that are part of the NSPS work packages. But there’s a tremendous amount of difficult work to be done in order to get to those contracts.”

However, the cost of many of the ships to be built under the strategy continues to increase.

The Conservative government is reviewing its plans for the Canadian Forces but it is difficult to imagine more money will be provided.

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Shipbuilding Tribune Staff, June 12, 2012