Canada’s C$ 2.9B “Joint Support Ship” Project Sinks
26-Aug-2008 18:49 EDT
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HMCS Protecteur, and HMCS Preserver have contributed to humanitarian aid missions in Florida and the Bahamas, peace-making off Somalia and East Timor, and have been poised for the evacuation of non-combatants from Haiti, to name but a few.
As part of its spate of military modernization announcements issued just before Canada Day (July 1) 2006, the Canadian government issued an RFP that began the process of defining and building 3 “Joint Support Ships.” The aim was to deliver 3 multi-role vessels with substantially more capability than the current Protecteur Class oiler and resupply ships. In addition to being able to provide at-sea support (re-fueling and re-supply) to deployed naval task groups, the new JSS ships were envisioned as ships that would also be capable of sealift operations, as well as amphibious support to forces deployed ashore.
This was expected to be a C$ 2.9 billion (USD $2.58 billion) project. DID describes the process, the 4 pre-qualified industry teams participating, and some of the issues swirling around Canada’s very ambitious specifications.
Specifications that ultimately sank the whole project, in a manner that was predictable from the outset. Leaving Canada’s navy with a serious problem…
JSS: The Procurement Process
JSS: Contracts and Key Events [updated]
Appendix A: DID Op-ed/Analysis – June 30, 2006
Appendix B: Additional Readings [updated]
JSS: The Procurement Process
Here’s how the three-step process announced by Paul Martin’s Liberal Party government in 2006 was expected to work:
Four industry teams have been pre-qualified to compete for the contract. A request for proposals, to be issued shortly, will trigger the process to select two industry teams for the project definition phase.
The second phase, Project Definition, will see two qualified consortia selected from among the qualifying proposals. These two consortia will each be awarded a C$ 12.5 million contract to produce and deliver an implementation proposal consisting of a preliminary ship design, a project implementation plan, and an in-service support plan. These proposals will be evaluated on the basis of compliance and the proposal demonstrating the best value, taking into consideration technical merit and total ownership cost, will be selected as the winner.
The final phase, Project Implementation, will see the winning bidder awarded two separate but inter-related contracts. The first will be for the completed design for and construction of the Joint Support Ships. The second will be for the in-service support for the life of the vessels. Delivery of the first ship is targeted for 2012.
The expected overall project cost for the JSS includes a base cost of C$ 2.1 billion (USD $1.87 billion), plus an estimated C$ 800 million (USD $712 million) in contracted in-service support over 20 years. Industry teams are led by:
Irving Shipbuilding
BAE Systems (Project) Limited (BAE Systems Naval Ships)
ThyssenKrupp Marine Systems AG
SNC-Lavalin Profac Inc.
A list of the required capabilities can be found in the Canadian government’s detailed release. Supply functions, medical care, repair facilities, self-defense, roll-on roll-off, lift-on lift-off helicopter operation, ice capabilities, deck space for vehicles…. the list goes on.
All in a 200m/28,000t ship.
The new Conservative Party government kept the JSS program, and followed the competition procedure to narrow the contest down to just 2 bidders: ThyssenKrupp Marine Systems AG, and SNC-Lavalin Profac Inc.
In the end, however, the specifications, design, and budget simply could not be made to agree. The JSS project is currently in limbo. A solution is required, and soon, but successfully executing one will demand a rethink of the project’s main premises.
JSS: Contracts and Key Events
HMCS Protecteur
(click to view larger)Aug 22/08: The End. Canada’s Ministry of Public Works and Government Services announces the termination of the JSS program:
“After receiving and evaluating the mandatory requirements for the Joint Support Ship Project from the bidders, the Crown has determined that the proposals were not compliant with the basic terms of the Request for Proposals (RFP). Among other compliance failures, both bids were significantly over the established budget provisions…. The Department of National Defence and the Department of Fisheries and Oceans are currently considering the next steps. The government is committed to procure, repair and refit vessels in Canada according to the government’s Buy Canada policy.”
The Hill Times was blunt, as it offered more background details:
“According to industry insiders, both design teams were unable to come up with a ship design under-budget. Although details are tight, officials say one team submitted a blueprint for two vessels [instead of 3], while the other sent in a plan for three, which was way over budget. In other words, industry has sent a strong signal to Ottawa – either increase the funding or scale down the project.”
The government’s decision leaves the Canadian navy’s future ability to operate independently at risk. HMCS Preserver and HMCS Protecteur were expected to reach the end of their service life between 2010- 2012, but the failure of the JSS concept means that it will be very difficult to build replacement ships before that date. Meanwhile, HMCS Preserver is headed into dock to have its boiler system repaired, just 2 years after the last repair. Those systems are an ongoing risk, as the Canadian Press explains:
“An undated briefing note, leaked to The Canadian Press over the weekend, show the navy was bracing for the blow…. “If the Protecteur and Preserver are going to be needed longer than expected, we will also determine what needs to be done to keep our supply ships safe, operational and available until they can be replaced…. Many of their systems are nearly obsolete, such as the boilers they use to generate steam for main propulsion. As you might expect, it’s becoming increasingly difficult and costly to maintain these ships. Spare parts are no longer readily available, and the skills needed to operate and maintain systems that were already mature in the 1960s are becoming increasingly rare.”.... Beyond basic mechanics, marine engineering designs and environmental laws have become more complex over the last 40 years. The navy’s two supply ships are single hull designs…”
See also: The Hill Times | Globe & Mail | Canwest News Service | Canadian Press | CBC.
Aug 3/08: The National Post reports that discussions have begun with Dutch shipbuilders, in the wake of serious problems with the JSS bid. The Netherlands builds the highly-regarded Rotterdam Class LSDs – but political friction is building around the prospect of contracting for shipbuilding outside Canada. Even though…
“This year, the federal government determined that proposals from two Canadian consortiums earmarked to build the new fleet were “noncompliant.” Defence officials were told the Joint Support Ship budget was not enough to build the three vessels envisioned and attempts to obtain more funding from the government have been unsuccessful.”
See Apendix A, which discusses why this outcome could have been, and was, predicted long in advance. Meanwhile, Conservative Party Defence Minister Peter MacKay’s press secretary Jay Paxton is attempting to douse the flames of controversy regarding the Netherlands visit:
“Although the director-general of major project delivery land and sea was in Europe on other business, he had a chance to meet with government representatives from the Netherlands who are undertaking a similar project and they compared best practices in the context of an update on their project.”
May 19/08: The Ottawa Citizen reports problems with the JSS program:
“The $2.1 billion set aside for buying three Joint Support Ships is not enough, defence officials confirm. They point out that part of the problem is the new vessels would conduct missions far beyond the scope of re-supplying warships at sea, the role now done by the decades-old Protecteur-class ships…. There is no similar type of ship in the world, as most navies use two types of vessels to perform the distinct roles.
Defence officials have heard from industry that the money set aside by the government might be enough for two ships, not three.”
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