Canadian Surface Combatant RFQ

[Navy_Pete]

This project is going to cost billions more then they are saying. Because once Irving Ship Yards spend all the money up front they will require more to keep going. The same crap they pulled with the Halifax Class.
It will be interesting to see. I hope we get a well built ship.

? That's not at all what happened with the Halifax Class builds; the hours and costs followed a pretty standard learning curve and the last ship was kicked out under budget. Not really sure what you are talking about with that, but suggest you give the hyperbole a rest unless you come with actual data to back it up and not use rumour mill BS as proof.

We've been beating the crap out of a the CPFs for a while, not doing the 1st and 2nd line PM, then when the huge DWP scope comes up, not doing a lot of it. I got to take over a ship that had zero arising work approved from a DWP that only did the planned work; that's insanely unlikely, and not a result of some kind of magic pre-DWP survey program that could see through to the inside of piping or underneath paint. It would be the equivalent to dragging a car out of a back field that hadn't run in decades, dropping in a new battery, fresh fuel and getting a show ready classic car after a quick wash. It may look okay, but probably held together by bondo and luck.

Sure, Irving has done some crappy work. So has FMF, SS, outside contractors etc. Some people will always do crappy work, which is why QC inspections, test and trials etc exist. I have had some bad dealings with them on the business side, but their work isn't overall any better/worse then elsewhere as long as the politicians don't interfere with us enforcing the QC and contractual issues.

The DWP yards aren't the reason the CPFs are in rough shape though ; we've been neglecting maintenance on them since day 1, and a 30 years butchers bill can get pretty big when we drive them like rentals. The west coast has a smaller fleet with a higher comparable resource base, so it's easier to manage and get the in service work done, and they are still having significant issues despite having the better shipyard for DWPs.

 

[Navy_Pete]

Would it not be better if the government handled shipyard upgrades in a separate transaction from the ships themselves? Perhaps using BDC or Industry Canada, provide low interest loans for that specific process? Then when DND is ordering ships, they in fact are just paying for the ships, and not the upgrade to the shipyards too? Such a process should work better for DND and taxpayers. The only winners in the current procurement model appears to be the shipyard owners who get their yards upgraded for free by DND (with no associated debt or equity dilution) just so they can actually build what they're bidding on.

The shipyard upgrades were paid for upfront by the shipyards with some guarantees that they would get the value of work packages in the RFP. Sure, DND and CCG will pay them for the work, including profit, which indirectly is what paid for the upgrades but there is no 'guaranteed profit' in the contract. So if they lose money or break even on the builds and don't recoup the upgrade costs, that's on them. Having them pay for the upgrades gave them skin in the game to do a better job to pay the upgrades back (which was totally undercut by the forgivable pronvincial loan from NS, but that was an unexpected loophole they found).

Material costs are pretty fixed with transparent markups, so the best way for them to make big profits is to quote on the work at a reasonable level of effort, then get efficient enough to be at/below that level of effort. That means eliminating rework, coordinating work packages tightly so you aren't wasting people's time waiting for another shop, and generally doing all the other things they should be doing to be an competitive shipyard.

So if they do a good job and build the ships efficiently, then they make money, and get a good reputation, with possibility for more work. If they convince us to overpay and do a crap job, they make money but it's a one time shot. If they do a crap job but we don't overpay then they also lose money.

It's like when you get a quote from a mechanic; there is a standard labour quote for a specific jobs plus parts. If it takes them longer, that's their problem, but if they get it done quicker that's money in their pocket. Way more complex to figure out if the labour quote is reasonable, but basically the same idea.

We're also a massively pain in the ass customer. Personally I wouldn't get into a long term business relationship and invest in infrastructure without some guarantees and cancellation penalties either.

 

[Colin Parkinson]

There is no way for them to go to the money lenders and say "yea Canada promises they buy X number of ships from us if we upgrade, can we get the money to upgrade please?" and the banks will laugh and say "A Canadian government promise won't buy you a coffee around here". Seaspan has already had one contract yanked from them for an icebreaker.

 

[Navy_Pete]

There is no way for them to go to the money lenders and say "yea Canada promises they buy X number of ships from us if we upgrade, can we get the money to upgrade please?" and the banks will laugh and say "A Canadian government promise won't buy you a coffee around here". Seaspan has already had one contract yanked from them for an icebreaker.

Yeah, that's why the 'backstop guarantee' was built into the contract. The gist of it was released publically, but basically Canada agreed to provide some pro-rated payback if we cancelled work (without replacement of equivalent value) so they had a chance to earn money and back back the lenders. It was up to the full value of their shipyard upgrades (which we had previously vetted as meeting their 'Target State' upgrades for NSS).

Ian Mack had explained it much better than I could in one of his articles. Makes sense to me though; it's just a cancellation clause tied that we 'pay down' by awarding them contracts under the NSS.

 

[MarkOttawa]

Major paper from Naval Association of Canada defending CSCs:

THE NATIONAL SHIPBUILDING STRATEGY AND THE CANADIAN SURFACE COMBATANT

https://www.navalassoc.ca/wp-content/uploads/2021/02/CSC-Report-NAC-Feb-2021-LR.pdf

Mark Collins

 

[Weinie]

Major paper from Naval Association of Canada defending CSCs:



Mark Collins

Thanks Mark. Good article for context.

 

[childs56]

? That's not at all what happened with the Halifax Class builds; the hours and costs followed a pretty standard learning curve and the last ship was kicked out under budget. Not really sure what you are talking about with that, but suggest you give the hyperbole a rest unless you come with actual data to back it up and not use rumour mill BS as proof.

We've been beating the crap out of a the CPFs for a while, not doing the 1st and 2nd line PM, then when the huge DWP scope comes up, not doing a lot of it. I got to take over a ship that had zero arising work approved from a DWP that only did the planned work; that's insanely unlikely, and not a result of some kind of magic pre-DWP survey program that could see through to the inside of piping or underneath paint. It would be the equivalent to dragging a car out of a back field that hadn't run in decades, dropping in a new battery, fresh fuel and getting a show ready classic car after a quick wash. It may look okay, but probably held together by bondo and luck.

Sure, Irving has done some crappy work. So has FMF, SS, outside contractors etc. Some people will always do crappy work, which is why QC inspections, test and trials etc exist. I have had some bad dealings with them on the business side, but their work isn't overall any better/worse then elsewhere as long as the politicians don't interfere with us enforcing the QC and contractual issues.

The DWP yards aren't the reason the CPFs are in rough shape though ; we've been neglecting maintenance on them since day 1, and a 30 years butchers bill can get pretty big when we drive them like rentals. The west coast has a smaller fleet with a higher comparable resource base, so it's easier to manage and get the in service work done, and they are still having significant issues despite having the better shipyard for DWPs.

Sorry I miss quoted it was Davie Ship yard that did cost over runs.

Halifax class costs
Original Contract of 3.9 billion for six Frigates equals $650,000,000 each

Additional six frigates cost 5.64 billion. Each additional Frigate cost $940,000,000. Turns into an additional $290,000,000 per ship.

Total cost of contract 9.54 billion. Nope no cost over run there. Your right.

The cost for our New ships is outrageous. I don't care who you are or what you do. Justifying a $4 billion per ship is not justifiable in any way.
That 60billion is including their contingency fund that was put in place for just in case unknowns. We have already blow that out of the water. They haven't even cut metal yet.

Its hard as a tax payer to justify buying a frigate for $4billion each when the Us is building a ship for $1.2 billion. So each of our ships are worth 2.8 billion more? Give you head a shake.
Something's going to give once this project starts cutting steel. It will mean the Navy will settle with fewer then 15 ships. We might even see a downgrading of electronic equipment on the ship due to costs.
Liberals are notorious for extremely high costs of Military contracts. Only to cancel them, only after we pay a huge fee to do so.

 

[childs56]

The shipyard upgrades were paid for upfront by the shipyards with some guarantees that they would get the value of work packages in the RFP. Sure, DND and CCG will pay them for the work, including profit, which indirectly is what paid for the upgrades but there is no 'guaranteed profit' in the contract. So if they lose money or break even on the builds and don't recoup the upgrade costs, that's on them. Having them pay for the upgrades gave them skin in the game to do a better job to pay the upgrades back (which was totally undercut by the forgivable pronvincial loan from NS, but that was an unexpected loophole they found).

Material costs are pretty fixed with transparent markups, so the best way for them to make big profits is to quote on the work at a reasonable level of effort, then get efficient enough to be at/below that level of effort. That means eliminating rework, coordinating work packages tightly so you aren't wasting people's time waiting for another shop, and generally doing all the other things they should be doing to be an competitive shipyard.

So if they do a good job and build the ships efficiently, then they make money, and get a good reputation, with possibility for more work. If they convince us to overpay and do a crap job, they make money but it's a one time shot. If they do a crap job but we don't overpay then they also lose money.

It's like when you get a quote from a mechanic; there is a standard labour quote for a specific jobs plus parts. If it takes them longer, that's their problem, but if they get it done quicker that's money in their pocket. Way more complex to figure out if the labour quote is reasonable, but basically the same idea.

Again this is where cost plus always comes into play.

We're also a massively pain in the ass customer. Personally I wouldn't get into a long term business relationship and invest in infrastructure without some guarantees and cancellation penalties either.

Even the government said that the large cost of the overall project was because it included upgrade costs to the ship yards because they are investing in a industry.
The best way to "make money" on these contracts are for "cost plus" that's how it goes.

in reality if they can not secure customers after the fact the yards will significantly scale down and or shut down. We went this route with the Halifax class ships as part of a ship building strategy back then.

I have said my piece on this subject. Some people are so convinced paying double the cost for a program is justified then so be it.

I hope the Navy gets the best ship, the required amount of ships and get them on time.

 

[Good2Golf]

Sorry I miss quoted it was Davie Ship yard that did cost over runs.

Halifax class costs
Original Contract of 3.9 billion for six Frigates equals $650,000,000 each

Additional six frigates cost 5.64 billion. Each additional Frigate cost $940,000,000. Turns into an additional $290,000,000 per ship.

Total cost of contract 9.54 billion. Nope no cost over run there. Your right.

The cost for our New ships is outrageous. I don't care who you are or what you do. Justifying a $4 billion per ship is not justifiable in any way.
That 60billion is including their contingency fund that was put in place for just in case unknowns. We have already blow that out of the water. They haven't even cut metal yet.

Its hard as a tax payer to justify buying a frigate for $4billion each when the Us is building a ship for $1.2 billion. So each of our ships are worth 2.8 billion more? Give you head a shake.
Something's going to give once this project starts cutting steel. It will mean the Navy will settle with fewer then 15 ships. We might even see a downgrading of electronic equipment on the ship due to costs.
Liberals are notorious for extremely high costs of Military contracts. Only to cancel them, only after we pay a huge fee to do so.

You do know that the budget includes in-service support for

1/5 of a Century

...right?

20-year ISS currently budgets to 2.5-3 times the initial acquisition costs, so that puts each ship acqusition share at around 950M-1150M, which compared to last flight of CPF isn’t unreasonable at all.

 

[Navy_Pete]

Sorry I miss quoted it was Davie Ship yard that did cost over runs.

Halifax class costs
Original Contract of 3.9 billion for six Frigates equals $650,000,000 each

Additional six frigates cost 5.64 billion. Each additional Frigate cost $940,000,000. Turns into an additional $290,000,000 per ship.

Total cost of contract 9.54 billion. Nope no cost over run there. Your right.

The cost for our New ships is outrageous. I don't care who you are or what you do. Justifying a $4 billion per ship is not justifiable in any way.
That 60billion is including their contingency fund that was put in place for just in case unknowns. We have already blow that out of the water. They haven't even cut metal yet.

Its hard as a tax payer to justify buying a frigate for $4billion each when the Us is building a ship for $1.2 billion. So each of our ships are worth 2.8 billion more? Give you head a shake.
Something's going to give once this project starts cutting steel. It will mean the Navy will settle with fewer then 15 ships. We might even see a downgrading of electronic equipment on the ship due to costs.
Liberals are notorious for extremely high costs of Military contracts. Only to cancel them, only after we pay a huge fee to do so.

Holy crap; the difference in the project costing for the US has been explained in detail in this thread and in a ton of articles, but basically it boils down to their $1.2 Billion is JUST FOR THE HULL AND MARINE SYSTEMS. Everything else is provided to the shipyards and costed under different projects.

For example the Zumwalts were estimated at $4.2 B each for just the ships; that excluded all the R&D and other real costs to develop and operate them. That's over $5.4 B Canadian, and still excludes a bunch of other costs we would roll into our own project accounting.

The initial frigates included some FMS which drastically lowered the shipyard contract award, but the actual total cost between the first ship and the last ship was something like 20-30% lower once they got better at building it. All of that fed into the NSS analysis, and you can see the same thing in any public report for the US, EU and others that talk about a 'learning curve' for ship building. Even experienced yards have it; they just started at a better baseline than the brand new NSS yards.

Our project costs include everything to do with designing and building the ships, all the weapon systems, all initial sparing and ammunition, all initial crew training, infrastructure like jetties, trainers, etc, all technical information (and related IP licensing) plus 30% contingency. So it's not $4B per ship, it's for the entire program delivery per ship. And some of those are fixed regardless of how many ships we buy, so it's not linear. Again, this has been explained repeatedly and quite publically in multiple articles, interviews and analyses. Even our own PBO couldn't find a valid cost comparison between the AOPs project costs and other countries programs because everyone reports totally different data sets as part of their costs.

And the NSS concept was developed and awarded under the Harper govt, so no idea why you think this is a Liberal program.

You are railing against something you are uninformed about against people involved in the actual work and making some pretty crappy arguments not backed up by any actual facts. If you want to know why big procurement takes so long in the GoC, imagine there are whole hordes of people doing the same thing every time you brief something up, and continue to do it after approval using the same uninformed, already disproven arguments not based on any kind of reality.

 

[Navy_Pete]

Again this is where cost plus always comes into play.

Even the government said that the large cost of the overall project was because it included upgrade costs to the ship yards because they are investing in a industry.
The best way to "make money" on these contracts are for "cost plus" that's how it goes.

in reality if they can not secure customers after the fact the yards will significantly scale down and or shut down. We went this route with the Halifax class ships as part of a ship building strategy back then.

I have said my piece on this subject. Some people are so convinced paying double the cost for a program is justified then so be it.

I hope the Navy gets the best ship, the required amount of ships and get them on time.

Except the build contracts are fixed price, so not sure what your point is.

Some bits of the contract are cost plus (like buying materials, we pay actual cost plus the overhead), but build contracts are negotiated in batches so we can get new fixed prices based on the continuing efficiency gains (which we can see because we have access to the production data that includes actual labour hours as well as planned). There were probably initial build bits that were also at 'cost plus' because the design wasn't finalize, and that's a totally reasonable approach to share the risk, but not the standard way of doing business.

Labour hours will always be expected to go down until you get into the only incremental improvement stage near the end, but that could still mean costs go up between ships because of normal inflation and cost of living increases. So everytime we negotiate the next batch it's based on a projection for the labour hours continuing to improve, not how long it took them the first time they did it.

The people running the projects aren't stupid, and they also brought a lot of really experienced people with a huge amount of shipbuilding time to consult on it so that we can get the best bang for our buck and also try to have an endstate of genuinely competitive shipyards. Everyone involved is keenly aware that every dollar wasted means it won't be spent on an actual capability, so it's not like we're just bending over and taking whatever highball quote we get.

I get it, you don't like the program, but please do us the favour of making informed arguements based in demonstrable facts that match the context and don't just recycle the same BS from op-eds written by people who haven't got a clue what they are talking about (and have been explained repeatedly over the 111 pages and counting of this thread).

 

[childs56]

Holy crap; the difference in the project costing for the US has been explained in detail in this thread and in a ton of articles, but basically it boils down to their $1.2 Billion is JUST FOR THE HULL AND MARINE SYSTEMS. Everything else is provided to the shipyards and costed under different projects.

For example the Zumwalt's were estimated at $4.2 B each for just the ships; that excluded all the R&D and other real costs to develop and operate them. That's over $5.4 B Canadian, and still excludes a bunch of other costs we would roll into our own project accounting.

The initial frigates included some FMS which drastically lowered the shipyard contract award, but the actual total cost between the first ship and the last ship was something like 20-30% lower once they got better at building it. All of that fed into the NSS analysis, and you can see the same thing in any public report for the US, EU and others that talk about a 'learning curve' for ship building. Even experienced yards have it; they just started at a better baseline than the brand new NSS yards.

Our project costs include everything to do with designing and building the ships, all the weapon systems, all initial sparing and ammunition, all initial crew training, infrastructure like jetties, trainers, etc, all technical information (and related IP licensing) plus 30% contingency. So it's not $4B per ship, it's for the entire program delivery per ship. And some of those are fixed regardless of how many ships we buy, so it's not linear. Again, this has been explained repeatedly and quite publically in multiple articles, interviews and analyses. Even our own PBO couldn't find a valid cost comparison between the AOPs project costs and other countries programs because everyone reports totally different data sets as part of their costs.

And the NSS concept was developed and awarded under the Harper govt, so no idea why you think this is a Liberal program.

You are railing against something you are uninformed about against people involved in the actual work and making some pretty crappy arguments not backed up by any actual facts. If you want to know why big procurement takes so long in the GoC, imagine there are whole hordes of people doing the same thing every time you brief something up, and continue to do it after approval using the same uninformed, already disproven arguments not based on any kind of reality.

Our build Costs taking from the PMOs review of the program.
Pre-Production 5.3 Billion Per ship $353,333,333 (277,702,333US)
Production 53.2 Billion Per ship cost $3,546,666,666 Cdn (2,787,254,399US)
Project-Wide 11.4 Billion (spares, training Life cycle) Per ship $760,000,000
Total 69.8 Per ship overall cost is $4,653,333,333Cdn ($ 3,615,048,000US)


The Contract cost per Ship for the U.S. Navy’s future small combatant (FREMM)
1,470,000,000 US Each (1,870,413,300Cdn)


The Zumwalt class was a R and D into s future combatant. They decided the costs for value is not worth it at this time.


Yup it was a Conservative process the costs were much lower for a reason.
Fact is we are over paying per ship cost no matter how you want to swing it. If we take overall project cost we are paying double what we should be.
To buy a ship design and then re design the thing and add an extreme amount of weight tells me that once Again a Canadian made problem to a solution is at work. We are trying to make all in one platform at a "budget price" those guys out east are loving it. Were already into cost contingency fund and we haven't even started the build. Numbers do not lie. Yes I do know how to crunch numbers and read reports.

 

[Halifax Tar]

Our build Costs taking from the PMOs review of the program.
Pre-Production 5.3 Billion Per ship $353,333,333 (277,702,333US)
Production 53.2 Billion Per ship cost $3,546,666,666 Cdn (2,787,254,399US)
Project-Wide 11.4 Billion (spares, training Life cycle) Per ship $760,000,000
Total 69.8 Per ship overall cost is $4,653,333,333Cdn ($ 3,615,048,000US)


The Contract cost per Ship for the U.S. Navy’s future small combatant (FREMM)
1,470,000,000 US Each (1,870,413,300Cdn)


The Zumwalt class was a R and D into s future combatant. They decided the costs for value is not worth it at this time.


Yup it was a Conservative process the costs were much lower for a reason.
Fact is we are over paying per ship cost no matter how you want to swing it. If we take overall project cost we are paying double what we should be.
To buy a ship design and then re design the thing and add an extreme amount of weight tells me that once Again a Canadian made problem to a solution is at work. We are trying to make all in one platform at a "budget price" those guys out east are loving it. Were already into cost contingency fund and we haven't even started the build. Numbers do not lie. Yes I do know how to crunch numbers and read reports.

You always have me until the "east" comments start to come out.

 

[Uzlu]

Yes I do know how to crunch numbers and read reports.

Maybe your ability to crunch numbers and read reports is not that good. https://www.navalassoc.ca/wp-content/uploads/2021/02/CSC-Report-NAC-Feb-2021-LR.pdf

 

[childs56]

You always have me until the "east" comments start to come out.

Bombardier, Irving, Chevy/GMC, Dodge/Chrysler, lesser extent Davies, Ford and GD are all heavily subsidized by both provincial and federal. Yet we see very little in the investment return for money invested overall. Those are facts. Eventually they have to build product on their own to sustain them. We have to see a commitment for them to do this.
Yes industries are subsidized. But Bombardier and Irving more so then others. Were not not talking about a couple hundred million here and there. Were talking about Billions, maybe another Billions here and there.
In Order for us to be taking seriously international theses companies need to build a quality product at a fair price. The economic benefit has to outweigh the investment dollars. Spending double the cost of a project just to create jobs is not fiscally responsible nor is is sustainable.

We are seeing our NATO partners, Our Pacific Partners buying ships from foreign countries. We were not prepared for this. We could have had a wicked ship building capacity. That we could have projected off shore. Instead we are building ships when everyone else has already made orders. Once again our ships will be so Canadianized that they will not be sellable.
I understand having to invest in Canadian industry to make money. I understand investing in the Canadian economy to employ Canadians especially in keeping our Military supplied with equipment. But the only time we spend this much money is to shore up the ship yards, or shore up Bombardier. Then they go bust right afterwards.
This is as much a Government problem as a business problem.
Maybe we need government ship yards that are leased out to companies.
Maybe we need a Defence program that owns Ship building abilities, airplane building abilities, land vehicle abilities. For long term on going research and sustainability.

 

[childs56]

Maybe your ability to crunch numbers and read reports is not that good. https://www.navalassoc.ca/wp-content/uploads/2021/02/CSC-Report-NAC-Feb-2021-LR.pdf

My numbers are from the PMO report on the CSC. Cant get any more concrete then that I would think. They are broken down pretty good.
That report you linked to narrowly breaks down the cost. Then compares us to the US Navy only in terms of capability. yet leaves out Australia, New Zealand, Britain, Portugal to name a few.
Then goes off on the "holistic" approach. But most of the projects such as the Artic Sea port upgrades to the Jettys on the East/West Coast were already budgeted outside of the budget for the ships. The actual cost of design, build, equip, launch, float, test and sail away is what? It sounds like we are buying a Anti Air surface ship with limited ASW abilities. Which is different then the original requirements.

 

[SeaKingTacco]

My numbers are from the PMO report on the CSC. Cant get any more concrete then that I would think. They are broken down pretty good.
That report you linked to narrowly breaks down the cost. Then compares us to the US Navy only in terms of capability. yet leaves out Australia, New Zealand, Britain, Portugal to name a few.
Then goes off on the "holistic" approach. But most of the projects such as the Artic Sea port upgrades to the Jettys on the East/West Coast were already budgeted outside of the budget for the ships. The actual cost of design, build, equip, launch, float, test and sail away is what? It sounds like we are buying a Anti Air surface ship with limited ASW abilities. Which is different then the original requirements.

You are entirely incorrect about the “buying an AAW ship with limited ASW capabilities”. We are buying a ship which can survive for the next 30 years. The ASW suite is impressive, too.

Statements like this are convincing me that you do not have the first clue about warships or naval warfare.

 

[Good2Golf]

My numbers are from the PMO report on the CSC. Cant get any more concrete then that I would think.

PMO hasn’t issued a report on CSC.

 

[Uzlu]

My numbers are from the PMO report on the CSC. Cant get any more concrete then that I would think.

Not all your numbers were from the Parliamentary Budget Officer. And it is not about concrete numbers. It is about a fair comparison. When you stated those prices, was it a fair comparison? What does the Naval Association of Canada say about fair comparisons of prices of the Canadian Surface Combatants compared to other frigates?

They are broken down pretty good.

Are the numbers for the Constellation-class frigates broken down pretty good? Are they broken down as good? Is it even a fair comparison? Are the Canadian Surface Combatants going to be more capable frigates than the Constellation-class frigates? What did the Naval Association of Canada have to say about this?

That report you linked to narrowly breaks down the cost.

That report I linked to debunks your claim that the Canadian Surface Combatants are outrageously expensive when compared to the Constellation-class frigates.

Then compares us to the US Navy only in terms of capability.

No. It also compares the different ways prices are calculated.

yet leaves out Australia, New Zealand, Britain, Portugal to name a few.

And what is your point? Are you perhaps suggesting that Australia, New Zealand, the United Kingdom, Portugal, etc. all can build frigates like the Canadian Surface Combatants at a much lower price?

 

[Navy_Pete]

Our build Costs taking from the PMOs review of the program.
Pre-Production 5.3 Billion Per ship $353,333,333 (277,702,333US)
Production 53.2 Billion Per ship cost $3,546,666,666 Cdn (2,787,254,399US)
Project-Wide 11.4 Billion (spares, training Life cycle) Per ship $760,000,000
Total 69.8 Per ship overall cost is $4,653,333,333Cdn ($ 3,615,048,000US)


The Contract cost per Ship for the U.S. Navy’s future small combatant (FREMM)
1,470,000,000 US Each (1,870,413,300Cdn)


The Zumwalt class was a R and D into s future combatant. They decided the costs for value is not worth it at this time.


Yup it was a Conservative process the costs were much lower for a reason.
Fact is we are over paying per ship cost no matter how you want to swing it. If we take overall project cost we are paying double what we should be.
To buy a ship design and then re design the thing and add an extreme amount of weight tells me that once Again a Canadian made problem to a solution is at work. We are trying to make all in one platform at a "budget price" those guys out east are loving it. Were already into cost contingency fund and we haven't even started the build. Numbers do not lie. Yes I do know how to crunch numbers and read reports.

I'm assuming you are talking about the PBO report; did you miss the part where the actual parametic estimate for the 9th ship is $1.9 B, with the FREMM at $1.6 B and Arleigh at $2.0B? That's a ROM based on the size of the hull and power output, so because the FREMM is smaller it's cheaper, but pretty close to the Arleigh because they are about the same tonnage and similar power out.

The overall costs of $4B per ship includes absolutely everything (including contingency), which is why it's so much higher than the 'just the ship' costs. The early estimate under the Harper govt was a ROM with no firm ship specs, so it got updated once we nailed down the actual ship requirements figured out and ended up with a bigger hull then envisioned. TBS also added all the other costs into the reporting requirements, so that's why the budget ballooned. Some of it was due to a bigger ship that gives real costs increases, some of it was existing costs that got added in, and then there were inflation costs from an overly optimistic initial schedule.

None of that really had anything to do with a change of government, but comparing the two is an apple/oranges effort.

Preproduction work is all the fixed costs to create the production design (basically the build instructions and planning) plus any design changes. Even if you buy an off the shelf design and build it somewhere other than the donor shipyard, you need to do the production design and planning. It's a lot of work. That's a real cost that would have been added on by building in Canada, but if we want functional shipbuilding yards, they need that expertise. On the flip side, it means that if something happens, we aren't hoping a foreign government won't step in and seize the production for their own needs (see COVID).

The production costs are adjusted for inflation, and have built in the contingency. When that's 30 % of the project budget, that's pretty significant. They also note that every delay adds billions to the overall cost of the project just in inflation (even though the level of effort is the same). The PBO report also includes taxes for some reason; DND doesn't (because it doesn't make sense for use to pay taxes for the companies to process the payment and return the taxes to us; it's an electronic money shuffle that actually costs us real money to do).