New Canadian Shipbuilding Strategy

[Oldgateboatdriver]

Davie are the worse of the worst sore losers.

Which makes them better than Irving, which is the worse of the worst sore winner. After all, It's Irving who tried to use its influence with the Liberal party in order to have the new government cancel a contract already negotiated and agreed to by the past government, just so they could snatch it up themselves after having already 40B$ worth of contract in their pocket.

Seriously, MTS? There is nothing, underline nothing, in that article from Davie, other than saying they are happy to have gotten the interim ice breaker contracts. The article is from a business reporter at La Presse - the MONTREAL newspaper, which couldn't care less if a business in Quebec City lays off 800 employees, and is based on information from Ottawa obtained on an access to information request and on discussion with Ottawa based civil servants known to this reporter.

Nothing to do with Davie here.

And for the factual information of the people hanging around here, when the senior Federal civil servant states that Davie was not selected "as a result of an open, fair and transparent competitive process.", that spokesperson is full of it.

When the selection of shipyards for the NSPS was being made, Davie was in receivership and could not get itself considered, until the last minute, because it was bought and brought out of bankruptcy a few weeks before the closing of the process. Davie put together a last minute bid to get selected as the yard for the non-combat vessels (the one Seaspan got). However, that bid was rejected by the government without further consideration because one of the "requirement" was to have a collective agreement in place and in Davie's case because of the bankruptcy, the agreement had expired and, obviously, the new owners hadn't had time to sit down with the union and negotiate a new one. So to say that Davie had a fair and competitive shot at this work is simple bullsh^^t. Ottawa didn't even look at the actual Davie bid. (BTW, about having an agreement in place at the time of selecting the yard as opposed to when you do the work: How's that working out for Irving?)

Now, in another thread relating to the Coast Guard, we have just learned that the Cygnus - on of four East coast fisheries patrol vessel is limping back to port having sprung a leak. She is 37 years old. Her older sister the Cape Roger is 41 years old and has already suffered flooding while alongside. This leaves the two "youngsters" of the gang, Leonard Cowley, 34 and Grenfeld 31. These are to be replaced, under the NSPS, by Seaspan after they complete the next three Ofshore science vessels, the two JSS and the Arctic Icebreaker. We are talking a start date at least 10 years from now, by which time the "Atlantic Four" will be between 41 and 51 years old. These are the ships and people watching our fisheries and keeping foreign fishermen in line off our East coast!

Meanwhile, the "interim" icebreakers are there to stop the current gap until the new river icebreakers (class 3-4) come on line. When? We don't know as no contract for their replacement are even contemplated at this time in the NSPS. So they would be at the end of the current Seaspan  pile - thus not even begun for the next 15years. These icebreakers are between 31 (the Larsen) and 40  (Amundsen and Radisson) years old as we speak, they will be at least between 45 an 54 by the time they are replaced if things stand as they are.

I, for one, think that if you are going to build new icebreakers, they should come from a single yard, as it is specialized work - so better to concentrate in one place.

This said, can anyone tell me why Canada doesn't simply negotiate with Davie for the immediate acquisition of a satisfactory design for a Coast Guard offshore patrol vessel and then give Davie the contract to build five of them, maybe six, right now. In return, you give Seaspan a contract to build three or four river icebreakers right after the Diefenbaker.

The NSPS may have been a good idea when it was envisaged, but it took too much time to execute and right now, the Coast Guard is in dire straight, even a lot more than the Navy.

 

[Loachman]

Davie are the worse of the worst sore losers.

Please - there is no need to reproduce the whole article in a response.

 

[Loachman]

Wonder if we could sell the Germans CH-148 Cyclones?

We could if we built them, but we don't.

 

[Navy_Pete]

Nothing to do with Davie here.

And for the factual information of the people hanging around here, when the senior Federal civil servant states that Davie was not selected "as a result of an open, fair and transparent competitive process.", that spokesperson is full of it.

When the selection of shipyards for the NSPS was being made, Davie was in receivership and could not get itself considered, until the last minute, because it was bought and brought out of bankruptcy a few weeks before the closing of the process. Davie put together a last minute bid to get selected as the yard for the non-combat vessels (the one Seaspan got). However, that bid was rejected by the government without further consideration because one of the "requirement" was to have a collective agreement in place and in Davie's case because of the bankruptcy, the agreement had expired and, obviously, the new owners hadn't had time to sit down with the union and negotiate a new one. So to say that Davie had a fair and competitive shot at this work is simple bullsh^^t. Ottawa didn't even look at the actual Davie bid. (BTW, about having an agreement in place at the time of selecting the yard as opposed to when you do the work: How's that working out for Irving?)

The Davie bid was fully reviewed and scored; the yards were selected based on that, and VSY had a better proposal for the NC package. Not sure where you heard otherwise, but it's simply not true.

Not being bankrupt is a pretty reasonable requirement,and is a standard requirement that is part of pretty much every single GoC contract to provide certain financial guarantees. You can't seriously criticize anyone for that; if it wasn't considered then you would probably also be up in arms about 'pandering to Quebec' and politics interfering with procurement process. If they lost points for not meeting something that was very clearly laid out in the evaluation scoring guide (which they had as part of the RFP) then it's really no one's fault but the bid team, but c'mon.  Would you have someone in chapter 11 build your house?

 

[Rifleman62]

Spot on! My error.

 

[Oldgateboatdriver]

3 points, Navy_Pete:

1) Your reference to "Chapter eleven" is like a reference to Second Amendment rights. It's a US thing that has absolutely nothing to do with Canada.

2) I didn't say they were rejected because they were in bankruptcy: They were out of it by that time. I said it was because they didn't have a Collective Agreement in place with their Union at the time.

3) I hold my info from a good friend of mine: The lawyer in charge of the file for the then owners of Davie. Were is yours from?

 

[MTShaw]

Which makes them better than Irving, which is the worse of the worst sore winner. After all, It's Irving who tried to use its influence with the Liberal party in order to have the new government cancel a contract already negotiated and agreed to by the past government, just so they could snatch it up themselves after having already 40B$ worth of contract in their pocket.

Seriously, MTS? There is nothing, underline nothing, in that article from Davie, other than saying they are happy to have gotten the interim ice breaker contracts. The article is from a business reporter at La Presse - the MONTREAL newspaper, which couldn't care less if a business in Quebec City lays off 800 employees, and is based on information from Ottawa obtained on an access to information request and on discussion with Ottawa based civil servants known to this reporter.

Nothing to do with Davie here.

And for the factual information of the people hanging around here, when the senior Federal civil servant states that Davie was not selected "as a result of an open, fair and transparent competitive process.", that spokesperson is full of it.

When the selection of shipyards for the NSPS was being made, Davie was in receivership and could not get itself considered, until the last minute, because it was bought and brought out of bankruptcy a few weeks before the closing of the process. Davie put together a last minute bid to get selected as the yard for the non-combat vessels (the one Seaspan got). However, that bid was rejected by the government without further consideration because one of the "requirement" was to have a collective agreement in place and in Davie's case because of the bankruptcy, the agreement had expired and, obviously, the new owners hadn't had time to sit down with the union and negotiate a new one. So to say that Davie had a fair and competitive shot at this work is simple bullsh^^t. Ottawa didn't even look at the actual Davie bid. (BTW, about having an agreement in place at the time of selecting the yard as opposed to when you do the work: How's that working out for Irving?)

Now, in another thread relating to the Coast Guard, we have just learned that the Cygnus - on of four East coast fisheries patrol vessel is limping back to port having sprung a leak. She is 37 years old. Her older sister the Cape Roger is 41 years old and has already suffered flooding while alongside. This leaves the two "youngsters" of the gang, Leonard Cowley, 34 and Grenfeld 31. These are to be replaced, under the NSPS, by Seaspan after they complete the next three Ofshore science vessels, the two JSS and the Arctic Icebreaker. We are talking a start date at least 10 years from now, by which time the "Atlantic Four" will be between 41 and 51 years old. These are the ships and people watching our fisheries and keeping foreign fishermen in line off our East coast!

Meanwhile, the "interim" icebreakers are there to stop the current gap until the new river icebreakers (class 3-4) come on line. When? We don't know as no contract for their replacement are even contemplated at this time in the NSPS. So they would be at the end of the current Seaspan  pile - thus not even begun for the next 15years. These icebreakers are between 31 (the Larsen) and 40  (Amundsen and Radisson) years old as we speak, they will be at least between 45 an 54 by the time they are replaced if things stand as they are.

I, for one, think that if you are going to build new icebreakers, they should come from a single yard, as it is specialized work - so better to concentrate in one place.

This said, can anyone tell me why Canada doesn't simply negotiate with Davie for the immediate acquisition of a satisfactory design for a Coast Guard offshore patrol vessel and then give Davie the contract to build five of them, maybe six, right now. In return, you give Seaspan a contract to build three or four river icebreakers right after the Diefenbaker.

The NSPS may have been a good idea when it was envisaged, but it took too much time to execute and right now, the Coast Guard is in dire straight, even a lot more than the Navy.

I've had a number of strokes. My brain works fine apart from communication, so bare with me.

But that and fatigue are making a proper reply to your appreciated response impossible.

In short, your right to a point. Quebec is trying to take Seaspan's work. Link to article removed in accordance with site rules.

No, I'm not saying your wrong. In short

• I'd love in for Davie to become Canada's Coast Guard yard. 
• Then Seaspan gets to build 3 JSS and future work minor ships like OPV or Corvette
• Irving gets what it already has.

That's the best you get from me today.

 

[Navy_Pete]

3 points, Navy_Pete:

1) Your reference to "Chapter eleven" is like a reference to Second Amendment rights. It's a US thing that has absolutely nothing to do with Canada.

2) I didn't say they were rejected because they were in bankruptcy: They were out of it by that time. I said it was because they didn't have a Collective Agreement in place with their Union at the time.

3) I hold my info from a good friend of mine: The lawyer in charge of the file for the then owners of Davie. Were is yours from?

1) Chapter eleven is like Kleenex; it's widely understood as being in bankruptcy protection, but yes, understand it's an American law

2)Not true, they lost because they came 3rd, with only two spots on the podium.

3)By reading all three bids, the scoring criteria, the results and the recommended outcome based on the scores (ie Irving gets combat, VSY gets non combat)

The process went massively out of it's way to be free of interference, free from politics, and absolutely fair that any suggestion otherwise is pretty ridiculous. I had nothing to do with the RFP at the time, but it really was a massive amount of time and resources spent to make sure that the results could not be challenged under the guise of it not being fair, and the fact that the Davie bid was even considered was them bending over backwards to avoid challenges after the fact. 

Responding to RFPs is a big investment of time and resources; the NSS is a thirty plus year program where the government partnered with shipyards to rebuild an entire industry as a strategic investment. Being insolvent and not having a collective agreement are both massive risks and should absolutely be considered when we are talking about the Government spending BILLIONS of taxpayers money. Putting together a hurried bid that doesn't meet all the criteria will result in a low score.

They did a good job on Asterix, and their ad campaigns are pretty funny, but that was built on the fly, exempt from all kinds of rules that the two NSS shipyards have to follow (ie build in Canada, IRBs, etc) and doesn't require anywhere near the abilities needed to actually build a ship from scratch.  Really encouraging that they can get there, and they did a lot of good things, but they would need a lot more things than just a graving dock to start efficiently building ships at the kind of pace they would need to be commercially competitive, which would require modernization of the facilities and a bunch more people.

 

[Oldgateboatdriver]

Seen, N.P.

However: Again, I did not say that there was interference, political or other, in the process. But there are different degrees of what constitutes fairness.

For instance, in the current phase of selecting a design for the CSC, they have changed the rules (not to mention made multiple extensions) so that they can review bids, and then tell various bidders if there are non conformities to give them a chance of correcting same. That maybe good for the government side of things, but a bidder that is in full conformity from the start may find that "unfair".

In reverse here, knowing that the various bidders (there were more than the two winners and davie) had had 9 months to put their bid together, while Davie had three weeks, couldn't they have either given them an extension to negotiate a Collective Agreement (after all, the damn process was already 2 years behind by then), or simply told them that any consideration - setting that aside - would require them to enter into one within a given amount of time after?

I do take exception, however, with your comment on Davie's need for modernization and more than just a graving dock. First of all, the other two yards were, at the time in the same or even worse degrees of backwardness where facilities are concerned. They only improved and modernized their facilities as a result of getting selected for the NSPS. Second of all, Davie has modernized and rebuilt and improved its various shops and they are just as modern as need be already - their pipe shop is actually considered a model. Third, they have much more than only  graveyard, they in fact have five separate large slips that can be used and shops for module assembly. You talk of "pace" for commercial competitiveness: They could build the CSC's six at time and be done in little more than two batches if the government wished. Come and see me when Irving can match that pace. Finally, building ships from scratch: Since the new ownership took over and excluding Asterix, they have built five ships from scratch in the 3500 to 4500 tons displacement range, including three extremely complex deep sea construction ships. Who else has done that in Canada in the last 5 years.

 

[Navy_Pete]

Yes, they modernized the yards to meet the standard that was mandated in the NSS; Davie would have done the same as it was part of their proposal.  Upgrading the shipyards is a mandatory contract requirement.

Davie still has some upgrades required to meet that standard.

They've done a lot, but I think you are underestimating the complexity and work required to build CSC; even the best warship builders in the world aren't able to build anything at that pace. From cutting steel to launch one ship takes a few years until launch, but they'll have three or four ships in different phases of production at a time.

ISI currently has three AOPs under construction, and VSY has three OFSVs on the go (with two projects in the design phase). It takes a long time to get an industry started but it's actually starting to to roll on at a decent pace, and you have to remember there was a couple of years for each yard to basically tear it all down and rebuild the infrastructure plus get a team put together. Weirdly enough a thirty year program to build a strategic asset takes some time. 

 

[MarkOttawa]

Not a very bright way to make terribly expensive acquisitions--all about politics (all parties) not needs of RCN or CCG.  Our federal governments just not serious about core responsibilities.

Mark
Ottawa

 

[Uzlu]

Not a very bright way to make terribly expensive acquisitions--all about politics (all parties) not needs of RCN or CCG.  Our federal governments just not serious about core responsibilities.

What do you suggest?  Only buy off the shelf from overseas?  That might be a lot quicker.  But are Canadian governments even interested in providing badly needed ships for the navy and coast guard at an adequate rate?  The National Ship Building Strategy needs to be drastically changed to include Davie.  There appears to be no way Seaspan can supply all those ships for the coast guard and navy in a timely manner.

 

[Underway]

The National Ship Building Strategy needs to be drastically changed to include Davie.

No it doesn't.  There are plenty of other options and other builders that can do such work if required. Why Davie and not Welland (as a random example)?  They did good work on previous RCN ships over the years and it could be argued you'll get more votes out of the Liberal/PC balanced Niagara region with that sort of pork barrelling then in Quebec who constantly are "what have you done for me lately" with their voting.  Not not to mention Niagara needs the jobs a hell of a lot more than Quebec City does.

Fixating on Davie is dangerous.  If you want to add a yard for work then hold a competition, like always.  If Davie is the best bidder then they get the work.  I would be willing to bet that given a competition, the Asterix project would have cost less for taxpayers, Welland could have done that conversion work easily as well and that competition would have forced the price down.

 

[jollyjacktar]

Actually, Welland didn't do so great on ATH's last refit.

 

[Oldgateboatdriver]

You do realize, Underway, that  "Welland" is part of Heddle Marine.

They screwed up the ATH at Welland, and I think the Coast Guard was none too please with how the Amundsen came out of refit either. Then at the Hamilton yard, they screwed up the Hudson - badly.

Out of all their locations, the last ship they build was a small lake/river ferry in 1992. They, in fact did not even put in for the NSPS: They merely indicated they were hoping to get sub-contract work from it (fat chance with Irving winning - Whereas Davie, from the start has been advocating part build work let to subcontractors).  http://www.wellandtribune.ca/2011/07/22/boon-to-local-economy-if-shipbuilding-bid-wins-2

And also, there was competition for the Asterix. After Davie came out with its proposed plan for an interim AOR, the government asked other selected companies to propose something similar. Both Seaspan and Irving made proposals, but Davie's was the one selected. You may recall that the letter from Irving that started the whole Admiral Norman debacle was one where Irving was asking the Trudeau government to reconsider their proposal, claiming it had been unfairly considered. What was different with the Asterix deal was not that there was no competition, it was that to go faster they modified the rules to give the final contract by single source process after getting all the various proposals for review edited to add: and to foil the a**holes civil servants who refused to let the government even consider ANY interim ship by fear of their cherished NSPS becoming unraveled - you may be sure these are the same ones that have now made sure no second iAOR will ever see the light of day).

 

[Underway]

I'm not advocating for them, just using them as an example.  And as an example of why we should stop listening to the loudest shouter.

As for screwing up the ATH, I heard a completely different story.  The RCN screwed that up.  Welland did their due diligence and found far more damage to the ATH structure (during ultrasounds etc...) then the RCN was willing to pay for, which of course through everything out of kilter.  The ship was one big wave away from disaster due to structural fatigue.  The towing incident certainly can't be blamed on the yard. 

But it's essentially irrelevant to my argument.  It doesn't necessarily have to be Davie but necessarily has to be a competition.  Odds are Davie would win easy a fair competition.

 

[Oldgateboatdriver]

I am 100% with you that everything should be by open competition.

As I said above, however, in view of various delays in the NSPS (mostly from the governments, not the yards), and the dire situation of the Coast Guard fleet (at least in the Navy, we got all the frigates mid-lifed), there are now serious gaps in the needs of the fleets in relation to the deliverables of the NSPS and beyond.

This provides an opportunity for immediately expanding industrial benefits of the fleet replacements without depriving the selected shipyards under the NSPS of any benefits they have already acquired under it. With a bit of imagination (and really - not much in terms of brainpower required), this can alleviate the fleets needs while improving for all on the NSPS.

But yes: only by doing it with fair and open competitions.

 

[jollyjacktar]

As for screwing up the ATH, I heard a completely different story.  The RCN screwed that up.  Welland did their due diligence and found far more damage to the ATH structure (during ultrasounds etc...) then the RCN was willing to pay for, which of course through everything out of kilter.  The ship was one big wave away from disaster due to structural fatigue.  The towing incident certainly can't be blamed on the yard. 

I came off ATH shortly before she went in to Welland and kept in touch with the guys who were there doing QA.  Don't kid yourself,  there was plenty wrong with the refit that wasn't on our side.  And the timing of the tow was because of the yard.

 

[Navy_Pete]

I came off ATH shortly before she went in to Welland and kept in touch with the guys who were there doing QA.  Don't kid yourself,  there was plenty wrong with the refit that wasn't on our side.  And the timing of the tow was because of the yard.

Can confirm; there was re-re-re-work on multiple tanks due to major QC fails on the paint (subcontractor work).  On the plus side, they did excellent steel, pipe and electrical work and their own paint department was good (just too small to do all the tank work).  That delayed the undocking (can't paint tanks in the water) so we couldn't do any of the set to work and sail her back before the canals closed for the season, hence the tow.

Port Weller was not part of Heddle Marine when ATH was there; they were a separate company that was a subsidiary of Upper Lakes group.  They shut down shortly after ATH, and understand it's now basically just a facility available for rent of the drydocks.  It's too bad; all the guys that worked there were giving it that last shot, but were going to move on as the work in the area was all drying up (Welland industrial base has basically collapsed), but there were some really good people there.

Agree with the need to review it and compete some of the new work; the CCG has had a bunch of new requirements come up since the NSS started 10 years ago so it's a good time to look at it.  There are a few other yards that could build some of the medium ships and a couple options for the large ships but someone like Davie should be well positioned to make a competitive bid.

 

[Cdn Blackshirt]

The problem with trying to do "open bidding" but only allowing 2-3 domestic competitors is you're very likely to get bid rigging and inflated profiteering. 

On some of these national security type contracts where we are politically saying "we must source from domestic sources" I would argue it makes sense to treat such procurement as a regulated utility and cap a maximum (cost +) agreement with the profit margin falling as they miss on quality or time specifications.