Arctic/Offshore Patrol Ship AOPS

[Ex-Dragoon]

Ok guys stick with the AOPS as its the topic at hand

Milnet.Ca Staff

 

[Edward Campbell]

There's a new report on CBC News that repreats pretty much what other have said here: we're paying way too much compared to other countries.

 

[Privateer]

CBC News also asked MacKay to explain why Canada would pay Irving ten times as much for the design as other shipyards say it should cost.

MacKay replied "other shipyards are wrong," and left it at that.

Hmmm...

 

[Seyek]

"We are implementing what's called a design and then build strategy," the minister told CBC News.

Hopefully the navy types here will have a better idea than myself, but is there any way of building a ship that DOESN'T first require you design it? Or do other navies just haphazardly throw parts together until something's floating?

 

[Kirkhill]

There's one curious bit of info that was news to me:

We actually own design for the Svalbard - purchased for 5 MCAD.

Good, bad or indifferent we could have started cutting steel for carbon copies at the time that design was purchased and had at least a couple of hulls in the water by this time.

Which, as the esteemed MND has said, good, bad or indifferent, would have meant a capability we don't have.  In addition it would have meant a design that could have been evaluated in the field and modified in the next flight........

But hey, we have experts purchasing this stuff..... and so we are going offshore to find people to keep track of the projects

http://www.tpsgc-pwgsc.gc.ca/app-acq/sam-mps/cmms-nr-eng.html

 

[CougarKing]

Ahhh yes, the Canadian Centre for Policy Alternatives...  :

link

Is Canada’s Arctic patrol ship program on the same course as the F-35s?

Screwing up military procurement contacts is as Canadian as shinny and maple syrup.

Word that there are questions surrounding the Conservative government's program for new Arctic patrol ships, including of course the cost, should startle no one.

You can go back a century to the infamous Ross rifle that Canadian soldiers took into the trenches in the First World War, only to find the mud made them jam and worse — the bolts sometimes fell out or even flew back and hit soldiers in the face when they fired.

Flash forward to more recent history and you've got the Liberals' purchase of second-hand British submarines that have been in the repair dock more than at sea, the endlessly delayed replacement for the navy's ancient Sea King helicopters and of course the budget-busting F-35 stealth fighter program.

It is surprising that the government appears to be circling the wagons on questions about the plan to build eight ice-capable offshore patrol vessels, just as it did when questions were first raised about the F-35 program's soaring costs.

CBC News is reporting that Ottawa appears to be overpaying for the design of the new ships, based on the costs of similar vessels bought by other countries.

The $288-million price tag for Halifax shipbuilder J.D. Irving to design the ships is many times higher than for ice-capable patrol vessels bought by Norway, Denmark and Ireland, according to ship-building experts CBC News interviewed.

And that's before construction of the ships, which is covered under a separate contract between Irving and Public Works Canada, which is administering the program for the Department of National Defence. The total cost of the program as announced in 2007 was estimated at $3.1 billion.

According to CBC News, Norway paid just $5 million to design the Svalbard, the vessel on which the Canadian ships' design will be based. The total cost including construction was $100 million in 2002. Denmark got two similar ships for $105 million in 2007, all in. The Irish navy is spending $125 million for two patrol ships now under construction, CBC News said.

Shipbuilding experts said vessel design normally makes up 10 to 20 per cent of the total cost of a ship.

CBC News said neither Public Works Minister Rona Ambrose, Defence Minister Peter MacKay nor officials in Ambrose's department could explain the cost discrepancy.

When confronted with the opinions of experts from other shipyards, MacKay said simply, "other shipyards are wrong."

If the defence minister's, um, defensiveness sounds familiar, it's because MacKay stonewalled questions about the F-35 program's costs for months before conceding it had grown to $25 billion from a previous estimate of $15 billion, as critics had warned. The original estimate was $9 billion.

The assessment was confirmed last year in a report by the auditor general, who hammered MacKay's department for keeping Parliament in the dark. A further review put the total life-cycle cost of the fighters at almost $46 billion.

The entire fighter program has now been "reset" to see if there are cheaper alternatives to the F-35, further delaying replacement of the RCAF's aging CF-18 Hornets. The process was put in the hands of a separate National Fighter Jet Procurement Secretariat under Public Works.

Is the patrol-ship program following the same narrative arc?

Last month, the left-leaning Canadian Centre for Policy Alternatives, along with the Rideau Institute, produced a report warning the program was a "titanic blunder," CBC News reported.

It took issue not just with the costs but with the kind of vessels the government wanted, saying the Svalbard-class light icebreaker's design contained too many compromises to fulfill Canadian requirements.

 

[Kirkhill]

Unfortunately we keep setting up targets that are impossible to miss.  At times I'm convinced that folks like Irving are on the same side as the "policy alternative" folks. 

 

[Colin Parkinson]

The conservatives should say; "We have listened to the advice of the Liberals and the NDP and will purchase these ships offshore. We wish to thank the parties for putting the interests of the treasury ahead of regional benefits" then sit back and watch them spin.

 

[Edward Campbell]

There's a new report on CBC News that repreats pretty much what other have said here: we're paying way too much compared to other countries.

And, in a full page ad in (at least) the Ottawa Citizen, Irving fights back:

Source: iPolitics

 

[Canadian.Trucker]

This is just another example of a potential procurement boondoggle in a long list of other boondoggles.  We're so bassackwards when it comes to procurement it really isn't funny anymore.  From flash to bang it takes our military so long to get the necessary equipment into the hands of our soldiers/sailors/air force personnel that by the time it does come around it's a surprise that it shows up because people almost forget it was in process to begin with.

I am ofcourse being extra sarcastic and facetious in my statements.

 

[Kirkhill]

Irving's position still doesn't rationalize the procedures of other yards which design-build-modify-build-modify-build-build-build....

288 MCAD for Irving to figure out how to do the stuff they said they could do at the time they got the NSPS (AOPS-CSC) contract.

I have no problem with Canada standing up the industrial capability to build ships.  I think it is an excellent idea.

Equally I have no problem with paying the extra dollar to create that capability. 

I do have a problem with costs not being clearly defined.

Irving will build a non-functional module to train its team to build these ships.  That's fair.  They don't have that capability just now. They not only have to design a vessel and build it.  Damen, Langsten, Ulstein and the Odense yards have(had) that capability and it is regularly exercised.  Irving also has to learn how to design and build vessels.  If they knew how I don't believe they would have to go offshore to buy the expertise from an outfit like Odense.

Let's not pretend that Irving has the capability - they are embarking on a very steep learning curve.  And even with the test module I doubt if the first complete AOPS will be like the last one or have the same life.  I consider that cost an acceptable cost - within limits.

Equally we need clarity in the accounting to be able to clearly delineate the point in time when Irving has learned its trade and vessels are delivered at their real production cost - not the subsidized cost to develop the industry.

 

[Cdn Blackshirt]

Like Kirkhill, I have some real problems with this which I lay at the feet of PW, the government and NDHQ.

My objective in all this is: "Build the ships in Canada."

I want the labour here....

The design I'm less concerned about....and in fact, buying only off-the-shelf tested designs has a lot of merit to me.

The fact that NDHQ appears to have a strong need to "Canadianize" everything to me appears to often to be an employment justifier as opposed to an operational necessity.

Me again....I would've pooled the 20-year build plan and bid out the entire thing to the world's biggest military builders and let them make recommendations about fleet composition and necessary inclusions....then let them negotiate with Canadian shipyards as I'm damn-sure they'd do a better job than the silly buggers at NDHQ/PW.

If they decided to use Irving, good for them. 

If they decide not to because they think Irving is a bunch of nincompoops, and instead want to build a new state-of-the-art facility from scratch....also good for them.

But for the Love of God, pick one location and build the facility out right.  Make it the most high-tech facility in the world so that after it's done building out our military ships, capacity is fought for to produce civil vessels.  Do not try to spread it around.  Military procurement should never be mixed in with provincial hand-outs....but as long as it is, we will see this same absurd process repeat itself.


Matthew.

P.S.  As a side note, I think military procurement of items produced in Canada should be billed to the military 'net of' income taxes and HST.  Why the military is forced to pay these taxes given its role, is beyond me.  If the military did not spend, the taxes would not exist.  So wipe the slate and do all cost calculations exclusive of those taxes (fuel taxes too).

 

[GR66]

I've got no problem with the idea of "buying Canadian" and supporting Canadian industry IF that industry can be competitive in the global market. 

It's nice to say "let's build a Canadian Shipbuilding industry" but is there a long-term market for the products that we would produce?  Once we tool up, train the labour force, obtain the know how and build our Canadian ships (at great start-up expense), is there an ongoing market out there for what we can produce and can we be competitive in that market?  If not, they we've just misallocated precious resources that could have been better invested in other industries where we CAN be competitive in the long term rather than an ongoing drain on the economy in the form of industrial subsidies, etc.  I'd be curious to know if anyone has made such an assessment in this case.

 

[Kirkhill]

GR66

I have a lower standard than export potential.

All that I ask is that the effort is fully engaged supplying a service, at reasonable market price, that we can utilize.  When UPS outperforms Canada Post then Canada Post is surplus to requirement.

If we need ships, and I mean really need them and intend to use them effectively, and can build them domestically at a reasonably competitive rate,  then by all means build them here.  I don't really care if they never get sold off shore.

 

[GR66]

If we need ships, and I mean really need them and intend to use them effectively, and can build them domestically at a reasonably competitive rate,  then by all means build them here.  I don't really care if they never get sold off shore.

If the cost of buying those ships domestically "at a reasonably competitive rate" involves massive start-up costs, industrial subsidies and re-tooling/re-training expenses that will soon be lost once our immediate domestic orders are filled and the industry then withers on the vine because it can't sell offshore then it is not a good investment.  That money could be much better invested in viable industries that will generate ongoing employment (and tax revenue from a healthy industry).

If I thought Canada could/would have an ongoing ship procurement strategy that could keep domestic shipyards working indefinitely instead of one spurt to fill our order then decades of nothing then I'd agree with you.

 

[Kirkhill]

If I thought Canada could/would have an ongoing ship procurement strategy that could keep domestic shipyards working indefinitely instead of one spurt to fill our order then decades of nothing then I'd agree with you.

We are in violent agreement then. 

I HOPE that a long term strategy can be created and maintained. 

I HOPE that this NSPS plan can be moulded to that outcome.

I FEAR that the early indications are not conducive to such ends.

It is not only the yards themselves (not wanting to point fingers anymore than I have) but it is also the lack of a consistent strategy that enjoys real all party support.

 

[dapaterson]

For a bit of clarification:  DND get spending authorities including HST.  When DND spends money, it is chaarged amounts net of HST.  HST amounts are charged to an account that is not part of DND's allocation.

Clear as mud?

 

[YZT580]

If the government of Canada had been doing their job and buiding and maintaining a fleet all along none of this discussion would be taking place.  For a nation the size of Canada with the coastline we have to protect there is an ongoing requirement for a navy which also means an ongoing requirement for ships.  We should have been launching several ships per year, every year since the frigate contract was completed.  Then Irving wouldn't be re-learning skills that should never have been let go.  But we haven't, we didn't, and now we are paying a very steep price for that neglect.  The airforce is in the same boat or even worse.  Now NDHQ don't make it any easier by Canadianizing everything they buy including trucks and Johnnies and that is probably Peter's biggest problem.

 

[Navy_Pete]

If the government of Canada had been doing their job and buiding and maintaining a fleet all along none of this discussion would be taking place.  For a nation the size of Canada with the coastline we have to protect there is an ongoing requirement for a navy which also means an ongoing requirement for ships.  We should have been launching several ships per year, every year since the frigate contract was completed.  Then Irving wouldn't be re-learning skills that should never have been let go.  But we haven't, we didn't, and now we are paying a very steep price for that neglect.  The airforce is in the same boat or even worse.  Now NDHQ don't make it any easier by Canadianizing everything they buy including trucks and Johnnies and that is probably Peter's biggest problem.

Not sure why you think it's NDHQ.  Ever hear of 'Industrial Regional Benefits'?

http://www.ic.gc.ca/eic/site/042.nsf/eng/h_00016.html

So we can buy a ship design, and copy it, but govt policy is that it should be provided by a Canadian supplier, and spread across the country.  Aside from PWGSC and DND, pretty sure Industry Canada is also involved in NSPS.

For some reason the phrase 'competing priorities' comes to mind.

 

[Kirkhill]

For some reason the phrase 'competing priorities' comes to mind.

Indeed.

http://www.ic.gc.ca/eic/site/sim-cnmi.nsf/eng/uv00050.html