- Reaction score
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This is good news for the submarine community I think. a three year delay would have been totally unacceptable.
Published: 2008-01-04
B.C. keeps $1.5b sub contract
Irving shipyard plans to continue with lawsuit
By MURRAY BREWSTER The Canadian Press
OTTAWA — A British Columbia consortium has won a $1.5-billion maintenance contract for Canada’s four Victoria-class submarines in a controversial decision that defence sources say went all the way up to the prime minister’s desk.
Canadian Submarine Management Group was informally awarded Phase One of the 15-year contract by the Conservative government almost a year ago. But a signed, written agreement was put on hold last year after a lawsuit was filed by a group that includes Maritimes-based rival Irving Shipbuilding.
There were suggestions last fall the contract would be re-tendered, but the navy has told both Defence Minister Peter MacKay and the Privy Council Office that such a move would create an unacceptable delay in the submarine program, which is already years behind schedule.
"Going back out to tender and getting it totally put to bed means three years," said a senior defence source. "We can’t afford that."
The issue was shuttled up the chain of command early last fall to the point where Prime Minister Stephen Harper became involved — and ultimately gave the green light for negotiations to resume "and get this done," said a second defence source.
"There will be no re-tendering," a senior government official said on background.
A spokesman with the Defence Department’s material branch confirmed Thursday that negotiations with the B.C. consortium, headed by Victoria Shipyards, have resumed and a final contract would be awarded in a few months.
"Due to legal and other issues, negotiations were delayed for several months," said David Martin.
"Detailed contractual negotiations are underway with completion expected in a few months."
Almost 18 months ago, the Conservative government announced it would publicly tender the contract. It identified Canadian Submarine Management Group as the "most compliant" with the contract aims and began negotiating a final contract.
But Irving Shipbuilding and Fleetway Inc. — part of a rival consortium led by British defence giant BAE (Canada) Systems Inc. — challenged the decision by calling for a judicial review. The Irving-owned companies stood to gain $750 million in work.
The lawsuit alleges one of the companies that participated in the winning bid played a role in developing the statement of work and evaluation criteria for the contract.
Last summer, a Federal Court judge dismissed an attempt by the federal government to have the case thrown out of court.
A spokeswoman for Irving Shipbuilding said she wasn’t aware that negotiations with the B.C. consortium had resumed and confirmed the lawsuit is still on track.
"We continue to believe the contract was awarded unfairly, contrary to applicable law," said Mary Keith.
"There has been a preliminary exchange of information between legal counsels and the case is proceeding."
The contract has also been the subject of some intense, powerful backroom lobbying.
Longtime Tory heavyweight Fred Doucet was hired to plead Irving’s case to federal officials and politicians. Stephen Dover of Capital Hill Group Inc. registered as a lobbyist on the file for Weir Canada Inc., one of the partners in the B.C. group.
The four mothballed diesel-electric submarines were purchased by Canada from the Royal Navy in the late 1990s for almost $900 million. They were built in Britain by BAE Systems in the late 1980s and early 1990s but taken out of service when the British decided to go with an all-nuclear fleet.
Reactivating the submarines has proven to be a huge challenge for the navy, especially in the aftermath of a fatal fire aboard HMCS Chicoutimi in October 2004.
HMCS Corner Brook is the only submarine now in service. HMCS Windsor and HMCS Victoria are undergoing repairs and upgrades.
The Chicoutimi is not scheduled to have its fire damage repaired until 2010 and is being used for spare parts.
Published: 2008-01-04
B.C. keeps $1.5b sub contract
Irving shipyard plans to continue with lawsuit
By MURRAY BREWSTER The Canadian Press
OTTAWA — A British Columbia consortium has won a $1.5-billion maintenance contract for Canada’s four Victoria-class submarines in a controversial decision that defence sources say went all the way up to the prime minister’s desk.
Canadian Submarine Management Group was informally awarded Phase One of the 15-year contract by the Conservative government almost a year ago. But a signed, written agreement was put on hold last year after a lawsuit was filed by a group that includes Maritimes-based rival Irving Shipbuilding.
There were suggestions last fall the contract would be re-tendered, but the navy has told both Defence Minister Peter MacKay and the Privy Council Office that such a move would create an unacceptable delay in the submarine program, which is already years behind schedule.
"Going back out to tender and getting it totally put to bed means three years," said a senior defence source. "We can’t afford that."
The issue was shuttled up the chain of command early last fall to the point where Prime Minister Stephen Harper became involved — and ultimately gave the green light for negotiations to resume "and get this done," said a second defence source.
"There will be no re-tendering," a senior government official said on background.
A spokesman with the Defence Department’s material branch confirmed Thursday that negotiations with the B.C. consortium, headed by Victoria Shipyards, have resumed and a final contract would be awarded in a few months.
"Due to legal and other issues, negotiations were delayed for several months," said David Martin.
"Detailed contractual negotiations are underway with completion expected in a few months."
Almost 18 months ago, the Conservative government announced it would publicly tender the contract. It identified Canadian Submarine Management Group as the "most compliant" with the contract aims and began negotiating a final contract.
But Irving Shipbuilding and Fleetway Inc. — part of a rival consortium led by British defence giant BAE (Canada) Systems Inc. — challenged the decision by calling for a judicial review. The Irving-owned companies stood to gain $750 million in work.
The lawsuit alleges one of the companies that participated in the winning bid played a role in developing the statement of work and evaluation criteria for the contract.
Last summer, a Federal Court judge dismissed an attempt by the federal government to have the case thrown out of court.
A spokeswoman for Irving Shipbuilding said she wasn’t aware that negotiations with the B.C. consortium had resumed and confirmed the lawsuit is still on track.
"We continue to believe the contract was awarded unfairly, contrary to applicable law," said Mary Keith.
"There has been a preliminary exchange of information between legal counsels and the case is proceeding."
The contract has also been the subject of some intense, powerful backroom lobbying.
Longtime Tory heavyweight Fred Doucet was hired to plead Irving’s case to federal officials and politicians. Stephen Dover of Capital Hill Group Inc. registered as a lobbyist on the file for Weir Canada Inc., one of the partners in the B.C. group.
The four mothballed diesel-electric submarines were purchased by Canada from the Royal Navy in the late 1990s for almost $900 million. They were built in Britain by BAE Systems in the late 1980s and early 1990s but taken out of service when the British decided to go with an all-nuclear fleet.
Reactivating the submarines has proven to be a huge challenge for the navy, especially in the aftermath of a fatal fire aboard HMCS Chicoutimi in October 2004.
HMCS Corner Brook is the only submarine now in service. HMCS Windsor and HMCS Victoria are undergoing repairs and upgrades.
The Chicoutimi is not scheduled to have its fire damage repaired until 2010 and is being used for spare parts.
