New Canadian Shipbuilding Strategy

[FSTO]

So what that article is saying to me is that our DM's and their staff are far far far more interested in the "process" and blackmailing companies than in getting the right equipment for the job.

 

[Oldgateboatdriver]

OGBD:

I enjoy picking on you because I know the feeling is mutual.

I wouldn't call it picking: Its an ongoing muscled but civil debate of opinions which, I believe is very educational for both parties and, I would think, for those that follow its unfolding.

There are no hard feelings at all, quite the opposite: I don't get to go to your side of the country these days, but rest assured that next time I am in your neck of the woods, the first round of 25 yrs old single malt is on me. 

So what that article is saying to me is that our DM's and their staff are far far far more interested in the "process" and blackmailing companies than in getting the right equipment for the job.

He who profits is enslaved to the provider of funds. What I find most disturbing in the "Mistral" debacle of last year is that the uniformed personnel supported the acquisition but it was opposed by the National Defence DM, not the PWGS one, on the basis of effect on the Shipbuilding Strategy, which we all know is an industrial strategy - not a military one.

 

[Kirkhill]

I wouldn't call it picking: Its an ongoing muscled but civil debate of opinions which, I believe is very educational for both parties and, I would think, for those that follow its unfolding.

There are no hard feelings at all, quite the opposite: I don't get to go to your side of the country these days, but rest assured that next time I am in your neck of the woods, the first round of 25 yrs old single malt is on me. 

He who profits is enslaved to the provider of funds. What I find most disturbing in the "Mistral" debacle of last year is that the uniformed personnel supported the acquisition but it was opposed by the National Defence DM, not the PWGS one, on the basis of effect on the Shipbuilding Strategy, which we all know is an industrial strategy - not a military one.

I look forward to the sharing.

 

[Edward Campbell]

...
He who profits is enslaved to the provider of funds. What I find most disturbing in the "Mistral" debacle of last year is that the uniformed personnel supported the acquisition but it was opposed by the National Defence DM, not the PWGS one, on the basis of effect on the Shipbuilding Strategy, which we all know is an industrial strategy - not a military one.

But the "National Defence DM," not anyone in uniform, is the official charged with managing defence policy, which, arguably, was the domain within which the Mistral decision lay. The fact that the CDS may have "liked" the idea of having a Mistral is irrelevant given that there was no policy base for acquiring such a beast. The Shipbuilding Strategy is, indeed, an industrial support programme, but it is a "national" one and a significant one, and it is one that I would expect that all senior officials would support, actively.

 

[Good2Golf]

...although in fairness to the CDS, there were, as intended within the DND construct, two different advices given:  Military (capability) Advice, and Departmental Advice (Policy/Resources).  The first is the CDS' and second exclusively the DM, so having Mil and Dept advices not being the same is not a bad thing, otherwise, one might argue that military advice should always be a sub-set (it isn't) in full compliance underneath a political/policy/resource-driven position.

:2c:

Regards
G2G

 

[Eye In The Sky]

Nothing to add, this is an educational thread for me.  Just a post to stay in the loop.

 

[Edward Campbell]

...although in fairness to the CDS, there were, as intended within the DND construct, two different advices given:  Military (capability) Advice, and Departmental Advice (Policy/Resources).  The first is the CDS' and second exclusively the DM, so having Mil and Dept advices not being the same is not a bad thing, otherwise, one might argue that military advice should always be a sub-set (it isn't) in full compliance underneath a political/policy/resource-driven position.

:2c:

Regards
G2G

In fact it is a very good thing. One of the (near fatal) flaws in the reorganization that axed CFHQ and integrated it into NDHQ was a perceived, never stated, requirement that the DM and CDS be "in accord" before taking anything to the minister. (My, personal, memory suggests that a change in minister changed that, but I also remember that it took a long time for the idea that the military staff could offer "uncoordinated" advice (advice that had not been "approved" by e.g. ADM(Pol)) to disappear.) Of course advice from the CDS should not come as a surprise to the DM, nor vice versa, but I agree fully that the military is allowed to give independent advice ... but on policy matters the DM's voice should, almost always, prevail because he, not the CDS, is the expert on defence policy.

 

[Baz]

... but on policy matters the DM's voice should, almost always, prevail because he, not the CDS, is the expert on defence policy.

I agree wholeheartedly.  Like it or not, DND is the biggest discretionary spending in the Federal budget.  That money should be used in the best interest of Canada, and not just the military interests, like every other country does; how we ensure the best bang for the buck doing so seems to be out of align more and more of late.

I do think, but would have to research, that sometimes apples get compared to oranges.  You don't have to look long to find quotes like "Key principles of Dutch defence industrial policy.  The Dutch approach combines import substitution in the form of offsets, export promotion in the form of R&D investments, skill development, market access instruments and by supporting through procurement and R&D support a national champion in shipbuilding."  (http://aerospacereview.ca/eic/site/060.nsf/vwapj/Def_Ind_Pol_Approaches_-_Final_Draft_-_July_13.pdf/$FILE/Def_Ind_Pol_Approaches_-_Final_Draft_-_July_13.pdf page 28)  The government provides extra money so that they can maintain a ship building industry and export ships (at reasonable costs), and therefore at first look their ships are cheaper, because that is good for their country.  It doesn't mean that going and buying them there is good for ours (it may be, but not necessarily).

However, question for you... would you agree that the CDS is, and should be, the expert, and therefore primary advisor on operations?  I feel that way because it should be somebody that understands the risks that tells others to take them.  There has been some disturbing rumbles as of late that the DM is infringing...

 

[Journeyman]

There has been some disturbing rumbles as of late that the DM is infringing...

IF true.....perhaps that's the inevitable legacy of having had a weak CDS.  I suspect that with our current CDS, such a potential situation would be rebalanced in short order.

 

[Kirkhill]

....

I do think, but would have to research, that sometimes apples get compared to oranges.  You don't have to look long to find quotes like "Key principles of Dutch defence industrial policy.  The Dutch approach combines import substitution in the form of offsets, export promotion in the form of R&D investments, skill development, market access instruments and by supporting through procurement and R&D support a national champion in shipbuilding."  ....

The government provides extra money so that they can maintain a ship building industry and export ships (at reasonable costs), and therefore at first look their ships are cheaper, because that is good for their country. ....

I am quite all right with Canada adopting that strategy wrt Bombardier for example.  But is there some cultural difference between Damen and Bombardier, or even Irving, a similar company, that occasions such very different results?  Or is there some obvious set of management practices that prevent 70,000,000 dollar Svalbards becoming 460,000,000 de Wolfs?

I would also note that Thales Integrated Mission Mast, welded to the Holland OPV, was explicitly part of that strategy.  The Hollands were "cheap" for the Navy to buy and operate.  They kept the yards busy.  They showcased the IMM.  As they sail around they sell the Netherlands, Damen, Thales NL, the Hollands and the IMM.  All of which results in Dutchmen working rather than collecting the dole.

The concept is not bad.  I am not that wedded to the Free Market. It is just that I have yet to see any evidence of cost effective results here in Canada.  Perhaps part of the difference is that the Dutch, while happy to pocket a Guilder, also want an effective method of keeping the French and the Germans out.  Conversely, we are lumbered with a population that is just as happy if no ship sails, or no plane flies,  so long as they get good jobs with good pensions.

 

[Spencer100]

http://www.defense-aerospace.com/articles-view/release/3/171597/canada-alters-course-on-frigate-replacement%3B-opts-for-foreign-design.html

Does this mean they are going to rebid the shipyard to build them?  Or just prime contractor and Irving is still the ship yard?

 

[Colin Parkinson]

I am not sure if the term "free market" actually applies to large warship ship building, almost every yard gets some form of subsidy one way or another.

 

[Kirkhill]

When originally conceived, the Harper government estimated the cost of building 15 warships would be in the range of $26 billion, but internal documents and published reports last fall suggested the price tag could go as high as $40 billion.

The art and science of estimating.

Announced estimate 26 BCAD at time of announcement.

IF this were a Concept or Feasibility determination according to AACE guidelines then it would be a Class 4 Estimate.
According to AACE rules then the 26 BCAD is allowed to vary between +30% and -15% and between +120% and -60%

Effectively that means that the actual cost of the project could come in somewhere between 26 BCAD - 60% (or 10 BCAD) and 26 BCAD + 120% (or 57 BCAD) and the estimator would have done his job in a suitably professional manner.

26 BCAD Class 4 means a project cost of 10 to 57 BCAD.




IF this were a Budget or Authorization determination according to AACE guidelines then it would be a Class 3 Estimate.
And, according to AACE rules then the 26 BCAD is allowed to vary between +20% and -10% and between +60% and -30%

Effectively that means that the actual cost of the project could come in somewhere between 26 BCAD - 30% (or 18 BCAD) and 26 BCAD + 60% (or 42 BCAD) and the estimator would have done his job in a suitably professional manner.

26 BCAD Class 3 Loose means a project cost of 18 to 42 BCAD



If the estimater were confident in his or her assumptions and was prepared to sign off on a tight estimate then the 26 BCAD project could be expected to cost somewhere between 23 BCAD and 32 BCAD.

26 BCAD Class 3 Tight means a project cost of 23 to 32 BCAD



Given the "up to 40 BCAD" expectation I believe it is likely that a loose Class 3 Budget Estimate or a tight Class 4 Feasibility Estimate was the basis for planning.

That, in my opinion, would not be unreasonable given that yard, ship, weapons fit and support packages were all known unknowns.



IF the government has moved to decide on a firm supply package, a known design that has previously been built,  then they are effectively moving up to a Bid or Tender Estimate, or a Class 2 Estimate.  Many of the known unknowns become known and quantifiable.

At that point the 26 BCAD project could come in between 25 BCAD and 29 BCAD (tight) or between 22 BCAD and 34 BCAD (loose).


26 BCAD Class 2 Tight means a project cost of 25 to 29 BCAD
26 BCAD Class 2 Loose means a project cost of 22 to 34 BCAD.



Normally this would mean the government could be more comfortable on making projections about the number of ships with the number of systems possible with a budget of 26 BCAD.  If we assume that the intention was to build 16 hulls for 26 BCAD and the budget holds but costs rise to the equivalent of 34 BCAD then available 26 BCAD will only buy 12 ships with the intended capabilities.

More ships can be acquired if some or all of them have reduced capabilities.



None of this takes into account the timelapse between the original 26 BCAD estimate and the current realities or realities at time of construction.

Nor does it take into account the Canadian Conundrum that sees a 100 MCAD Svalbard become a 460 MCAD Harry de Wolf with broadly similar fits and capabilities.  Fits and capabilities also broadly similar to the second hand Ice Ship that the RN bought second hand from Rieber of Norway in 2011 for about 400 MNOK or 63 MCAD - constructed in 2001.  Or something in the same price range as a new Svalbard.

http://www.royalnavy.mod.uk/our-organisation/the-fighting-arms/surface-fleet/survey/antarctic-patrol-ship/hms-protector

Link to AACE estimates guide.

So when the press get ahold of a number like 26 BCAD and discover to their glee that the number could be higher, I does not demonstrate the malfeasance of the estimator or the incompetence of the client.  It demonstrates the ignorance of the press.

A Feasibility Study is not a Budget.

A Budget is not a Contract.

 

[Kirkhill]

New from Michael den Tandt:

The economic argument is that, in creating big multi-year bottlenecks at two yards while leaving one de facto out in the cold, the NSPS is impeding the growth of the latter while making the former inordinately reliant on non-commercial work.

“It is not too late to correct the flaws in the previous strategy,” the release says pointedly. “The remaining umbrella agreements are non-binding and Canada has a free hand in shaping the future of domestic shipbuilding.”

The crux, given the foregoing, will be this: Can the Trudeau government stickhandle its way out of part of an $8-billion commitment to British Columbia, in a reboot that directly benefits Quebec, without igniting a regional tug-of-war and backlash akin to the Bristol-Aerospace-Bombardier fiasco of 1986?

That was no small thing; it was instrumental in the creation of the Reform Party. Adjusting the NSPS to deliver more ships sooner at lower cost would seem to make eminent sense. Whether this government has the skill to pull it off, without sparking an epic regional bun fight, is the open question.

http://news.nationalpost.com/news/canada/canadian-politics/michael-den-tandt-liberalss-untangling-of-shipbuilding-strategy-could-ignite-regional-tug-of-war

PM Trudeau's dad accused Brian Mulroney of being the Sorcerer's Apprentice.  At least he had an apprenticeship.

Option one:

Pull jobs from BC and give them to Quebec - proven strategy.

Option two:

Throw more money at the problem and create a boom which will go bust as soon as the fleet is rebuilt - another proven strategy.

 

[MarkOttawa]

One idea to placate both Davie and Seaspan:

Why not more Canadian Coast Guard Icebreakers Instead of RCN JSS?
https://cgai3ds.wordpress.com/2015/10/28/mark-collins-why-not-more-canadian-coast-guard-icebreakers-instead-of-rcn-jss/

Mark
Ottawa

 

[Kirkhill]

And some chap name of Mark?  ;D

It's only money.

Admittedly if they are planning on borrowing money I would sooner it were borrowed to buy new ships (including a whole bunch of environmental response vessels built on the West Coast) than to sink into the abyss of social infrastructure.  I wouldn't even mind if they called it Green Infrastructure.


NOCGV Aalesund

NOCGV Harstad

NOCGV Barentshav.

And these guys run on Christie's preferred fuel: Liquified Natural Gas

They can leave those very unCanadian deck guns at home.

And yes, those are environmental response vessels.


Barentshav

their main tasks are EEZ patrol, fishery inspection, search and rescue as well as tug readiness along the shore of Norway which is seeing increasing traffic from tankers.

Alesund

Ålesund is used for general EEZ patrol, including fishery inspection and search and rescue.

Harstad

Harstad was built as a multipurpose vessel, but optimised for emergency towing of large oil tankers (up to 200,000 tonnes deadweight (DWT)), oil spill clean-up and fire fighting. The most common duty will be fishery inspection and search and rescue in Norway's large exclusive economic zone. The steadily increasing traffic of large oil tankers along the Norwegian coast explains the need for this type of vessel.

 

[Kirkhill]

So...

If there were more money in the kitty:

1 - Send the JSS work to Davie and tell Quebec get out of the way of  Energy East. (Add in some work for Bombardier - if they want a BCAD then they can supply something for that cash).

2 - Give Christie's yards an equivalent dollar value / man hours of work to build LNG powered environmental response boats for the Coast Guard to operate on her coast and tell her to get out of the way of Northern Gateway and Transmountain.

3 - Get Irving (and Bombardier) under supervision and get their costs under control.

With the oil (and LNG) coming out of the pipelines we could actually afford to buy this stuff.

 

[NavyShooter]

Unfortunately, all of this involves decisions being made, and actions being taken.  Neither of which seems to be a priority in the NSPS process.

I believe the solution will continue to be per below:

 

[Colin Parkinson]

Let's not forget that part that cost was to rebuild the shipyard capacity. Shipyards need new builds to recapitalize the equipment and modernize, repair work keeps things ticking along but rarely allows for big budget items like that big crane at Seaspan. As i said before, let Davie build the 2 light JSS, by the time the JSS are built, those 2 lights will need to go into refit, then keep a JSS and light JSS on both coasts. This way you fleet will always have a JSS and as Baz pointed out the light can also go back reprovision and resupply the fleet while the main JSS stays on station.

 

[Oldgateboatdriver]

Personally, I think that what MarkOttawa proposes is a good start.

Whether we like it or not, by the time the Diefenbaker hits the water (to replace the Saint-laurent, one would think), the Terry Fox will near 40 years old and also need replacement. Same goes for the 1200 class, except the Larsen, which is a bit younger.

I therefore agree with M.O suggestion: move the Berlin's to Davie right after they finish the project Resolve (and sister, I would suggest) and get Seaspan going on the Diefenbaker that much earlier, followed by two more. With three polar icebreakers, one can be posted West so as to operate from the Western Arctic while the other two operate from the East. Then Seaspan can turn its attention to building four heavy river icebreakers to replace the 1200 class.

Meanwhile: Cut the AOPS program and turn it into a proper OPV program, with OPV's that are ice strengthened only (a good example would be the New Zealand "Otago" class ships (Again, a Canadian design - we seem to be able to design ships for everybody except ourselves ???). With the OPVs out of the way, likely faster than the AOPS would have been, Irving can get on with the "combatants".

Meanwhile, when finished with the supply ships, Davie could be made to acquire the design and build a couple of "Mistral" type LHD's.

Result: A continued effective fleet of icebreakers for the Coast Guard and, in about 12 to 15 years, a Navy with four supply ships, a couple of medium size amphibs, about 12-14 DDG/FFG, about 8-10 OPV's and whatever submarines we would wish to acquire (and my view would be getting 6 to 8 of them).

A good, efficient and capable mid-size, general purpose blue-water Navy.

BTW: IMHO, under the "Canadian Shipbuilding Strategy", we should under no circumstances whatsoever attempt to build our submarines. This is one for the foreign builders for sure. It is a type of shipbuilding that is far too complex and different than the others to be learned, mastered and undertaken for limited runs - talk to the Australians if you don't believe me.