New Canadian Shipbuilding Strategy

[Kirkhill]

But Mark .... that ship is built to Civilian standards  >

And STX bought Aker who had bought Kvaerner who build icebreakers.  Including Canadian and Norwegian ones. Including the Svalbard which was the model for the AOPS.....being built by Irving.

In fact STX Marine designed the AOPS

http://www.stxmarine.net/ship_ice.html

 

[The Bread Guy]

Summary from the OAG report just out - not atrocious remarks on the NSPS, but may have to adjust the # of ships - highlights mine:

.... What we found

The competitive process for selecting two shipyards resulted in a successful and efficient process independent of political influence, consistent with government regulations and policies, and carried out in an open and transparent manner. The selection process included extensive and ongoing consultation with industry and bidders, monitoring by independent third parties, and using subject matter experts who provided valuable advice and added credibility to the process. The resulting arrangements should help sustain Canada’s shipbuilding capacity over the next 25 years in one shipyard, and for 7 years in the other.

Following the selection, the shipyards negotiated changes to the terms of the draft agreement that was included in the request for proposals (RFP) to ensure they would be compensated for their capital investments should a project be cancelled, delayed, or reduced in scope. As a result, the agreements that were signed with the shipyards differ significantly from the draft agreements that had been included in the RFP, as these did not include such backstop provisions. It was not clear from the wording of the RFP that the negotiation of backstop provisions was anticipated. Consequently, based on lessons learned from the RFP issued under the NSPS and the negotiations that came after the winning bidders were selected, Public Works and Government Services Canada should consider how the terms of future RFPs could be made clearer and more explicit as to the extent of negotiations of post-bid changes with successful contractors.

National Defence and Public Works and Government Services Canada, in consultation with Treasury Board of Canada Secretariat, are working to acquire federal ships in a timely and affordable manner consistent with the NSPS. For the three military ship projects we examined, departments have identified and are managing key project risks. These risks include the lack of competition in the shipbuilding industry, schedule delays, unaffordable costs, and technical risks. As it is still early in the 30-year Strategy, not all performance measures are in place. To ensure that Canada acquires ships in an affordable manner, Public Works and Government Services Canada, supported by Industry Canada, National Defence, and Fisheries and Oceans Canada, needs to regularly monitor the productivity of shipyards in terms of competitiveness, cost-effectiveness, and efficiency, including measuring progress against the target state.

National Defence established budgets early in the planning process, based on rough estimates and historic information. These have not been revised for the changes in the cost of materials and labour since the projects were first approved. The Department has had to reduce the expected number of military ships or their capabilities to remain within budget. National Defence and Public Works and Government Services Canada need to continue to monitor cost/capability trade-offs and make revisions to project budgets, if necessary, to ensure that Canada gets the ships and capabilities it needs to protect national interests and sovereignty.

(....)

 

[MarkOttawa]

Kirkhill:

But Mark .... that ship is built to Civilian standards  >
http://forums.milnet.ca/forums/threads/90990/post-1270573.html#msg1270573

I had the Diefenbreaker more in mind.  Also STX Marine-designed:
http://www.dfo-mpo.gc.ca/media/npress-communique/2012/hq-ac05-eng.htm

Mark
Ottawa

 

[Navy_Pete]

I think the basic project approval gates where your ROM order of magnitude guess at the budget gets set as the overall budget years ahead of time before you even know what you are trying to get is a big part of the problem; until they rationalize the TBS process into something that makes sense this will continue to happen.

The whole system is pretty much FUBARd and set up in a way that no rational person would agree was terribly efficient.

 

[AlexanderM]

If we were buying from other countries the budget would be enough.

 

[Oldgateboatdriver]

It may or may not change everything.

What is required in reality is more transparent figures, and by that I mean more easily comprehensible accounting concepts and figure for the public at large.

Its quite normal for the Department of defense to want to know and understand life cycle cost of new equipment and its effect on annual budgets from year to year throughout its expected lifetime in order to make decisions. For instance, it's normal to want to know things like: If I buy this ship that reduces my crewing requirements by 30 seaman and thus saves me their salary every year for the next 30 years, will the cost of extra automation and its maintenance, upgrade and repair outweigh the crew reduction over the lifetime?

What is unacceptable IMHO is to use these calculations of overall lifetime costs as the figure that is presented to the public as the program cost as if it was the actual incremental cost to the nation. We must present it right: here is what  each of these ship/plane/tank will cost me from the manufacturer and, here is how much more/less funding I will need in my annual budget to operate it in the next "n" years.

While DND needs to try and gaze in their crystal ball to divine the answers to question like the one above (Bones: "I think he means that he has more trust in your guesses than other people's facts". Spock: So, it is a compliment. I shall endeavour to make the best guess possible"), I think all Canadians want is little bit of honesty on the way we present it to them so they get what it really means in term of budgeting.

I remember from my accounting classes in university, the professors explaining to us that accounting evolved from the need for business to have complete, organised and easy to understand factual basis from which, to make informed decisions. In my view DND/Ottawa's public accounting, in the public's eye, is anything but useful in making anything but "cloaked-in-darkness" decisions.   

 

[Monsoon]

If we were buying from other countries the budget would be enough.

If we weren't buying ships at all it would also be enough. Remember: the NSPS has several goals and equipping the RCN and CCG is only one of them.

Prediction: no discussion of this in government until after it gets its budgetary surplus in 2015 and a new electoral mandate. Then cabinet quietly approves whatever additional funds are required to complete the procurement based on the fact that the original estimates are dated. Is there a reason we're trying to make it hard for them to do this?

 

[Kirkhill]

:goodpost:

 

[Navy_Pete]

You have to appreciate that there are numerous sets of numbers floating around within DND.  Some are from the project, some are from ADM(FIN CS) and others are the estimates relating to the ISSC.  They are also trying to look at the AORs historical data and extrapolate forward for operating costs, which in my opinion, isn't comparing apples.

PBOs expectations, TBS expectations, and internal DND reporting requirements aren't aligned, so it's a bit of a mess.  Also, they can't give a final estimate of the cost until the ship requirements are finalized and the design is set, at which point they can give a ROM build cost and add in some wiggle room for inflation, delays, arisings etc.

IF you want a widget that does xyz, and want it for a certain budget, and need it by a certain timeline, and also want to modify it to do new stuff... something has to give.  Then you add in IRBs and politics and other silliness, you can't really blame anyone on the project for this kind of bs.

(No, I don't work on the project)

 

[mad dog 2020]

Too bad Canadian Companies couldn't sponsor Canada? courtesy the Bay Observer Hamilton.

Algoma Central Corporation to name new ship after City of Sault Ste. Marie
Posted by: Bay Observer Staff  October 18, 2013 in Business Leave a comment

Great lakes fleet renewal continues The lifting of the duty on foreign built ships continues to result in reneal of the Great Lakes ship fleet. The latest launch is Algoma Central Corporation’s new environmentally-advanced Equinox Class vessel named after the City of Sault Ste. Marie. Algoma Central, which is now headquartered in St. Catharines, has evolved into the largest Canadian- flag shipowner in the Great Lakes with 32 Canadian flag vessels. The Algoma Sault is expected to arrive to trade in the Great Lakes-Seaway region for the beginning of the 2015 navigation season. Algoma Central, and its customer the Canadian Wheat Board, have invested close to $500 million in 10 new vessels. Two of these ships are already trading in the Great Lakes and eight Equinox Class ships are under construction in China. The first Equinox Class vessel, the Algoma Equinox, is expected to arrive in the Great Lakes in November 2013. Algoma Central says the vessels, which will carry grain, iron ore, coal, construction materials and salt, will carry more cargo, at higher speeds using less fuel; resulting in a 45% reduction in greenhouse gases. Algoma will also be installing exhaust gas scrubbing systems for the eight new Equinox Class vessels that will virtually eliminate sulfur oxide emissions.

 

[Edward Campbell]

You have to appreciate that there are numerous sets of numbers floating around within DND.  Some are from the project, some are from ADM(FIN CS) and others are the estimates relating to the ISSC.  They are also trying to look at the AORs historical data and extrapolate forward for operating costs, which in my opinion, isn't comparing apples.

PBOs expectations, TBS expectations, and internal DND reporting requirements aren't aligned, so it's a bit of a mess.  Also, they can't give a final estimate of the cost until the ship requirements are finalized and the design is set, at which point they can give a ROM build cost and add in some wiggle room for inflation, delays, arisings etc.

IF you want a widget that does xyz, and want it for a certain budget, and need it by a certain timeline, and also want to modify it to do new stuff... something has to give.  Then you add in IRBs and politics and other silliness, you can't really blame anyone on the project for this kind of bs.

(No, I don't work on the project)

I agree ... at the risk of oversimplifying, the Canada First Defence Strategy (which, I understand is being revised) does not provide anywhere near enough money to meet the CF's minimal operational requirements ~ at least in so far as those requirements are set by military experts within DND.

It's important to remember that military experts don't get the final say; arguably they don't even get the semi-final say. The "semi-final" say rests with other, civilian experts in the Privy Council Office who balance all national requirements, including military ones, against their view of the resources which will might be available in the future.

The final say rests, of course, with cabinet and the Minister of Finance and the President of the Treasury Board get a bigger say about the defence budget than does the Minister of National Defence.

(And that's as it should be. Our, English, version of a liberal, parliamentary democracy is based on the notion that the best way to serve the best interests of the nation is to contain the monarch and the best way to do that is to control public (crown) spending, especially on the military. We have about 1,000 years of precedence for this, going back to the medieval witenagemots which had some power over the king's right to tax (and, therefore, to spend).)

 

[CougarKing]

An update for this thread:

from: CBC News
Shipbuilding memo shows more delays, cost overruns

With Canada's only Pacific supply ship laid up in Hawaii, help doesn't appear to be close

By Terry Milewski, CBC News

An internal government memo obtained by CBC News shows that all four parts of the government's huge shipbuilding program are either over budget, behind schedule, or both.

Written Oct. 7 last year by the deputy minister of national defence, Richard Fadden, the memo shows that three of those four programs also face "major challenges" of a technical nature, as well as difficulties lining up skilled manpower to get the ships built at all.

The memo, released to the CBC following an Access to Information request, leaves little doubt that Canada's crippled supply ship, HMCS Protecteur, won't be replaced before the year 2020.

The spectacle of the 46-year-old Protecteur, Canada's only supply ship in the Pacific, being towed into Honolulu after an engine-room fire has thrown the lack of a replacement into sharp focus. Although there's a plan to build two new supply ships, there's no sign the work will even begin until late 2016. That means a new one won't enter service until the end of the decade.

The Fadden memo was intended to assure Defence Minister Rob Nicholson that there are "many success stories" in the procurement saga that has dogged the government for years.

But the attached details show no major program without problems.

A chart summarizing the state of the shipbuilding effort uses green and yellow squares to indicate where those problems are — the green meaning, on track, and yellow meaning, trouble — and there's a lot of yellow.

For the Joint Support Ships — that's the pair of supply ships — the chart shows trouble with both the schedule and the price. The memo explains that this means the program is up to 20 per cent behind schedule and up to 10 per cent over budget.

For the Arctic Patrol Ships, the chart shows yellow for three measures: the cost, "HR" — meaning Human Resources, or skilled workers — and technical issues. The memo describes these as "major challenges in finding solutions; significant scope changes may be required." That suggests the ships may need to be redesigned in order to fix the technical problems.

All of those same issues — cost, manpower and technical — also dog the plan to upgrade Canada's Halifax-class frigates.

But for the biggest program of all — the $38-billion project to build 15 new warships known as "Surface Combatants" — there is trouble cited on four measures: the schedule, the technical and manpower issues and the procurement strategy itself. It doesn't say how any of those can be fixed, but it does say they are fixable.

(...EDITED)- more at link

 

[Edward Campbell]

An update for this thread:

Here is a useful DND infographic from that CBC report:

 

[Navy_Pete]

Don't forget to squint and imagine a huge cloud of dope when looking at MCP info; that's how you get into the project staff POV!

;D

 

[Oldgateboatdriver]

Not sure what the "HR" or "manpower" , referring to skill workers, refers to: The Navy personnel or the shipyard personnel.

If the shipyard (as I suspect), it is interesting to note that the yard with problems is our good friend Irving Shipyard and that there are no issues with the one in B.-C. building the JSS or (I suppose) the icebreakers.

 

[Good2Golf]

Here is a useful DND infographic from that CBC report:

I wonder how a procurement process is good if there are otherwise problems with: money, capability and people?  ???

 

[mad dog 2020]

going out on a limb here!
Maybe we should look at how people do things, in real life:
a.  when the cost of repairs to our old clunker car is consistently exceeding the price of  a car payment for a new or gently used one.  and
b.  as a novice or semi-skilled handyman it is easier to work overtime and pay a professional over the hours of mistakes and aggravation to get a job done. Not to mention the waiting and unanticipated expenses.

So we need to save some cash and either buy used (there were plenty of good deals recently and still are available) or buy something off the rack over a sub-standard unproven Canadian Made option. You may never convince the providers to adopt a value long term commitment.  We don't need to buy a shoddy Canadian suit!
Like the land vehicles urban legend states the US was running a batch of HUMMERS and asked: Do you want use to extend the run for you?"
Canadians are buying KIA and Hyundai over Ford and GM so maybe we need one quick purchase of ships to fill the gap rather than waiting for the clowns to stumble through. In Irving. Maybe send a contingent to South Korea to see how it can be done without gouging the citizens of Canada. 

 

[Tibbson]

Why does it seem we are the only nation that can't get it's collective crap together when it comes to military procurement?  Do others have similar problems? 

Whats the root cause(s)?

- buy Canadian policies?
- insistence on regional development?
- lack of sufficient skilled workers in industries we really can't support?
- too many fingers in the pie?
- public service meddling?
- the inability of the military to plan for such acquisitions?
- any or all of the above?
- none of the above?

 

[Kirkhill]

The bottom line problem is:  nobody can agree on when a Canadian soldier can open fire and who the target might be.  Neither the politicians nor the CF itself seems to be able to answer that question.

 

[Old EO Tech]

Why does it seem we are the only nation that can't get it's collective crap together when it comes to military procurement?  Do others have similar problems? 

Whats the root cause(s)?

- buy Canadian policies?
- insistence on regional development?
- lack of sufficient skilled workers in industries we really can't support?
- too many fingers in the pie?
- public service meddling?
- the inability of the military to plan for such acquisitions?
- any or all of the above?
- none of the above?

I'd say all of the above, though maybe a little less on the ability of military planners.  The difference between what we are doing and the Brits is that they have given up on the idea of making ships at home and simply want the best price for what they want, ergo South Korea is building them 4 supply ships for have the price we are building two.  Our NSBP is very much a economic/regional development program as it is a ship manufacturing issue.  Which is why we have lack of skilled workers and "technical issues" delaying the program.