Four provinces are about to begin an anxious wait for the federal government’s decision in a battle to build the country’s next generation of warships and coast guard vessels, but military analysts say the benefits of the program will be widespread, no matter who wins.
The deadline for final bids passes on Thursday on $35-billion in contracts to build navy warships, coast guard cutters and other vessels over the next 30 years.
But while much of the attention has been focused on who will get the contracts, experts say the vast bulk of the work likely won’t be done by the winning shipyard.
Douglas Bland, a research fellow at Queen’s University’s defence management studies program, said there’s been a disproportionate focus on winning what’s seen as the big prize.
“This is not about welding pieces of metal together to make a hull and a superstructure for a ship,” Mr. Bland said from Kingston, Ont., on Wednesday.
The process of building the ships is no doubt important, but Mr. Bland said it’s “hardly the big project.”
“It’s what's in them [ships], that’s where the big money is, not welding the ships together.”
Mr. Bland said much of the technical work will flow elsewhere to provide the ships with wiring, guidance and weapons systems, medical facilities and even kitchens.
There are two major contracts up for grabs, one for $25-billion to build about 20 large combat vessels for the navy, and a second for $8-billion to build the smaller vessels for the coast guard and supply ships. A further $2-billion will be spent on other small craft and repair contracts.
Dan Middlemiss, an expert on politics and defence issues at Dalhousie University in Halifax, agrees with Mr. Bland, saying that most estimates place the cutting of the steel to make a ship at about 30 per cent of the total value of the overall contract.
That means much of the technical work will not be done on either of Canada’s east or west coasts.
“A lot of the systems integration and companies involved in supplying the prime contractors will be from central Canada in any case,” said Mr. Middlemiss.
On Wednesday, two companies – the Irving-owned Halifax Shipyard and Seaspan Marine Inc. of Vancouver – confirmed they were submitting bids. The Davie Yards in Levis, Que., and Seaway Marine and Industrial of St. Catharines, Ont., were also expected to bid.
Executives for Upper Lakes Group shipyard were in Quebec Superior Court on Wednesday seeking a judge’s approval of the company's acquisition of Davie Yards. It was unclear when a decision will come down.
Mr. Middlemiss said the Irving bid is likely the front-runner given its experience in building Canada's Halifax-class frigates and the fact the company was working on refitting and modernizing the current fleet.
He said while Seaspan has done work on the navy's Victoria-class submarines it would also be “credible and attractive” from a regional prospective because the bulk of the Conservative government’s political strength is in the West.
Likewise, Mr. Middlemiss said the bid involving the Davie Yard shouldn’t be dismissed outright because of the expertise involved in a consortium that includes engineering firm SNC Lavalin and South Korean shipbuilding giant Daewoo. However, the joint venture between those two companies was only announced last Friday after Ottawa had granted a two-week extension from its original July 7 bid deadline.
Mr. Middlemiss believes the time restraints are just too significant for the Davie Yard.
“The other companies have had more than a year to be preparing what will be a small room full of documentation … and I just don’t think that with all the good will in the world there will be enough time for them [Davie group] to do that.”
The federal government has been at pains to emphasize that the bidding process will be fair and has delegated the responsibility for assessing the bids to a committee of deputy ministers from across a range of government departments.
But both experts contend that while there will be significant pressure for Ottawa to stick with what the committee recommends in a decision that’s expected some time in September, politics will inevitably be involved.
“Well it is public money, so it’s going to have to be a political decision,” said Mr. Bland.
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