Harper Government Awards Shipbuilding Contract that Supports Jobs Across Canada
January 23, 2015 – Halifax, N.S. – Public Works and Government Services Canada
The Honourable Diane Finley, Minister of Public Works and Government Services, along with the Honourable Peter MacKay, Regional Minister for Nova Scotia, today announced the awarding of the build contract with Irving Shipbuilding Inc. for the construction of six Arctic Offshore Patrol Ships (AOPS) as part of the National Shipbuilding Procurement Strategy (NSPS). This contract, valued at $2.3 billion, marks the start of the construction phase under the NSPS.
The contract has been designed to ensure best value for taxpayers and sets out the plan for the delivery of six ships within a ceiling price.
The AOPS build contract will sustain approximately 1,000 jobs at Irving Shipbuilding as well as many jobs at suppliers across Canada. For example, today, Member of Parliament, Bryan Hayes, highlighted that the majority (60 per cent) of steel plate for the first Arctic Offshore Patrol Ship will be produced at the Essar Steel Algoma rolling mill in his riding of Sault Saint Marie in Ontario. To date, 197 companies in Canada have already benefited from NSPS work.
Construction of an initial block for the first AOPS is scheduled for the summer, while full production will commence in September 2015. Delivery of the first HMCS Harry DeWolf class ship is expected in 2018.
It was also confirmed that Irving Shipbuilding will be the Prime Contractor for the Canadian Surface Combatant project. As outlined in the NSPS RFP and the resulting umbrella agreement with the selected shipyards, Canada retains the right to determine if the shipyard will be designated as the Prime Contractor. After discussions with industry and review by an independent third party, it was determined that Irving is best positioned to manage the contracts associated with the three decades of work to design and build these ships.
- Industry analysts have estimated that government shipbuilding projects would create, both directly and indirectly, 15,000 jobs and generate $2 billion annually through the NSPS.
- To date, Irving Shipbuilding has made NSPS commitments in Canada totaling $370 million.
- The $3.5 billion budget for the AOPS includes acquisition costs (for vessel design and build), project office operations, a provision for infrastructure costs (e.g. for jetties), as well as initial spares and support.
- The build contract, valued at $2.3 billion, is a cost reimbursable incentive fee-based contract that provides incentives for Irving Shipbuilding to deliver six ships to the Royal Canadian Navy within a pre‑determined and not-to-exceed ceiling price.
- The new DeWolf-class Arctic Offshore Patrol Ships will be equipped with state of the art sensors and will also be able to operate and support the new Cyclone naval helicopters. Operating in conjunction with other capabilities of the Canadian Armed Forces and the Canadian Coast Guard, the DeWolf-class ships will play a critical role in protecting Canada’s offshore sovereignty in the Atlantic, the Pacific as well as in the Arctic.
- The AOPS will have a number of capabilities, including: the ability to operate in first year ice up to one metre in thickness; the ability to sustain operations for up to four months; command, control and communication capability to exchange real-time information with the Canadian Armed Forces Maritime Security Operations Centres; modern surface search radars; and, a gun armament.
“I am pleased to be here to mark the award of this important contract. It will sustain an estimated 1,000 jobs right here in Halifax and many more at suppliers across Canada. This is further proof that our shipbuilding strategy is bringing jobs and prosperity to communities on our coastlines and across the country.”
The Honourable Diane Finley
Minister of Public Works and Government Services
The awarding of this contract under the National Shipbuilding Procurement Strategy is great news for our Canadian Armed Forces and for all Canadians. Our Government is taking action to ensure that the Royal Canadian Navy and the Canadian Coast Guard have the equipment they need to operate effectively in today’s environment and in the future. This project is also important for the revitalization of the shipbuilding industry here in Halifax, bringing immense benefits to Nova Scotia for many decades to come.”
The Honourable Peter MacKay
Regional Minister for Nova Scotia
“Our Government is committed to ensuring that the Canadian Armed Forces and the Royal Canadian Navy have the equipment needed to monitor and defend Canadian waters, and to contribute to international naval operations well into the 21st century. The Arctic Offshore Patrol Ships will better enable the Navy to assert and enforce sovereignty in Canadian waters, including in the Arctic.”
The Honourable Rob Nicholson
Minister of National Defence
Our Government is committed to ensuring that Canada has the tools to assert our sovereignty and safeguard our vast territory. That is why I am pleased that the construction of the Arctic Offshore Patrol Ships is moving forward, further strengthening our ability to protect our borders and citizens from threats.”
The Honourable Julian Fantino
Associate Minister of National Defence
National Shipbuilding Procurement Strategy
National Defence – Arctic Offshore Patrol Ships
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Office of the Honourable Diane Finley
Public Works and Government Services Canada
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