The NSPS represents the largest procurement sourcing arrangement in Canadian history and according to industry estimates is expected to provide thousands of high-value jobs over the next 20 to 30 years. It is made up of three elements: two packages of work valued at $33 billion in total to build large vessels, one for combat ships and the other for non-combat ships; small vessel construction valued at $2 billion for shipyards that are not selected for the large vessels; and finally ongoing refit and repair work valued at $500 million annually that will be open to all shipyards through normal procurement processes.
Irving Shipbuilding Inc. in Halifax, Nova Scotia, was selected by the NSPS Secretariat as the recipient of the combat package of work following a thorough, rigorous and objective evaluation process that was entirely free of bias or any political influence.
The approach and selection process represents a unique and innovative way of conducting large procurements. It is the result of extensive consultations with the shipyards. As a result, the proponents themselves helped shape the selection process by identifying and establishing the weighting of the selection criteria. This entire process, which lasted over 12 months, resulted in five bids from three yards for two packages of work. These proposals, after a thorough and rigorous evaluation with input from several independent third-party experts, have resulted in the selection of the two qualified shipyards.
The NSPS will have significant economic benefits in shipbuilding and related industries across Canada. It will involve skilled work in a variety of sectors, such as steel manufacturing, information technology, and defence systems development and integration. Small- and medium-sized enterprises across the country will benefit through the construction of large and small vessels, as well as work related to repairing and refitting.
The agreement in principle announced on January 12, 2012, will lead to the finalization of the strategic sourcing arrangements, called an umbrella agreement (UA), and is an important milestone in moving forward on this major initiative. The UA will define the relationship between the Government of Canada and Irving Shipbuilding Inc. It will set the parameters under which the government will negotiate fair and reasonable individual contracts with Irving Shipbuilding Inc. for each combat vessel it undertakes.
Once the UA has been signed, both parties will commence contract negotiations for the first project in the combat package of the NSPS, the Royal Canadian Navy’s Arctic Offshore Patrol Ships which will conduct armed sea-borne surveillance in Canada’s waters, including the Arctic.
On October 19, 2011, the NSPS Secretariat announced the selection of two Canadian shipyards that will rebuild Canada’s aging fleet. Irving Shipbuilding Inc. has been selected to build the combat vessel work package, and Vancouver Shipyards Co. Ltd. has been selected to build the non-combat vessel work package.
Also a key element of the UA will be a commitment to continue to meet established benchmarking standards. Once the UA is signed, Canada will commence contract negotiations for the first projects in each work package and for the establishment of construction timelines.