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Archived - Preliminary Contract signed with Irving Shipbuilding for the Arctic Offshore Patrol Ships

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Halifax, Nova Scotia, July 10, 2012 — The Honourable Peter MacKay, Minister of National Defence, on behalf of the Honourable Rona Ambrose, Minister of Public Works and Government Services and Minister for Status of Women, today welcomed the signing of a preliminary contract with Irving Shipbuilding Inc. as part of the Arctic Offshore Patrol Ships (AOPS) project being implemented under the National Shipbuilding Procurement Strategy (NSPS).

This preliminary $9.3-million contract will enable Irving Shipbuilding Inc. to conduct a review of the existing AOPS design and specifications and create an execution strategy for the AOPS project. The AOPS will provide the Royal Canadian Navy with the flexibility to operate in Arctic and other offshore environments year-round, asserting and enforcing Canadian sovereignty, including domestic surveillance, search and rescue, and supporting other government departments.

“We have entered into a long-term relationship with Irving Shipbuilding, and we are pleased to see the awarding of this contract. This is the first in a series of contracts leading to the delivery of new ships for the Royal Canadian Navy,” said Minister Ambrose. “The National Shipbuilding Procurement Strategy continues and we look forward to further progress, and the awarding of further contracts, as they pave the way to job creation and economic growth.”

“This strategic relationship with Canadian shipyards will help us deliver on our commitment to the Canada First Defence Strategy, and enable us to provide our Navy with the modern ships they need to defend Canada’s interests at home and abroad,” said Minister MacKay. “Canada has the longest coastline of any nation on Earth and these new ships will allow the Royal Canadian Navy to enforce Canada’s northern sovereignty.”

The National Shipbuilding Procurement Strategy—the largest procurement sourcing arrangement in Canadian history—is expected to create thousands of high-value jobs in shipbuilding and related industries across the country. The Strategy is about undertaking major ship procurements in a smarter, more effective way—a way that sustains Canadian jobs, strengthens the marine sector and provides the best value for Canadian taxpayers.

For more information on NSPS, please visit http://www.tpsgc-pwgsc.gc.ca/app-acq/sam-mps/snacn-nsps-eng.html.

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BACKGROUNDER

Harper Government Signs Preliminary Contract with Irving Shipbuilding for the Arctic Offshore Patrol Ships

The Harper Government is committed to ensuring that the Royal Canadian Navy and the Canadian Coast Guard have the equipment they need to do the work we ask of them.

On October 19, 2011, the Government of Canada announced that Irving Shipbuilding Inc. had been selected to build the combat vessel work package and Vancouver Shipyards Co. Ltd. had been selected to build the non-combat vessel work package. The total value of both packages is $33 billion and the projects will span 20 to 30 years, creating millions of hours of work for the Canadian shipbuilding industry.

In February 2012, the Government of Canada signed the umbrella agreements for the construction of both the combat and non-combat fleets under the National Shipbuilding Procurement Strategy. The combat package includes the Navy’s Arctic Offshore Patrol Ships and the Canadian Surface Combatant Ships (replacements for the current fleet of destroyers and frigates).

During the initial discussions regarding the Navy's Arctic offshore patrol ships, Canada and Irving Shipbuilding agreed that the first contract should be a smaller preliminary contract, followed by a larger Definition Contract to complete the Arctic Offshore Patrol Ships design to production-level drawings, and subsequently the Implementation Contract to build and deliver the ships.

This “design–then-build” approach will mitigate both technical and cost risks by reducing unknowns and therefore risks for the building phase. This approach is also aligned with the National Shipbuilding Procurement Strategy, which is built upon a more collaborative and risk-sharing relationship.

On July 10, 2012, the Government announced the awarding of a $9.3-million (HST included) preliminary contract to Irving Shipbuilding Inc. as a part of the National Shipbuilding Procurement Strategy. The contract is the first in a series of contracts leading to the delivery of new ships for the Royal Canadian Navy.

Within this preliminary contract, Irving Shipbuilding Inc. will review the existing Canadian-developed Arctic Offshore Patrol Ships design and specifications, prepare an execution strategy, and deliver a proposal detailing the scope and cost of the subsequent definition contract.

Irving Shipbuilding Inc. was selected following an open, fair and transparent process, with independent oversight provided by a fairness monitor and the assistance of third-party subject matter experts.

Arctic Offshore Patrol Ships will be used by National Defence to conduct armed sea-borne surveillance inCanada’s economic exclusion zone, including in theArctic.

For more information on NSPS, please visit http://www.tpsgc-pwgsc.gc.ca/app-acq/sam-mps/snacn-nsps-eng.html.

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