Canadia’s decision effectively removes Naval
Group and Fincantieri from taking part in the program since the companies never
submitted a formal bid, government officials noted. (Naval Group)
By: Pierre Tran , Tom Kington , and David Pugliese
PARIS, ROME, and VICTORIA, British Columbia — Naval Group
and Fincantieri are out of the running to compete in Canada’s program to
acquire a fleet of new surface combatants after they failed to submit a bid
through the formal process and instead sent a proposal directly to the Canadian
government.
The companies had offered Canada a proposal to construct
15 ships at Irving Shipbuilding in Nova Scotia for a fixed cost. But the
proposal circumvented the government’s procurement procedure, which required
formal bids to be submitted to Irving by Nov. 30. Naval Group and Fincantieri
did not follow that requirement.
The Canadian government announced Tuesday it had rejected
the proposal from the two firms. “The submission of an unsolicited proposal at
the final hour undermines the fair and competitive nature of this procurement
suggesting a sole source contracting arrangement,” Public Services and
Procurement Canada, or PSPC, which is overseeing the procurement, said in a
statement. “Acceptance of such a proposal would break faith with the bidders
who invested time and effort to participate in the competitive process, put at
risk the Government’s ability to properly equip the Royal Canadian Navy and
would establish a harmful precedent for future competitive procurements.”
Canada’s decision effectively removes Naval Group and
Fincantieri from taking part in the program since the companies never submitted
a formal bid, government officials noted.
Public Services and Procurement Canada declined to say
how many bids were received for the Canadian Surface Combatant project. Besides
a bid from the BAE-Lockheed Martin Canada consortium for the Type 26 frigate,
only two other companies have acknowledged bidding.
A team led by Alion Canada is offering the Dutch De Zeven
Provinciën-class air-defense and command frigate. The Spanish shipyard,
Navantia, has submitted a bid based on its F-105 frigate design.
Canada expects to make a decision on the winning bid
sometime in 2018.
The program to build 15 new warships is estimated to be
worth CAN$62 billion (U.S. $49 billion). The program was originally estimated
to cost CAN$26 billion, but that figure has been revised a number of times and
has been climbing steadily over the last several years.
Fincantieri and Naval Group had hoped the proposal of a
fixed price tag of about CAN$30 billion for a new fleet might sway the Liberal
government, as it would eliminate much of the risk and would offer a proven
warship design. The proposal had the backing of the French and Italian
governments and was made directly to Canadian Defence Minister Harjit Sajjan.
Naval Group and Fincantieri took note Canada had rejected
their joint bid that filed outside the competition for a frigate fleet, but
they were still ready to offer the design of their warship for local assembly,
the companies said Wednesday.
“We acknowledge the position expressed by the Public
Services and Procurement Canada (PSPC) not to take into consideration the
offers submitted outside the process of the Canadian Surface Combatant program
(CSC) Request For Proposal (RFP),” Naval Group and Fincantieri said.
“Nevertheless, Naval Group and Fincantieri remain at the
disposal of Canada to contribute to the modernization of Canadian forces with a
sea-proven warship, currently in service with the French and Italian Navies,
that would minimize the scheduling gaps for design and construction of all the
ships in Canada and maximize value for money,” the companies said.
Asked on Wednesday how Fincantieri and Naval Group will
react to Canada’s rejection, Fincantieri CEO Giuseppe Bono declined to give a
direct response but did suggest there might be room for compromise.
“We don’t want to take risks,” he said, adding: “we need
to see what makes sense” and “the customer is always right.”
In addition, he said the design of the ship offered to
Canada would be more similar to the Italian version than the French.
“We have made a joint offer of a FREMM, which is close to
the Italian version if only because Italy has an anti-submarine warfare
version,” he said.
The terms of the Canadian competition posed a problem as
the tender required bidders to hand over intellectual property and there was
danger it might end up in the wrong hands, an analyst said.
“The problem from the outset is how the Liberals have set
the competition,” said Robbin Laird, of consultancy International
Communications and Strategic Assessments, based in Paris and the Washington,
D.C., area.
“One would think that with … the U.S. and Australia
launching new frigates as well as the French and Italians working on a new
frigate program, the approach would be to leverage the allied global
recapitalization effort,” he added. “Yet what the Canadian government has
focused upon is simply forcing competitors to provide intellectual property to
their own Canadian shipyard without any real protection against leakage of that
technology to China or to other competitors.”
In their direct bid to the Canadian government, the
European partners offered a speedy start of shipbuilding in 2019, which they
said would help sustain local jobs. A frigate generally takes about four years
to build.
The Franco-Italian frigate was offered with the Thales
Sea Fire radar, a multifunction digital system, an industry executive said. Naval
Group offered its Senit combat management system, with Fincantieri delivering
the ship design.
Thales developed the flat-paneled Sea Fire for the FTI,
an intermediate frigate ordered for the French Navy and aimed mainly for export
markets.
Anti-submarine systems included Thales Captas
hull-mounted and towed array sonars, specialist website Mer et Marine reported.
The weapons could include a 127mm gun and two vertical launchers for
surface-to-air missiles, which would likely be Aster but would also be
available for American weapons.
Original post: defensenews.com
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