canadian navy news and views

Fuel costs dock navy ships

A $51-million fuel bill last year keeps fleet in harbour

By VALERIE DUFOUR, SUN MEDIA

The Calgary Sun

MONTREAL -- Ballooning fuel prices and recruitment problems kept Canadian navy vessels docked for much of last year, Sun Media has learned.

The 34 vessels deployed on Canada's East and West coasts, on average, spent only 81 days at sea in 2007, according to documents obtained by Sun Media through the Access to Information Act.

Fuel costs for Canada's navy ships jumped 50% last year, the documents revealed, and are expected to rise another 25% this year.

"The rapidly rising price of oil will have dramatic consequences on the 2007-2008 operations budget," said David Statham, a former Canadian naval officer.

This increase will also impact on the operational capacity of the Canadian fleet.

More than $51 million was spent on fuel for the vessels last year, up from $34.1 million the year before. With oil prices now close to $130 a barrel, things are unlikely to improve in 2008.


"The (fuel) bill will certainly rise by another 25% this year," said Bloc Quebecois MP Claude Bachand.

"Fuel consumption varies according to cruising speed and weather conditions, but in a visit on the frigate HMCS Winnipeg I was told it costs $25,000 in gas per day," said Bachand.

At $13.6 million for fuel, the HMCS Algonquin was the costliest to sail between 2005 and 2007.

The frigate HMCS Vancouver took second place at $9.8 million and the auxiliary oil replenishment (AOP) vessel HMCS Protecteur ranked third at $6.9 million, even though she has been inactive for a good part of 2006.

The Protecteur and the HMCS Preserver sailed 62 and 52 days, respectively, a very minor performance for the only two auxiliary oil replenishing (AOR) ships in the navy.

"The number of days at sea of the AORs is very limited. This tells me they were not deployed in the major fleet exercises," said Statham.

Stephen Priestley, a researcher at B.C.'s Simon Fraser University, also points out the navy has major difficulty recruiting and keeping seamen, which creates a shortage of qualified personnel.

Statham said many vessels were docked between January and March, usually a slow period because of bad weather, which is the time when sections of the fleet normally participate in exercises with allies in the Caribbean.

Those exercises did not occur in 2007.

"This lack of training will reduce our operational capacity" and, as with any other line of work, you must practise to keep your skills sharp, said Statham.

Frigate HMCS Toronto was the busiest ship in the navy in 2007 with a total of 179 days at sea, including a long mission in the Middle East.

Frigates HMCS Charlottetown, HMCS Halifax, HMCS St. John's and HMCS Vancouver each spent about 100 days at sea in 2007.

A BIZARRE TURN OF EVENTS ON THE FRIGATE MODERNIZATION

The buzz in the defence industry that started over the problems on the Halifax-class frigate modernization program has risen to a collective groan about how the defence procurement system has gone off the rails.

Fingers seem to be pointed in a number of directions; inexperienced DND procurement staff, lack of proper guidance from Public Works and unreasonable expectations for the amount of money on the table, are among the reasons folks are putting forth about the growing problems with military equipment projects..

At stake this time around is the upgrade of the frigates’ combat systems and a contract that was supposed to be awarded this coming September….article is here.

Well, General Dynamics and its partners (General Dynamics was one of two consortiums that were deemed capable of working on this project) decided not to bid on the $1.1 billion program as it was just too risky and “not commercially viable.”

A consortium led by Lockheed Martin Canada, following the rules set out by the government, dutifully put in their bid last Friday.

As I wrote in the Citizen on Tuesday, under government rules, the modernization contract should be awarded to the only bidder left, Lockheed Martin Canada of Ottawa, if that company can fulfill all the requirements. But the government has at the last minute instead extended the bidding process for another two weeks….I’m told in the slim slim hope that other firms might submit a proposal…..or at least to give the appearance that it tried to drum up some competition.

The real bizarro moment that everyone in the defence industry is talking about came when executives were informed about this two week extension on the bidding on Saturday via a transmission to their Blackberries. No one I’ve talked to can recall this type of thing taking place before…..and there’s lots of discussion in industry these days about just how amateurish Canada’s defence procurement system has become, that Saturday incident being a good example, according to folks in the business.

For its part, Lockheed Martin is taking the high road. Don McClure, Lockheed Martin Canada’s vice president of business development, said his firm was informed of the extension but not given any reasons by the government for that. He added, however, that the firm is not concerned about the bid extension. “The government has its rules and regulations,” Mr. McClure said. “We live by them and I assume they do as well.”

Lockheed Martin has joined forces with xwave, IBM Canada, and Saab of Sweden among other firms to bid on the frigate modernization.

Lockheed Martin officials point out that anyone who suggests that the competitive process was lacking on the frigate modernization project is wrong; the process to get to this point was quite rigorous they say with at least three consortiums taking part in the initial stages. That number was eventually reduced to two; Lockheed Martin and General Dynamics.

As usual, the Defence Department is keeping mum about this as it has for the last two years on all equipment procurements.

In the Commons on Tuesday, NDP defence critic Dawn Black asked about the problems with the Halifax-class frigate procurement, the other problems with the lease regarding UAVs for Kandahar, the stalled fixed wing search and rescue project, problems with the Joint Support Ship procurement, etc, (she accused the government of making the Afghan mission its priority over the Canada First Strategy).

Defence Minister Peter MacKay responded like this:

“With respect to the procurements that are taking place in this country, this government has embarked on an unprecedented effort to give the men and women of the armed forces the necessary equipment they need to do the important work in Afghanistan that allows us to do reconstruction and development. We are not going to get pulled into the way of the government previously that rusted out and hollowed out the Canadian Forces. We are behind them 100% and we are getting the job done.”

He then went on to accuse the NDP of not supporting the military:

“Mr. Speaker, these are all good questions, which begs the real question. Why does the NDP not support our military? We are going full bore ahead with procurement of ships, of important land craft, important air craft. While the previous government starved our armed forces of necessary procurement, we are going full bore to get them that gear.

When it comes to supporting our military procurements, our men and women in uniform and their families, the NDP has consistently voted against every step this government has made to get that important support for our men and women.”

If you can find an answer in Mr. MacKay’s response detailing why all these problems are happening with defence procurements --and what is being done to deal with those problems-- please let me know.



Cheers David Pugliese

Additional Readings & Sources: The Victoria Class

Canadian DND, Navy – A Short history of the Canadian Submarine Service
Canadian DND (April 6/98) – Backgrounder: Submarines for Canada’s Navy
Canadian DND (Oct 1/04) – Backgrounder: VICTORIA Class Submarines: An Indispensable Asset
Naval Technology – SSK Victoria Class Long-Range Patrol Submarines, Canada
Wikipedia – Victoria Class submarine
DID (Aug 24/05) – $11.8M for HMCS Chicoutimi Submarine Phase II Repairs
DID (April 6/05) – Another $465M for Canadian Submarines? If so, the total would top C$ 1.35 billion, almost double the expected C$ 750 million purchase price.
Canadian DND (October 2004) – HMCS Chicoutimi – News Room. Deals with the October 2004 fire, and aftermath.
CBC: Fire on HMCs Chicoutimi – Timeline
Additional Readings: News & Events

Irving Shipbuilding
The Canadian Press news agency (Jan 4/08) – Fight over Victoria-class submarine maintenance contract gets ugly
The Globe and Mail – Sub contract won’t be tendered again
Truro Daily News (Jan 4/08) – Maintenance contract for submarines ‘defies common sense’: Casey
CBC (Jan 4/08) – Irving proceeding with lawsuit over sub contract
Calgary Herald (Dec 30/08) – B.C. expects to land submarine maintenance contract
Canadian DND, DAIP office (April 2007) – Reports access to information request #A-2006-01305. “VCISSC procurement information to include: the NSE questionnaire, correspondence etc between & in DND, including: DMEPM SM, DGIIP, ADM (Mat) & PWGSC containing the rationale, & including specific security interests for invoking the NSE for this project.”
Halifax Daily News (March 30/07) – Irving alleges sub conflict. “The company applied for a judicial review in front of the Federal Court in Ottawa. Irving claims the contract was awarded to a West Coast group unfairly, and under a conflict of interest.”
Defense News (Jan 22/07) – Will Maintenance Work Come to Canada? Local Industry Seeks Guarantees
CBC (Jan 12/07) – Irving loses bid for submarine repair contract

The Submarine Support Contract Controversy

[img]The Submarine Support Contract Controversy[/img]
HMCS Windsor

The VCISSC contract is seen as an important final stage in getting the Victoria Class into active service at last. It was put out for tender in September 2006, and 3 consortia bid. In January 2007, Canadian Submarine Management Group (CSMG) of British Columbia was deemed “most compliant” due to its points rating, and picked as the preferred bidder. A lawsuit by Irving Shipbuilding caused the government to break off negotiations, however, stalling the deal.

In November 2007, it was reported the government might cancel the deal, which represents about 150 of jobs in Victoria over 15 years. That drew outrage from local BC politicians. In January 2008, however, a decision was taken to re-start those negotiations with CSMG to get the deal done. DND spokesman David Martin has told the Canadian Press news agency that those negotiations are underway, and a final contract is expected in a few months.

The decision reportedly went all the way up to Prime Minister Stephen Harper’s desk. Even so, the signing of that contract is about to face rough waters again.



HMCS Victoria

At the moment, HMCS Victoria is based at Esquimalt, British Columbia on Canada’s west coast, with a target date to re-enter active duty in 2009. The other 3 submarines, including the currently-serving HMCS Corner Brook, are based/drydocked in Halifax, Nova Scotia. The rising importance of the Pacific Rim is causing calls for 2 submarines to be based at CFB Esquimalt, but this is not yet reflected in Navy plans.

Independent-minded Canadian MP Bill Casey of Nova Scotia [Cons – Cumberland Colchester Musquodoboit Valley] is known as the Canadian Parliament’s foremost authority on the Victoria Class submarines, and his investigations began long before the HMCS Chicoutimi incident. He blasted the contract award, noting that HMCS Victoria experienced problems transiting the Panama Canal because the class is not designed to operate in warm waters, and lacks adequate cooling. Barring a sharp speed-up of ice melting that clears the Northwest Passage sooner than expected, or the use of Russia’s Northern Sea Route, a deficiency of that kind would make shuttling the subs between the maintenance yard in British Columbia and their base in Nova Scotia a difficult exercise at best.


Taking Chicoutimi home

On the contractor end, one of the rival groups was led by BAE Systems (Canada) Ltd., and included the politically-connected east coast shipping giant Irving Shipbuilding, whose share of the work has been estimated at 50% if their consortium had won. Irving company Fleetway, Inc. was the 3rd member of this consortium.
Irving Shipbuilding is doing more than just protest, though they are making a public case about the costs to the taxpayer of shuttling the subs from the Atlantic to the Pacific for maintenance. The firm also says that it intends to file a lawsuit. VP Kevin Hudson called the award a “travesty,” and said that “We are proceeding with our court action and believe our case is very strong.” The firm has already been involved in 2 court actions over this contract.

Other Irving spokespeople called on the government to re-bid the contract.

Irving spokespeople point out that CSMG partner Weir Canada Inc. drew up initial plans for the contract’s statement of work and evaluation criteria, and cite that as “a grave conflict of interest and use of insider knowledge.” The company added that the winning bid failed to meet the necessary requirements, and the total estimated value of the contract’s scope of work was not included in the price evaluation.

For its part, Canada’s Navy is unwilling to re-bid, given delays to date and the needs of its submarine fleet. One “senior defence source” put it bluntly to CP: “Going back out to tender and getting it totally put to bed means three years. We can’t afford that.”

Updates and Related News


Windsor and HMCS Montreal

June 17/08: After the HMCS Chicoutimi’s fire in October 2004, many of the submarine’s 55-member crew had to breathe in the smoke and live in the ash for days as a mater of course, as they struggled to save and return their stricken submarine. Since that date, some of the crew members have reported breathing troubles and variety of neurological disorders. claims to Veteran’s Affairs have been held up, or even rejected due to lack of information.
A report covering exactly what the sailors were exposed to was expected in the 2005 board of inquiry, but the tests were not completed until just recently. The Canadian Press news service reports that a briefing on the subject is scheduled for June 18/08 in Halifax, involving Canadian vice-admiral Drew Robertson.

June 4/08: A Minister’s briefing that admits Canada will have just one operational submarine until 2009, in order to cover 3 oceans and one of the world’s longest coast lines, has put the Victoria Class submarine program back in the spotlight. Th briefing reportedly states that:

“If pressed on submarine availability [the Minister should focus on] a maintenance regime that plans for at least one submarine to be available for operations until steady state is achieved in late 2009, after which two or more submarines will usually be operational and available at all times…. and to repair Chicoutimi as part of that submarine’s already scheduled maintenance period in 2010-2012.”

A return to service in 2012 would b 2 years later than originally planned, and involve a total sideline period of about 8 years. CanWest News | CTV | Victoria Times | UPI

Sub Fleet Creating Canadian Controversies

17-Jun-2008 13:02 EDT

Canada’s aging fleet of Oberon class submarines had become simply too old to put in the water. In July 2000, their de facto retirement became official. The question was: what, if anything, would replace them? With long coastlines, and a significant portion of its iced-in northern seas used as running grounds for foreign submarines, it was felt that giving up submarine capability was not a viable option for the country’s sovereignty.
Unfortunately, the country’s purchase of second-hand diesel-electric Upholder Class submarines from Britain ran into controversy almost from its inception. Refit and refurbishment costs for the renamed Victoria Class skyrocketed well past the initial GBP C$ 750 million estimate, and reliability problems ensued. Then, on Oct 5/04, HMCS Chicoutimi was sailing from Falsane, Scotland when it was disabled by a fire caused by the entry of seawater. One sailor died, 2 others were injured, and the boat had to be rescued by British frigates. HMCS Corner Brook [SSK 878] is currently the only Canadian submarine in service. HMCS Victoria [SSK 876] and HMCS Windsor [SSK 877] are undergoing repairs and upgrades, and HMCS Chicoutimi [SSK 879] is in drydock being used for spare parts, as it is not scheduled to have its fire damage repaired until 2010 or 2012.


http://watershed.bm23.com/public/?q=...6scg5nz7yduvht
Victoria Class
In early 2008, controversy flared again as the submarines’ C$ 1.5 billion Victoria Class In-Service Support Contract (VCISSC) became an issue. The government had finally pushed through a decision in January – but implementation ran into another lawsuit filed by the losing bidder, as well as strong pressure from a member of the Prime Minister’s own party. Who also happens to be the Canadian Parliament’s recognized authority on its submarines. Now there are revelations that Canada will have just 1 operational submarine until 2009…

The Submarine Support Contract Controversy

The VCISSC contract is seen as an important final stage in getting the Victoria Class into active service at last. It was put out for tender in September 2006, and 3 consortia bid. In January 2007, Canadian Submarine Management Group (CSMG) of British Columbia was deemed “most compliant” due to its points rating, and picked as the preferred bidder. A lawsuit by Irving Shipbuilding caused the government to break off negotiations, however, stalling the deal.

In November 2007, it was reported the government might cancel the deal, which represents about 150 of jobs in Victoria over 15 years. That drew outrage from local BC politicians. In January 2008, however, a decision was taken to re-start those negotiations with CSMG to get the deal done. DND spokesman David Martin has told the Canadian Press news agency that those negotiations are underway, and a final contract is expected in a few months.

The decision reportedly went all the way up to Prime Minister Stephen Harper’s desk. Even so, the signing of that contract is about to face rough waters again.

At the moment, HMCS Victoria is based at Esquimalt, British Columbia on Canada’s west coast, with a target date to re-enter active duty in 2009. The other 3 submarines, including the currently-serving HMCS Corner Brook, are based/drydocked in Halifax, Nova Scotia. The rising importance of the Pacific Rim is causing calls for 2 submarines to be based at CFB Esquimalt, but this is not yet reflected in Navy plans.

Independent-minded Canadian MP Bill Casey of Nova Scotia [Cons – Cumberland Colchester Musquodoboit Valley] is known as the Canadian Parliament’s foremost authority on the Victoria Class submarines, and his investigations began long before the HMCS Chicoutimi incident. He blasted the contract award, noting that HMCS Victoria experienced problems transiting the Panama Canal because the class is not designed to operate in warm waters, and lacks adequate cooling. Barring a sharp speed-up of ice melting that clears the Northwest Passage sooner than expected, or the use of Russia’s Northern Sea Route, a deficiency of that kind would make shuttling the subs between the maintenance yard in British Columbia and their base in Nova Scotia a difficult exercise at best.

On the contractor end, one of the rival groups was led by BAE Systems (Canada) Ltd., and included the politically-connected east coast shipping giant Irving Shipbuilding, whose share of the work has been estimated at 50% if their consortium had won. Irving company Fleetway, Inc. was the 3rd member of this consortium.

Irving Shipbuilding is doing more than just protest, though they are making a public case about the costs to the taxpayer of shuttling the subs from the Atlantic to the Pacific for maintenance. The firm also says that it intends to file a lawsuit. VP Kevin Hudson called the award a “travesty,” and said that “We are proceeding with our court action and believe our case is very strong.” The firm has already been involved in 2 court actions over this contract.

Other Irving spokespeople called on the government to re-bid the contract.

Irving spokespeople point out that CSMG partner Weir Canada Inc. drew up initial plans for the contract’s statement of work and evaluation criteria, and cite that as “a grave conflict of interest and use of insider knowledge.” The company added that the winning bid failed to meet the necessary requirements, and the total estimated value of the contract’s scope of work was not included in the price evaluation.

For its part, Canada’s Navy is unwilling to re-bid, given delays to date and the needs of its submarine fleet. One “senior defence source” put it bluntly to CP: “Going back out to tender and getting it totally put to bed means three years. We can’t afford that.”

Originally Posted by sandyj

Sub Fleet Creating Canadian Controversies

This is complete BS. It seems to me politics are again getting in the way of proper contracting again; contracts should be awarded on the basis of the best proposal, not on the basis of geography (unless that's part of the stated evaluation criteria from the outset, which would be a perfectly legitimate thing to do, subject to things like free trade agreements).

Besides in case you don't know, a lot of the work on ships in refit is not done by the shipyard at all but by subcontractors who work at all shipyards. That may mean that the 3 Vic's based in the Atlantic may not even go to the Pacific at all, as some of the work may in fact be contracted out East.