Irving signs $2.3 billion contract for Arctic offshore patrol ships

The following is the text of a news release from Public Works and Government Services Canada:

(HALIFAX, Nova Scotia) (Jan. 23) — The Honorable Diane Finley, minister of Public Works and Government Services, along with the Honorable 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, a member of Parliament, Bryan Hayes, highlighted that the majority (60 percent) 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, 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.

Quick facts

  • 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 1 meter 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 Centers; modern surface search radars; and, a gun armament.
By Professional Mariner Staff