Third National Shipbuilding Strategy Shipyard

1. Introduction

Samson & Associates was engaged by Public Works and Government Services Canada (PWGSC) as a Fairness Monitor (FM) on August 30, 2019 to observe the competitive selection process for the Third National Shipbuilding Strategy (NSS) Shipyard, issued by Public Works and Government Services Canada (PWGSC) as a result of solicitation F7013-190036/B. Samson & Associates is an independent third party with respect to this activity.

The FM did not observe the activities connected with the procurement process until August 30, 2019. However, the FM reviewed the Invitation to Qualify (ITQ), its amendments including questions and answers to the ITQ when he became involved. We reviewed all of the information provided, observed all relevant activities and had full access to all aspects of the procurement process and co-operation from all stakeholders.

We hereby submit the Final Report, covering the activities of the FM commencing with the issuance of the ITQ and continuing through the close of ITQ evaluation Phase.

This report includes our attestation of assurance, a summary of the scope and objectives of our assignment, the methodologies applied and relevant observations from the activities undertaken.

2. Attestation of assurance

The Fairness Monitor hereby provides the following unqualified assurance statement concerning the procurement process for the Third National Shipbuilding Strategy Shipyard, commencing with the issuance of the Invitation to Qualify and continuing through to the close of the Invitation to Qualify evaluation Phase.

It is our professional opinion that the procurement process we observed for the above activities, was carried out in a fair, open, and transparent manner.

3. Requirement

The NSS, formerly called National Shipbuilding Procurement Strategy is a long-term initiative to renew Canada's federal fleet of vessels. To date, strategic sourcing relationships have been formed with two Canadian shipyards—Vancouver Shipyards (VSY) and Irving Shipbuilding Inc. (ISI) to deliver “large vessels” to the Royal Canadian Navy (RCN) and the Canadian Coast Guard (CCG). The strategy provides economic benefits to Canadians and rebuilds our country’s shipbuilding industry, including delivering the first of Arctic Offshore Patrol Ships and the first of Offshore Fisheries Science Vessels in 2019, with continued commitments to deliver more ships. Currently, the new Canadian Surface Combatants and Offshore Oceanographic Science Vessel (CCG) are at the design stage, while the new Joint Support Ships have entered the build phase.

When the National Shipbuilding Procurement Strategy (NSPS) was implemented, initial assumptions were that the two shipyards would have sufficient capacity to recapitalize the federal fleets. However, it has been assessed that the NSS shipyards do not have the capacity to build all of the future ships that Canada requires in the timeframes needed to maintain service continuity. The Program Icebreakers (PIBs), which form part of the CCG future fleet, will replace the aging heavy and medium icebreakers, which are expected to reach their maximum end of service life between 2030 and 2042.

Given the time to procure large ships such as icebreakers and fully transition them into service, an alternative solution is necessary. Any delays in the PIBs project would result in significant operational capability gaps for the icebreaking program starting in 2030.

These challenges have resulted in a requirement to identify a third Canadian shipyard with the capacity and capability to undertake the PIBs project.

4. Methodology

Samson & Associates was engaged as a FM to observe the competitive selection process for the Third Canadian Shipyard, and to attest to the fairness, openness and transparency of this monitored activity.

In accordance with the terms of our engagement, we familiarized ourselves with the relevant documents and observed procurement activities (for example ITQ and related amendments), identifying fairness-related matters to the contracting and technical authorities and ensuring that responses and actions were reasonable and appropriate.

4.1 Activities and observations—invitation to qualify

The ITQ was published on buyandsell.gc.ca on August 2, 2019 as solicitation No. F7013-190036/B. Interested parties were invited to pre-qualify in accordance with the terms and conditions of this ITQ in order to participate in any later phases of the procurement process. The ITQ closed on August 30, 2019.

The FM did not observe the activities connected with the procurement process until August 30, 2019. However, the FM reviewed the ITQ, all amendments including questions and answers to the ITQ when he became involved. No fairness issues were identified.

The ITQ document was written in a clear and understandable manner. All questions submitted were responded to in an understandable fashion.

4.2 Activities and observations—invitation to qualify evaluation

The FM reviewed the ITQ evaluation plan and framework. As described in the ITQ, all criteria established were mandatory. An information session for the evaluation team attended by the Contracting Authority (CA) and the FM was held on September 3, 2019.

Two bids were received in response to the ITQ. Subsequently, two consensus meetings were held, one on September 4th, 2019 and the second on September 10, 2019. Both the FM and the Contracting Authority were present.

Consensus discussions were open, and a consensus was reached for all the criteria according to the terms of the ITQ. The ITQ evaluation was completed on September 10, 2019.

One respondent met the qualifications and conditions of the ITQ and was thus qualified.

4.3 Activities and observations—invitation to qualify conclusion

This section covers the period following the evaluation phase of this ITQ.

There were two bids submitted in response to the ITQ. One of the two bids was deemed non-responsive because it did not meet all mandatory criteria. The bidders were advised of the evaluation results in writing on December 17, 2019. The letter to the unsuccessful bidder, and reviewed by the FM, explained the reasons the bid did not qualify.

Debriefings were not requested following the communication of the results.

In conclusion, the one qualified bidder will be invited to participate in the procurement of a third shipyard in support of the Program Icebreakers.

5. Reference documents

The documents related to the solicitation # F7013-190036/B are available through PWGSC or on buyandsell.gc.ca.