Royal Canadian Navy Discussions and updates

StobieWan

Super Moderator
Staff member
I was thinking, wow that's a lot of money! But they're talking about Canadian dollars... I guess it's still a lot of money. But you don't get those bespoke US toys for free!

I'm not impressed however. Neither with the Type 26 nor with the Canadians plans to buy 15 of them. I'm sure the RN will be very happy with them, but they'd be happy with a rowboat after how much they've had to give up for those useless carriers. And I don't really get why the Aussies are buying them, because they are also using their own systems instead of what the Brits are designing it for. Because those Brits just need to be special and pretend they still have a relevant defense industry.

Anyway, the Type 26 just seems very expensive for what it brings to the table. But even so, the Type 31 is by no means comparable as it is in a completely different class of performance. And while I like the FREMM and what the Italians have done with it. I wouldn't trust those French bastards to run a bath let alone a shipbuilding program. So a bullet dodged there I say!

However BAE isn't exactly know for it's problem free designs and on time, on budget deliveries...

The Type 26 hull is expensive because it's *really* quiet. The RN has specialised in ASW for a long time as part of it's NATO commitments and Type 26 has a lot of noise reduction elements which go wayyyy beyond anything previously seen. So, it's a large, roomy design, very quiet and has a very flexible layout. Additionally, the program (from the offset) invited members of various foreign navies to observe, participate and contribute.

The end results speak for themselves - two 5I countries have picked the design up.
 

Mattshel

Member
I am thinking this look-see by the PBO is going to confirm what everyone already knows.
  1. These ships will cost more on a like for like basis than foreign-built vessels, not double but a good amount more, which is the price to pay for a sovereign shipbuilding capacity and everything that it entails. Many other nations realized this long ago and I think people in the know and that make the decisions here in Canada realize this now as well.
  2. We may actually see a like for like comparison of costs on foreign vessels using the Canadian accounting methods, heck the mission systems are not even taken into account in some of the comparables (FFGX - Government Furnished), whereas with Canada even upgrades to infrastructure are included in the costs.
  3. It will not matter a sniff because the way NSPS is tied to jobs in those regions there is no way they will not get built, naval shipbuilding seems to be the only procurement file in the country that all politicians no matter their allegiance agree with and support. The concern I have is the capabilities being watered down to an unacceptable level, or neutered to prevent something like the capability to perform BMD.
In reality, even if the numbers were cut to 12 Vessels it would match the current amount of combatants the Canadian Navy has had for the past 3 years and with the 6 x AOPS taking some lower threat taskings away it would likely result in more potential deployment time with a vastly more capable and modern ship. I do believe however that the Vessels should be purchased in Flights and lessons learned in the flight that follows, this would keep naval design staff employed and "hot" and would result in a more capable ship much the way that the USN has been incrementally building upon the Arleigh Burke Class. I would even be happy with the RCN following the Dutch model of not doing Mid Life Refits as they did on some of their M-Class and instead selling the vessels at the mid-life point and procuring new ones, this would keep the shipbuilding industry moving along, and the RCN with modern vessels.

We need to make sure in this country that we do not go through the pain of building a shipbuilding industry again in 25 years because of shortsighted procurement decisions and political whims.
 

ngatimozart

Super Moderator
Staff member
Verified Defense Pro
In NZ new infrastructure and / or infrastructure upgrades are included as part of an acquisition project cost. That costs also includes all the sensors, manuals, simulators, training, maintenance, ongoing support etc. However weapons that are considered consumables such as missiles, bombs, ammo etc., are not included and they come out of the OPEX budget.
 

Toptob

Active Member
I am thinking this look-see by the PBO is going to confirm what everyone already knows.
  1. These ships will cost more on a like for like basis than foreign-built vessels, not double but a good amount more, which is the price to pay for a sovereign shipbuilding capacity and everything that it entails. Many other nations realized this long ago and I think people in the know and that make the decisions here in Canada realize this now as well.
  2. We may actually see a like for like comparison of costs on foreign vessels using the Canadian accounting methods, heck the mission systems are not even taken into account in some of the comparables (FFGX - Government Furnished), whereas with Canada even upgrades to infrastructure are included in the costs.
  3. It will not matter a sniff because the way NSPS is tied to jobs in those regions there is no way they will not get built, naval shipbuilding seems to be the only procurement file in the country that all politicians no matter their allegiance agree with and support. The concern I have is the capabilities being watered down to an unacceptable level, or neutered to prevent something like the capability to perform BMD.
In reality, even if the numbers were cut to 12 Vessels it would match the current amount of combatants the Canadian Navy has had for the past 3 years and with the 6 x AOPS taking some lower threat taskings away it would likely result in more potential deployment time with a vastly more capable and modern ship. I do believe however that the Vessels should be purchased in Flights and lessons learned in the flight that follows, this would keep naval design staff employed and "hot" and would result in a more capable ship much the way that the USN has been incrementally building upon the Arleigh Burke Class. I would even be happy with the RCN following the Dutch model of not doing Mid Life Refits as they did on some of their M-Class and instead selling the vessels at the mid-life point and procuring new ones, this would keep the shipbuilding industry moving along, and the RCN with modern vessels.

We need to make sure in this country that we do not go through the pain of building a shipbuilding industry again in 25 years because of shortsighted procurement decisions and political whims.
The Dutch and Belgian M-class ships did go through a MLU program, which was surprisingly successful and relatively low cost. But it was necessary because they will only be replaced after serving well past their original out of service date. So it couldn't be avoided if the navy wanted to send their people to sea in a responsible manner.

But I do think that when you're building this many ships over a period as long as @Todjaeger describes in a post above (30 years!) it is logical that the later ships will be different than the earlier ones. There will be some design changes as the equipment fit out evolves with time, isn't that one of the big selling points of the T26 anyways? I don't know if it's the best idea to be buying the ships in batches however.

I admit that I don't know exactly how the deal is going to be structured, but would buying the ships in different batches also mean that the decision making responsibility will be distributed over different time periods as well? Because when @Todjaeger posted about a 30 year program my biggest worry was that a defense program that runs for a long time can be vulnerable to the whims and fancy of the political situation at different times. What are the initial contracts going to entail? And how much will the entire run of 15 ships be set in stone when those contracts are signed? And how could financial setbacks or unexpected technological advancements and requirements be dealt with if the program is under contract? Could and will there be re-negotiations and what will be subject to these re-negotiations?

I know these are some very in depth things, but I'm interested now and haven't been able to find much about it.

In NZ new infrastructure and / or infrastructure upgrades are included as part of an acquisition project cost. That costs also includes all the sensors, manuals, simulators, training, maintenance, ongoing support etc. However weapons that are considered consumables such as missiles, bombs, ammo etc., are not included and they come out of the OPEX budget.
Is investment in private assets like upgrading the shipbuilders docks usually included in infrastructure costs? Like the (proposed?) new "frigate factory" at Rossyth, or like with the TKMS bid for Dutch submarines? I believe in the TKMS case it's included in their bid. so even though the government will pay for it they would have had to find space within the budget that was requested. This article says "$69.8 billion includes $5.3 billion in pre-production costs, $53.2 billion in production costs and $11.4 billion in project-wide costs".

So would something like Rolls Royce's center of excellence be payed by Rolls Royce out of their revenue on this project, or would it be subsidized as infrastructure or maybe pre-production or project wide costs?
 

ngatimozart

Super Moderator
Staff member
Verified Defense Pro
Is investment in private assets like upgrading the shipbuilders docks usually included in infrastructure costs? Like the (proposed?) new "frigate factory" at Rossyth, or like with the TKMS bid for Dutch submarines? I believe in the TKMS case it's included in their bid. so even though the government will pay for it they would have had to find space within the budget that was requested. This article says "$69.8 billion includes $5.3 billion in pre-production costs, $53.2 billion in production costs and $11.4 billion in project-wide costs".

So would something like Rolls Royce's center of excellence be payed by Rolls Royce out of their revenue on this project, or would it be subsidized as infrastructure or maybe pre-production or project wide costs?
In NZ we don't build our own ships because we don't have the industrial base or skills for it, nor would we have the throughput to warrant such a program, however if we did, I doubt that we would pay for private companies to upgraded their facilities. IIRC in Australia, they operate a similar model and the only yards that have been upgrade, at Commonwealth of Australia expense, are the ASC ones. The ASC is govt owned.
But I do think that when you're building this many ships over a period as long as @Todjaeger describes in a post above (30 years!) it is logical that the later ships will be different than the earlier ones. There will be some design changes as the equipment fit out evolves with time, isn't that one of the big selling points of the T26 anyways? I don't know if it's the best idea to be buying the ships in batches however.

I admit that I don't know exactly how the deal is going to be structured, but would buying the ships in different batches also mean that the decision making responsibility will be distributed over different time periods as well? Because when @Todjaeger posted about a 30 year program my biggest worry was that a defense program that runs for a long time can be vulnerable to the whims and fancy of the political situation at different times. What are the initial contracts going to entail? And how much will the entire run of 15 ships be set in stone when those contracts are signed? And how could financial setbacks or unexpected technological advancements and requirements be dealt with if the program is under contract? Could and will there be re-negotiations and what will be subject to these re-negotiations?
I think that if you want to look at an exemplar of how such a program could work is how the Commonwealth of Australia's Naval Ship Building Plan. The advantage that Australia has over Canada is that there is a cross party consensus between the major political parties, on defence and that is unlikely to change in the foreseeable future. The Hunter class (RAN Type 26 FFG) build is in batches, IIRC batches of three ship, with incremental capability increases in each batch. I think that the RAN service life is intended to be around the 20 year mark before they will be paid off from RAN service and sold.
 

John Fedup

The Bunker Group
In NZ we don't build our own ships because we don't have the industrial base or skills for it, nor would we have the throughput to warrant such a program, however if we did, I doubt that we would pay for private companies to upgraded their facilities. IIRC in Australia, they operate a similar model and the only yards that have been upgrade, at Commonwealth of Australia expense, are the ASC ones. The ASC is govt owned.

I think that if you want to look at an exemplar of how such a program could work is how the Commonwealth of Australia's Naval Ship Building Plan. The advantage that Australia has over Canada is that there is a cross party consensus between the major political parties, on defence and that is unlikely to change in the foreseeable future. The Hunter class (RAN Type 26 FFG) build is in batches, IIRC batches of three ship, with incremental capability increases in each batch. I think that the RAN service life is intended to be around the 20 year mark before they will be paid off from RAN service and sold.
Paying off a T26 after only 20 years seems pretty ambitious and expensive, especially with COVID expenses that Australia also has to deal with. Maybe junior has a secret deal with Australia to buy used T26s half way through the CSC build.
 

oldsig127

The Bunker Group
Verified Defense Pro
Paying off a T26 after only 20 years seems pretty ambitious and expensive, especially with COVID expenses that Australia also has to deal with. Maybe junior has a secret deal with Australia to buy used T26s half way through the CSC build.
I think it's slightly out. The published explanation of the continuous build included the full program of T26 plus replacements for the AWD before starting the T26 replacement. That would require a beat of about one vessel every 18 months which we are told the yard can manage, but if I remember correctly was suggested as possible, but only if necessary

oldsig
 

Meriv90

Member
Just to specify on FREMM and IP.

We didn't circumvent the system for nothing, we tried to protect our IP because if you remember if we followed the tender we should have supplied not the CAD government but Irving (if i remember correctly it was the advisor company) all of our technical design without any insurance. Thus to not risk a chance for an huge IP theft we tried to get a G2G deal. If the CAD government would have kept a competitor out of the loop there wouldn't have been problems like for the Sea5000 or the other tenders Fincantieri took part in the last years.

Obviously a situation like your fixed wing rescue plane or other famous Canadian tenders didn't help in increasing the trust.

So please don't accuse us of unfair game when the rules of the game have been changed at race started and the tender organization was at fault.

Regards

Meriv
 

John Fedup

The Bunker Group
I don’t know exactly what access Irving would have to IP for FREMM that would be any different from what BAE offered (and Alion). The latter two companies followed the guidelines specified by the GoC. I can just imagine the cluster from BAE and Alion if the GoC even gave lip service to the unsolicited offer.
 

Mattshel

Member
Just to specify on FREMM and IP.

We didn't circumvent the system for nothing, we tried to protect our IP because if you remember if we followed the tender we should have supplied not the CAD government but Irving (if i remember correctly it was the advisor company) all of our technical design without any insurance. Thus to not risk a chance for an huge IP theft we tried to get a G2G deal. If the CAD government would have kept a competitor out of the loop there wouldn't have been problems like for the Sea5000 or the other tenders Fincantieri took part in the last years.

Obviously a situation like your fixed wing rescue plane or other famous Canadian tenders didn't help in increasing the trust.

So please don't accuse us of unfair game when the rules of the game have been changed at race started and the tender organization was at fault.

Regards

Meriv
It is not an IP "theft", theft assumes that nothing was gained from it. The FREMM team would have been paid for the IP, they did not like the fact that the design would go to Irving and that is why what happened, happened. The bidder was well aware of what the result of a successful tender would be and this was known to all at the outset of the procurement process, their offer was hail mary and a stunt and that is all.

The fact remains, they made an unsolicited offer outside of the RFP which was soundly rejected, I know these types of deals are made all the time with some nations, but it opens up procurement to a much greater chance of bribery and scandal (i.e. Rafale/India).
 

Meriv90

Member
100% agree that a G2G is always inferior to a tender because it opens too many opportunities for corruption.

No they wouldn't have been paid because the designs would have went through Irving, and they would have got paid only if FREMM won. In a way or another Irving would have gone through the designs since it was the advisor to choose the winner.

It isnt like the FFGX where the designs went through only the USN and they bought the IP for it.
 

Mattshel

Member
100% agree that a G2G is always inferior to a tender because it opens too many opportunities for corruption.

No they wouldn't have been paid because the designs would have went through Irving, and they would have got paid only if FREMM won. In a way or another Irving would have gone through the designs since it was the advisor to choose the winner.

It isnt like the FFGX where the designs went through only the USN and they bought the IP for it.
Everything goes through Irving or Seaspan, this is the way the Shipbuilding Strategy was designed. If there was an issue with how the tender was structured then they should have contacted the tendering authority and lodged a formal complaint on the procurement. Alion did this after they were not awarded, the FREMM team had the option to do this from the outset and they did not, nor did they do it afterwards.
 

Meriv90

Member
Fincantieri did in a letter sent in October 2016, you know the answer from the ministry?
Talk to Irving.....
A company which we accused of conflict of interest (as written in the previous article)

Which kind of question did solicit this kind of answer if not a complain on how the tender works?

The warship project "is being conducted in such a way that ensures that all bidders are treated equally, with no unfair advantage given to any individual bidder," Irving spokesman Sean Lewis said in an email.
 

OPSSG

Super Moderator
Staff member
I'm not impressed however. Neither with the Type 26 nor with the Canadians plans to buy 15 of them. I'm sure the RN will be very happy with them, but they'd be happy with a rowboat after how much they've had to give up for those useless carriers. And I don't really get why the Aussies are buying them, because they are also using their own systems instead of what the Brits are designing it for. Because those Brits just need to be special and pretend they still have a relevant defense industry.

Anyway, the Type 26 just seems very expensive for what it brings to the table....

And while I like the FREMM and what the Italians have done with it. I wouldn't trust those French [Mod edit: Bigoted statement deleted] to run a bath let alone a shipbuilding program. So a bullet dodged there I say!

However BAE isn't exactly know for it's problem free designs and on time, on budget deliveries...
It has come to the Mod Team’s attention that Toptob (a member since Sep 2009), has said some unsavoury things. This was pointed out to him by a senior member and also by the Mod Team. He was given a chance to withdrawal his statement but he elected not to do so.

In the last two months, we have had to ban a member who served with the Canadian Navy and now a civilian like Toptob. The Mod Team would like to clarify that we treat all members alike — the same
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Unlike other lesser forums, we do ask softly and escalate the warnings from
green, to red (often along with the gift of warning points), prior to bans. In both cases, I believe the Mod Team has given the involved parties every opportunity to correct their behaviour prior to the application of a ban.
 
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ngatimozart

Super Moderator
Staff member
Verified Defense Pro
Everything goes through Irving or Seaspan, this is the way the Shipbuilding Strategy was designed. If there was an issue with how the tender was structured then they should have contacted the tendering authority and lodged a formal complaint on the procurement. Alion did this after they were not awarded, the FREMM team had the option to do this from the outset and they did not, nor did they do it afterwards.
I would find that a serious conflict of interest and if I was a design house or ship builder I would have considerable problems with this. None of the other FVEY nations design a tender or build strategy like this, because it can cause to many problems. It opens up both the government and the Canadian shipbuilding companies to accusations of corruption and IP theft. Not even the Indians undertake a procurement this way. To my mind this is very unprofessional and is illustrative of the immaturity and chaotic environment that Canadian defence procurement exists in. It's banana republic quality standards.
 

Calculus

Active Member
I would find that a serious conflict of interest and if I was a design house or ship builder I would have considerable problems with this. None of the other FVEY nations design a tender or build strategy like this, because it can cause to many problems. It opens up both the government and the Canadian shipbuilding companies to accusations of corruption and IP theft. Not even the Indians undertake a procurement this way. To my mind this is very unprofessional and is illustrative of the immaturity and chaotic environment that Canadian defence procurement exists in. It's banana republic quality standards.
There are several posters who persist in propagating the myth that the associated IP for NSS ships go to the shipbuilder (Irving or Seaspan). This has been addressed before in this thread, by myself and others, but I will say it again: NO IP goes to either Irving or Seaspan. The IP will owned by the Government of Canada. The government will pay for the rights to "use and maintain" the IP for the "lifetime of the equipment". Exactly the same as any other country would. For CSC, Irving will licence the design of the ship ("hull and machinery"), but that's a licence agreement, not a transfer of IP. If Irving was to build a T26 for another customer other that the GoC, it would have to pay BAE to do so under the terms set out in the licensing agreement. It's also important to remember that the CSC program has two elements: The ship construction (Irving), and the systems integration (LM). For the systems (CMS, sensors, weapons, electronics, etc...), also known as the "fighty bits", the GoC will be buying those items directly from the vendors, and LM will be integrating them into the ship. Irving has no involvement in the purchase of the systems or weapons, or even any involvement in the integration of those systems or weapons. Therefore, this is a red herring.
 

Calculus

Active Member

ngatimozart

Super Moderator
Staff member
Verified Defense Pro
There are several posters who persist in propagating the myth that the associated IP for NSS ships go to the shipbuilder (Irving or Seaspan). This has been addressed before in this thread, by myself and others, but I will say it again: NO IP goes to either Irving or Seaspan. The IP will owned by the Government of Canada. The government will pay for the rights to "use and maintain" the IP for the "lifetime of the equipment". Exactly the same as any other country would. For CSC, Irving will licence the design of the ship ("hull and machinery"), but that's a licence agreement, not a transfer of IP. If Irving was to build a T26 for another customer other that the GoC, it would have to pay BAE to do so under the terms set out in the licensing agreement. It's also important to remember that the CSC program has two elements: The ship construction (Irving), and the systems integration (LM). For the systems (CMS, sensors, weapons, electronics, etc...), also known as the "fighty bits", the GoC will be buying those items directly from the vendors, and LM will be integrating them into the ship. Irving has no involvement in the purchase of the systems or weapons, or even any involvement in the integration of those systems or weapons. Therefore, this is a red herring.
You might say that, but as outsiders looking in, it doesn't look so clear cut. How about some documentation to prove that and we'll all be happy then, won't we? It's just that Canadian defence procurement looks to be murky and mysterious at the best of times.
 
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