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New Canadian Shipbuilding Strategy

Kirkhill said:
.... Design Build can mean Design Build a ship or it can mean Design Build a fully functional fighting system ....
Or buildings for that matter, where one price covers both design & build.
 
milnews.ca said:

4 Billion? Really? They must be accounting for the wages of every worker at Washington Marine Group for these types of numbers!

All we want is a gas station and convienince store. Its only weapon system will be CIWS and MASS decoy system.  I have no idea what SOR the PBO is looking at.
 
FSTO:

They do reference the US GAO with respect to budget management.  Given the USN's track record in getting ships in the water the GAO has reason to be gun-shy of budget predictions.

Can the RCN, working with a neophyte industry do better?  ???
 
Kirkhill said:
FSTO:

They do reference the US GAO with respect to budget management.  Given the USN's track record in getting ships in the water the GAO has reason to be gun-shy of budget predictions.

Can the RCN, working with a neophyte industry do better?  ???

Not sure, but the design of an AOR is pretty generic. It's not like we are building a radical new ship like the original JSS was going to be.
But then again this is Canada and if we can find away to make this tougher than needed we usually succed. :mad:
 
FSTO said:
Not sure, but the design of an AOR is pretty generic. It's not like we are building a radical new ship like the original JSS was going to be.
But then again this is Canada and if we can find away to make this tougher than needed we usually succed. :mad:

Agreed:

I know all the arguments about life-cycle budgeting, project budgeting, ops and maintenance separate from capital.  But as the F35 saga demonstrates most of those costs are unknowable estimates that will in fact vary very little according to the platform.  (The Navy has a big advantage over the Air Force as it numbers the operational crew per platform in the hundreds instead of singletons and so can consider spreading 225 sailors over 5 hulls).

Ultimately, in my considered opinion the only real, solid basis of comparison is the cost of the platform itself.  Everything else is an estimate.

To wit the Dutch Joint Logistic Support Ship Karel Doorman (pretty much following the spec for the original JSS):

Royal Netherlands Navy orders new Hr.Ms.Karel Doorman Dec 24, '09 5:22 AM
for everyone
After more than 30 years that Hr.Ms Karel Doorman the Aircraftcarrier was sold to Argentina the Royal Netherlands Navy gets his famous name back in to the fleet.

Mid 2014 the Damen Schelde shipyards will deliver a new JLS ( Join Logistic Support) vessel.

This ship 205mtrs long and 30mtrs wide is such a big ship that it may have the name of Karel Doorman. The new Karel Doorman will have the ambition to operate worldwide, for humanitarian as well warconflicts.

Total costs € 384 million. The ship can harbour 180 personnel and 120 marines of the Royal Netherlands Marine Corps.

2 big Chinook helicopters can land at the same time on deck. A hangar offers at the same time space for another 6 helicopters. Except fot over 400 tons of ammunition there will be room for 9000 kubicmtrs of fuel.

It can operate as a self supporting village in the middle of the Ocean , load and unloading all kinds of miltairy equpment as trucks, jeeps, tanks. The new Hr.Ms Karel Doorman will get all kinds of the newest advanced weaponsystems which will be controled from the central command room..

The new warship will replace in 4 years the Hr.Ms.Zuiderkruis.

link
 
milnews.ca said:

And here's the Aviation Week pricing for the Danish Ivar Huitfeldts with APAR, SMART-L and Standard SM-2s

Production of Most Powerful Danish Frigate Ever Starts -- in Lithuania
Posted by Joris Janssen Lok 6:55 AM on Feb 27, 2008

Production of the first of three new frigates for the Royal Danish Navy has started yesterday -- in Lithuania. The Baltija Shipyard at Klaipeda, Lithuania, is one of two companies in the Baltic Republics that have won a role as subcontractor to supply building block sections for the 138-meter (450-ft.)-long ships (see www.navalhistory.dk).

The other subcontractor is Loksa Shipyard in Estonia. The first building blocks are scheduled to arrive at the main shipbuilder, Odense Steel Shipyard in Lindo, Denmark, during May, and a formal keel laying ceremony is planned for early June.

e43135c7-2d3c-43a9-9076-79dbd84746dd.Large.jpg


Image: Defense Acquisition and Logistics Organization (FMT), Denmark

Denmark is now officially calling its new surface combatants "frigates" -- previously, they had to be called "patrol ships" for political reasons. The name change appears to be justified: the new ships are described by senior program officials as the "largest, most powerful warships ever" for Denmark's navy, which marks its 500th anniversay in August 2010.

The first-of-class of these new ships is hoped to be officially presented during the celebrations for this event.

The three ships, reportedly to be called the Ivar Huitfeldt-class as this would be the name for the lead ship, have a more or less common hull to the two Absalon-class combat support ships built in recent years, which are now entering operational service.

918c8ce2-a602-4843-810e-c9504c3d25d0.Large.jpg


Image: Defense Acquisition and Logistics Organization (FMT), Denmark


The frigate program has an overall projected cost of 4.7 billion Danish kronor ($936 million, so $312 million per ship -- compare this to the staggering cost of U.S. Navy surface warships, even relatively small ones such as the Littoral Combat Ship...)

This provides three area air defense-capable ships to enter service between 2012-14. They are to replace three Olfert Fischer-class missile corvettes and ten Willemoes-class fast attack craft (the latter have already been decommissioned).

So far, the following contracts have been awarded associated with this program:

- the shipbuilding contract with Odense Steel Shipyard (which is part of the Maersk shipping group and routinely builds large merchant ships for Maersk while it has also built the two Absalon-class ships for the navy);

- the anti-air warfare system contract with Thales Nederland. This includes the Smart-L long-range 3D volume search radar and the APAR medium-range multifunction radar, plus the associated command & fire control systems. Thanks to the 400-km-range Smart-L radar, when positioned in the center of the Danish archipelago, a single frigate of this class can monitor the airspace over the whole of Denmark proper;

- the Mk 41 vertical launching system contract with Lockheed Martin;

- the contract for Ceros 200 radar/electro-optic fire control directors from Saab Systems of Sweden (these are to provide fire control for the various guns on the ship);

- the bow-mounted sonar contract with Atlas Elektronik;

- the contract for ballistic protection panels with Ten Cate/Roshield of Denmark

- the contract with Saab Danmark for the internal/external communications suite.

Yet to be awarded are contracts for the missiles (planned are Raytheon Standard Missile SM-2 Block IIIA, Raytheon Tomahawk, Raytheon ESSM); the main gun (planned to be of 127-mm. caliber), and the 35-mm. close-in weapon systems (planned to be Millennium guns from Rheinmetall/Oerlikon Contraves).

Tags: ar99 Denmark Lithuania Estonia frigate

The Dollars referenced are USD.

As an aside - and probably more relevant to the DND-PWGSC debate - it is informative that the purchase of these ships is the responsibility of a military Defense Acquisition and Logistics Organisation.

Policies Here
 
PBO has a not-to-scale illustration of how costs increase:

CF Operational Requirements -> Design/modify designs -> Build in Canada.

Use an off the shelf design & tell the Navy to adapt, or buy somewhere other than Canada, and prices will go down.  As we're unwilling to use someone else's design, and unwilling to shop around for a better price offshore, we're stuck.

(And the PBO report was reviewed by overseas experts - bullet-resistant, if not bullet-proof).
 
dapaterson said:
PBO has a not-to-scale illustration of how costs increase:

CF Operational Requirements -> Design/modify designs -> Build in Canada.

Use an off the shelf design & tell the Navy to adapt, or buy somewhere other than Canada, and prices will go down.  As we're unwilling to use someone else's design, and unwilling to shop around for a better price offshore, we're stuck.

(And the PBO report was reviewed by overseas experts - bullet-resistant, if not bullet-proof).

Great, just **** great. Lets have another couple of years of BS "debate" while we pay more and more to keep the old hulks afloat. Get on with it already.
 
PBO's assumptions:  (Page 7)

1. Weight
2. Manufacturing complexity for structure
3. Percent of new structure
4. Percent of design repeat for structure
5. Engineering complexity


As indicated, the inputs for the point estimate were:

1. Weight of 18,469,520 lbs
(i.e. Protecteur’s weight)

2. MCPLXS of 3.78
(i.e. Protecteur’s MCPLXS)

3. Percent of new design of 85%
(reflecting the significant redesign work that would be necessary to adapt any design to Canadian operating requirements and make it possible to be built in a Canadian shipyard)

4. Design repeat for structure of 40% (reflecting the fact that there will be some, but not complete, symmetry in the design of the ship)

5. Engineering complexity of 1.1
(i.e. a new design based on existing technology, designed and executed by a team with mixed experience and some product familiarity,
thus reflecting Seaspan’s current state)

For these values, the model returned a point estimate of approximately $3.28 billion.

Apparently all the assumptions are the PBO's own, assisted by external advisers, and the estimate is generated by a "crystal ball" programme.

I don't see any reference to an actual dollar associated estimate of activities.

But that could just be me.
 
Kirkhill said:
PBO's assumptions:  (Page 7)

Apparently all the assumptions are the PBO's own, assisted by external advisers, and the estimate is generated by a "crystal ball" programme.

I don't see any reference to an actual dollar associated estimate of activities.

But that could just be me.

Who are the external advisors? Crystal ball program, WTF is that?
 
External Advisors are listed on page 2 of the document, and include folks from the US GAO and CBO, the Naval Post-grad institute, and the Danish Navy.


The PBO made assumptions based on available information, and extrapolated.  They express confidence levels in the data as well - based on their assessment, the's less than a 5% chance that the JSS can be delivered within the current funding envelope.
 
Kirkhill said:
And here's the Aviation Week pricing for the Danish Ivar Huitfeldts with APAR, SMART-L and Standard SM-2s

The Dollars referenced are USD.

As an aside - and probably more relevant to the DND-PWGSC debate - it is informative that the purchase of these ships is the responsibility of a military Defense Acquisition and Logistics Organisation.

Policies Here
So, $312 million per ship.  Would be real interesting to see how much it would cost us to build the same ship.  I don't like only 32 vls cells per ship, would like at least 48.  If we could build for 4x the cost, 1.248 billion per ship, times 15 hulls, is less than 20 billion total, fits right within budget.

I also very much like the De Zeven Provinciën-class and FREMM-class frigate designs.
 
NSPS subcontracting: "Shipyard suppliers chosen for familiarity, not via competition"
http://www.embassynews.ca/news/2013/03/05/shipyard-suppliers-chosen-for-familiarity-not-via-competition/43403

Plus CSC:

"Harper Government Continues to Engage Industry on the Canadian Surface Combatant Project

GATINEAU, QUEBEC--(Marketwire - March 8, 2013) - The Harper Government is holding the first in a series of technical consultation sessions for the Canadian surface combatant project today. This is part of the second phase of industry engagement for this project.

"The Harper Government is following through on our commitment to build ships in Canada," said the Honourable Rona Ambrose, Minister of Public Works and Government Services and Minister for Status of Women. "Our national shipbuilding strategy will result in long-term jobs and economic growth for Canadians, stability for the industry, and vital equipment for our men and women in the Royal Canadian Navy and the Canadian Coast Guard."

Through this series of technical consultation sessions, the Government is seeking industry input on a number of subjects related to the design of combat ships. The topic of the first of these discussions will be the feasibility of a common hull for both the destroyers and frigates [emphasis added]. Additional sessions will be scheduled over the coming months, as further industry input is required...

For more information about the Canadian surface combatant project and the National Shipbuilding Procurement Strategy, please visit www.tpsgc-pwgsc.gc.ca/app-acq/sam-mps/snacn-nsps-eng.html..."

http://www.marketwire.com/press-release/harper-government-continues-engage-industry-on-canadian-surface-combatant-project-1766007.htm

From September 2010

"New fleet in sight – Canadian navy builds for tomorrow

It might not be smooth sailing just yet for the Canadian navy, but this summer saw progress toward the renewal of its fleet. In June, the government announced the procurement strategy for acquiring more than 20 new ships over the next 30 years. In August, Vanguard spoke with Rear Admiral (Ret’d) Ian Mack, National Defence’s Director General for Major Project Delivery (Land and Sea) about the navy’s shipbuilding program.

The Ships
...
Canadian Surface Combatant
The most anticipated vessel in the new wave of shipbuilding is the Canadian Surface Combatant, the 15 ships that will replace the current mix of destroyers and frigates. With acquisition costs of about $26 billion and in-service support estimated at almost $15 billion over twenty years, these ships will be Canada’s military presence on the world’s oceans..."
http://vanguardcanada.com/new-fleet-in-sight-canadian-navy-builds-for-tomorrow/

Mark
Ottawa
 
ANALYSIS
Brian Stewart: How not to rebuild Canada's navy
By Brian Stewart, special to, CBC News
Last Updated: Mar 21, 2013 5:07 ET

Brian Stewart
Canada and abroad
If you thought it hard having to deal with the bizarre budgetary twists and turns of the F-35 fighter jet procurement, with its stratospheric cost overruns, brace yourself for even wilder turbulence over the navy's massive construction program.

Not what anyone wants to hear, I know. After all, for years now the Harper government has been promising that this $33 billion plan to rebuild our navy's aging fleets would be a model of how to handle big, complex procurement programs.


Was it just a year ago? Prime Minister Stephen tells workers at Halifax Shipyard in January 2012 that the government has agreed in principle to a $25 billion revitalization program for Canada's navy, which they will undertake. Reuters


The 40-year-old supply ship HMCS Preserver sits in dry dock at the Halifax Shipyard in July 2010, when Defence Minister Peter MacKay first announced the replacement JSS program. Reuters


Public Works Minister Rona Ambrose, flanked by business executive Tom Jenkins, after releasing a report outlining new policies for military procurement, in February 2013. Reuters

It was going to be the largest peacetime defence contract in our history, and would create a jobs bonanza on the East and West coasts, the political value in votes from such largesse need hardly be stressed.

Rather than buying cheaper vessels offshore, Ottawa was gambling that in turning to our own industries — despite their inexperience in naval work in recent decades — we would jump-start a vast new Canadian shipbuilding capacity.

So, $25 billion would go to building 23 surface warships, including eight new Arctic patrol craft, on the East coast, while $8 billion would go to a B.C. firm to see the launch of new non-combat support ships.

But brace yourselves, for the first cold shocks of reality have started to rock the program even as the future hulls are still only on the drawing boards.

As with the turbulent F-35 cost figures, there's evidence that the government has been playing with quite illusionary numbers here as well.

In what looks to be huge oversight, according at least to Parliamentary Budget Officer Kevin Page, the government has underestimated these future naval costs by failing to take into account that the inflation rate for military construction runs between 7 and 11 per cent annually, rather than the civilian rate of around 2.7 per cent.

Ships are particularly hard hit by inflation as they're built in much smaller numbers than planes, tanks or trucks. They are also built for unique purposes, and require highly sophisticated weapons, sensors, communications equipment and operating systems built to withstand exacting ocean wear over decades.

A highly specialized work force and frequent construction delays inevitably drive up costs.

So a failure to factor in defence-specific inflation likely means that any naval program will cost far more than originally promised if it's to meet the original standards.

That means that, if Page is right, and he's not the only one saying this, Canada is faced with two harsh options: A much more expensive fleet, or a much smaller one.

The navy's future

Within the military, the debate has already started over two of the most important future ships, the large Joint Support Ships (JSS) said to be "integral" to future naval operations.

Part re-supply ships, part floating command headquarters for overseas operations, part helicopter platform, and part humanitarian emergency vessel, these JSS are strategic vessels capable of giving Canada more options and influence at sea.

Military supply ships $1.5 billion over budget, Page says
Defence buys should focus on building industry, report
The ships are also beyond desperately needed to replace the two decrepit supply vessels, HMCS Preserver and Protecteur, whose keels were laid down at the time of Expo '67, almost 46 years ago.

After years of delay, the federal government set aside $2.6 billion in 2010 to see these new JSS built in Vancouver's Seaspan yards by 2018 and 2019 respectively.

But that simply can't be achieved at today's dollars, according to the parliamentary budget officer. Using independent analysis of the program from the Conference of Defence Associations Institute in Ottawa, Page slapped a new price tag of $3.28 billion on the two ships.

In fact, just to be safe, he urges the government to set aside 60 per cent more than planned — $4.13 billion.

Back at the drawing board

In the brouhaha that followed, Public Works Minister Rona Ambrose immediately denounced Page's projections and stood by her department's forecasts.

"If adjustments need to be made, they will be done in partnership with the shipyards, the navy and the coast guard," she said.

Well, maybe. But after the F-35 debacle such statements don't carry as much weight as concerned taxpayers have a right to expect.

There seem to be several basic problems with naval procurement in Canada, one of the main ones being that our lack of national expertise means the learning curve inevitably imposes delay after costly delay.

But as governments don't want to be seen raising the ceiling on projects like the Joint Support Ship program, naval architects are left struggling to reshape these vessels according to ever-tightening limitations.

They get tasked with having to drop capability, size and function, which inevitably leads to more delay, higher costs, and then a new round of squeezing and so on.

At this rate, the NDP's procurement critic Matthew Kellway jokes, all that will come out of the naval budget in the end will be "nothing but two tugboats painted grey."

Working backwards

The parliamentary budget director says Ottawa works back to front when it comes to military procurement on this scale.

It doesn't start with a core design, but with a simple budget number "as opposed to the folks in the military saying, 'Let's build a bottom-up set of requirements and let's put numbers against those requirements.'"

The budget office is now looking into the far bigger program in Halifax, the one to build 15 warships along with Arctic patrol craft. But already stories that the current East coast program is seriously underfunded are rampant in defence circles.

Writing in the Canadian Naval Review, veteran defence writer Sharon Hobson says the word among her naval sources is that the East Coast construction will be closer to $30 to $40 billion all in, as opposed to the $25 billion budgeted.

That's a big jump for taxpayers to swallow, especially if austerity is being called for elsewhere.

David ********, one of the country's best informed defence journalists, writes that bureaucrats are already reducing the capability of future navy vessels, and sources warn the number of surface warships may be cut from 15 "to 12 or even 10."

What's more, this kind of speculation was making the rounds well before the recent leaks pertaining to tomorrow's federal budget, which is expected to continue three successive years of cutting defence spending.

The central question that always surrounded the Conservative's boldly named National Shipbuilding Procurement Strategy was whether realistic funding would eventually support all the ballyhoo, or whether drift and delay would undercut it.

The current gloom suggests that unless the government can seriously reassure the navy that ship numbers and capability will not be sacrificed, the ballyhoo will soon be swept away by the bitter recriminations our defence debates are so prone to.
About the author
One of this country's most experienced journalists and foreign correspondents, Brian Stewart is currently a Distinguished Senior Fellow at the Munk School for Global Affairs at the University of Toronto. He also sits on the advisory board of Human Rights Watch Canada. In almost four decades of reporting, he has covered many of the world's conflicts and reported from 10 war zones, from El Salvador to Beirut and Afghanistan.
 
Let's see....the CBC has managed to completely dismiss any ships being built, unless they fit a bath tub, bring up the F35 cost overruns at least 4-5 times, denounce the Conservatives.......yup, it's a CBC story alright..... ::)
 
GAP said:
Let's see....the CBC has managed to completely dismiss any ships being built, unless they fit a bath tub, bring up the F35 cost overruns at least 4-5 times, denounce the Conservatives.......yup, it's a CBC story alright..... ::)
That being said, there's a lot I agree with what he's saying.  We won't get as much as we were promised, we never do.  And what we get will be watered down and less capable than originally proposed too.  He's spot on that were we to go offshore it would cost much less and be faster too boot.  Of course that's not politically viable, which is a shame.  My  :2c:
 
Brian Stewart is one of the few old school journalists still providing reports to CBC.  When he turns up on my TV I pay attention. He has some great sources and is obviously "in the know." Perhaps this is due to his position at the U of T Munk centre.
 
If this goes the way it looks to be going, I'd much rather buy the ships for a good price elsewhere.  We're just going to end up paying through the nose for ships, and won't be at all competitive at shipbuilding when it's all over.  Why not dangle the order in front of the EU and get back a full scale free trade deal, plus a pile of business for Canadian companies?  The idea that a Berlin Class costs 2 billion means we've already reached ludicrous speed.
 
AlexanderM said:
If this goes the way it looks to be going, I'd much rather buy the ships for a good price elsewhere.  We're just going to end up paying through the nose for ships, and won't be at all competitive at shipbuilding when it's all over.  Why not dangle the order in front of the EU and get back a full scale free trade deal, plus a pile of business for Canadian companies?  The idea that a Berlin Class costs 2 billion means we've reached ludicrous speed.

Too late. The contracts have been signed, sealed and delivered. I do agree with you that we could have gotten cheaper deals from foreign shipbuilders, but can you imagine the uproar from all the opposition parties, unions, special interest groups, etc, about how the Conservatives were betraying Canada and were in the pocket of foreign corporations, etc.
 
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