Canada Awards Thales Up To $4.1 Billion In Arctic And Support Ship Services

The Canadian Acting Minister of Public Services and Procurement announced Thursday an eight-year $631 million contract award France's Thales to provide in-service support for Arctic and Offshore Patrol Ships (AOPS) and Joint Support Ships (JSS).

The support includes refit, repair, and maintenance and training for the AOPS and JSS vessels. The contract covers eight years initially but options can extend it up to a total of 35 years at $4.1 billion for the life cycle of the vessels. The contract was specifically awarded to a joint venture of Thales Canada and Thales Australia.

Artists' concept of the Canadian Arctic and Offshore Patrol Ships (AOPS). Image: Irving Shipbuilding.

Artists' concept of the Canadian Arctic and Offshore Patrol Ships (AOPS). Image: Irving Shipbuilding.

The government highlighted Thales is required to compete the work among subcontractors. For ships delivered in the east part of Canada, work will occur in Quebec or Ontario while for ships delivered in the west will have work conducted in the Western provinces and Territories.

These directives seek regional economic benefits and the government anticipated over 2,000 jobs will be created or maintained across Canada during the 35-year period.

Six AOPS are being built by Canada's Irving Shipbuilding and delivery of the first ship to the Royal Canadian Navy is set for 2018. Hong Kong-based Seaspan Corp.’s [SSW] Vancouver Shipyards are scheduled to build two JSS with the first scheduled for delivery in 2021.

The AOPS and JSS vessels are part of Canada’s National Shipbuilding Strategy, which seeks to support the country’s maritime industry and build vessel in Canada. This is to help the industry make up for a slowdown that occurred from the 1990s through 2010.

The contract “will ensure Canada is ready to support the vessels once they are delivered, while supporting the long-term growth of the marine sector in Canada,” Public Services and Procurement Canada (PSPC) said in a statement.

PSPC added the selection of Thales “will result in a wealth of award-winning marine in-service support experience being transferred to Canadian industry.”

In-services support work under the contract is required to occur in Canada, unless a ship requires maintenance while overseas.

“The government is revitalizing the shipbuilding industry, bringing middle-class jobs and prosperity to many communities across the country,” Jim Carr, acting Minister of Public Services and Procurement, said in a statement.

“We are giving our navy the ships it needs, and we are taking steps to make sure that we have solid, cost-effective support in place to keep our fleet in full operational readiness,” he added.

Officials highlighted the competition was open and transparent, featuring frequent industry engagement and new procurement concepts.

Harjit Sajjan, Minister of National Defence, noted the AOPS and JSS vessels are “essential” to the fleet and the contract helps ensure the people manning the ships will be provided with reliable support for years.

“Thales Canada’s best-in-class in-service support solution will drive Canadian innovation, create growth and ensure that ships are mission-ready, where and when they are needed,” Mark Halinaty president and CEO of Thales Canada, added.

The Minister of Public Services and Procurement announced the launch of this contract’s competition in July 2016 after conducting industry consultation. The evaluation requirements for the bids included technical and relational criteria, economic benefit commitments, and a financial bid. A fairness monitor oversaw the procurement process as well, PSPC said.

Bidders were told of their ranking in Dec. 2016 and negotiations with the highest-rank bidders finished in Feb. 2017.

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