Canada selected the Lockheed Martin [LMT]-led team offering the Type 26 ship as its preferred bidder for the Royal Canadian Navy’s next naval ship, the Canadian Surface Combatant (CSC).
Lockheed Martin partnered with BAE Systems to bid for the CSC with BAE's Type 26 Global Combat Ship (GCS). Other team partners include Canada’s CAE, L3 Technologies [LLL], Canada’s MBA, and Britain’s Ultra Electronics.
Lockheed Martin beat out two other competitors: a team led by Alion Science and Technology offered the Dutch De Zeven Provincien-class frigate built by the Netherlands-based shipbuilder Damen while a Navantia-Saab team bid a ship based on the Spanish Navy's F-105 frigate and Australia's destroyer HMAS Hobart (Defense Daily, Aug. 9).
Canada aims to purchase 15 CSCs to replace the Iroquois-class destroyers and Halifax-class multirole frigates. The program is valued at $42 billion to $46 billion and the government plans construction to start in the early 2020s at Irving Shipbuilding.
The first deliveries are expected in 2024-2025.
The U.K. Royal Navy previously selected the Type 26 for eight of its future ships. Lockheed Martin previously said given the Type 26’s stage of development, there is no obsolescence in its design and offers the lowest build risk for Canada (Defense Daily, Nov. 29, 2017).
BAE first started building the Type 26 in July 2016. The ship is designed with a low acoustic signature and able to be configured for multiple roles including anti-submarine warfare, air defense, and humanitarian assistance.
Lockheed Martin previously argued its offering exceeds Canada’s baseline requirements with only small alterations to the existing Type 26 design.
Canada’s procurement agency said while the selection of preferred bidder is a milestone, it is not a final decision. Lockheed Martin Canada now has to go through a “due diligence process” before a final selection and full contract award, expected this upcoming winter.
The due diligence process includes negotiations with the awardee on intellectual property rights, an assessment of combat systems performance, and an assessment of Lockheed Martin’s financial capability to deliver the project combined with the verification of other administrative issues.
Public Services and Procurement Canada (PSPC) said if Lockheed Martin does not successfully demonstrate to the government and Irving Shipbuilding that it meets all of the requirements, the next highest ranked compliant bidder becomes the preferred bidder. That next bidder would then have the chance to demonstrate it meets the due diligence requirements.
PSPC in a statement called the CSC program “the largest, most complex procurement ever undertaken by the Government of Canada. These ships will form the backbone of our Royal Canadian Navy and will be Canada’s major surface component of maritime combat power for decades to come.”
The CSC came out of a 2017 government plan to almost double the defense budget over the next decade. The government plans to grow overall defense spending from about $14.4 billion in 2017 to almost $25 billion in 2027, an increase of over 70 percent (Defense Daily, June 7, 2017).
BAE’s Type 26 is having a run of success after winning the original U.K. award. In June, Australia selected a variant of the Type 26 to build nine next-generation anti-submarine frigates in a program worth up to $26 billion (Defense Daily, June 29).