The head of North Vancouver’s Seaspan Shipyards said he’s disappointed the federal government has chosen to go ahead with awarding a large contract directly to a Quebec shipyard, despite last-minute pleas from both Seaspan and Irving shipyards to reconsider.
The federal government announced Monday it is going ahead with the $587-million contract direct awarded to Chantier Davie Shipyard by the previous Conservative government during the election.
The contract involves converting a commercial container ship into a navy support ship that can be used on an interim basis until new joint support ships are completed at Seaspan. The ship is to be finished by the fall of 2017.
The decision comes after Seaspan’s chief executive officer Jonathan Whitworth called on Ottawa to take a second look at the contract, which he said was awarded without a proper competitive process “for political reasons” during the federal election.
Whitworth said last week Davie’s bid will cost taxpayers significantly more than the proposal put forward by Seaspan, but the North Vancouver company’s bid was never seriously considered.
In announcing the decision Monday, federal officials noted the decision to award the contract directly to Davie was made by the previous Conservative government. They added work on the project has already begun in the Davie shipyard and restarting the bid process would mean delaying delivery of the ship. Ottawa would also have to pay Davie up to $89 million if the contract were cancelled.
The need for an interim navy supply ship became urgent over a year ago, after both existing supply ships – the HMCS Protecteur and HMCS Preserver – had to be retired early.
In response to the decision, North Vancouver MP Jonathan Wilkinson said the Liberal government’s dilemma is it inherited the contract with Davie from the Conservative government. “I’m not a big fan of sole-source contracts,” he said, adding, “They’re rife with the opportunity for considerations other than those to do with price and quality.”
Wilkinson said the decision to go ahead with the existing contract was a practical one, given that the work had already started. “Procurement processes in government move very slowly,” he said. “In cases where there are crises or emergencies that need to be addressed quickly, at times there are reasons for not having a full-blown procurement process.”
“The navy will tell you they need the ship urgently.”
The federal announcement stated the government will review the process that allows direct awards of military contracts.
Seaspan is currently working on the design and engineering for the two new joint support ships for the navy. The first of those ships is scheduled to be finished in 2020. In announcing the Davie contract Monday, Ottawa added it is still committed to building ships under the national shipbuilding program. Seaspan won the right to negotiate contracts for non-combat vessels under that program following a lengthy bidding process.
