Making the decision on the construction of the large non-combat vessels: the Polar Icebreaker and Joint Support Ships
Backgrounder - October 11, 2013
Under the National Shipbuilding Procurement Strategy (NSPS), the Royal Canadian Navy will replace its Auxiliary Oiler Replenishment vessels with Joint Support Ships (JSS), while the Canadian Coast Guard will replace the icebreaker Canadian Coast Guard Ship (CCGS) Louis S. St-Laurent with a new Polar Icebreaker.
The Polar Icebreaker and the JSS cannot be built simultaneously. This fact was known and accepted by the Department of National Defence and the Canadian Coast Guard when the NSPS shipyard selection process was conducted. An important principle of the NSPS is to avoid boom and bust cycles, which are ultimately inefficient and detrimental to the long-term sustainability of the Canadian shipbuilding industry.
Analysis supporting the decision
The NSPS Secretariat, made up of members from the Department of National Defence the Canadian Coast Guard, Industry Canada and Public Works and Government Services Canada, carried out an analysis to determine the order in which the ships should be built. The factors considered included:
- readiness of the ship designs;
- any capability gap for either the Canadian Coast Guard or the Royal Canadian Navy due to the construction schedule for the vessels and the associated risk mitigation measures;
- project risks related to cost and schedule, including the need for vessel refits or life extensions for different schedule scenarios; and
- impact on shipyard productivity.
Input was sought from:
- the ship project teams;
- the federal departments involved;
- the shipyard;
- First Marine International, the third party consultant with regard to shipyard capability;
- KPMG, which reviewed the analysis methodology; and
- the NSPS interdepartmental director general and assistant deputy minister governance committees.
KPMG was retained by Canada in July 2013 to provide support as a third party expert for NSPS projects. For the Polar Icebreaker/JSS decision, KPMG was tasked to review the methodology and processes outlined in the Decision Analysis Plan developed by the Secretariat, to ensure that the Plan fulfilled the intended purpose and that the analysis was unbiased and could withstand scrutiny.
First Marine International
First Marine International (FMI) is a leading independent consulting firm providing services to the marine industry worldwide. FMI is the foremost international expert in shipyard assessment. Its advice was sought with respect to the potential implications of workload, scheduling, productivity and challenges associated with the two projects and their sequencing on the shipyard.
Vancouver Shipyards was selected in October 2011 to build Canada's non-combat vessels, including both the JSS and the Polar Icebreaker. Vancouver Shipyards' input was sought with regard to a delivery schedule for the Polar Icebreaker and the JSS for the sequencing options. The company also provided its perspectives on the advantages, disadvantages, risks and opportunities of the sequencing options.
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