The Canadian government’s procurement agency rejected a last-minute bid by France’s Naval Group and Italy’s Fincantieri to propose their FREMM frigate to satisfy the country’s new frigate project.
Canada closed bids on the bids for the Canadian Surface Combatant (CSC) program on Nov. 30. The government previously said there were 12 eligible bidders for this future frigate program but has not disclosed how many actually made bids.
The program has a budget of $19 billion for 15 ships (Defense Daily, June 9).
The French-Italian team directly offered the Defense Ministry an off-the-shelf version model of their FREMM frigate that would be built at Canada’s Irving Shipyard, CSC prime contractor at a fixed fee of $24 billion and in a shortened time frame, Canada’s National Post reported last week.
The report said the Naval Group-Fincantieri team thinks the procurement process is biased in favor of a bid by a Lockheed Martin [LMT]-led team with Britain’s BAE Systems Type 26 Global Combat Ship. BAE is building the Type 26 for the British Royal Navy. The Lockheed Martin team submitted its bid last week (Defense Daily, Nov. 29).
On Tuesday Public Services and Procurement Canada (PSPC) clarified that “any proposals submitted outside of the established competitive process will not be considered.”
The agency said establishing and respecting the bidding process being consistently applied is a key part of transparent and fair procurement. Without common requirements and criteria, the government cannot effectively or consistently evaluate proposals.
“The submission of an unsolicited proposal at the final hour undermines the fair and competitive nature of this procurement suggesting a sole source contracting arrangement,” PSPC said in a statement.
“Acceptance of such a proposal would break faith with the bidders who invested time and effort to participate in the competitive process, put at risk the Government’s ability to properly equip the Royal Canadian Navy and would establish a harmful precedent for future competitive procurements,” it added.
The agency also said it is “far from evident” that the Naval Group-Fincantieri offer would provide significant cost savings. PSPC noted warship budgeting must cover delivering the ship, design and definition work, infrastructure, spare parts, contingencies, training, and management.
“Typically, the acquisition of the ships themselves only represents about 50-60% of the project’s overall budget,” and any prices named outside the context of the Request for proposals (RFP) terms and conditions “are effectively meaningless,” the agency said. This includes intellectual property rights, liability limitations, indemnities, and divisions of responsibility.
PSPC said the government and Irving Shipbuilding “will work together to evaluate the proposals in accordance with the published evaluation plan.” Potential bidders had over a year to prepare their proposals since the RFP was finalized and the government noted by the close of the period on November 30, “multiple bids were properly submitted.”