A contract for the next class of Royal Canadian Navy’s ships to Lockheed Martin [LMT] is on hold after Alion Science and Technology Corp. successfully lodged a complaint with the Canadian International Trade Tribunal.
Alion alleged to the tribunal that the Lockheed Martin proposal for the Canadian Surface Combatant (CSC), the BAE Systems Type 26 currently being produced for the United Kingdom, “is incapable of bid compliance with certain mandatory requirements of the solicitation.”
(Image: BAE Systems)
After receiving the complaint on Nov. 21, on Nov. 26 the tribunal decided to conduct an inquiry into the complaint and has ordered the Canadian government to put the contract award on hold during the review.
In October the Canadian government selected Lockheed Martin as the preferred bidder for the CSC. The company is working with Type 26 Global Combat Ship builder BAE, Canada’s CAE, L3 Technologies [LLL], Canada’s MBA, and Britain’s Ultra Electronics (Defense Daily, Oct. 22).
Canada plans to purchase 15 CSCs to replace its Iroquois-class destroyers and Halifax-class multirole frigates. This is Canada’s largest military procurement program, valued at $42 billion to $46 billion. The government had planned to award the CSC contract in early 2019 and start construction in the early 2020s at Irving Shipbuilding.
Lockheed’s competitors in the end were a team led by Alion offering the Dutch De Zeven Provincien-class frigate built by the Netherlands-based shipbuilder Damen as well as a Navantia–Saab team bidding with a ship based on the Spanish Navy’s F-105 frigate and Australia’s destroyer HMAS Hobart (Defense Daily, Aug. 9).
The Type 26 was selected by the U.K. Royal Navy for eight of its future ships. BAE started building the Type 26 in July 2016. It is designed with a low acoustic signature and is geared for multiple roles including anti-submarine warfare, air defense and humanitarian assistance.
Alion also protested the award to the Federal Court of Canada on Nov. 16, lodging a request for judicial review of the decision to name Lockheed Martin as the top bidder.
According to local media reports, Alion alleges the Type 26 cannot meet the Navy’s stated requirements like speed. Alion also reportedly said the requirements and other parameters of the CSC were altered 88 times during the process, diluting the requirements and allowing the government to choose an unproven platform.
When Lockheed Martin was announced as the preferred bidder, Canada’s procurement agency said it had to go through a “due diligence process” before a final selection and full contract would be awarded. This covers negotiating intellectual property rights, assessing combat systems performance, assessing Lockheed Martin’s financial capability to deliver the project, and verification of other administrative issues.
The agency said if Lockheed Martin could not successfully demonstrate it meets all the requirements, the next highest-ranked complaint bidder would become the preferred bidder. That bidder would then be able to demonstrate it meets the due diligence requirements.
Initially there were 12 eligible bidders, but only the Lockheed Martin, Alion, and Navantia-Saab bids moved forward.
The procurement agency earlier rejected a last-minute joint bid by a Naval Group–Fincatieri team to offer the FREMM frigate because it submitted the proposal outside the established competitive process. The team had argued it thought the existing process was biased in favor of Lockheed Martin (Defense Daily, Dec. 6, 2017).