Irving Shipbuilding's deal to build Arctic patrol vessels questioned

Almost three and a half years after the Halifax shipyard won a bid to build Arctic patrol vessels as part of the $25-billion contract under the national shipbuilding strategy, questions about the validity of its contract are being raised.

Michael Byers, a political science professor at the University of British Columbia, suggests Irving could be in a vulnerable position to renegotiate following revelations that Quebec-based Chantier Davie Canada Inc. submitted a revised bid to the federal government to provide icebreakers and multi-purpose ships for the Canadian Coast Guard.

"The question is, are the ships that the Harper government decided to get the right ships for Canada or should Irving be building a somewhat different kind of vessel? And to get to that decision, some negotiations would need to take place," said Byers.

• Davie shipyard makes unsolicited bid to build for coast guard
• Irving Shipbuilding shows off world's 'most modern shipyard' in Halifax

Under the National Shipbuilding Procurement Strategy, Irving's Halifax Shipyard is building Arctic offshore patrol vessels and combat ships. Vancouver-based Seaspan is building coast guard ships.

On Friday afternoon, Public Services and Procurement Canada said there were "no requests for proposals for‎ icebreakers and multi-purpose ships for the coast guard."

"Two shipyards, considered centres of excellence, were competitively selected to build Canada's combat and non-combat large ships," the statement said.

The department also said Davie Shipyard can bid on future requests for proposals.

Davie already lost bid

The president of Irving Shipbuilding, Kevin McCoy, told CBC Radio's Information Morning he didn't believe that Davie's proposal would affect existing construction plans.

"Davie lost. It was a fair competition and the competition is over," he said.

"Ships are being built on both coasts. With that sound [shipbuilding] strategy, and the results produced today, Davie should not be allowed to undermine Canada's very, very well thought out and executed competition." 

McCoy said his company has already issued $1 billion in contracts to Canadian companies for services and materials to build the ships and work is underway.

'Camel' ships

Byers hasn't been a fan of the Arctic patrol vessels since the beginning, calling them "camels."

"The plans in Halifax should be modified and the design changed so that the ships that are built are high speed purpose designed offshore patrol vessels — ones that can operate on the grand banks in the winter, which the Arctic patrol ships can't do and that can operate at high speeds and potentially catch smugglers, which the Arctic patrol ships can't do," he said.

According to Byers, the Trudeau government has the right to alter Irving's shipbuilding deal. However, he is doubtful the Halifax shipyard could lose its entire workload.

"Irving would have some legal grounds for compensation if the contract was simply terminated," Byers said.

The political scientist says the Vancouver shipyard never signed a contract, which puts them in a weaker spot.

"Those designations were not contracts. They selected the two shipyards and left the negotiation of contracts until later, and with regards to the coast guard icebreaker that is supposed to be built in Vancouver, no contract has been signed," said Byers.

Davie deal questioned

Chantier Davie Canada Inc. was awarded a $700-million contract to provide the navy with a temporary supply ship. The Liberals, shortly after being elected last fall, temporarily put the plan on hold. 

Irving Shipyards also submitted a bid and McCoy said his company's proposal suggested building the vessel over a shorter time frame for a "fraction of the cost." 

In November, the company wrote a letter to federal ministers accusing the government of pursuing a sole source contract with Davie.  

"Everything we've seen about their proposal for the interim refueller was neither lean nor innovative," McCoy said Friday. 

"We don't think it's very good value for the country."