by Mark Cardwell
Providing a practical solution for a good customer. That’s how Alex Vicefield, CEO of Davie Canada’s parent company, Inocea Group, describes the Quebec shipyard’s recent unsolicited bid to build icebreakers and multipurpose ships for the Canadian Coast Guard. “Others are making it into something political, which I can assure you it’s not,” Vicefield told Canadian Sailings from the parent company’s headquarters in Monaco. “We presented (the Canadian government) with an idea to convert some of the many high-ice class vessels from the offshore oil and gas industry vessels that are now available in North America and elsewhere. “We’re telling them to stop throwing good money after bad by repairing old ships, and instead take advantage of the current economic environment by buying or leasing new or newer ships.”
The Canadian Press broke the story about Davie’s unsolicited bid in early March, when it obtained a copy of the cover letter Davie sent to Public Services and Procurement Minister Judy Foote on Feb. 24. According to CP, Davie has re-pitched an idea it presented three years ago to the former Conservative government, offering to build and deliver a Polar Class 3 icebreaker in 18 months. That proposal, which would have undermined the massive contract of civilian ship construction awarded to Vancouver’s Seaspan shipyard under the politically-sensitive and badly-listing National Shipbuilding Strategy, was quietly scuttled.
Last year, Davie also made another unsolicited bid – and won – a nearly $600-million-dollar contract to provide the Royal Canadian Navy with a temporary supply ship, to wit a tanker that it had already bought overseas and had delivered to its yard in Levis, Quebec, where conversion work is ongoing. After initially hesitating, the new Liberal government confirmed the deal on November 30.
In addition to a big icebreaker, Davie is now offering to build three smaller so-called River-class icebreakers for the Canadian government, as well as two multi-purpose ships that could be used for a myriad of sovereignty, rescue and scientific roles and tasks. “This is a fast-track solution providing enhanced capabilities at a fraction of the newbuilding price,” quoted CP from the proposal.
Davie’s pitch notably suggests the conversion of either the three high-tech offshore vessels that are already being built in its yard, or others bought on the international market “at highly affordable prices,” according to the report. According to CP, Davie says it can deliver ships “at 60 per cent of the cost of the current program with Seaspan, and gives the federal government the option of either buying or leasing the vessels.”
Unnamed sources told CP the bid adds up to around $1 billion in contracts, depending on what ships and options would be chosen.
According to Vicefield, Davie came up with the idea of making the bid when the management learned that Canadian officials had gone to Finland recently to look at ice breakers. “That got us thinking,” he said. “We come from the international marine industry where we have to be innovative and lean to compete.
“When we see a situation which is clearly facing all kinds of problems and we have solutions which can save our client many hundreds of millions of dollars and receive an even better product faster, it would not be in anyone’s interest to hold back.”
A spokesperson for Canada’s Department of Fisheries & Oceans confirmed the Finnish trip in an email to Canadian Sailings in late March, though she denied it was to buy or inspect ice breakers. “The Coast Guard met with both Finnish government and private sector marine companies to discuss an array of subjects in December 2015,” wrote Carole Saindon. “The objective of the trip was to enhance bilateral cooperation in Arctic research and solidify existing networks for addressing issues of common interest, such as ocean resources; search and rescue coordination which was exemplified in the recent joint action for F/V Saputi; development and protection; and environmental response and shipbuilding. “The Coast Guard did not visit Finland with the goal of purchasing or leasing icebreakers,” added Saindon.
Marine pundits have been quick to read a rejection of Davie’s bid into comments made by government ministers. Davie’s NSPS competitors have also ripped the proposal, saying it undermines the spirit of NSPS. “The worst thing we could do is to stop, alter or otherwise change NSPS before it’s actually really gotten underway,” Jonathan Whitworth, CEO of Seaspan, told CP. Irving Shipbuilding also issued a press release, saying it rejects “the outrageous comments” made by Vicefield about NSPS.
“(NSPS) is widely recognized as a robust, open, and fair procurement strategy that is working for Canada,” wrote Irving. “The process included extensive evaluations of shipyard capabilities and Irving Shipbuilding and Seaspan were selected to build ships for Canada. “The deadline for the original NSPS competition in 2011 was extended at Davie’s request – and they lost. “Despite this, and without credibility, Davie continues to attempt to disrupt a well-run, open and transparent process.”
The President of the Shipbuilding Assocation of Canada, former Vice-Admiral Peter Cairns, did not return several calls requesting an interview about the state of NSPS, the prospects for Davie’s bid, and the strong reaction against it by Seaspan and Irving.
For his part, Vicefield rejects the criticism of Davie’s bid – and business – from its homegrown competitors. “These other yards are playing politics and talking, not building ships like they promised and were contracted to do,” he said. “We are only trying to help the Canadian government deal with some very real and pressing needs for a wide variety of vessels,” added Vicefield. “We put in a proposal for a solution to a very complex issue, and of course they were not going to accept it straight up. We remain quietly optimistic.”
For its part, Pierre-Alain Bujold of Public Services and Procurement Canada responded by confirming that PSPC has received an unsolicited proposal from Davie Shipyard, and commented further that “The government of Canada remains committed to the National Shipbuilding Strategy (NSS) and the two shipyards selected to build our vessels over 1,000 tonnes, which includes the Polar Icebreaker. The National Shipbuilding Strategy (NSS) objectives are to deliver the vessels that are needed by the Royal Canadian Navy and the Canadian Coast Guard, to create a sustainable shipbuilding industry in Canada, and to ensure the economic benefits stay in Canada. As part of this strategy, a long-term strategic relationship was established. Irving and Seaspan shipyards were selected through a competitive process based on merit. Davie participated in this competitive process and was not successful. Any potential interim requirements would be addressed through industry engagement and will follow the government’s regulations and practice, including fair, open and transparent procurement processes.”