Canada has officially provided clear instructions for bidding to the two companies competing for the construction of the navy’s new submarines, as revealed by CBC News. The instructions were sent to ThyssenKrupp Marine Systems (TKMS) of Germany and Hanwha Ocean Co. Ltd. of South Korea last week. James Rourke, an official in the newly established federal Defence Investment Agency, confirmed the document’s delivery to both qualified bidders, detailing the government’s expectations and the criteria for decision-making.
A portion of the extensive 40-page document has been reviewed by CBC News to confirm its authenticity. The government will heavily consider the sustainment package each company can offer for the fleet of 12 submarines post-purchase, with this aspect accounting for 50% of the evaluation. In addition, 20% of the decision will focus on the platform itself, while the financial capacity of the company will contribute 15%, and the remaining 15% will assess the economic benefits related to the contract.
Rourke refrained from discussing specific details but emphasized the importance of maximizing economic benefits for Canada through the procurement process. The government aims to leverage the Canadian defense industry to create jobs and stimulate economic growth. Two defense sources indicated that responses from both companies are expected by March.
Out of the initial five interested firms, Prime Minister Mark Carney’s government narrowed down the selection to the current two contenders. Carney has conducted site visits to both shipyards and inspected the submarine offerings. The project, intended to replace Canada’s aging Victoria-class submarines, holds a potential value of up to $24 billion for the boat purchases alone. There are plans for sustainment facilities on both coasts to generate Canadian employment opportunities.
Alan Williams, a former top procurement official at the Defence Department, expressed initial concerns about the rapid downselection process but is now satisfied with the issuance of formal bidding instructions. Transparency is deemed crucial due to the substantial nature of the purchase. The federal government, particularly Industry Minister Mélanie Joly, has emphasized the role of defense spending in supporting the Canadian economy.
The federal government is deliberating on whether to proceed with the full submarine order or adjust the quantity and purchase additional jets. Discussions with Saab regarding the Gripen E fighter jet as an alternative to the F-35 have been acknowledged by Joly, who believes the job creation potential of the F-35 program is insufficient. Williams cautioned against political maneuvering in the submarine procurement process and advised against interference to avoid legal repercussions.
The bidding process for the submarine program is now in progress, and any ministerial intervention could have significant legal consequences, as highlighted by Williams.