national shipbuilding procurement strategy secretariat secrétariat de la stratégie nationale...

National Shipbuilding Procurement Strategy Secretariat Secrétariat de la stratégie nationale d’approvisionnement en matière de construction navale

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National Shipbuilding Procurement Strategy (NSPS)

British Columbia Government DelegationBriefing

23 June 2011


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Objective

• To provide a brief background of the NSPS

• Provide an overview of the NSPS Governance Structure

• To provide an outline NSPS Large Ship Procurement Process


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NSPS BackgroundWhy a new Strategy?

• Navy and Coast Guard fleets require renewal

• Government and other studies determined that individual procurements would not sustain the shipbuilding industry

• To end the boom and bust in federal shipbuilding

• All of our allies have an “NSPS” in some form

• Need to maximize limited budgets for fleet renewal – value for money for taxpayers

• Requested and supported by industry and associations


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Establish a strategic relationship with two Canadian shipyards and designate them as source of supply to build Government ships over 1000 tonnes displacement, where:

1. One shipyard will build the combat vessels package• Arctic/Offshore Patrol Ship, Canadian Surface Combatant

2. The other will build the non-combat vessels package• Offshore Oceanographic Science Vessel, Offshore Fisheries Science

Vessel, Polar Icebreaker, Joint Support Ship

Set-aside smaller vessels for competition by other than the two selected yards and their affiliates

Repair, maintenance and refit – Business as usual

Web Site: http://www.tpsgc-pwgsc.gc.ca/app-acq/sam-mps/snacn-nsps-eng.html

National Shipbuilding Procurement Strategy


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Enhanced MeasuresUnprecedented lengths to ensure the fairness, openness and transparency of this historic procurement process

•Regular meetings with the shipyards to develop procurement approach and Request For Proposal documents•An internationally recognized third party expert (FMI) has benchmarked the capability and performance of the yards•A leading consulting firm (KPMG) assisted in development of the procurement process•Fairness Monitor involved to provide independent assurance that activities are conducted in a fair, open and transparent manner

– interim report at RFP release: “… decisions are made objectively, free from personal favouritism and political influence, and encompasses the elements of openness, competitiveness, transparency and compliance.”

•Robust governance, empowered decision making, dispute avoidance and resolution


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NSPS Governance StructureDM-Level Governance Committee

DM/PWGSC (Chair), DM/DND, DM/DFO, DM/ICplus ex officio membership

ADM-Level Interdepartmental Steering CommitteeADM/PWGSC (Chair), ADM/DND, ADM/DFO, ADM/IC

plus ex officio membership

NSPS SecretariatPWGSC (Lead), DND representatives, DFO/CCG representative, IC

representative, PWGSC representatives & other resources

NSPS Interdepartmental Working GroupDG/PWGSC (Chair), DG/DND, DG/DFO, DG/IC

plus ex officio membership


Dispute Avoidance & Resolution

• Ongoing engagement and dialogue

• Governance structure used as dispute resolution ladder

• Designed to eliminate requirement to engage lobbyists

• Goal to minimize potential legal disputes

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A National Competition to select 2 Canadian Shipyards:

Issue a Solicitation of Interest and Qualification (SOIQ) to all Canadian shipyards to establish a short list of potential shipyards for the competitive RFP (Sept 2010)

Issue a Request for Proposals (RFP) to the short-listed shipyards (Feb 2011)

Evaluate Proposals and select 2 shipyards (Summer 2011)

Finalize an Umbrella Agreement (UA) with each selected shipyard (Fall-Winter 2011)

Negotiate Contracts for the individual projects

Overview - Procurement Process

Vancouver ShipyardsVancouver, British Columbia

Solicitation of Interestand Qualification (SOIQ)

• A SOIQ was issued to all Canadian shipyards to establish Short-Listed Respondents (SLR) for the competitive RFP process

• The SOIQ used criteria that were simple and concise while comprehensive, fair and open

• 5 SLRs were established from the SOIQ

Irving Shipbuilding Inc.Halifax, Nova Scotia

Seaway Marine & Industrial Inc.St. Catharines, Ontario

Davie Yards Inc.Lévis, Québec

Kiewit Offshore ServicesMarystown, Newfoundland



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Request for Proposals (RFP)

• RFP documents developed in consultation with Shipyards

• One RFP has been released:• Shipyards may submit proposals for one or both work

package(s); and

• A shipyard may only win one work package, not both

• Shipyard selection will be based on best value to Canada


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Proposal Evaluation

1 – Mandatory (Pass/Fail)1a. Administrative 1b. Legal 1c. Financial

2 – Shipyard’s Current State and Plans (60%)2a. Current State 2b. Plans

3 – Cost to Canada for Upgrades and Improvements (20%)4 – Shipyard’s Financial Situation (10%)

4a. Financial Capability 4b. Source of funding for Improvements

5 – Value Proposition (10%)

The final selection of the successful yards will be done within the established governance process approved by Cabinet and in accordance with the published terms of the RFP


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Shipyards’ Proposals• Must address how the shipyard intends to address any capability gaps

identified by our 3rd Party Expert (First Marine International)

• Infrastructure and process improvements

• Cost to Canada

• Lay out the commitments that contribute to the health of the marine sector over the long term, if selected, such as:

• Sustain a knowledge-based economy (partnership with provinces and other enterprises in the marine sector)

• Invest in skills and human resources (skill set development)

• Long-term supply chain development (out-sourcing and sub-contracting to other shipyards and SMEs)

• Increased commercial work (job creation)

Umbrella Agreements (UA) & Shipbuilding Contracts

• UAs will be negotiated with the 2 selected shipyards to establish the framework by which Bidders’ productivity improvement and value proposition commitments will be measured and monitored over the duration of the Strategy

• Ensuing contracts for shipbuilding projects will be:

• Negotiated in accordance with the rules established in the UAs;

• Subject to separate Government approval; and

• Used by the selected shipyards to deliver the productivity improvement and value proposition commitments detailed in the UAs



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Overall Schedule for NSPS Process

Jul 2010 Dec 2012

Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Jan 2011 - Jun 2011

Negotiate

Umbrella

Agreement

Selection of

shipyards

Finalize

UA

RFP

ClosesSOIQ

Release

List of

Pre -

qualifiers

RFP

Release

2011

Lead

Projects

Contract

Negotiations

Industry

Day

Under

Contract :

- FMI

- FM

- TAS

Jan 2011 - Jun 2011

Evaluation

of

Proposals

Jan 2011 - Jun 2011

Initial Benchmarking

Of Shipyards

RFP

Locked

Down

Milestone Planned Completion DateHire 3rd party Experts (TAS, FMI, FM) Complete pre-qualification & issue results Issue Request for Proposals to pre-qualified Shipyards Select 2 Shipyards Summer 2011

Complete the Negotiation of the Umbrella Agreements Fall 2011

Initiate Contract Negotiations for Initial Projects (Science Vessels, AOPS)

Fall 2011 / Winter 2012

July 7Feb 7

national shipbuilding procurement strategy secretariat secrétariat de la stratégie nationale...

Documents

procurement approach

construction navale

shipbuilding industry

federal shipbuilding

new strategy

nsps background

nsps governance structure

resolution slide