National Shipbuilding Procurement Strategy Secretariat
Secrétariat de la stratégie nationale d’approvisionnement en matière de construction navale
National Shipbuilding
Procurement Strategy (NSPS)
British Columbia Government Delegation
Briefing
23 June 2011
1
National Shipbuilding Procurement Strategy Secretariat
Secrétariat de la stratégie nationale d’approvisionnement en matière de construction navale
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
2
National Shipbuilding Procurement Strategy Secretariat
Secrétariat de la stratégie nationale d’approvisionnement en matière de construction navale
NSPS Background
Why 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
3
National Shipbuilding Procurement Strategy Secretariat
Secrétariat de la stratégie nationale d’approvisionnement en matière de construction navale
National Shipbuilding Procurement
Strategy
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
•
2.
Arctic/Offshore Patrol Ship, Canadian Surface Combatant
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
4
National Shipbuilding Procurement Strategy Secretariat
Secrétariat de la stratégie nationale d’approvisionnement en matière de construction navale
Enhanced Measures
Unprecedented 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
5
National Shipbuilding Procurement Strategy Secretariat
Secrétariat de la stratégie nationale d’approvisionnement en matière de construction navale
NSPS Governance Structure
DM-Level Governance Committee
DM/PWGSC (Chair), DM/DND, DM/DFO, DM/IC
plus ex officio membership
ADM-Level Interdepartmental Steering Committee
ADM/PWGSC (Chair), ADM/DND, ADM/DFO, ADM/IC
plus ex officio membership
NSPS Interdepartmental Working Group
DG/PWGSC (Chair), DG/DND, DG/DFO, DG/IC
plus ex officio membership
NSPS Secretariat
PWGSC (Lead), DND representatives, DFO/CCG representative, IC
representative, PWGSC representatives & other resources
6
National Shipbuilding Procurement Strategy Secretariat
Secrétariat de la stratégie nationale d’approvisionnement en matière de construction navale
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
7
National Shipbuilding Procurement Strategy Secretariat
Secrétariat de la stratégie nationale d’approvisionnement en matière de construction navale
Overview - Procurement Process
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
8
National Shipbuilding Procurement Strategy Secretariat
Secrétariat de la stratégie nationale d’approvisionnement en matière de construction navale
Solicitation of Interest
and 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
Kiewit Offshore Services
Vancouver Shipyards
Marystown, Newfoundland
Vancouver, British Columbia
Davie Yards Inc.
Lévis, Québec
Seaway Marine & Industrial Inc.
St. Catharines, Ontario
Irving Shipbuilding Inc.
Halifax, Nova Scotia
National Shipbuilding Procurement Strategy Secretariat
Secrétariat de la stratégie nationale d’approvisionnement en matière de construction navale
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
10
National Shipbuilding Procurement Strategy Secretariat
Secrétariat de la stratégie nationale d’approvisionnement en matière de construction navale
Proposal Evaluation
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
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%)
4b. Source of funding for
4a. Financial Capability
Improvements
5 – Value Proposition (10%)
11
National Shipbuilding Procurement Strategy Secretariat
Secrétariat de la stratégie nationale d’approvisionnement en matière de construction navale
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)
12
National Shipbuilding Procurement Strategy Secretariat
Secrétariat de la stratégie nationale d’approvisionnement en matière de construction navale
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
National Shipbuilding Procurement Strategy Secretariat
Secrétariat de la stratégie nationale d’approvisionnement en matière de construction navale
Under
Contract
- FMI
- FM
- TAS
Overall Schedule for NSPS Process
:
Industry
Day
SOIQ
Release
Aug
Sep
Oct
List of
Pre qualifiers
Nov
RFP
RFP
RFP
Locked
Down
Release
Feb 7
Dec
Jan
Jul 2010
Feb
Mar
Apr
May
July 7
Jul
Aug
Sep
Oct
Nov
Dec
Dec 2012
2011
Jan 2011
- Jun 2011
Initial Benchmarking
Of Shipyards
Milestone
Hire 3rd party Experts (TAS, FMI, FM)
Complete pre-qualification & issue results
Issue Request for Proposals to pre-qualified Shipyards
Select 2 Shipyards
Complete the Negotiation of the Umbrella Agreements
Initiate Contract Negotiations for Initial Projects (Science Vessels,
AOPS)
14
Jun
Finalize
UA
Selection of
shipyards
Closes
Jan 2011
- Jun 2011
Evaluation
of
Proposals
Jan 2011
- Jun 2011
Negotiate
Umbrella
Agreement
Lead
Projects
Contract
Negotiations
Planned Completion Date



Summer 2011
Fall 2011
Fall 2011 / Winter 2012
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