Despite the PBO cost warning, there are no plans to change the warship, top executives say



Ottawa — Canada’s top military procurement officials say there are no plans to change direction regarding the construction of a fleet of new naval warships, despite recent warnings from Congressional budget oversight agencies about rising costs.

In an exclusive interview with the Canadian press, Troy Crosby, Deputy Minister of Defense Supplies, said he was confident in the estimated prices of 15 Ottawa vessels.

And he suggested that switching things now to save money would only delay and undermine the Navy’s ability to protect Canada.

“The solution we have will provide the Navy and Canada with the equipment they need in the long run for their surface fighters,” Crosby said. “We will do our best to provide it as timely as possible so that the Navy can get the ship it needs.”

Crosby’s comment came about a month after Parliamentary Budget Officer Yves Giroux released a report predicting an additional billion-dollar cost increase, albeit already the largest military procurement in Canada’s history. I will.

The government says warships can cost up to $ 60 billion, which Giroux says is over $ 77.3 billion.

When the Navy’s frigate-destroyer exchange project began in earnest 10 years ago, the cost of these ships would have been $ 26 billion.

Despite the Congressional Budget Office’s long history of predicting such costs, Crosby was sticking to the accuracy of the government’s current figures set in June 2017.

“They use a different model than we do, but that’s okay. We provide a comparison,” he said. “But we are confident in the quotes we wrote.”

Crosby also supports government estimates, despite recent exposure that the first warships based on British-designed Type 26 models, which have not yet been built in any country, will not arrive until at least 2030. Years behind expectations.

Officials had previously questioned Giroux’s numbers, suggesting that he overemphasized the weight of the ship in his calculations and included taxes that the government said they didn’t have to pay.

Crosby also pointed out that the $ 60 billion figure includes reserves, and confidence in that number is that the project has moved from abstract ideas to actual designs over the years. He added that it is based on a better understanding of.

“There are far more facts that can be brought into cost estimates,” he said. “All the information provided by the contractor and the experience gained internationally in the Type-26 program, for example, can be incorporated into our own quotation work.”

Giroux and his team also considered the idea of ​​a hybrid fleet in which Canada would build three Type-26 vessels and add 12 other vessels to them. This is three destroyers and twelve frigates, mimicking the way the Navy was previously built.

To that end, the PBO could save $ 40 billion by building only three Type-26 frigate ships by the government and adding a smaller, less capable Type 12 Type-31, similar to the UK’s decision. I found.

Canada could also save $ 50 billion if it abandoned its plans to build Type-26 and adopted the entire Type-31 fleet, according to the report. End’Type-26. “

We also found that the delivery of the first ship could be delayed by four years as we started the competition to choose a new design.

The government had previously stated that it had no plans to restart the project, but Crosby said the hybrid approach “does not meet the needs, does not meet the requirements” of the Navy.

One of the areas Crosby raises concerns is the Halifax Shipyard and the corresponding shipyard in Vancouver, which is building two naval support vessels alongside multiple vessels for the Canadian Coast Guard. It was whether there were enough staff to do it.

A recent report by the Federal Audit President highlighted the potential shortage of personnel and the need for more government officials to oversee shipbuilding projects.

“We don’t have enough work to do all the work we need, but it’s okay because we don’t have to do it today,” Crosby said. “That’s certainly something we’re paying attention to.”

He also said that some of the projects already underway may be behind schedule as the shipyard is forced to reduce work or otherwise adapt to COVID-19. Suggested.

“COVID caused a challenge in the yard,” he said. “The full results of COVID will become apparent over time.”

By Lee Berthiaume

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