AOR Replacement & the Joint Support Ship (Merged Threads)

[Stoker]

This is the second time you quote numbers without source, and I would say, obviously without any knowledge of what is in the contract. To compound that, you also misinform on technical aspects.

Lets deal with contractual matter first. And I will confess: I have not seen or read the contract either - but I have negotiated and drafted that type of contract before and they are fairly standard (this Davie proposal may have been "novel" for dealing with government procurement, but it is done on a daily basis in industry), and I have access to specialized publications.

You are correct that the 2.1 B$ id the PBO figure - Davie says so on its own slide. The true cost could be higher - we won't know until the contract is let out and final tallying of the costs done. But just this week the government let out a 250 M$ contract to Seaspan just to do the final and detailed drawings on the new PROTECTEUR class. That is not giving me fuzzy feelings.

On the Davie side, you will note that they call the $650M "sail-away" cost. That is contractual term of art: It means that is the cost to Canada to buy the ship right now, as is, if they wanted to. So it is the true and final cost of the ship.

But it is a lease, which includes more than just the ship. It includes the salaries of 54 merchant mariner (36 at all time x 1.5 to get the industry standard rotation of personnel), the whole mechanical upkeep, maintenance repairs and risks associated with unforeseen breakdowns, together with full management of the platform, plus wharfage, pilotage and tugs costs, you can look up the list of what Federal Services will do as included in the cost in the slides. How much would all of that cost the RCN every year? You have to deduct that from the overall lease cost. Then you have to deduct the annual financing cost of Davie/Federal services (they incurred the $650M charge for building the ship, but recover partially year to year, so the "loan" has a rate of return - since it is a"loan" to the Government of Canada, that rate is likely lower than the market rate).

Now, the info I have seen on the contract states overall total lease payments of $540M for five years and $700M for ten years (option exercised). Based on my knowledge of such contracts, a back of the envelope calculation at full market rate would leave an acquisition payment of approximately $200M after five years and $120M after ten.

On the technical side now, and my first comment is not addressed to you alone here, but to the many people who still insist on calling the PROTECTEUR's JSS's. They are NOT JSS, the idea of JSS was abandoned after the first round in the early 2010. They are AOR's. This, BTW means that the new PRO will NOT have any RO/RO capability whatsoever. Those were original JSS requirements that were dropped all together. Second, the "edge of ice" thingy is an alleged requirement of the RCN that was purely imagined by it because they know dick about merchant ships. There is no such capability. All merchant ships can operate at the "edge" of an ice pack, and in fact, all can get into some ice - a lot more ice than the frigates or MCDV's, and yet those two types of ships go up in the Arctic at the "edge of ice" all the time. In fact, right now, there are about 20 large merchant ships pushing their way through the ice of the Gulf of St-Lawrence and the River, all the way to and from Montreal, in more ice than the PRO's will ever encounter at the "edge" of Arctic ice. None (well, maybe one or two) of them have had any modification whatsoever made to their design in order to be able to get into that ice.

Finally, Asterix was five years old (launched in 2010) when acquired by Davie. So, at the end of the first five year, she'll be 13 years old, and at the end of the ten years, she'll be 18 years old. No big deal, especially when you consider that it is only the hull that is five years older at the time davie acquired it: They stripped her interior of everything else, rebuilt the main diesel engine completely, put all brand new bow auxiliary propulsion system and all brand new generators, and all other electrical and mechanical equipment. The difference with a brand new built is insignificant and she is all new for all practical purposes. Besides, the cost of that "used" hull is part of the $650M sail-away cost.

 

A goggle search will find media stories stating the figure 659M  (numbers from federal fleet) for a five year lease with the option of another 5 years at a unknown cost. It would interesting to know what a further 5 years will cost the government especially when the government is not going to take Davie up on their offer of a second conversion.

https://www.theglobeandmail.com/news/national/navy-to-begin-training-crew-at-sea-on-leased-supply-vessel-mv-asterix/article37441593/

https://globalnews.ca/news/3969013/supply-ship-mv-asterix/

Federal Fleet can be wrong but that's the number they're stating and what the media is stating for the contract length and I never claimed I saw the terms of the contract. Any Naval architect will tell you commercial ships are built cheaply and fast and the hull often being the weak point. Yes as you said she was basically gutted and all internals new but she still has a used hull with a design life of 25 to 30 years and most likely the reason its an interim lease. Didn't know about the dropping of the RO/RO capability.  Yes significantly cheaper than the JSS/PROTECTEUR Class but still less capable in some ways.

 

[Oldgateboatdriver]

In the Globe and Mail article you quote, here is exactly what is said by the Federal Fleet executive cited:

"Overall, with the cost of personnel included, Schmidt's latest estimate of the cost to taxpayers for the vessel is $659-million."

"cost to taxpayers for the vessel". No specification as to any specific duration. Is it for acquiring it outright today? Or the all-in cost after five years, including purchase at that time? Or all-in after ten years and purchase at that time? Or just the walk away cost of the lease (i.e. you lease for the full period but don't acquire the ship)?

There are no indications whatsoever of what this estimate is for. And the Global news article you quote second makes no mention of the costs at all.

Personally, if an executive was to tell me that a given figure represents the cost to me for the vessel, I would assume it is the actual full cost of acquiring the ship, whichever way you arrange the numbers. Why then is it just an estimate? Well the executive refers to "cost of personnel included". I suspect two possibilities here: first one is that he wishes to include the RCN personnel costs in here, but can only estimate them, but I doubt it. The second and to me more likely possibility, is that in the contract negotiation, there is an ongoing additional fee payable to Fed Fleet to cover any overtime of its personnel that may be required at the Navy's request and which otherwise would not be payable in operating a merchant ship. About $9M over five to ten years makes some sense. Other costs may also be variable, such as fuel, where a certain amount may be included for the estimated annual steaming, but any extra, or cost of fuel increase be covered separately, etc.

These contracts are generally quite thorough on all these potential costs increases and decreases and who pays or benefit from them, and to which extent.

 

[Stoker]

In the Globe and Mail article you quote, here is exactly what is said by the Federal Fleet executive cited:

"Overall, with the cost of personnel included, Schmidt's latest estimate of the cost to taxpayers for the vessel is $659-million."

"cost to taxpayers for the vessel". No specification as to any specific duration. Is it for acquiring it outright today? Or the all-in cost after five years, including purchase at that time? Or all-in after ten years and purchase at that time? Or just the walk away cost of the lease (i.e. you lease for the full period but don't acquire the ship)?

There are no indications whatsoever of what this estimate is for. And the Global news article you quote second makes no mention of the costs at all.

Personally, if an executive was to tell me that a given figure represents the cost to me for the vessel, I would assume it is the actual full cost of acquiring the ship, whichever way you arrange the numbers. Why then is it just an estimate? Well the executive refers to "cost of personnel included". I suspect two possibilities here: first one is that he wishes to include the RCN personnel costs in here, but can only estimate them, but I doubt it. The second and to me more likely possibility, is that in the contract negotiation, there is an ongoing additional fee payable to Fed Fleet to cover any overtime of its personnel that may be required at the Navy's request and which otherwise would not be payable in operating a merchant ship. About $9M over five to ten years makes some sense. Other costs may also be variable, such as fuel, where a certain amount may be included for the estimated annual steaming, but any extra, or cost of fuel increase be covered separately, etc.

These contracts are generally quite thorough on all these potential costs increases and decreases and who pays or benefit from them, and to which extent.

The second article mentions the 5 years lease with an option of renewal for a further 5 years. I would like know the the cost to the government of Canada for 10 years of the lease if it goes that long and the cost of the ship. Anything else would be pure speculation.

 

[Cloud Cover]

Chief they wouldn't give that information in a clear manner to the house standing committee in 2017, so i doubt they will now:  http://www.ourcommons.ca/DocumentViewer/en/42-1/NDDN/meeting-34/evidence

 

[Stoker]

Chief they wouldn't give that information in a clear manner to the house standing committee in 2017, so i doubt they will now:  http://www.ourcommons.ca/DocumentViewer/en/42-1/NDDN/meeting-34/evidence

It seems to me that it may be more expensive than whats being publicly stated.

 

[Oldgateboatdriver]

Funny, I saw it the other way.

Considering that the Libs tried to stop it to favour their friends at Irving - potentially - and were really cheesed off when the cancellation was foiled, if they could have pointed out to an overly expansive contract that wasn't necessarily that cheap, if they could show Davie lying about the true costs in any way - they would have had the numbers plastered out all over the place.

On the other hand, considering the reports that, when the Conservatives made that deal, many civil servants - particularly at Procurement Canada - were very miffed and wanted to scuttle it because they felt it would be detrimental to their little puppy: the NSPS, I think it's more likely that we never see the actual complete figures because they would make the procurement strategy (and the Libs for trying to scuttle it) look particularly bad.

So I am inclined to think the actual, true and complete figures, which ought to be public as far as I am concerned, are never mentioned in a comprehensive fashion because Davie had to make that deal is at the request of the government (which itself, then hides behind the "commercial secret" false exception to ATI requests).

But I could be wrong. It's just that Davie has no interest in hiding true costs. After all, Davie is trying to leverage their success with the Asterix with other NATO nations and into more commercial work. If it even looked for a second, in negotiating with other nations or commercial customers, that the figures they put out in public for the Asterix are a sham and the reality much more expansive, they would lose too much of their reputation to ever build anything again. So their figures must be close enough to reality for them to manage to get some work - since they, unlike others, don't have 20-30 years of government of Canada work guaranteed in front of them.

 

[Cloud Cover]

My sense is that FFS and Davie are both contractually bound not to disclose, and that is why they are suggesting the auditor general look at it. What's that saying, a bird in hand is worth 2 in the bush? Well here we have a supply ship in the water and two that may just fly away after the next election.  Edit: that is probably the concern of the public servants, who Davie and FFS are clearly targeting as the root cause of the problems with the NSPS. 

 

[Stoker]

Funny, I saw it the other way.

Considering that the Libs tried to stop it to favour their friends at Irving - potentially - and were really cheesed off when the cancellation was foiled, if they could have pointed out to an overly expansive contract that wasn't necessarily that cheap, if they could show Davie lying about the true costs in any way - they would have had the numbers plastered out all over the place.

On the other hand, considering the reports that, when the Conservatives made that deal, many civil servants - particularly at Procurement Canada - were very miffed and wanted to scuttle it because they felt it would be detrimental to their little puppy: the NSPS, I think it's more likely that we never see the actual complete figures because they would make the procurement strategy (and the Libs for trying to scuttle it) look particularly bad.

So I am inclined to think the actual, true and complete figures, which ought to be public as far as I am concerned, are never mentioned in a comprehensive fashion because Davie had to make that deal is at the request of the government (which itself, then hides behind the "commercial secret" false exception to ATI requests).

But I could be wrong. It's just that Davie has no interest in hiding true costs. After all, Davie is trying to leverage their success with the Asterix with other NATO nations and into more commercial work. If it even looked for a second, in negotiating with other nations or commercial customers, that the figures they put out in public for the Asterix are a sham and the reality much more expansive, they would lose too much of their reputation to ever build anything again. So their figures must be close enough to reality for them to manage to get some work - since they, unlike others, don't have 20-30 years of government of Canada work guaranteed in front of them.

Davie's aggressiveness towards getting more work from the government is a major reason why they won't get further work from the GOC. I highly doubt they will get further work from other NATO nations as well.

 

[dapaterson]

Yes significantly cheaper than the JSS/PROTECTEUR Class but still less capable in some ways.

One class is performing RAS.  The other is still on the drawing board.


You're right that one is more capable than the other.  You're wrong about which one.

 

[Stoker]

One class is performing RAS.  The other is still on the drawing board.


You're right that one is more capable than the other.  You're wrong about which one.

True and its a very capable ship, too bad we're only getting one.

 

[FSTO]

True and its a very capable ship, too bad we're only getting one.

That is because our government seems to be completely clueless as to what the real capability gap is.

I'm looking at you Members of Parliament Garneau and Leslie.

 

[jollyjacktar]

:rofl:

 

[Eye In The Sky]

I've seen somewhere recently the "RCN of the future" is looking at naval task forces;  is there any plans for the interim AOR or the JSS to do maint on the MH, similar to what was done before on the AOR like during GW1 ref the attached article?

 

[SeaKingTacco]

Except the maintenance concept for Cyclone is completely different from the maintenance concept for Sea King...

 

[Baz]

I've seen somewhere recently the "RCN of the future" is looking at naval task forces;  is there any plans for the interim AOR or the JSS to do maint on the MH, similar to what was done before on the AOR like during GW1 ref the attached article?

I was wondering if they put the spaces in; but mentioned, as SKT just did, the maintenance concept is completely different for the Cyclone.

To be fair, this isn't really the "RCN of the future."  It's been the cornerstone of the RCN since at least the early '70s, and you could easily say well before that.  The Bonnie, in her final configuration, was an ASW task group, and that task group (not just the carrier) formed the center of the East Coast Navy.

When I first started in the early '90s the task group, centered on the tanker, with one Destroyer for Air Defense, 2-3 steamers/frigates, and 6+ helos embarked, was what we were training for.  However, I have to admit, I only did that once or maybe twice; with all the single ship deployments it just became harder and harder to do.  On the helo side alone 12 Wing would be hard pressed to put 3 helos to sea on one coast when I left a couple of years ago; that would be a full push with no single det deployments ongoing.  And the ship issues to fill out that task group are obvious...

So yes, the goal is the task group; but it is definitely true to say that this is a period of "re-gen."  The RCN has stated a goal to deploy a smaller version of that task group in the early '20s and lead a multinational ASW exercise with it ("If we are successful, and I am confident we will be, success in 2022 will be:" ... "A Naval Task Group consisting of four surface combatants, one submarine, MV Asterix, and CH-148 Cyclone helicopters leading a multinational theatre-ASW exercise." RCN Strategic Plan 2017-2022, page 14)

To circle back though, if the full up Air spaces required for MH maintenance at sea are present in either the Resolve or Protecteur Class AORs (OBGD is correct, they are *not* JSS as originally envisaged; however, we need to be careful: the RCN Strategic Plan, page 18, calls them "Joint Supply Ships" and refers to them as "joint support ships" on page 13 and directly calls them the "Protecteur Class Joint Support Ship" on page 14, but I digress), then the maintenance concept of the Cyclone could be changed.  It would require both a modification the MH ISS contract and to the manning and training levels of 12 Wing...

On a final note, the RCN has always toyed with the idea of something at the center of that task group other than an AOR (JSS as currently envisioned).  Although I don't have time to find the references right now, their strategic level guidance routine makes reference to a "joint enabler" (my term), which harkens back to the latest time it was considered (Standing Contingency Task Force and it's Big Honkin' Ship)...

 

[Colin Parkinson]

Which would have been fulfilled had the Conservatives not called an election or made it so long, we would be looking at 2 Mistrals sitting at the dock and Astreix on the same time frame. The timing might have been right as the Mistrals would have taken up the sailors from the AORS and DDH. Mind you each might have 1-2 Sea kings embarked.

 

[Cloud Cover]

Conversation always come back to the Mistrals. Why that conventional type ship, and not something more realistic given the skittish nature of our political establishment?? I would love to see an LPD/LPH combo, but really the most you could hope for would be a used LPD or some cooked up home brew like Irvings "Humanitarian Ship" or the expeditionary hospital ship proposed by Davie "Project Respite"  (both converted civilian cargo ships)  I think there was even a suggestion once from Davie for an arctic support expeditionary platform (I think they called it that) which looked suspiciously like a pregnant San Antonio without the masts and gadgetry.

 

[Colin Parkinson]

Because there were 2 for sale and documents showed that the CPC was very interested in them at the time. Starting from fresh would they be the best choice, I don't know, likely that design or the Aussie/Spanish one. Hulls could be built overseas and outfitting by Davie.

 

[MilEME09]

Because there were 2 for sale and documents showed that the CPC was very interested in them at the time. Starting from fresh would they be the best choice, I don't know, likely that design or the Aussie/Spanish one. Hulls could be built overseas and outfitting by Davie.

We would only know how good they were if we actually got them, I'd love to see a Canadian Naval Task force centered around a mistral, unlikely to happen though, the current political climate wouldn't support buying any off shore ships unless they were maybe subs.

 

[Kirkhill]

Conversation always come back to the Mistrals. Why that conventional type ship, and not something more realistic given the skittish nature of our political establishment?? I would love to see an LPD/LPH combo, but really the most you could hope for would be a used LPD or some cooked up home brew like Irvings "Humanitarian Ship" or the expeditionary hospital ship proposed by Davie "Project Respite"  (both converted civilian cargo ships)  I think there was even a suggestion once from Davie for an arctic support expeditionary platform (I think they called it that) which looked suspiciously like a pregnant San Antonio without the masts and gadgetry.

I'd be quite happy with something along those lines (Basically something like the Damen Enforcer/Bay Class/Rotterdam) on the grounds you argue.  A Mistral looks like an aircraft carrier to a people that see every vehicle with a gun as a tank.  On the other hand an LPD looks like a ferry or a cargo ship - and C17s, C130s and CH-147s are good, in those same eyes.  The less military something looks the easier it is to get the Canadian public to swallow it.  Fortunately logistics needs look the least military - and can be sold as transporters of blankets and parkas.