national shipbuilding procurement strategy (nsps) · – one shipyard will build the combat vessels...
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National Shipbuilding Procurement Strategy Secretariat Secrétariat de la stratégie nationale d’approvisionnement en matière de construction navale NATIONAL SHIPBUILDING PROCUREMENT STRATEGY STRATÉGIE NATIONALE D’APPROVISIONNEMENT EN MATIÈRE DE CONSTRUCTION NAVALE
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National Shipbuilding
Procurement Strategy
(NSPS)
NATIONAL SHIPBUILDING PROCUREMENT STRATEGY STRATÉGIE NATIONALE D’APPROVISIONNEMENT EN MATIÈRE DE CONSTRUCTION NAVALE
National Shipbuilding Procurement Strategy Secretariat Secrétariat de la stratégie nationale d’approvisionnement en matière de construction navale
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Environment
• “…it has been 14 years since the last major warship was launched in Canada. The 38-year-old, 5,100-tonne destroyer HMCS Iroquois will soon be the oldest frontline warship in the western world.”
(Gen. Walter Natynczyk, Chief of Defense Staff)
• 78% of the Canadian Coast Guard’s large vessels exceed their designed operational life, its youngest large vessels are over 20 years old and the oldest is over 45 years old
• Canada’s shipbuilding industry was not well positioned to deliver on our ambitious shipbuilding objectives
• Canadian Shipbuilding Policy states that the Government will procure, repair and refit vessels in Canada subject to operational requirements and the continued existence of a competitive domestic marketplace
• Canada’s previous approach to building ships was project-by-project with no long term strategy resulting in a “boom” and “bust” cycle
• A number of unsuccessful shipbuilding solicitations underlined the issues arising from this ad hoc approach
NATIONAL SHIPBUILDING PROCUREMENT STRATEGY STRATÉGIE NATIONALE D’APPROVISIONNEMENT EN MATIÈRE DE CONSTRUCTION NAVALE
Vancouver Shipyards Vancouver, British Columbia
Major Canadian Shipyards
Irving Shipbuilding Inc. Halifax, Nova Scotia
Seaway Marine & Industrial Inc. St. Catharines, Ontario
Davie Yards Inc. Lévis, Québec
Kiewit Offshore Services Marystown, Newfoundland
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 Secretariat Secrétariat de la stratégie nationale d’approvisionnement en matière de construction navale
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Economic Opportunity
• A once-in-a-generation opportunity to leverage Canada’s fleet renewal
investment to foster a stronger, more sustainable Canadian marine
industry
• The renewal of the federal fleet will support 15,000 jobs annually in
communities across Canada over the next 30 years (CADSI - Sovereignty, Security and Prosperity – Government Ships, May 2009)
• The Industrial and Regional Benefits Policy will ensure that the full
value of the resulting contracts (both shipyard and non-shipyard related
work) is leveraged back into the Canadian economy
• In exchange for long term, predictable federal shipbuilding work,
shipyards to make investments that contribute to the competitiveness,
viability and health of the marine sector over the long term
NATIONAL SHIPBUILDING PROCUREMENT STRATEGY STRATÉGIE NATIONALE D’APPROVISIONNEMENT EN MATIÈRE DE CONSTRUCTION NAVALE
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
1. Establish a long-term strategic relationship with two Canadian
shipyards and designate them as source of supply to build
government’s large ships, where:
– One shipyard will build the combat vessels package:
• 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
2. Set aside smaller vessels for competition by other than the two
selected yards and their affiliates
3. Repair, maintenance and refit remains business as usual
NATIONAL SHIPBUILDING PROCUREMENT STRATEGY STRATÉGIE NATIONALE D’APPROVISIONNEMENT EN MATIÈRE DE CONSTRUCTION NAVALE
National Shipbuilding Procurement Strategy Secretariat Secrétariat de la stratégie nationale d’approvisionnement en matière de construction navale
Smaller Vessels
• Set aside designed to allow for the distribution of benefits to the greatest extent possible
• At this time only a notional list of future small ship requirements is available (116 vessels, $2B worth of work)
• It is not Canada’s intention to bundle the small ships into a single package but rather to conduct open competitions on a project by project basis when requirements arise
• Canada does not have a policy restricting the regional area of competitive shipbuilding requirements
• Companies should monitor the Government Electronic Tendering System (GETS) at www.MERX.com.
National Shipbuilding Procurement Strategy Secretariat Secrétariat de la stratégie nationale d’approvisionnement en matière de construction navale
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A national competition to select 2 Canadian shipyards:
Issue a Solicitation of Interest and Qualification to all Canadian shipyards to establish a short list of potential shipyards for the competitive RFP (Sept 2010)
Issue a Request for Proposals to the short-listed shipyards (Issued Feb 7, 2011, Closed July 21, 2011)
• Five Proposals from 3 Bidders: 2 Combat, 3 Non-Combat
Evaluation of Proposals and select 2 shipyards (Selection announced October 19, 2012)
Finalize an Umbrella Agreement with each selected shipyard (Signed February 2012)
Negotiate Contracts for the first project in each work package
NSPS Process - What Did We Do
NATIONAL SHIPBUILDING PROCUREMENT STRATEGY STRATÉGIE NATIONALE D’APPROVISIONNEMENT EN MATIÈRE DE CONSTRUCTION NAVALE
NSPS Attributes • Engagement
– Regular meetings with stakeholders
– Canada in “lead, but listen” mode
– Stakeholders contribute to development of RFPs, evaluation criteria and
methodology and procurement schedule
• Leadership, Governance & Decision-Making
– Arms-length from political considerations
– Dispute resolution process in place
– Timely, key decisions made openly and transparently by committee of DMs
and communicated instantly on the website
• Use of Reputable 3rd Parties
– To validate processes and provide credibility
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NATIONAL SHIPBUILDING PROCUREMENT STRATEGY STRATÉGIE NATIONALE D’APPROVISIONNEMENT EN MATIÈRE DE CONSTRUCTION NAVALE
National Shipbuilding Procurement Strategy Secretariat Secrétariat de la stratégie nationale d’approvisionnement en matière de construction navale
Timeliness
Can
ad
ian
Va
lue
s
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How NSPS addressed challenges
Governance
+ + =
Clarifying roles and
responsibilities
Engagement
Improving
industry/client
relationship
• Consultation
sessions
• Industry days
Transparency
Independent Third
Parties
• Use of fairness
monitor
• Third party
assessments from
independent experts
• Creation of the NSPS
website
Innovative and
outcome based
procurement,
meeting client needs,
while respecting
socio-economic
objectives and best
value for Canadians.
By : By : By :
• Innovative
interdepartmental
governance structure
• Robust dispute
resolution process
• NSPS Secretariat
supporting the
governance
NSPS Winner - Public Policy Environment
• Overwhelming positive commentary on the process and the results
from media, industry associations, parliamentarians, academia and
international observers
• Restored public confidence in government procurement and the
federal bureaucracy as a whole
• Provided a blueprint for future major procurements
• Keeping the process at arms-length from politicians was lauded
• The web site provided up to date and detailed communications with
the public and media and eliminated time-wasting rumours and
information power-brokers
• Maintaining the security / secrecy of the results until the formal
announcement was unprecedented
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NATIONAL SHIPBUILDING PROCUREMENT STRATEGY STRATÉGIE NATIONALE D’APPROVISIONNEMENT EN MATIÈRE DE CONSTRUCTION NAVALE
National Shipbuilding Procurement Strategy Secretariat Secrétariat de la stratégie nationale d’approvisionnement en matière de construction navale
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• “We strongly support the government’s decision to build its naval and coast guard fleets in Canada and to manage their production in a way that mitigates the boom-and-bust cycles normally associated with ship fleet construction.”
Canadian Association of Defence and Security Industries (CADSI)
• “It’s a great day, I can’t remember a day like this in the industry and I’ve been in it a long, long time.”
Shipyard General Workers Federation
• “Beyond the benefits for the winning companies and their workers, the shipbuilding contracts will have profound benefits for the entire economy, coast-to-coast. We congratulate the government on a fair and transparent process that will maximize opportunity for participation and growth throughout all regions of Canada to address the subject matter.”
Canadian Manufacturers and Exporters (CME)
• "That's competition for you. And in this case no one can complain that the competition for the contracts was unfair."
Yves-Thomas Dorval of Quebec's Conseil du patronat
NSPS Process – Feedback
NATIONAL SHIPBUILDING PROCUREMENT STRATEGY STRATÉGIE NATIONALE D’APPROVISIONNEMENT EN MATIÈRE DE CONSTRUCTION NAVALE
National Shipbuilding Procurement Strategy Secretariat Secrétariat de la stratégie nationale d’approvisionnement en matière de construction navale
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• Negotiate ship project contracts for the first projects in each package
– Combat: Arctic Offshore Patrol Ships
– Non-Combat: Coast Guard Science Vessels
• Use NSPS best practices, and governance and engagement models to foster and maintain a values and results-based culture throughout the GC procurement system
NSPS Process – What’s Next
NATIONAL SHIPBUILDING PROCUREMENT STRATEGY STRATÉGIE NATIONALE D’APPROVISIONNEMENT EN MATIÈRE DE CONSTRUCTION NAVALE
New Approach to Procurement
National Shipbuilding Procurement Strategy Secretariat Secrétariat de la stratégie nationale d’approvisionnement en matière de construction navale
• Listen to those with a stake in the process - clients and suppliers in equal
measure
– Suppliers often have valuable ideas about how to efficiently supply the
government with what it needs
• Adopt a governance or decision-making process that allows for real
business choices to be made by both clients and procurement staff with
direct input from suppliers
– Make sure there is a robust dispute-resolution process to address any
concerns and manage risks in a timely manner
• Seek advice and input from those who are knowledgeable or expert but
do not have a stake in the process
These three simple attributes, applied with judgement, will allow Canada to buy smarter,
achieve better results, save taxpayers’ money, expand Canadian business and other,
yet-to-be determined positive outcomes
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