Canada has officially provided clear bidding instructions to the two competing companies for constructing the navy’s new submarines, according to information obtained by CBC News.
ThyssenKrupp Marine Systems (TKMS) of Germany and Hanwha Ocean Co. Ltd. of South Korea received the document from the newly established federal Defence Investment Agency. James Rourke, an official in the agency, confirmed the delivery of the document, which outlines the government’s expectations and the criteria that will influence the decision.
The federal government will heavily consider the sustainment package each company can offer for the fleet of 12 submarines post-purchase, with this aspect accounting for half of the company’s score. The platform itself will carry a 20% weight in the decision, while the company’s financial stability will contribute 15%, and the remaining 15% will focus on the economic benefits related to the contract.
Rourke refrained from commenting on specific details but emphasized the importance of maximizing economic benefits for Canada and leveraging the country’s defense industry to create jobs and foster economic growth in a secure procurement setting.
The Canadian government anticipates responses from both companies by March, after narrowing down the initial five interested firms to the final two contenders last year under Prime Minister Mark Carney’s administration. The submarine project, aimed at replacing the aging Victoria-class submarines, holds an estimated value of up to $24 billion solely for the boat purchase, signaling the government’s interest in establishing sustainment facilities on both coasts to generate employment opportunities.
Former Defense Department procurement official Alan Williams expressed initial concerns about the rapid downselection process to two bidders but expressed satisfaction with the issuance of formal bidding instructions, highlighting the necessity for transparency given the purchase scale. The government, led by Industry Minister Mélanie Joly, aims to utilize defense spending to bolster the Canadian economy, although caution is advised to prevent political controversies similar to those surrounding the F-35 fighter jet procurement review.
The submarine bidding process is ongoing, with the government evaluating whether to proceed with the full order or reduce the quantity and explore alternative options. Minister Joly has engaged with Saab regarding the Gripen E fighter jet, emphasizing the need for increased job creation compared to the F-35 program. Williams emphasized the importance of avoiding political maneuvering in the submarine program bidding phase, advocating for a transparent and legally compliant process.
The bidding instructions aim to ensure a fair and competitive process as Canada moves forward with its submarine procurement plans.