Canada has officially provided clear instructions for bidding to the two companies competing to construct the navy’s new submarines, as revealed by CBC News. The instructions were sent to ThyssenKrupp Marine Systems (TKMS) of Germany and Hanwha Ocean Co. Ltd. of South Korea last week.
James Rourke, a representative from the newly formed federal Defence Investment Agency, confirmed the issuance of the document detailing the government’s expectations and the criteria for decision-making to the qualified bidders. A portion of the extensive 40-page document has been reviewed by CBC News to confirm its authenticity.
In assessing the bids, the federal government will place significant emphasis on the sustainment packages each company can provide for the fleet of 12 submarines post-purchase, accounting for 50% of the evaluation. The platform itself will hold a 20% weight in the decision, with the company’s financial strength contributing 15%, and the remaining 15% focusing on the economic benefits tied to the contract.
Rourke refrained from elaborating on specifics but emphasized the importance of maximizing economic benefits for Canada and leveraging the country’s defense industry to generate quality employment and foster economic growth. The sensitive nature of procuring advanced submarine capabilities was cited as a reason for withholding further details due to national security and sovereignty concerns.
Sources within the defense sector indicated that responses from both companies are expected by March. Initially, five firms expressed interest in constructing submarines for Canada, but the selection process led by Prime Minister Mark Carney’s government narrowed it down to ThyssenKrupp Marine Systems and Hanwha Ocean Co. Ltd.
Carney personally visited the shipyards and inspected the submarine offerings from both companies. The project, aimed at replacing Canada’s aging Victoria-class submarines, carries a potential value of up to $24 billion for the boat purchase alone. The federal government has indicated its desire to establish sustainment facilities on both coasts to create job opportunities in Canada.
Alan Williams, a former senior procurement official at the Defence Department, initially raised concerns about the swift downselection to two bidders but expressed satisfaction with the issuance of formal bidding instructions. Transparency was emphasized given the magnitude of the procurement.
The federal government, particularly Industry Minister Mélanie Joly, has highlighted the intention to utilize defense spending to bolster the Canadian economy. Williams cautioned against political maneuvering, citing ongoing debates surrounding the acquisition of F-35 stealth fighters from Lockheed Martin. The submarine bidding process is expected to proceed without such interventions.
The government is deliberating whether to proceed with the full submarine order or reduce the quantity and explore alternative options. Minister Joly’s discussions with Saab regarding the Gripen E fighter jet as an alternative to the F-35 underscore the government’s commitment to maximizing job creation.
Williams cautioned against political interference in the submarine program, urging ministers to exercise restraint and avoid actions that could have legal implications. The bidding process is underway, and any undue interference may have serious consequences.