The federal government awarded Thales Canada an $800-million contract to provide in-service support to the incoming fleet of Arctic Offshore Patrol Ships over the next eight years. It’s a deal the feds say is the largest-ever contract of its kind, and an example of improvements to the government’s often-maligned procurement process.
Thales Canada’s Ottawa operations will add roughly 60 employees as part of the ISS contract according to Dale Potter, the company’s vice-president of defense mission systems. That’s in addition to a current headcount of more than 200 at Thales in Ottawa, where the firm provides systems integration and software development for the Canadian Armed Forces and naval operations.
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As part of the new contract, Thales will provide refits, repairs, maintenance and training to the AOPS and joint support ships. Options included in the agreement could see the partnership extended up to 35 years for a total value of $5.2 billion.
The federal government claims that those 35 years of services will result in an economic benefit of $250 million in research and development from Thales.
Mr. Potter, in his comments to members of the media, highlighted its partnership with L3-MAS’ Quebec outpost as an example of the contract’s anticipated impact on local subcontractors and suppliers.
Canada-wide contract
Ottawa doesn’t have any ports or shipyards, so expect any construction and installation work associated with the contract to take place at Thales Canada’s outposts in Halifax or Vancouver. At a simultaneous event in Halifax, Thales Canada CEO Mark Halinaty said he expects thousands of jobs and hundreds of suppliers to be engaged across Canada.
Speaking to OBJ after the press conference, Mr. Potter said the work being done in Ottawa will be more logistical in nature.
“We will build up a team here in Canada. Part of our team will be here in Ottawa, because that’s where our customer is … Primarily that team will be responsible for the oversight, the management and the planning for all of the in-service support activities that will happen on this platform,” he says.
Technical work does take place in Ottawa, however, primarily in systems integration. Mr. Potter says equipment is routinely brought to Ottawa for testing before being installed in ships on the coast.
Procurement overhaul
Steve MacKinnon, parliamentary secretary to the Minister of Public Services and Procurement, was on-hand to tout the improved procurement process used to award this contract. Among the improvements, he says, was the use of a more “relational” approach between the government and bidders, a phased system that allowed bidders to correct minor application errors throughout the process and a concurrent evaluation method that provides the support contract for the AOPS while they’re still being built.
“These approaches increased transparency while ensuring bidders are not excluded for simple technicalities,” Mr. MacKinnon said.
The feds are also in the midst of exploring bids to deliver the Royal Canadian Navy’s next generation of Canadian warships. Officials told media that they anticipated further announcements about the next stage of that procurement process in the next few weeks.
In addition to its system integration work, Thales Canada provides radars and sensors for the Canadian Armed Forces, the coastguard and some police services in the country. A release states that Thales Canada currently earns $500 million in annual revenue, with 1,800 employees across the country.
