Arctic/Offshore Patrol Ship AOPS

[Kirkhill]

$288-million deal will kick-start design of Arctic patrol ships, Ottawa announces

National Post

So where does this leave the STX design for the AOPS?  Is it incorporated in the Irving / Odense design or are they starting with a clean sheet?

I believe Odense Marine Technology is responsible for the Absalon/Huitfeldt frigates as well as the Maersk container ships.  The good news, if that is the case, is that they are the people responsible for delivering the Danish vessels for approximately half the price of the rest of NATO while working in a Western Labour Environment. (350 MCAD for the Iver Huitfeldt vs 700 MCAD for the Zeven Provincien with the same equipment suite).

 

[Monsoon]

National Post
So where does this leave the STX design for the AOPS?  Is it incorporated in the Irving / Odense design or are they starting with a clean sheet?

As I understand it, what this contract award is for is design at a much more detailed level than the STX design we're familiar with. STX designed the overall look, dimensions and layout; this Irving contract will basically create builder's plans for every frame of the ship, electrical wiring diagrams, etc. The STX design is still the one that's being built - this contract just turns the pretty pictures and floor plans into something you can hand to a shipyard and say, "Here: build this."

 

[AlexanderM]

National Post

The good news, if that is the case, is that they are the people responsible for delivering the Danish vessels for approximately half the price of the rest of NATO while working in a Western Labour Environment. (350 MCAD for the Iver Huitfeldt vs 700 MCAD for the Zeven Provincien with the same equipment suite).

And, hopefully we can build those frigates with HSLA-100 steel for 1.2 billion, average cost each for the 15 hulls.  They are a very flexible design, able to handle lots of mission modules.  32 SM-2's and 48 ESSM per ship, and hopefully some of the cells will be strike type to handle the SM-3 missle, as we'll then have ballistic missle defence.  They won't be as sexy as some of the designs, but still will be good.

 

[MarkOttawa]

Gov't A/OPS release:
http://www.marketwire.com/press-release/harper-governments-ship-strategy-bolstering-canadas-economy-1765340.htm

More on BMT, STX design involvement (both foreign susbsidiaries, I'd wager a lot of the work done abroad):
http://www.bmt.org/projects/defence-arctic-offshore-patrol-ship-design-engineering-logistics-and-management-support/
http://www.stxmarine.net/ship_ice.html

2012 STX PowerPoint:
http://higherlogicdownload.s3.amazonaws.com/SNAME/ce7dbd62-cb5f-4739-abc2-44ac55b35df0/UploadedImages/AOPS%20SNAME%20PNW%20Section%20Presentation%20Rev2.pdf

STX is also designing the--one only--new CCG icebreaker:
http://www.stxmarine.net/headlines.html#polar
http://www.dfo-mpo.gc.ca/media/npress-communique/2013/hq-ac02-eng.htm

And STX's S. Korean parent is helping Seaspan Vancouver with their shipyard:
http://www.nsnews.com/news/Korean+experts+advise+Vancouver+Shipyards+redesign/6490267/story.html

Mark
Ottawa

 

[Kirkhill]

Thanks Mark.

Looks like we're going to be buying a whole lot of offshore assistance for the yards.  I have to believe that, given the state of our industry, its necessary.

And HT.

Thanks for the clarification.

 

[MarkOttawa]

Plus Odense Maritime Technology:
http://www.odensemaritime.com/da-DK/Home.aspx

Mark
Ottawa

 

[RC]

A few clarifications on the last couple of posts:

STX Canada Marine is about 65 people and is an independent ship design consultant based in Canada.  It is Korean owned, but has no real ties to Korea beyond ownership.  The company has just under 20 OPV designs operating worldwide.

About 95% of the AOPS design was done in Canada.  A few specialized bits of hull shape for ice breaking and winterization were done by a sister company in Finland.

Ship design has several stages.  They are concept, class, functional, production (functional/production are sometimes combined and called detailed and in Europe, class and functional are combined and called basic.).  The AOPS design has been completed to somewhere past a class package, meaning that a Classification society has all it needs to approve the ship for construction.  Much of the engineering required for functional design is also done, but couldn't be taken further without selecting specific equipment.  In short, its a lot more than just arrangements and pretty pictures.

The design is at a stage where a typical shipyard could go ahead and build it after incorporating specific equipment and generating production information.  There's about $7 to $12 million worth of detailed engineering left to get the production information required to build.  The total design cost is normally about 10% of the build cost for this ship type.

I can't reconcile the $288 million for remaining design.  I find it extremely embarassing for both the industry and our country.  It makes no sense and all those of us in the industry can do is laugh and shake our heads.

 

[Pat in Halifax]

Could this be $$$ for shipyard expansion for future projects. When I say future, I mean out beyond CSC as the goal of NSPS is to create an industry not just 20 or so ships. Again, if I am wrong, I am wrong but I keep trying to envision what may be happenning and what infrastructure companies like Halifax Shipyards will need say 20 years from now. Like an RRSP, people need to look at this in the long term not the short political term we have all become accustomed to.

Pat

 

[MarkOttawa]

RC: Thanks for helpful clarifications.

Mark
Ottawa

 

[Cdn Blackshirt]

A few clarifications on the last couple of posts:

STX Canada Marine is about 65 people and is an independent ship design consultant based in Canada.  It is Korean owned, but has no real ties to Korea beyond ownership.  The company has just under 20 OPV designs operating worldwide.

About 95% of the AOPS design was done in Canada.  A few specialized bits of hull shape for ice breaking and winterization were done by a sister company in Finland.

Ship design has several stages.  They are concept, class, functional, production (functional/production are sometimes combined and called detailed and in Europe, class and functional are combined and called basic.).  The AOPS design has been completed to somewhere past a class package, meaning that a Classification society has all it needs to approve the ship for construction.  Much of the engineering required for functional design is also done, but couldn't be taken further without selecting specific equipment.  In short, its a lot more than just arrangements and pretty pictures.

The design is at a stage where a typical shipyard could go ahead and build it after incorporating specific equipment and generating production information.  There's about $7 to $12 million worth of detailed engineering left to get the production information required to build.  The total design cost is normally about 10% of the build cost for this ship type.

I can't reconcile the $288 million for remaining design.  I find it extremely embarassing for both the industry and our country.  It makes no sense and all those of us in the industry can do is laugh and shake our heads.

Just wanted to say thank you for great post....for those of us outside your world, you're definitely teaching us something.


Cheers, Matthew. 

 

[AlexanderM]

If there isn't a good explanation, someone should prepare a detailed report, and get it into the hands of the opposition in Ottawa and the press.

 

[Pat in Halifax]

If there isn't a good explanation, someone should prepare a detailed report, and get it into the hands of the opposition in Ottawa and the press.

Just because someone on Army.ca cannot come up with a good explanation for this doesn't mean there isn't one. We can speculate all we want but that specific info may not get publicly released and that is not uncommon in the major procurement world. I can say from experience though that every aspect of these Projects is 'over reviewed' by Oversight Committees-If there is anything shady (which I personally do not think is the case here), TB will find it.

Pat

 

[AlexanderM]

Just because someone on Army.ca cannot come up with a good explanation for this doesn't mean there isn't one. We can speculate all we want but that specific info may not get publicly released and that is not uncommon in the major procurement world. I can say from experience though that every aspect of these Projects is 'over reviewed' by Oversight Committees-If there is anything shady (which I personally do not think is the case here), TB will find it.

Pat

I wish I was as confident as you, and frankly, we have a history of overpaying on these projects.  The idea that it would cost up to 4 billion dollars to replace our two re-supply ships, as was released the other day, is absolutely ludicrous.  I would be shocked if we were able to build the Iver Huitfeldt Class for 4 times what the Dutch paid.  It is quite frustrating.

 

[RC]

Could this be $$$ for shipyard expansion for future projects. When I say future, I mean out beyond CSC as the goal of NSPS is to create an industry not just 20 or so ships. Again, if I am wrong, I am wrong but I keep trying to envision what may be happenning and what infrastructure companies like Halifax Shipyards will need say 20 years from now. Like an RRSP, people need to look at this in the long term not the short political term we have all become accustomed to.

Pat

I believe I read somewhere that this is not permitted under the NSPS umbrella agreement.  They do need to upgrade infrastructure, but they are required to amortize it over the program, not feed it into a single design contract.

On the other coast, Seaspan, who I don't believe are in any better shape in terms of infrastructure and have larger vessels to build, released their cost to design the first vessel that will be built there at less than $15 million.  Obviously it's a smaller civilian vessel, but that can't account for much infrastructure improvement on their side.  Why the discrepancy?

In my opinion, this will kill the AOPS program.  This is more than one would reasonably expect an entire ship to cost (design included), so what are they going to ask to actually build one of these things?  Maybe the strategy is to kill the program, make a huge profit through design and litigation, and get a free upgraded shipyard at taxpayers expense without having to go through the inconvenience of actually building a ship?

My fear is that if AOPS dies a slow enough death, the folks in Seaspan will get the impression that the navy is handing out free cash and the implications for JSS could be very negative.  With this kind of price to design a comparatively basic OPV, what are the implications for CSC?  Why is no one comparing this to the cost of the similar reference ship?  If I recall correctly, that ship was designed AND built for less than half of this budget.

In my opinion this is a very dark day for the Canadian Navy.  I sincerely hope that there is something more to this that will make it all make sense (maybe the budget includes equipment costs on long lead items for six shipsets??), but I just can't see it.

 

[RC]

I wish I was as confident as you, and frankly, we have a history of overpaying on these projects.  The idea that it would cost up to 4 billion dollars to replace our two re-supply ships, as was released the other day, is absolutely ludicrous.  I would be shocked if we were able to build the Iver Huitfeldt Class for 4 times what the Dutch paid.  It is quite frustrating.

If I was an estimator at Seaspan, I would be looking at the PBO report and this contract with Irving and scratching my head saying "Did I miss a zero?  Why is my number so much less than these other guys?"

Bad, bad news on both fronts.

 

[AlexanderM]

Also, they said on the news just the other day that the upgrades for the Irving shipyards were being covered by a 200 million dollar loan from the provincial government.

 

[Kirkhill]

Why is no one comparing this to the cost of the similar reference ship?  If I recall correctly, that ship was designed AND built for less than half of this budget.

The cost of building the Svalbard (the reference vessel?) was

575 millioner kroner (101 MCAD as of 24 Jan 2006)

http://forums.army.ca/forums/threads/38894/post-325773.html#msg325773

That would suggest a design cost of 10 MCAD at 10% of build cost.  If I read you right RC.

What are the relative histories of SeaSpan and Irving like?  I believe that SeaSpan has got a more substantive Commercial record than Irving.  Irving, to my understanding, has generally relied on Government work.  Please correct me if I am wrong.

 

[SeaKingTacco]

Some interesting comments. If this is a game of Irving trying to squeeze the Government on price for the AOPS (and who really knows, other than Irving), then I fear that they have seriously misread the political climate.

I do not see this Government overpaying for another defence project.  Contractor beware...

 

[AlexanderM]

Except that the announcement the other day was the government going ahead with that initial money, was it not?  The 288 million is being paid out, so the overspending begins.

 

[Kirkhill]

Perhaps Irving took comfort from the recent PBO report that stated categorically that you can't build two ships for less than 4 Billion Canadian Dollars.

That report was modelled by Americans and based on American ships.  The European ships, which formed a distinct low cost cluster, disappeared in the data set just like the Mediaeval Warming Period in Michael Mann's Hockey Stick.

I don't recall seeing anywhere that the Dutch or the Danes or the Norwegians or the Spanish ...... spent Billions "Developing" and "Prototyping" their ships.  They generally seem to design, build, launch, sail.  Just like industry tends to do.  I presume the crews work out the fine points of operating the systems once they get them in their hands.