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Canadian Surface Combatant RFQ

Good2Golf

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As much as this is a cost issue, in my opinion this is monumental "effective communicate failure" issue.

DND/Government should present pricing for all military programs in a format citizens can relate to and intuitively understand.

1. What's the "sticker price" (to walk out of the store or showroom with the item)?
2. What's the anticipated "parts for maintenance and service" cost per annum?
3. What's the "crew costs" per annum?

Full life cycle budgeting is absolutely appropriate for some things like assessing RFQ submissions. But for communication to the public? It's akin to the CRA posting a news release: "Average Federal Income Tax is going up to $2 million per person!", with the fine print then explaining that's actually for the average total over their working lives. Although factually accurate, the information is in a context that most people can't relate to easily, and therefore ends up being extremely misleading....which does a disservice to everyone.
...and provide ‘Payments to Individuals’ amounts for the same periods. That EI alone, in the same period as CSC is TRILLIONS of dollars, would indeed help put 0.017 trillion dollars for a key national defence capability into relative perspective.
 

Cdn Blackshirt

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The bigger question is who authorized/requested the PBO to research then release the (obviously cheaper) Type 31 as a comparable as I strongly doubt they would have done that on their own initiative. My wager would be on a former drama teacher with a penchant for colourful socks.
 

Blackadder1916

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The bigger question is who authorized/requested the PBO to research then release the (obviously cheaper) Type 31 as a comparable as I strongly doubt they would have done that on their own initiative. My wager would be on a former drama teacher with a penchant for colourful socks.

In the PBO report it states
On June 19, 2020 the House of Commons Standing Committee on
Government Operations and Estimates (OGGO) requested that the Office of
the Parliamentary Budget Officer (PBO) undertake a costing analysis of the
Canadian Surface Combatant (CSC) project. This was to include the cost of
the current program, based on the Type 26 design, as well as the cost for two
other designs: the FREMM and the Type 31e.1

From the minutes of the OGGO meeting for June 19, 2020
Motion
Julie Vignola moved, — That the committee request that the Office of the Parliamentary Budget Officer undertake a costing analysis of building the Canadian Surface Combatants and building the FREMM and the Type 31e and that the report containing this analysis be presented to the Chair of the committee by Thursday, October 22, 2020.
The question was put on the motion and it was agreed to on the following recorded division:

YEAS: Ziad Aboultaif, Kelly Block, Francis Drouin, Matthew Green, Majid Jowhari, Irek Kusmierczyk, Steven MacKinnon, Kelly McCauley, Julie Vignola, Patrick Weiler — 10;

NAYS: — 0.

Ms. Vignola is one of the vice-chairs of the committee (the chair is a Conservative, other vice-chair is Liberal). She is the Bloc Québécois MP for Beauport--Limoilou (that's in Quebec City, directly across the river from the Davie shipyard). I don't know whether she was a former drama teacher nor anything about her fashion style.

And if you read the evidence (transcript) there was no discussion and basically the yeas were given because it was the end of a Friday afternoon meeting and they wanted to get out of there.
 
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SeaKingTacco

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Personally, I'd be quite happy to follow the UK path ... as long as we follow it all the way:

Three Type 26 and twelve Type 31 !

Fine, but I also then want the proportional 3 Type 45 AAW destroyers, one Queen Elizabeth class aircraft carrier (with attendant 40 F-35B's), one Bulwark class amphibious assault ship, six Sandown class and three Hunt class mine hunters and six Astute class SSN (because we don't want SSBN's) and of course, seven various fleet oilers, AOR's and amphibious support ships.
I get it, but the Type 31 is not useful in our context. It is too small and underarmed for for what we need.
 

Cdn Blackshirt

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In the PBO report it states


From the minutes of the OGGO meeting for June 19, 2020


Ms. Vignola is one of the vice-chairs of the committee (the chair is a Conservative, other vice-chair is Liberal). She is the Bloc Québécois MP for Beauport--Limoilou (that's in Quebec City, directly across the river from the Davie shipyard). I don't know whether she was a former drama teacher nor anything about her fashion style.

And if you read the evidence (transcript) there was no discussion and basically the yeas were given because it was the end of a Friday afternoon meeting and they wanted to get out of there.

My sincerest thanks for not only the correction, but the thorough links. I'd much rather be corrected and learn what is right, than be left uncorrected and continue to believe a falsehood.

Although I still distrust our PM greatly, it appears he was completely innocent in this particular case and I hereby retract my charge. :salute:
 

JMCanada

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According to PBO's numbers (including taxes and so) ...
T26: $77 B / 15 hulls = 5.133 B / hull
T31: $27 B / 15 hulls = 1.80 B / hull (50 B savings)

... seems like there are no cancellation costs or penalties, and this works with
3 T26 + 12 T31 = 3× 5.133 + 12× 1.80 = 37 B
that is $40 B savings as the PBO reports.

Mix it all and my bet is for...
10 × Type 26 ($51.33 B) + 6 × Type 31 ($10.80 B) = $62.13 B

This is not to come soon, will take some years to come, but bet my 2 cents for an hybrid fleet will be the end of this story.

Selling points for a politician:
1. $15 B savings !! (62 vs 77). And still the cut is just below 20% (15/77 , 19.5 %).

2. Ten top-combatants...
- more than AUS or UK
- 5 ships per coast
- three units deployed or ready for it (3 times 3) plus one under extensive refit.

3. Six low-profile combatants, means two in operations like Caribbe or the coast of Africa. At much lower cost than T26 but better prepared against assimetric threats than AOPs or MCDVs.

4. In total, one more ship than initially planned.

5. If built in parallel (Irving and Davie) could be "sold to the voters" as more jobs at a time (even though delivery might be stretched for the same total period).

6. Loss of capability... yes, but ... who cares? (from a politician's point of view).
 

Navy_Pete

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...and provide ‘Payments to Individuals’ amounts for the same periods. That EI alone, in the same period as CSC is TRILLIONS of dollars, would indeed help put 0.017 trillion dollars for a key national defence capability into relative perspective.
Or even the GoC itself; the numbers aren't really clear, but from what I was able to gather, the cost of running Parliament and the Senate combine to about $1B per year.**

So the operating costs of Parliament over CSC will be about $25-30B +

**those numbers were fuzzy, but was about $140-200 million for the Senate and $700-800 million for Parliament. That seemed to include the cost for staff, security, 3rd party reports etc. No idea if that had the Parliament repairs in there or how else it broke down, but honestly expected it to be higher. That was just gleamed from a few CBC stories so could be totally wrong.
 

Retired AF Guy

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I'm not an expert on big project items such as the CSC program, and I realize that the PBO is only looking at the budgetary aspects of the CSC program but I found the following statement interesting:

3.1.Design Characteristics

A detailed analysis of the capabilities of the FREMM or the Type 31e with respect to those of the Type 26 is outside the scope of this report.

I would have thought that a comparison of the three designs capabilities would be a part of your cost analysis?
 

Underway

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The PBO is basically doing a few things here. They looked at the cost as directed by the committee. They compared with the other options listed. But they also stayed in their lane. It's not their job to assess capability aligned with GoC requirements for the RCN. That's the RCN's job to do that. They are the professionals in that sphere.

The RCN put quite a bit of work into the SOR for the CSC and did just as much analysis on the bids to see if they met the SOR. This was done because the GoC asked for certain jobs to be done and the RCN looked at those jobs and said this is what we need to do it.

Right now its working the way it should.

The RCN response was "We don't agree with your numbers and we couldn't do the jobs asked with a different ship, so we're holding course".

Outside of a few circles there really isn't a challenge to the program that I can see. Both the conservatives and libs want it to continue. The challenges to it seem to be a few in the press, and a few sour grapes from the industry types who lost. No one I know outside of military circles is paying attention to this, they are focused on COVID, vaccines, jobs, economy and WandaVision.
 

Colin Parkinson

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I'm not an expert on big project items such as the CSC program, and I realize that the PBO is only looking at the budgetary aspects of the CSC program but I found the following statement interesting:



I would have thought that a comparison of the three designs capabilities would be a part of your cost analysis?
Including those factors would have sunk their report and made them look like fools I suspect.
 

Uzlu

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T31: $27 B / 15 hulls = 1.80 B / hull (50 B savings)
Maybe not.
Several important categories of costs are not included in this analysis. These are:
• The cost of extending the life of the current Halifax-class fleet of frigates, which may be necessary to bridge a 4-year gap in the delivery of new frigates;
• Any costs arising from a 4-year interruption of production at the partner shipyard, Irving Shipbuilding Inc., including any impacts this interruption may have on subcontractors; and,
• Any additional costs associated with legal proceedings and contract liabilities that are otherwise not already included.
3 T26 + 12 T31 = 3× 5.133 + 12× 1.80 = 37 B
The Parliamentary Budget Officer says that the Type 26 development and acquisitions costs for the first three ships is 17.2 billion dollars. “While outside the scope of this report, we note that there could be costs associated with supporting two fleets of ships instead of one.” So, that means more than 5.133 billion dollars for each Canadian Surface Combatant.
If built in parallel (Irving and Davie) could be "sold to the voters" as more jobs at a time (even though delivery might be stretched for the same total period).
Irving will never allow Davie to build frigates. But let us suppose Irving did allow Davie to build frigates. What happens after all these sixteen frigates are built?
 

Underway

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Build and repair war ships affordably? There is no such thing. Navies are expensive. Have always been that way and will always be that way. You'll see from Davie doing Docking Work Periods now that the price is pretty close between them and Irving. Now the "are we getting value for the money we are spending" argument.. well that's different.

We all know the issues left over when a ship comes back from Irving work periods. We'll have to see if Davie can do any better.
 

CBH99

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I don’t agree with his general position, but there are a few points in his article that do have some merit. A few...

He isn’t looking at the big picture of building an industry that is sustained for decades, just with this order book alone.

Nor does he factor in the economics of money trickling back to the government, and substantially boosting the local economies. (In 2 areas that seem to constantly be in recession.)

Overall - we’ve discussed his points in this thread ad nausea. Not all his points are bad, but he doesn’t see the big picture.


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