A consortium led by Irving is out of the competition to build three Canadian military support ships.

The company, which had planned to build the ships in Halifax, confirmed Tuesday that it had been dropped from the project, but said it didn't know why.

The consortium was one of three syndicates vying for the contract, one of the largest navy shipbuilding contracts in 20 years. The others are ThyssenKrupp Marine Systems Canada Inc. and SNC-Lavalin ProFac Inc. 

Defence Minister Gordon O'Connor was in Halifax last June to announce the government would replace vessels built in the 1960s with new 28,000-tonne ships.

The total cost of the contract, including an $800-million maintenance contract, was expected to be $2.1 billion.

Irving representatives expect to meet with federal officials in a few weeks to find out why they were dropped.

The government promised the ships would be built in Canada. The remaining bids would see them built in either Newfoundland and Labrador or B.C.

The first one is expected to be ready by 2012.