Frigate design decision challenged in Federal Court, putting $60B program in limbo

One of the losing bidders in the competition to design the navy’s next generation of warships has asked the Federal Court to overturn the recent decision to award the deal to a group of companies led by Lockheed Martin Canada.

Winning bid 'incapable of meeting three critical mandatory requirements,' says Alion Canada

An artist's rendering of the British Type 26 frigate, the design that won a federal competition to replace Canada's patrol frigates. (BAE Systems Inc./Lockheed Martin Canada)

One of the losing bidders in the competition to design the navy's next generation of warships has asked the Federal Court to overturn the recent decision to award the contract to a group of companies led by Lockheed Martin Canada.

Alion Science and Technology Corp. and its subsidiary, Alion Canada, asked for a judicial review on Friday — a challenge that could mean more delays to the $60 billion program.

The company had pitched the Dutch-designed De Zeven Provinciën Air Defence and Command (LCF) frigate as their solution for the Canadian navy.

It's asking the court to set aside an Oct. 19 decision to select Lockheed Martin Canada the preferred bidder and to prevent the federal government from entering into negotiations with the company, which has offered up the BAE Systems-designed Type 26 frigate.

In their court filing, Alion officials argue that the winning bid was "incapable of meeting three critical mandatory requirements" of the design tender.

Notably, they say the Type 26 cannot meet the mandatory speed requirements set out by the navy and that both Public Services and Procurement Canada and Irving Shipbuilding, the yard overseeing the construction, should have rejected the bid outright.

Alion said it "submitted a fully-compliant and conforming bid at enormous expense" and argued it "has been denied the fair treatment (it was) owed."

The court application also points out that the design tender was amended 88 times during the 22 months it was under consideration and that the changes "effectively diluted the [warship] requirements" and allowed the government and Irving to select "an unproven design platform."

Rising cost estimates

Over two years ago, the Liberal government said it wanted to select a "mature design" for the new frigates, rather than designing a warship from scratch. Former public works minister Judy Foote said it would be a faster, cheaper solution.

Unlike its two competitors, the Type 26 has yet to enter service with the Royal Navy and competitors have privately knocked it as "paper ship."

Navantia, a Spanish-based company, was the other failed bidder. It headed a team that included Saab and CEA Technologies and proposed the F-105 frigate design, a ship in service with the Spanish navy.

The Liberal government plans to build 15 new warships and hoped to get construction underway in the early 2020s. The program, which has been beset with delays and rising cost estimates, is intended to replace the navy's aging Halifax-class frigates, the backbone of the nation's maritime fighting force.

Federal procurement officials had hoped to nail down a complete design contract with Lockheed Martin by the winter. The court challenge now puts that timeline in doubt.

It also has enormous implications for Irving, which has been concerned about a slowdown in warship production between the current Arctic Offshore Patrol Ship program and the frigate replacements, which are formally titled 'Canadian Surface Combatants'.

No one at Public Works or Lockheed Martin was immediately available for comment on Wednesday.


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