VICTORIA, British Columbia — European and US firms will compete to win a multibillion-dollar contract to design the Royal Canadian Navy's future combat ship and integrate its combat systems.

Canadian government officials have announced that, starting next month, work will begin on compiling a short list of qualified bidders for the Canadian Surface Combatant (CSC).

Companies will have until October to provide the necessary documentation to support their entry onto the short list, senior government officials said.

One firm will be selected in early 2017 to design the CSC, and another to integrate the onboard combat systems.

DCNS, Lockheed Martin and BAE Systems have already announced their intention to bid on aspects of the CSC project.

The government has already designated Canadian firm Irving Shipbuilding of Halifax, Nova Scotia, as the prime contractor to oversee the CAN $26 billion (US $24 billion) project to build up to 15 ships. The vessels will replace the Royal Canadian Navy's Iroquois-class destroyers and Halifax-class frigates.

More than half of the cost of the project will go toward the combat systems and their integration, industry officials say.

French firm DCNS intends to pursue the warship design contract and the combat systems integrator role, said Olivier Casenave-Péré of DCNS Technologies Canada.

"At this stage, DCNS hasn't any comment on the procurement process; we are waiting for further information about the way the procurement will be organized and the requirements defined," Olivier said.

However, the French government and DCNS have been marketing the French multimissions frigate (FREMM) in Canada since 2012 in preparation for the CSC project. The lead ship of the class, the French Navy's Aquitaine, visited Halifax in 2013 and was toured by Canadian politicians and military personnel.

Anne Healey, BAE's general manager for group business development for Canada, said BAE Systems will submit an offer based on the Type 26 global combat ship design. Construction of those vessels for the UK Royal Navy is scheduled for 2016.

"The ship will take full advantage of modular design and open systems architecture, ensuring it can accommodate specific systems and equipment required by the Royal Canadian Navy and can be easily upgraded as new technology develops," Healey said.

"We have a successful track record of contracting Canadian companies into our global supply chain. Over the past five years, we have worked with 270 Canadian companies and invested over a quarter billion dollars with local suppliers," she said.

Rosemary Chapdelaine, vice president of Lockheed Martin Canada's mission systems and training organization, said the firm will compete for the role of combat system integrator for the CSC. She noted Lockheed Martin has already been selected for the combat systems modernization work underway on the Halifax-class frigates, and was named the command-and-surveillance systems integrator on the soon-to-be-built Arctic offshore patrol ships.

"The skill and depth of our existing Canadian workforce continues to drive results for the RCN through the Halifax-class modernization project and the Arctic offshore patrol ships, delivering enduring economic value to Canada," she said.

Canadian government officials say they are looking for a proven ship design that can be modified for Canadian needs.

Although Irving is the prime contractor, the Canadian government still retains overall control on the selection of the designer and combatant systems provider, government officials added.

The first group of Canadian surface combatants will be outfitted with air defense and command-and-control capabilities. The other variant, which will come later, will be a multipurpose ship. The ships will be based on a common hull design.

Government officials could not specify a year when the first CSC would be operational, saying that construction would begin in the early 2020s and the first ship would be in the water sometime in the mid-2020s.

The Royal Canadian Navy originally estimated the CSC replacements for the frigates and destroyers would be in place by 2015.

Both the government and industry are keen to have as much Canadian content as possible on the new ships.

Christyn Cianfarani, president of the Canadian Association of Defence and Security Industries, called the CSC "an historic opportunity for Canadian defense and security companies to compete, create and deliver world-class technologies, goods and services for these ships."

The CSC procurement will shape the Navy and Canadian industry for the future, she added.

Domestic defense companies have been pressuring the government to emphasize that the winning bidders must provide local companies with technology transfers to allow them to compete in future international competitions.

"If the government is to be successful in achieving its goals for the CSC, it will need to maintain pressure on bidders to transfer technology, intellectual property and know-how into Canada," Cianfarani said.

Another area of concern is cost of the CSCs. Building delays and inflation could increase costs, putting pressure on the Navy to decrease the number of ships built so it can stay within budget. Government officials say they are aware of the risks but are confident the project will stay on schedule.

Canada's Auditor General Michael Ferguson has already raised warnings about the budget for the CSC. In 2013 he said the $26 billion was "insufficient."


David Pugliese is the Canada correspondent for Defense News.

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