October 19, 2018

The Government of Canada and Irving Shipbuilding Inc. have identified Lockheed Martin Canada Inc. as the preferred bidder to provide the design and design team for the Royal Canadian Navy’s future Canadian Surface Combatants.

While this represents a significant milestone in the competitive process, more work is required before a contract is awarded.

Lockheed Martin Canada Inc. must now go through the “due diligence process,” which includes:

negotiations with the company on intellectual property rights

an assessment of combat systems performance

an assessment of the company’s financial capability to deliver the project, together with the verification of various other administrative matters

Should the preferred bidder not successfully demonstrate to Canada and Irving Shipbuilding Inc. that it meets all of the due diligence requirements, then the next highest ranked compliant bidder will become the preferred bidder. The new preferred bidder will then have to successfully demonstrate that it meets all of the due diligence requirements.

The identification of the preferred bidder follows a rigorous bid evaluation process. This process has been, and will continue to be, overseen by an independent Fairness Monitor. To date, the Fairness Monitor has submitted a series of interim reports on the Canadian Surface Combatant procurement process, and each of these reports have not identified any fairness deficiencies.

More recently, the Fairness Monitor provided the following statement to Public Services and Procurement Canada:

“As the Fairness Monitor for the Canadian Surface Combatant project, we have monitored the evaluation of proposals submitted in response to the Request for Proposals and have identified no fairness deficiencies. It is our opinion that the evaluation of proposals was conducted in a fair manner. Decisions were made objectively and free from personal favouritism or improper influence, and the process encompassed the elements of openness, competitiveness, transparency and compliance with the Request for Proposals.”

A contract award is expected this winter, with construction beginning in the early 2020s.

The Canadian Surface Combatant project is the largest, most complex procurement ever undertaken by the Government of Canada. These ships will form the backbone of our Royal Canadian Navy and will be Canada’s major surface component of maritime combat power for decades to come.

The Government of Canada remains committed to being open and transparent at each stage of the procurement process.