The head of Irving Shipbuilding Inc. intervened in the Trudeau government’s last-minute decision to review a contract for a $700-million interim supply ship for the Royal Canadian Navy.

The terms for the purchase of the ship, currently being built at Quebec’s Davie Shipyards, had been approved by the Conservatives prior to the election but was subject to review this week by the incoming Liberals.

In the letter, dated Nov. 17 and obtained by iPolitics, Irving co-chief executive officer James (Jimmy) Irving asked Defence Minister Harjit Sajjan and Public Services and Procurement Minister Judy Foote to help delay approval of the deal until after the government allows a proposal by Irving and U.S.-based Maersk Line Ltd. to be “competitively evaluated.”

“We understand that a contract for Davie Shipyard to provide the Interim Refuelling at Sea capability is awaiting approval by the new Government,” Irving writes. “I ask your support to request that the Irving-Maersk proposal be competitively evaluated before a contract is placed.”

Also copied on the letter were Finance Minister Bill Morneau and Treasury Board President Scott Brison, who represents the Nova Scotia riding of Kings-Hants.

Irving’s request appears to have been successful as the new government announced Friday that it will hit pause and take another two months to make a final decision. If the government fails to finalize the contract by Nov. 30, it must pay Davie an $89-million penalty, iPolitics confirmed.

That money is intended to compensate Davie for costs incurred through preparations to get started on the project – the company has already hired workers and bought the ship it intends to retrofit as a supply vessel, the MV Asterix.

Davie received the contract for the supply ship because of delays at the Vancouver-based Seaspan, which had the original contract for the two Joint Support Ships ordered under the $35-billion National Shipbuilding Procurement Strategy (NSPS).

The government says the first Joint Support Ship is expected in 2021.

The navy’s last two supply ships had to be retired recently after 45 years of service – HMCS Protecteur caught fire off the coast of Hawaii and HMCS Preserver rusted out despite valiant efforts by the navy to source parts off of eBay.

Without supply ships, Canadian vessels need to rely on allies for refuelling and resupplying or stick close to home, which significantly limits the navy’s capabilities.

Irving has already won the largest chunk of the NSPS, a $26-billion contract for the combat vessels, which will see it build six DeWolfe-class Arctic offshore patrol ships and 15 Canadian surface combatants.

Of those, Irving reportedly also won the prime contractor status on the surface combatant contract without competition.

Vancouver-based Seaspan won the smaller, $8-billion contract for non-combat vessels, including three Offshore Fisheries Science Vessels, one Offshore Oceanographic Science Vessel, two Joint Support Ships, one Polar Icebreaker, up to five Medium Endurance Multi-tasked Vessels and up to five Offshore Patrol Vessels.

Davie lost out on both those contracts, the biggest chunks of the total $35-billion budget of the NSPS, but has won three much smaller contracts through the program: the $13.6-million contract to refit the Canadian Coast Guard Ship Earl Grey, the $6.5-million contract for refit work on the Louis S. St-Laurent and a $4.5-million contract to refit the Des Groseilliers.

In April, Davie offered to retrofit a commercial vessel as a naval supply ship after it became clear that it will be years before Seaspan is able to get the Joint Support Ships in the water.

The government then changed the rules around when it can grant sole-sourced contracts, which allowed it to give the $700-million deal to Davie.

Under those changes, a non-competitive process would be allowable in “urgent” cases and as long as they were for interim, not long-term, solutions.

Former defence minister Jason Kenney said at the time of the decision that Davie provided a “flexibility” that Irving could not and that getting a replacement supply ship was not something that could wait for the years that a competitive process would take.

In his Nov. 17 letter to Sajjan and Foote, Irving wrote that his company also approached the federal government with its own plan to bridge the gap between the Joint Support Ships and no ships in January 2015.

“We had full expectation that our proposal would be evaluated in a fair and transparent manner,” Irving wrote. “However in June 2015, without any further engagement or explanation of the merits of our proposal, the Government decided to pursue a sole source contract with Davie Shipyard in Quebec. This was done on a non-competitive basis without transparency and without a full evaluation of cost, delivery schedule, capability, and risk associated with the Irving-Maersk proposal.”

The Irving-Maersk proposal would use a five-year-old ship that “can be converted in less than a year” and would allow for refuelling capabilities.

Irving also branded the proposal as potentially allowing the ships to be used more often for humanitarian assistance and disaster relief, saying Maersk “has already successfully modified an identical ship for the United States Special Forces.”

It estimates the cost of conversion at between $75 million and $100 million, “depending on the range of capability requested,” and would cost $20 million per year in crewing and maintenance costs going forward.

In contrast, the Davie plan would result in a ship that “could not only supply fuel but also ammunition, water, spare parts and food to individual ships or naval task groups, as well as to support task group helicopters.”

If Irving had presented a proposal that matched those capabilities, its costs would likely be much higher than the proposed $75 million to $100 million, one defence source said.

As well, Irving also stressed that his company had already invested $360 million in redesigning its Halifax shipyard – but neglected to mention that the bulk of that investment was taxpayer-funded.

In order to conduct upgrades necessary to win the $26-billion combat vessel contract, Irving got $304 million in provincial money for its shipyard- $260 million of that in the form on non-repayable loans and $44 million worth of repayable loans.

The $260 million loan will be forgiven if Irving and its direct sub-contractors create 4,000 jobs in Nova Scotia.

But in his letter to Sajjan and Foote, Irving appeared to imply that the company itself had put up the hundreds of millions of dollars behind the shipyard reconstruction.

“Irving Shipbuilding has invested $360 million to build the most modern shipyard in North America,” Irving wrote.

Defence insiders say Irving should have been clear that the majority of the money invested in the shipyard redesign was not the company’s own if it was attempting to use that as a factor to persuade the government to re-evaluate its proposal.

“I really don’t have a view on it other than if I were a taxpayer of Nova Scotia, I wouldn’t be too happy if – based on what you tell me – Irving was claiming the [$360 million] was their investment and not from the people of Nova Scotia,” said one industry executive with extensive knowledge of the National Shipbuilding Procurement Strategy.

Nova Scotia Premier Stephen McNeil could not be reached for comment but Irving president Kevin McCoy issued a statement Saturday morning addressing the letter.

“Our request has an continues to be for an open, merit-based evaluation of all proposals to ensure the best solution for the Navy and best value to Canadians,” McCoy said in the emailed statement.

However, Quebec Premier Philippe Couillard warned Friday that he “will simply not allow” any changes to be made to the plans to have Davie build the interim ship.