November 7, 2013 Michelle MacDonald, Senior Industrial Benefits - PowerPoint PPT Presentation

Atlantic Supplier Session November 7, 2013 Michelle MacDonald, Senior Industrial Benefits Advisor (Marine), Atlantic Canada Opportunities Agency (Ottawa Office) www.acoa.gc.ca

National Shipbuilding Procurement Strategy (NSPS) 1. Large Ship Construction • Combat Vessels - to be built at Irving Shipbuilding (est. $29.3B ) Ships to be built - Arctic Offshore Patrol Ships (AOPS) and Canadian Surface  Combatant Ships (CSC) • Non-combat vessels - to be built at Seaspan Marine (est. $7.3B ) Ships to be built - Offshore Science Vessels, Joint Support Ships (JSS), Polar  Ice Breaker (PIB), Medium Endurance Multi Tasked Vessels, and Offshore Patrol Vessels. 2. Small Ship Construction • 116 vessels estimated $2 B (over 30 years) 3. Maintenance and Refit • $500 M - $600 M annually Canada’s Industrial and Regional Benefits (IRB) Policy, will apply on projects with value of over $100M. The selected shipyards will be required to identify business activities in Canada valued at 100 per cent of the contract value, ensuring a dollar-for-dollar investment into the Canadian economy.

NSPS Update NSPS Combat Work Package (Irving Shipbuilding) • Shipyard Infrastructure Upgrades ($300M) 2013-2015 • Arctic Offshore Patrol Ships (AOPS)  Acquisition of up to eight fully supported Arctic/Offshore Patrol Ships  Key sub-contractors – Lockheed Martin Canada, General Electric, Odense Marine Technology, Fleetway, Lloyd’s Register  On track to cut steel 2015, with first vessel delivery for 2018  Status: Definition Phase (up to $288M) • Canadian Surface Combatants (CSC)  Most complex ships under the NSPS, up to 15 warships which will replace Canada's destroyers and frigates  Procurement Strategy engagement and analysis began November 2012  Anticipated procurement strategy decision for Fall 2013  Status: Industry Engagement

NSPS Update NSPS Non-Combat Vessels Work Package (Vancouver Shipyard) • Shipyard Infrastructure Upgrades ($200M) 2012-2014 • Offshore Science Vessels Offshore Fisheries Science Vessels (3) and Offshore Oceanographic Science Vessel (1) – critical  to department’s science mandate, as well as other gov’t departments and agencies. Key sub-contractors - RAlion, Thales, Imtech, CSC  Project Status: Construction Engineering Phase ($13.2M).  Builds in late-2014 (OFSV) and 2016 (OOSV).  • Joint Support Ships Acquisition of 2-3 support ships to provide refueling and replenishing of ships at sea.  TKMS design selection   Build will occur prior to Polar Ice Breaker in late 2016. Project Status: Definition Phase. ($1.4M).  • Polar Ice Breaker Coast Guard’s future Flagship, the Polar Icebreaker, CCGS John G. Diefenbaker  To be in service 2021-22   Designer: STX Project Status: Design Phase ($11.9M). 

NSPS Update Small Ship Construction • 116 vessels at less than 1,000 tonnes displacement, estimated to cost $2 B (over 30 years) • Open to Canadian shipyards other than ISI/VSY. Upcoming Projects : • Canadian Coast Guard to procure up to 21 vessels over the next seven years ($488M):  Search and Rescue (SAR) Lifeboats (10)  Specialty Vessels (3)  Channel Survey and Sounding Vessels (2)  Special Nav-Aid Vessels (2)  Near-Shore Fishery Research Vessels (2)  Mid-Shore Science Vessels (2) • For the Department of National Defence:  Large Tugs (up to 6)  Small Tugs Maintenance and Refit • $500-600M annually

NSPS – Key Players • National Defence – Sets Requirement/Technical Authority • Public Works and Government Services Canada – Contracting Authority, Canadian Controlled Goods • Industry Canada – Industrial Regional Benefits Authority • Regional Agencies – Advocacy and Business development, SME supplier development capacity • Canadian Shipyards • Provincial Governments – Business development, investment attraction • Industry Associations • Universities, Academia and Research facilities

ACOA's IRB Role – Advocating and Responding to Opportunities We are the regional voice in the federal IRB procurement policy and practices to support the growth and development for the Atlantic Industry. This includes: • Advocating for Atlantic interests interdepartmentally and with national and international industry. • Ensuring the application of IRB policy on Federal Procurements. • Positioning industry to benefit from Federal investments. • Establishing a cohesive engagement of Regional players - Industry; Associations; Provincial Governments. • Facilitating strategic engagement of Atlantic industry through targeted industry days, contractor regional tours; and global supply chain outreach activities for aerospace, land and marine procurements. • In response to the NSPS unique sourcing arrangement for ship procurements – ACOA’s engagement response is the Atlantic Shipbuilding Action Plan. 7

Atlantic Shipbuilding Action Plan To capitalize on and leverage opportunities related to NSPS procurements, ACOA developed the Atlantic Shipbuilding Action Plan (ASAP) ASAP is a long term strategy focused on: • Informing SMEs of potential opportunities by facilitating SME access and identification to shipyards, Tier 1 and 2 subcontractors; • Proactively addressing SME capacity building - certifications, process improvements, innovation gaps and skills development through ACOA programming tools; • Strategically engaging with Canadian shipyards and defence stakeholders to understand their current and planned activities; • Leading Atlantic wide outreach, supplier development opportunities and industry engagement to leverage industrial regional benefits; and • Coordinating with both federal and provincial partners to identify and address skills and labour force issues and challenges. 8

IRB’s – The Policy and ACOA’s role The IRB policy • Ensures Canadian companies can derive benefit from federal procurement • Contractually commits prime contractors to place work in Canada • Promotes industrial and regional development objectives • Encourages business that makes good business sense • Benefits can be direct or indirect ACOA’s role • Regional voice in IRB procurement policies and practices • Along with IC and the other RDA’s contributes to the development, evaluation and negotiation of IRB strategies • Lead point of contact for Prime contractors on development of regional IRB strategies and Atlantic industry engagement • Facilitate industry engagement to lever IRB commitments 9

What is the IRB Policy • The IRB Policy ensures that Government of Canada defence and security procurements generate high value-added business activity for Canadian industry. • The IRB Policy requires companies undertake business activities in Canada valued at 100 percent of the value of the defence or security contract they have been awarded by the Government of Canada. (Typically in procurements valued at $100M and above) • The IRB obligation is a contractual commitment and part of the overall government procurement contract. • Also known as "offsets", IRB policies are a common part of global defence and security procurements and are practiced in one form or another in 48 countries around the world. • Canada currently has more than 60 defence and security procurements that are subject to the IRB Policy and a portfolio of nearly 2,000 transactions and more than 700 distinct recipients. • The Government of Canada's IRB Policy is administered and managed by officials in the IRB Directorate, located within the Aerospace, Defence and Marine Branch of Industry Canada.

Procurement Process and the IRB Policy • Industry Canada, as the Government of Canada's IRB Authority, works with other federal government departments in the procurement process. • It is most commonly the Department of National Defence (DND) and the Canadian Coast Guard that are purchasing equipment or services. • Public Works and Government Services Canada (PWGSC) is the organization that handles all the contracting services for each project. • The IRB Policy is part of the PWGSC procurement contract, and defines separate IRB terms and conditions that govern the application of the Policy. • Industry Canada works closely with Regional Development Agencies (RDAs) that are active members of the evaluation of the policy.

Procurement Process and the IRB Policy • Once the Government of Canada decides on a procurement strategy for a particular project, a notice is released to the public. This can take the form of a Request for Information (RFI) or a Letter of Interest (LOI) and it is published on MERX, Canada's electronic tendering service. • Interested bidders (potential IRB contractors) then begin the search for Canadian capabilities and possible business partnership opportunities that meet the IRB requirements to be outlined in the Request for Proposals (RFP). • In due course, the Government of Canada, through PWGSC, publishes the specific project RFP. As part of a response to an RFP, bidders will need to submit an IRB proposal, along with their technical and pricing proposals. The IRB proposal contains plans that outline how the bidder will meet the IRB obligation