Ship Building in Nova Scoita
Written by BACC Admin
|
26 April 2012
Ship Building in Nova Scotia
Are You Ready?
The Lunenburg Queens Regional Development Agency (LQRDA) is the South Shore’s source for the latest news and updates on the federal shipbuilding program. Because information is originating from multiple sources, we will continue to seek-out relevant news and program information through our various networks; posting it to our website as it becomes available. Businesses, organizations and individuals will be able to sign-up at www.lqrda.ca to receive automatic updates.
The following is a compilation of highlights from recent information sessions, articles and news releases.
Background Information
On October 19, 2011 Irving Shipbuilding Inc. was awarded a $25 billion contract to construct 21 large combat vessels to replace the aging fleet of the Royal Canadian Navy. This was the first step in the Government of Canada’s National Shipbuilding Procurement Strategy and the beginning of a 30-year process that has the potential to change the economic landscape for the province of Nova Scotia. The Conference Board of Canada estimates that about 8,000 new jobs will be sustained over the period of the contract – equal to more than 1% of total provincial employment. They also estimate that the province of Nova Scotia will see an average increase in GDP of $800 million per year. Without doubt, this is good news that reaches far beyond Irving Shipbuilding Inc. and Halifax, as the whole province will gain from the increase in GDP and employment for years to come.
As with all major federal capital projects, especially projects of this size, there are ongoing procedures to satisfy the process of procurement and on January 12, 2012, the Government of Canada and Irving Shipbuilding Inc. finalized an agreement in principle to build the ships under the government’s national shipbuilding strategy. This was a significant first milestone as now Irving Shipbuilding Inc. and the Canadian government can begin to set the frame work for the contracts that will mean the beginning of the construction phase. However Steve Durrell, President of Irving Shipbuilding Inc., has pointed out that there is still a lot of work to be done before Irving is in a position to enter into agreements with suppliers and start actual ship construction:
“We’re currently working on laying important groundwork with the federal government, including the recently announced agreement in principle as well as negotiating the contract for the first set of vessels,” said Steve Durrell, President, Irving Shipbuilding. “We hope to be in a position to begin production on the first set of vessels in late 2013. No supplier selection related to NSPS [Nation Shipbuilding Procurement Strategy] programs has taken place as yet. We will only be in a position to begin supplier selection when we finalize those agreements and receive further detail on vessel designs and specifications.”
Atlantic Shipbuilding Action Plan
On February 13, 2012, the Government of Canada announced an Atlantic Shipbuilding Action Plan which focuses on maximizing opportunities for firms across the Atlantic region to participate in the multi-billion dollar federal shipbuilding initiative.
“These shipbuilding procurements represent a historic opportunity that will generate economic growth and create jobs in the four Atlantic Provinces in rural and urban communities,” said Minister Valcourt. “With this action plan, we want to ensure that small and medium-sized enterprises throughout Atlantic Canada are in the best position to seize all opportunities related to these major procurements. This is a great occasion for us to foster a new generation of entrepreneurs who will acquire the expertise to compete on the world scene.”
“Work undertaken at Irving Shipbuilding’s Halifax shipyard will be sustained for decades and carries the real potential to radically transform the entire Atlantic economy. The shipbuilders of Atlantic Canada will create jobs, drive innovation and help build a world class industry,” explained Minister MacKay. “Through the Atlantic Shipbuilding Action Plan, our Government is helping Atlantic businesses understand and be part of the process and address such areas as innovation capacity, certification and workforce skills so they can compete as suppliers and sub-contractors.”
The Atlantic Shipbuilding Action Plan includes:
Making sure Atlantic Canada small and medium-sized enterprises are fully aware of the process and the requirements to access supply chain opportunities;
- Giving small and medium-sized enterprises access to Atlantic Canada Opportunities Agency programs to proactively support their development so that they can capitalize on these opportunities in areas such as marketing, acquisition of certification, process improvements, training, and technology acquisition;
- Engaging with community colleges and the provincial governments on skills and labour force research and planning; and
- Holding supplier development sessions in each Atlantic province as well as an Atlantic Marine Industry Forum.
In delivering the Atlantic Shipbuilding Action Plan, the Atlantic Canada Opportunities Agency, in partnership with Irving Shipbuilding Inc., hosted ‘Supplier Development Sessions’ in Bathurst and Moncton, New Brunswick; Summerside, Prince Edward Island; Truro and Shelburne, Nova Scotia and St. John’s, Newfoundland and Labrador between February 21 and March 12, 2012. These information sessions provided small and medium-sized enterprises with an overview of the shipbuilding initiative and the critical information they need to become suppliers with marine supply chains. Documentation from the Shelburne session is available at the Lunenburg Queens RDA’s website, www.lqrda.ca.
In addition to positioning itself as a regional source of news and updates on the shipbuilding initiative, the Lunenburg Queens Regional Development Agency and its economic partners will participate in several upcoming strategy sessions that are being organized to link businesses to the opportunities of the ship building program.
The LQRDA is taking a proactive role in these sessions to make sure business and sector organizations have the most current and accurate information needed to take advantage of supply chain opportunities as the ship building program roles out and construction begins. A shipbuilding blog feed will soon be available at lqrda.ca where companies can subscribe to instant updates or other notification methods such as Twitter.
Where Do You Fit?
Understanding the Tier Level approach Irving uses to identify potential suppliers will help businesses make informed decisions as to where they have the best chance to participate in the supply chain.
Tier 1 and Tier 2 level suppliers will be the primary participants that interact and hold contracts directly with Irving Shipbuilding Inc. In the initial stages of the project these companies will be gathering from around the globe to establish a physical presence in Halifax and prepare to compete for tender opportunities with Irving. They will supply base materials and components including steel for hull construction, propulsion systems to power the vessels and weaponry for defense systems just to name a few.
Companies who register here will be part of a required product / service database that will be searched for potential businesses. Selected businesses will be invited to attend a forum; after which they will be able to formally bid on the project.
Tier 1 / Tier 2 suppliers may also use this database to look for possible businesses – however, businesses should also become very familiar with the MERX procurement website (www.merx.com) and look daily for opportunities to bid on projects / contracts.
Tier 3, Tier 4 and suppliers onward down the chain will be critical to the higher tier levels to deliver the materials and components they need to produce the products they have been contracted to deliver directly to Irving. Our region has many world class businesses that will compete for the Tier 1 and Tier 2 positions but opportunities become much broader as the supply chain expands in the lower levels and it is at these levels where many businesses in Lunenburg Queens counties will find their best fit.
Many companies are already recognizing their place in the supply chain and are preparing themselves to bid on contracts when they become public. Other companies are networking and forming partnerships so that they can work as a group and produce products that will move them higher on the tier system than they could otherwise accomplish on their own.
For example, a company that produces a circuit board may not be able to make a connection very high in the supplier network, but if that company works with another company that produces navigation equipment, and a third company that writes software, they may be able to build a package that can be sold directly to a top tier supplier.
Preparing to Compete
As stated before, Irving is not expecting to award supplier contracts for some time yet, so now is the time for businesses to prepare to compete for ship building and related contracts.
#1 - Register
The first step is to register your business at www.irvingshipbuilding.com to let Irving know the products and services you offer and how those offerings fit in the supply chain. There are eight defined clusters to select from when registering your business or “Other” if you don’t fit in a cluster provided.
- 1. Shipbuilding Repair and Support Services
- 2. Ocean Technology
- 3. Training and Simulation
- 4. Defense Software
- 5. Specialty Support
- 6. Highly Engineered Products
- 7. Military and Commercial MRO & ISS
- 8. Aero Structures and Related Services
Be sure to include as much information as possible for consideration and use the “Other” section to add information that is not specifically requested but relevant to your business. When you register, you need to have a website that clearly explains who you are, what you do, what you offer, contact information, etc.
Often Irving will review an application and need additional information which they expect to find easily on a web site. If your business does not have a website, it is confusing or out of date, you risk being passed over for a supplier with a good web presence.
#2 - Certification
The next step is to make sure your business has the appropriate certifications required to enter into a federal procurement contract. There are specific requirements imposed on companies that provide goods and/or services under a federal contract and the companies that supply the primary contractor are often required to also adhere to those requirements. Irving may also require additional certifications that are part of their internal policies of operation. It is important to know what certifications are required well ahead of time before contract negotiations as many certification processes take a significant amount of time to acquire. If you are in the process of obtaining a certification relevant to your application, be sure to include “in progress” on your website and as part of your registration. Examples of certifications that may be required are ISO, AS, CCG and ITAR.
#3 - Connect
Many industry groups and councils are working hard to provide their members with information specific to the industry they represent, i.e.
- Canadian Manufacturers and Exporters (CME)
- Atlantic Aerospace and Defence Alliance of Nova Scotia (ADIANS)
- Canadian Federation of Independent Business (CFIB)
- Excellence in Manufacturing Consortium (EMC)
It is important to connect with your representative industry group to stay informed about timelines, requirements and opportunities.
Government and similarly positioned organizations are also a strategic source of relevant information and ready to help you position your business for the coming opportunities, i.e.
- Lunenburg Queens Regional Development Agency (LQRDA)
- Atlantic Canada Opportunities Agency (ACOA)
- Nova Scotia Department of Economic and Rural Development (NSERDT)
- Nova Scotia Business Inc. (NSBI)
#4 - Deliver
Quality products delivered on time at a fair price with excellent service will ultimately be the test to obtain initial and subsequent contracts. This is just good business practice for dealing with whoever the customer may be, but Irving and the primary tiered suppliers will be holding other supply chain participants to the same standards. If a contract does not get fulfilled in the manner expected that supplier will not be considered for future contracts. Nova Scotia companies will be competing with suppliers from around the globe and although some preferences will be made to contract locally, these suppliers will be held to the same standards as international suppliers.
#5 - Start Now
There will be more information sessions held throughout the province in an effort to fully inform and educate businesses of how to prepare for the coming opportunities. Working with Irving directly or through their supplies will be a long term proposition that can bring prosperity to many Nova Scotian companies. The federal procurement process can be long and complicated but Irving is interested in working with companies that are interested in investing for long-term opportunities. It should be re-emphasized that these are only the early stages of a multi-billion dollar project which will provide opportunities for many generations to come, but now is the time to get ready.
Frequently Asked Questions
1. Why has the Government developed this Action Plan?
The procurements attached to the renewal of Canada’s naval fleet represent a significant opportunity for business and job growth and overall economic development in Atlantic Canada. Through the Atlantic Shipbuilding Action Plan, the Government will help ensure that small and medium sized enterprises (SMEs) in Atlantic Canada are in the best position to seize all opportunities by becoming part of the supply chain.
2. Specifically, how will the Government be helping companies take advantage of this major opportunity?
Through the Atlantic Shipbuilding Action Plan, ACOA will work closely with Atlantic businesses to maximize opportunities for the region. The Plan will include:
- Making sure Atlantic businesses are aware of the process and the requirements for accessing supply chain opportunities;
- Promoting ACOA programming to support supply chain development (for example, through certification, process improvements, marketing and technology acquisition);
- Engaging with community colleges and provincial governments on skills and labour force research and planning to ensure an available skilled labour force.
3. As a businessperson interested in these opportunities, how can I get more information?
To find out more about the opportunities and how you can prepare yourself to pursue them, you can contact the Lunenburg Queens Regional Development Agency (www.lqrda.ca). You can sign-up to receive news and updates as they become available from Irving, Federal & Provincial Governments and industry & sector organizations.
Shawn Allen
Business Growth Officer
Lunenburg Queens Regional Development Agency
Economic Centre
373 King Street
Bridgewater, NS B4V 1B1
t. 902-543-0491
This e-mail address is being protected from spambots. You need JavaScript enabled to view it
To register as a potential supplier, visit Irving Shipbuilding Inc.’s online supplier registryhttp://www.irvingshipbuilding.com/irving-shipbuilding-contact-suppliers.aspx
