As the shipyards vying for two large contracts under the National Shipbuilding Procurement Strategy (NSPS) put the final touches to their responses to the government’s request for proposal, one contender, Jonathan Whitworth, CEO of British Columbia’s Seaspan, spoke with Vanguard about the consultation process and the challenge of managing such a large project.
How does Canada’s shipbuilding industry view the NSPS and the opportunities it represents?
The good news is that the federal government is going to go ahead with the NSPS. I think the government has realized that the lack of new construction for both the coast guard and the navy for over two decades must be resolved. The bad news follows along that very same story. If you haven’t built a series of large vessels for two decades or more, it is hard to believe that the infrastructure, program management, process management and labour still exist. Regardless of where you are in the country, those who have been pre-selected for the bidding process on the large vessel side are willing and able. But do we have the facilities and processes ready for these projects? I would say the answer is no. This is why the government is asking the pre-qualified shipyards how they propose to close the gap.
How did industry regard the NSPS consultation process?
Traditionally in negotiations or consultations with the federal government on projects of this scale, dates, milestones and key events are not always articulated clearly. And if they are, they are rarely met. However, starting in the summer of 2010 when the NSPS concept was rolled out to industry, the government established a number of milestone dates, timelines and deliverables. As of June, the government has hit every one of those dates within a five-day window. To those in the shipbuilding industry, and to your readers who deal with federal procurement processes, this was quite unusual and an extremely pleasant surprise. In addition, the government engaged with the shipbuilding industry and asked for information, common suggestions and advice. Not everything the industry suggested was adopted, but a number of questions got out on the table and were addressed in a timely manner. Based on past experiences on large procurement projects, I tip my hat to Public Works (PWGSC) for running a transparent process. The timeliness, openness and ability to have consultation up until the release of the RFP on what the RFP was going to look like is a very different process and quite refreshing.
It is interesting that PWGSC undertook these consultations at a difficult time – minority government and intense media scrutiny.
I think it is different from what they have done in the past, but not dissimilar to commercial RFP bids. The world of construction, be it vessels or other types of large projects, goes through a very similar method. If the oil industry is looking to build a billion dollar plus FPSO [floating production, storage and offloading unit], they will do that same type of communication and stick with their deadlines. All of these things that we associate with normal operations in the commercial world have not always worked at the federal level, with the exception of this project. I don’t know if that is “going out on a limb.” But it’s refreshing that they are taking a model that works in the commercial world and applying it to the federal process.
Do you think the government will ease up on some of the ‘gotchas’ that have marked previous procurements, where companies have been disqualified for relatively minor failings?
That is certainly what both the elected federal politicians as well as the bureaucrats at DND, PWGSC and the Coast Guard have been saying. They’ve definitely been saying that this is a system where we want to make sure we build the very best ships in Canada, and we get the project done right. This all starts with picking the right shipyards and you want to do that on the merits of the shipyards and the bid, and not worry about crossing a T or dotting an I. Or, I would daresay, having the decision swayed by politics. Neither one of these conditions should be what kills a shipyard’s bid. What should kill a shipyard’s bid is that they can’t prove they have a financially strong shipyard with the experience and know-how worthy of a multi-billion dollar project.
Are there any big changes in shipbuilding that might have an impact on the NSPS?
On the design side, I’m probably not the best person to ask because we are not a design shipyard, we are a build shipyard. There has been a tremendous amount of change and upgrades with regards to the design of ships to make them more efficient and carry less of an ecological footprint. I can talk about what we as shipyards want to do within our facilities to make sure we are using innovation and technology and also making sure we are good environmental stewards. We are focusing on two key areas as we look at building the infrastructure in our shipyards in both Vancouver and Victoria. One is to make sure our infrastructure investment is committed to reducing energy consumption and our emissions footprint. We’re going to make sure our buildings are enclosed, for example, so there is limited to no emission releases. We are using technology in our equipment and construction methods to make sure that we are not only doing things with greater efficiency, but also with lower energy consumption and lower emissions. We are spending a lot of time and energy on our process and project management, as this is key to the long-term success of completing vessels for NSPS.
Can you give me a couple of examples?
They are all part of the value proposition that will differentiate us from our competition, so I’m afraid I can’t really go into any further details.
What skill sets is the industry looking for?
Because it’s so large and encompasses so many different parts of the shipbuilding business, it is not just going to be trades people who will need to be fully trained. In addition, we will need more skilled ship designers, engineers, project managers and those in leadership roles. It is going to be all of the above and more. That’s what makes this such an exciting project. It’s blue collar and it is white collar. The good news is that a lot of jobs are going to be created. The difficult question is how are we going to find the people?
Thankfully, we have a distinct advantage here on the West Coast. We have performed a tremendous amount of training and created a number of apprenticeship programs in the last 10 years. With the downturn in the economy, good men and women who honed their trades in our shipyards unfortunately left due to a lack of work. Thankfully, they didn’t go far; many went to the tar sands in Alberta. But as a postcard of Fort McMurray in February will show you, that is not necessarily where you want to live on a year-round basis. These very highly skilled people are literally on the other side of the mountains and I think it is safe to say that they are following the developments at Seaspan closely.
Are you feeling pressure to innovate?
Yes, but I would say we had that pressure before. We have not been a shipyard at the knees of the federal government looking for work. We have been busy doing commercial new construction in the period when the military was not building vessels. When you are building boats, barges and ferries, the demand from the commercial customer for innovation is further ahead than the demands from the government. One of our differentiators is the fact that we have been busy during the last 10 to 20 years doing other types of construction and this has helped us be innovative in design and build.
You built the Orca class. Do you feel that prepared you for possible NSPS wins?
This is a two-part answer. The easy answer is that when you do new construction of any size, it’s getting you prepared for the next project. So, the fact that we successfully built eight Orcas, and the fact that we successfully built 29 MLBs [Motor Life Boat] for the coast guard in the last six or seven years all bodes well for things like supply chain management, inventory control and project management. Those are all good things that these types of projects provide, and they do give you a good base. The second part is that scale does matter. These projects, as good as they are and as good an experience as they represent, will pale in magnitude with what is coming down the road with NSPS. We can only take out so much from those projects to apply to something as complex and large as the number of ships to be built under NSPS.
Clearly you want Seaspan to win one of the large work packages. What would that win mean?
We are definitely looking for an NSPS win. We know that the vessels would be constructed here in British Columbia, but that is not where it ends – it means relationships with a long list of partners across the country, all the way to the Maritimes. We look at this as not just a great project for B.C. but also as a great project for Canada. Lastly, this would mean a transformational experience for Seaspan and our employees. We would see approximately $150 million invested in our shipyards in the next two to three years, and for our employees, it would finally provide a career in shipbuilding, not just a job.
An interview with Seaspans Jonathan Whitworth.