The government, national defence, naval priorities and expeditionary requirements have not been well served by explanations for reconsideration of the approved JSS program given the economic importance and operational urgency in replacement of the old fleet supply vessels.
These have focused on bids that have greatly exceeded a badly miscalculated budget for capital and support allowances. This was set in the face of rapid and huge increases in steel, copper and other material prices alone, and aversion to unforeseeable risks in responsibility for fixed cost contracting of a 20 year program for technical support.
The budget structure was $2.1 Billion for capital and $800 Million for support, a total of $2.9 Billion or $967 Million for each JSS. Clearly, other GFE (Government Furnished Equipment) for "bells and whistles" as well as landing craft will boost this to well over a nominal $3 Billion. One bidder apparently indicated this would only cover 2 not 3 ships, implying a program cost increase from $3 Billion to $4.5 Billion or $1.5 Billion per ship, an escalation of 50%!
That alone would be sufficient justification for the government to call a halt for reconsideration. In its defence and to its credit, the government could have and now should publicly note and emphasize other key factors contributing to the enormous escalation in bid estimates:
(a) There has been no precedent in the design, construction, operation and support of such large and complex vessels and their costs. Like the old AORs they were designed to replace, their paramount duty and primary capability are committed to logistic replenishment of ships at sea;
(b) In addition however, they are to be double hulled vessels with a variety of secondary functions and capabilities. These include a very limited sealift and cargo capacity, ro-ro handling, hospital, command & control facilities, over-the-side launch and recovery of landing craft from the upper deck, four helicopters and "plug and play' modules for humanitarian and other assignments. All these will be a powerful element of the overall program cost, greatly in excess of that for simply a modern, efficient fleet supply vessel meeting the navy's requirement;
(c) While committed to their paramount duties in logistic support of our naval forces at sea, the JSS will rarely be able to respond for calls on its secondary capabilities, particularly for rapid reaction sealift and humanitarian service far removed from its area of operations. With only one JSS for each coast and a third to cover their rotations into maintenance, unscheduled repairs, refit, leave, crew changes, sea training and work-ups, there will inherently be limited availability and usefulness of their costly secondary capabilities, especially in sea lift; and
(d) These three ships would have to serve two heavily isolated fleets. Ships are divided between and deployed from our only naval bases at Halifax and Esquimalt, separated by a continent and by extremely long ocean transits via the Panama Canal. They cannot be readily or efficiently transferred between the Atlantic and Pacific coasts as needed to satisfy calls on secondary capabilities, especially unpredictable demands for rapid response sea lift. For this reason, a minimum of two JSS would be required on each coast. At the indicated bid cost, this would double the JSS program budget of about $3 Billion for three ships to $6 Billion for four ships. This is hardly a sensible or attractive proposition.
