Contract signed for CCG AOPS; budget grows

By Dr. Timothy Choi, 5 January 2023

Ottawa and Irving have signed the contract for the construction of AOPS 7 and 8 for the Canadian Coast Guard. These two will come in at a project budget of $1.6 billion, a $100 million increase over the last estimated project budget of $1.5 billion dating from the previous year.

At the same time, the project budget for the RCN's six AOPS has grown from $4.3 billion to $4.98 billion. The $4.3 billion figure was released prior to the COVID-19 pandemic. Given the ensuing supply chain, labour, and global inflation problems, it would be surprising if the budget required to complete the project in this "post"-COVID world didn't have to be increased.

As I noted to the reporter in the CBC article, one spot of unexpected news is how little (relatively speaking) the CCG variant budget envelop has grown. Given the fact that most of the ship's spaces have to be modified to fit Coast Guard accommodations, IT, and workspace standards, there is a lot of room for cost increases to occur. As well, the CCG variant is in many ways a more complex vessel than the RCN version due to a large number of additional sensors (nearly a dozen hull-mounted sensors!), equipment, and laboratories that the CCG requires for its science missions. Contrary to popular assumptions, it is not simply a matter of removing the weapons from the RCN version and calling it a day.

It is also important to note that the budget figures are for the entire project, of which the actual construction contracts for each ship is only one component. This means the construction costs for each ship is lower than a simple division of the project budget by the number of hulls. The project budget includes salaries for project management, spare parts, training, infrastructure, and other elements needed to support the entire acquisition process. This makes it difficult to compare with cost figures provided by other countries for their naval construction projects.



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