National Shipbuilding Procurement Strategy Secretariat welcomes the Auditor General's report on the NSPS Program

Departmental Statement

November 26, 2013

GATINEAU, Quebec — The National Shipbuilding Procurement Strategy (NSPS) Secretariat today welcomed the positive findings and observations made by the Auditor General following his review of the Government’s shipbuilding program.

The Auditor General’s positive findings and conclusions include:

the NSPS shipyard selection process was “successful and efficient;”
through the NSPS, the Government is indeed managing the acquisition of military ships in a timely, affordable, efficient and transparent manner that will support the shipbuilding industry for years to come; and
the NSPS model should be applied to future procurements.

Industry analysts have estimated that the Government of Canada’s shipbuilding strategy will contribute 15,000 jobs from coast to coast to coast and over $2 billion in annual economic benefits over the next 30 years. The Auditor General’s findings support this analysis, and in fact conclude that the shipbuilding strategy will eliminate the boom and bust cycle that has plagued this sector, while ensuring 30 years of sustained job creation and economic activity.

The Auditor General’s three recommendations have been accepted: Public Works and Government Services Canada will examine and apply the lessons learned from the NSPS shipyard selection process, ministers are regularly informed of developments by Public Works and Government Services Canada, National Defence, Fisheries and Oceans and the central agencies, and the tools to measure the shipyards’ productivity and cost-effectiveness are being developed. Lessons learned from the federal shipbuilding program are being applied to other complex government procurements.

Best practices being applied to all shipbuilding projects include:

a design-then-build approach, which includes working with the shipyards to ensure effective and appropriate cost-capability adjustments;
open-book accounting arrangements;
validation by third-party experts; and
strong governance and continuous engagement with the shipyards and suppliers.

The NSPS, announced in 2010, was developed in consultation with industry and is intended to help sustain a stronger and more viable shipbuilding industry, and make ship procurement affordable for the federal government. The shipbuilding strategy’s guiding principles include extensive consultation with industry, the use of third-party experts, and a strong governance structure to make key decisions on the Strategy’s implementation. These Smart Procurement principles have proven successful and are being applied to other complex procurements.

For more information on the NSPS, please visit http://www.tpsgc-pwgsc.gc.ca/app-acq/sam-mps/snacn-nsps-eng.html.

For more information, media may contact:

Media Relations
Public Works and Government Services Canada
819-956-2315