world class shipbuilding and repair presentation to rmc symposium – february 27, 2012
DESCRIPTION
World class shipbuilding and repair Presentation to RMC Symposium – February 27, 2012. October 19, 2011. Why They’re Excited: Monumental Economic Impact. NSPS Impact on ISI Employment. NSPS Annual NS Economic Impact. Consumer Spending in Nova Scotia. - PowerPoint PPT PresentationTRANSCRIPT
World class shipbuilding and repair
Presentation to RMC Symposium – February 27, 2012
1
2
October 19, 2011
Why They’re Excited:Monumental Economic Impact
3
4
NSPS Impact on ISI Employment
20122013
20142015
20162017
20182019
20202021
20222023
20242025
20262027
20282029
20302031
20322033
20342035
0
500
1000
1500
2000
2500
3000
2012 - 2035
Win Combat
FTE's
Employment Peak 2020 = 2,700 est.(AOPS and CSC production over-
lap)
Employment Ramp-Up Begins 2013/2014(MSPV and AOPS production overlap)
5
NSPS Annual NS Economic Impact
Combat VesselsAverage Peak
Employment 8,453 11,495
Real GDP (Basic Prices) $661M $897MFederal Income Taxes $66M $76M Provincial Income Taxes $51M $74MCorporate Income Taxes $34M $50M Indirect Taxes (HST, etc.) $115M $169M Personal Income $447M $634M
Personal Disposable Inc. $293.0 $412.0
6Source: Conference Board of Canada & Jupia Consultants Inc.
Consumer Spending in Nova Scotia
Personal Income will average $447 million per year over the life of the Combat Project and drive consumer spending
7Source:Conference Board of Canada & Jupia Consultants Inc.
Significant benefits to rest of Canada especially ON, PQ and BC
National Economic Impact
How Did We Get Here?Government & Industry Collaboration
8
9
• Existing marine procurement for fleet renewal was high risk– Highly complex– Time consuming– Expensive
• Change required given significant government shipbuilding requirements
• Need to ensure capable, qualified strategic shipbuilding asset in Canada
• Canadian Shipbuilding Association responded with collective recommendations– COEx…The Road Map to A Sustainable
Industry
2009 - An Industry Aligned
10
• Industry consultations held on July 27 & 28, 2009
• From that process, NSPS was developed
Collaboration Key to Success
11
• Federal ships to be built in Canada• Finite federal demand over a 30-year
horizon• Limited number of yards involved– Recognized there would be winners and
losers– Long-term stability of industry came first
• Government will level-load Construction Schedule Requirements– Eliminating Boom-Bust cycle so damaging
to long-term industry viability
What was required by Industry
12
• Award contract to 2 facilities emerging from SOI-Q process– Compete on capability, not scope of work– Use appropriate risk-reducing qualification criteria
• Use supply arrangements as basis for contracts to ensure best value
• Negotiate contracts by particularized project
• Build incentives into projects– Reward performance and share savings with
Canada
Procurement Recommendations
13
• Preserve sovereign capability for Canada• Shipbuilding as strategic asset for Canada• Steady workload into future (30 years)• Retain and develop high value jobs• Provide stable facilities for cost-effective
delivery • Allow for incremental investment to keep
pace with world wide industry• Reduce industry’s cost of proposals, more
money for facility and HR investment
Benefits of COEx Approach
14
• Provide basis for long term shipbuilding industrial strategy
• Expedite government procurement process
• Provide earlier delivery of vessels• Reduce Canada’s PMO office level of effort,
by:– Reducing Canada’s cost in project definition and
implementation phases– More money available for ship and project
deliverables– Reduce risk to program, contractor and Canada
Benefits of COEx Approach
Where Do We Go From Here?Capitalizing on the NSPS Experience
15
16
Benefits of NSPS Process
Industry’s Projected Benefits (2009) NSPS Benefits Realized (now & future)
Reduced solicitation time & cost
Significantly reduced up-front expenditure for government & industrySignificant project/program risk reductionsEarlier delivery of vessels & earlier IRB’sBest value for money for Canada
17
Benefits of NSPS Process
Industry’s Projected Benefits (2009) NSPS Benefits Realized (now & future)
Reduced solicitation time & cost Eliminated approx. 18 – 24 months of traditional procurement process
Significantly reduced up-front expenditure for government & industrySignificant project/program risk reductionsEarlier delivery of vessels & earlier IRB’sBest value for money for Canada
18
Benefits of NSPS Process
Industry’s Projected Benefits (2009) NSPS Benefits Realized (now & future)
Reduced solicitation time & cost Eliminated approx. 18 – 24 months of traditional procurement process
Significantly reduced up-front expenditure for government & industry
Costs associated with steps in procurement process eliminated
Significant project/program risk reductionsEarlier delivery of vessels & earlier IRB’sBest value for money for Canada
19
Benefits of NSPS Process
Industry’s Projected Benefits (2009) NSPS Benefits Realized (now & future)
Reduced solicitation time & cost Eliminated approx. 18 – 24 months of traditional procurement process
Significantly reduced up-front expenditure for government & industry
Costs associated with steps in procurement process eliminated
Significant project/program risk reductions
Resulted in new way of procurement – government / shipyard relationships
Earlier delivery of vessels & earlier IRB’sBest value for money for Canada
20
Benefits of NSPS Process
Industry’s Projected Benefits (2009) NSPS Benefits Realized (now & future)
Reduced solicitation time & cost Eliminated approx. 18 – 24 months of traditional procurement process
Significantly reduced up-front expenditure for government & industry
Costs associated with steps in procurement process eliminated
Significant project/program risk reductions
Resulted in new way of procurement – government / shipyard relationships
Earlier delivery of vessels & earlier IRB’s
18-24 months closer to production and delivery of vessels
Best value for money for Canada
21
Benefits of NSPS Process
Industry’s Projected Benefits (2009) NSPS Benefits Realized (now & future)
Reduced solicitation time & cost Eliminated approx. 18 – 24 months of traditional procurement process
Significantly reduced up-front expenditure for government & industry
Costs associated with steps in procurement process eliminated
Significant project/program risk reductions
Resulted in new way of procurement – government / shipyard relationships
Earlier delivery of vessels & earlier IRB’s
18-24 months closer to production and delivery of vessels
Best value for money for Canada Committed to a new relationship, with complete transparency and risk rebalancing to delivery best value for money to Canada
22
• Build Navy’s combat vessel fleet utilizing balanced work flow
• Provide value for $ to Canada• Meet 100% Industrial and Regional
Benefit commitments • Help build sustainable marine industry • Build World Class Shipbuilding Facility
capable of meeting all Canada’s Combat Vessel needs
ISI Long Term NSPS Goals
World class shipbuilding and repair
23