MCDV Industrial and Regional Benefits (IRB) Overall Results

Tags:  papers 
Author: Tony Thatcher
Published: May 9th 2017
Updated: 4 years ago


  1. IRB Scope

Fenco Engineers and its first tier subcontractors committed to meet 85% Canadian Content value during the performance of the Contract (in the end this amounted to about $ 442.091 million (September 30, 1990 dollars)) by using Canadian technology and Canadian suppliers to the maximum extent possible. A commitment to encourage the participation of Small Business was given for an amount of $40 million. Canadian Small Business was defined as companies employing 100 or less people in the manufacturing sectors and employing 50 or less people in the service sectors.

  1. Fenco Team Industrial Marketing Plan

Halifax-Dartmouth Industries Limited (HDIL) had established proven capabilities in ship construction. The MCDV contract was to result in long term steady employment at HDIL and enable them to produce modern cost effective small ships.

As Combat Systems Integrator, MacDonald Dettwiler & Associates (MDA) was to add to their established capability in complex computer systems integration. The project was to enable MacDonald Dettwiler to demonstrate their integrated Mine Countermeasure systems capability, in a production environment. MacDonald Dettwiler (MDA) as a Tier I Subcontractor was responsible for the system integration of that portion of the MCDV project related to the MCM system. MDA’s objectives were to develop and enhance the Western region undersea technology industries thereby maximizing Canadian content in the MCM system and providing a design that calls upon Canadian firms to make substantial contributions of advanced technical expertise.

Thomson-CSF Systems Canada Inc. (TCSC) had responsibility for design, development, integration and delivery of mission support systems (e.g. navigation, communication, surveillance, environment sensors, etc.). In addition, TCSC was responsible for Integrated Logistics Support (ILS) for mission systems. The project was to enable TCSC to enhance its systems engineering management capabilities and to implement an innovative ILS system based on a combination of military and commercial practices.

Eduplus Management Group Inc. was the lead training company in the MCDV project, was to apply its proven capabilities as a supplier of training systems and programs in the military environment. The project was to enable Eduplus to deliver an integrated computer based training system for the MCDV project that will support the training requirements of the Naval Reserve.

Fenco team members planned to promote the export of industrial capability related to the MCDV project. Emphasis was to be concentrated on the potential export sales of the MCM Route Survey System. Other Fenco team members were to assess and identify export market potentials of their products and/or services and promote international sales accordingly.

  1. The Canadian Market

A lot of MCDV equipment was bought offshore such as the main propulsion system (German/French), the route survey payload (US), the degaussing system (UK), the interior communications system (UK), exterior communication system (US/German), the radars (UK), gyros (German) etc. CPF had left a legacy of suppliers which the project benefited because MCDV straddled the end of the CPF procurement; for example Securiplex (Integrated Fire Detection & Monitoring System, Dorval, Que (IFDMS)), Bedco, Laval, Que (ammunition lockers). Once CPF closed down some suppliers closed down; for example the piping company owned by Irving. In some cases MCDV was big enough to sustain these industries – presumably they were required to meet their IRB commitment to stay in Canada a while.

Some Canadian companies that no doubt appreciated MCDV work were Zenon Environmental Inc. Oakville, Ont (Reverse Osmosis Desalinization (ROD) system), International Submarine Engineering Ltd, Vancouver, BC (Remotely Operated Vehicle payload), Indal, Mississauga, Ont (minesweeping payload), Hawbolt (windlass, etc), Knudsen Engineering, Perth Ont (echosounder), C-Tech, Cornwall, Ont (sonar electronics), Stork Canada, Montreal, Que (Heating, Ventilation & Air Conditioning (HVAC)). Since MCDV equipment was commercial-off-the-shelf there was little militarized equipment bought. Commercial equipment was generally fitted in ruggedized/marinized cases or appropriate racks; for example the DEC computers for the Mine Warfare Control System (MWCS), the administrative computers, the Communications Control & Monitoring System (CCMS)/Message Processing System (MPS).

Some Canadian companies had success as a result of MCDV; it is understood that a Saskatchewan company that supplied equipment to HSL was able to break into the US market as a result.

  1. The IRB Results

As of July 31, 1999 (the final IRB Report after most of the contract had been completed), Fenco MacLaren achieved a total $ 450.314 million Direct Canadian Content, directed $64.576 million to Small Business and provided approximately 3,571 Person Years of work to the Canadian industrial base (about 50% of the IRB commitment was labour).

Fenco MacLaren exceeded its Regional obligations in all regions except Quebec, where the shortfall was less than two Million dollars, 3.75% of the contracted target. It must however be recognized that project profit accrued to the parent company of Fenco MacLaren, SNC-Lavalin Inc, in Quebec eliminated any shortfall.

Actual performance by region was ($Sep 90):

  • Atlantic $233,970,000 - 117%

  • Quebec $38,547,000 - 96%

  • Ontario $124,670,000 - 156%

  • Western $ 53,129,000 - 106%

Total (all regions) $450,314,000 - 102%

The combined efforts of Fenco MacLaren, Tier 1 Subcontractors and major Tier 2 Subcontractors, to encourage the participation of Small Business has resulted in an over-achievement of the baseline Small Business commitment of $40 million by over $22 million.

  1. The Industrial Marketing Results

The following marketing results were probably a direct result of the MCDV Team’s involvement with MCDV.

MacDonald, Dettwiler & Associates continues to explore export markets for MCDV related technology. In 1996 MacDonald, Dettwiler and Associates Ltd. won a two-year, $18.4 million contract to supply simulator/trainers to the Canadian Navy. The Naval Combat Operator Trainer (NCOT) system, to be delivered in 1998, will provide onshore training for the officers and equipment operators who staff Canada’s main naval surface ships: four Tribal Class Destroyers and 12 Canadian Patrol Frigates. Since MCDV they have also continued to do research work in the area of mine hunting for DND and do maintenance and upgrade work for the in-service support of the MCDVs.

Thales has successfully converted its Communication Control & Monitoring System (CCMS) and Message Handling System (MHS) software to a Windows environment in the expectation of marketing the software to both Canadian and non-Canadian customers. The MHS is an important part of the midlife upgrade of the Belgian Wielingen (E71) Class frigates communications system. Thales’ MHS has completed Factory Acceptance Tests and, in mid-2001, it will be integrated with the complete interior and exterior communications systems. The MHS will also be provided for new Fast Attack Craft currently being built for the Hellenic Navy and for the Polish ORKAN class ships.

In February 1994, Fenco MacLaren Inc was awarded the Minesweeping Auxiliary (MSA) In-Service Support contract for two vessels. The contract value was $12,300,000 and was completed in 2000 when the vessels were decommissioned. In December 1995, Fenco MacLaren, was awarded the first in-service support contract for 12 new Maritime Coastal Defence Vessels (MCDVs) with a value of $47,140,000. The original 4-year contract continued with several extensions until July 2002 at which time the follow-on contract; Minor Warships & Auxiliary Vessels In-Service (MWAV) Support was awarded to Fenco MacLaren’s heir, SNC-Lavalin Defence Programs Inc. with a value in excess of $98,000,000. This contract foresees extending support to approximately 44 auxiliary vessels and continues until 2006 with an additional four 1 year options.

Tecsult Eduplus continued with additional project work for DND including the production of knowledge-based CBT for training Marine Engineer System Operators in the Naval
Reserve, and the production of four modules of CBT used for training Naval instructors and maintenance technicians in the use of a highly sophisticated sonobuoy radio receiver. They have also developed CBT for many other commercial customers.

After the MCDVs had been built HSL constructed four large offshore Anchor Handling Tugs/Supply vessels (AHTS) designed for harsh environment to operate in the North Sea, the Gulf of Mexico and the Canadian Atlantic regions. Also HSL modified a semi-submersible oil rig for year round operation. HSL continues to conduct refits and repairs to both commercial, Coast Guard and naval vessels, such as Preserver and Louis St Laurent.

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