Trade tribunal puts frigate program back on track

The federal government's plan to award to a group of companies led by Lockheed Martin Canada the contract to design and support the construction of the navy's new frigates has been nominally put back on track.

The Canadian International Trade Tribunal (CITT) has rescinded an order, issued late last month, that prevented the signing of the deal.

The decision to reverse course was made Monday after Public Services and Procurement Canada "certified in writing that the ... procurement is urgent and that a delay in awarding the contract would be contrary to the public interest," according to a copy of the ruling.

The decision opens the way for the government to finalize the contract, which is still under negotiation.

The Lockheed Martin Canada-led team was selected in October as the preferred bidder after a nearly two-year-long competition to select an off-the-shelf design for the 15 new warships that eventually will replace the navy's frigates.

One of the competitors, Alion, asked the CITT to investigate the procurement deal, saying the preferred warship design will need substantial changes and doesn't meet the navy's requirements as spelled out in the government tender.

The companyalso has asked the Federal Court in a separate filing for a judicial review of the long-awaited decision. That case is still pending.

The federal government hopes to be able to sign a contract this winter.

The order to postpone implementing a deal could have had a devastating impact on the $60 billion program, which already has suffered a series of delays.

One of the biggest concerns involved an anticipated production slowdown at the go-to shipyard for warship construction, Irving Shipbuilding in Halifax.

The federal government is expectinggap of, possibly, 18 months between the completion of the Arctic Offshore Patrol Ships and the beginning of construction on the new frigates, known as Canadian Surface Combatants.

The Liberal government has attempted to mitigate the slowdown by confirming the construction ofsix Arctic patrol ships. Further delays to the new frigates would have made that worse.