Shipbuilding, Repair, Refit and Modernization Policy

The Shipbuilding, Repair, Refit and Modernization Policy is a Government of Canada sourcing policy for Canadian government vessels. Public Services and Procurement Canada (PSPC) follows it when sourcing businesses for shipbuilding, ship repair, refit and mid-life modernization work. Its stated aims are to encourage competition among Canadian shipyards and to promote transparency and value. CanadaBuys publishes the guidance.

The policy works mainly through geography. Procurement procedures are based principally on the vessel's origin, which is its operational home port. For qualifying repair, refit and modernization procurements, competition is generally limited to a geographic area when adequate competition exists there. The policy sets who is invited to compete. The tender documents set everything else about the bid.

How vessel origin sets the sourcing geography

A vessel's origin is defined by its operational home port. From that port, the policy works outward through several geographic categories, each used by solicitations in different circumstances:

• Province or Territory of Origin, used for the smallest procurements.
• Region of Origin, used for ship repair, refit and mid-life modernization procurements over the lower threshold.
• Area of Origin, a broader category used where the applicable solicitation names it. A PSPC tender for the CCGS Peddle drydocking refit, for example, limited sourcing to suppliers in Eastern Canada, the vessel's Area of Origin.

Dollar thresholds and the adequate competition test

The CanadaBuys policy guidance ties the geographic limit to contract value. Competitions for procurements valued at $25,000 or less may be limited to the vessel's Province or Territory of Origin. For ship repair, refit and mid-life modernization procurements over $25,000, competition should be held within the vessel's Region of Origin where adequate competition exists.

The guidance defines adequate competition as two or more offerors. If fewer than two offerors can provide adequate competition within the Region of Origin, the requirement may remain in the Area of Origin if a suitable contract can be negotiated. Otherwise, the competition may be extended nationwide.

Where the policy appears in solicitations

The policy covers shipbuilding procurements as well as ship repair, refit and mid-life modernization procurements. It shows up in Canadian Coast Guard (CCG) work that PSPC conducts on the Coast Guard's behalf. The CCGS Peddle drydocking refit tender states that its sourcing strategy follows the policy. A separate tender notice covers refits of the CCGS Pearkes, Alexander and Black.

PSPC also describes broader vessel repair, refit and maintenance projects and in-service support contracts under the National Shipbuilding Strategy.

How it relates to the National Shipbuilding Strategy

The policy is not the same thing as the National Shipbuilding Strategy. The Strategy is the broader federal framework covering large-vessel construction, small-vessel construction, and repair, refit and maintenance. The repair, refit and maintenance pillar covers repairs and upgrades meant to extend vessel life and maintain reliability and safety. The Strategy states that federal repair and new-build contracts are to be awarded on a national competitive basis whenever feasible under Canada's Shipbuilding and Industrial Marine Policy, also known as the Buy-in-Canada policy. PSPC explains this on its National Shipbuilding Strategy overview.

The Shipbuilding, Repair, Refit and Modernization Policy is the sourcing framework used for particular shipbuilding and marine-service procurements within that wider context.

What it means for a supplier bidding on Canadian public contracts

Check the sourcing strategy in each solicitation before investing in a bid. Eligibility depends on where the vessel is based, so a shipyard outside the stated Province, Territory, Region or Area of Origin may be excluded from a given competition. If the buyer cannot find two or more offerors in the Region of Origin, the competition can widen, so a yard outside the region may become eligible later.

The policy decides only the sourcing geography. The tender documents set the technical, commercial, security, certification and submission requirements, and bid teams must meet those in full.