Impasse over intellectual property is tying up warship bids

Impasse over intellectual property is tying up warship bids
From CBC - August 11, 2017

The federal government's plan to buy an off-the-shelf design for the navy's new frigates is facing significant pushback from at least one of Canada's allies, which appears to question timelines and the fundamental structure of the high-stakes $60-billion project.

Documents obtained by CBC News show one of the 12 companies competing to design and help constructthe warships has been blocked from handing over "supporting data and services."

The unidentified bidder says one of Canada's allies, which owns the rights to the sensitive electronics embedded in the warship, is refusing permission to include the information and instead wants direct negotiations with the federal government.

The nation, which is also not identified in the Aug. 2 document obtained by CBC News, has no interest in dealing directly with Halifax-based Irving Shipbuilding Inc., which is the federal government's go-to company for warship construction.

Diplomatic exchange

The issue is serious enough that it has already been the subject of a diplomatic exchange, and Canada's ally finds certain terms in the federal government's request for proposals unacceptable.

"Bidder has been advised directly by Foreign Government that Foreign Government has communicated concerns directly to Canada and is awaiting Canada's response," said the internal documents, which area collection of questions and answers between prospective bidders and Irving Shipbuilding.

Since they are circulated to everyone in the competition, the name of the company and the country raising the objections havebeen censored.

"Bidder wishes to advise Canada that until appropriate terms for transfer of [government to government] supporting data and services are negotiated directly between Canada and Foreign Government, Foreign Government will not permit Bidder to submit mandated [Government to Government] supporting information."

Faster, cheaper process

The federal government intends to build 15 warships to replace the navy's frigates.

Last year, the Liberals went to great lengths when they relaunched the national shipbuilding strategy to say they wanted a proven warship designrather than something done from scratch.

They said it would be faster and cheaper.

A design competition, involving a dozen pre-qualified companies, was launched last fall.

But there has been growing skepticism among the bidders, particularly when it comes to the amount of technical and intellectual property data requested by the Canadian government.

Bidder's responsibility

Ottawa calls its request areasonable'


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