Battle Over Data Rights May Hamper Canadian Frigate Project

A key behind-the-scenes battle, which could affect the future of the Trudeau government's multi billion-dollar frigate replacement program for decades, has been fought this week in the back rooms of Ottawa.

It relates to an overarching demand by National Defence and Public Services for ship designers to hand over virtually all their intellectual property data for the complex combat systems that would be installed on the warships.

A copy of the draft request for proposals, obtained by CBC News, shows the federal government is asking companies competing to design Canada's next generation of warships for all their foreground and background data.

The government will be the owner of the information — including critical software coding — but will license it to Irving Shipbuilding, the prime contractor on the project.

An expert in defence procurement calls it an outrageous blunder by the former Conservative government that the Liberals urgently need to correct.

"The bureaucrats that have proposed this have gotten themselves in a bind here, and no minister should tolerate this," said Alan Williams, who used to be procurement boss at National Defence.

A series of closed-door meetings took place this week involving federal officials and Irving representatives. Another series of meetings will take place in Halifax on Aug. 15-16 with ship designers who want to bid on the Canadian Surface Combatant program, which is expected to cost $30 billion or more.

Among the companies in line to provide an off-the-shelf design include British-based BAE Systems Inc.; DCNS, the French warship-maker; and U.S. defence giant Lockheed Martin.

High stakes for taxpayers

The intellectual property issue is "huge," according to several government and industry sources who spoke to CBC News on background because they were not authorized to discuss the matter publicly.

The data is crucial not only for ship construction, but for the lucrative long-term maintenance contracts that will follow.

If the government doesn't get the negotiation just right, it could cost taxpayers untold hundreds of millions of dollars down the road in licencing fees, and even restrict the military's ability to update and use its own equipment.

Williams said the growing disagreement could see a significant number of designers and combat systems companies bow out of the competition even before the government issues a request for proposals. (end of excerpt)

Click herehere for the full story, on the CBC News website.

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