QUEBEC - A beleaguered Quebec shipyard will find out soon if bureaucrats are going to greenlight its eleventh-hour bid for a lucrative contract to build the next generation of warships and coast guard vessels.
Senior officials from the National Shipbuilding Procurement Strategy Secretariat say they'll decide in the days ahead if Davie Yards is fit to be vying for work that's worth billions of dollars.
The shipbuilder from Levis, Que., put in its pitch for the work on Thursday morning a scant few hours before the deadline. Two other short-listed companies -- Irving Shipbuilding and Vancouver Shipyards -- also submitted bids.
But it was Davie's bid that had people buzzing.
The shipbuilder has been in creditor protection since February 2010. The firm's money woes didn't keep the federal government from naming Davie one of five companies on a short list for the shipbuilding jobs.
The only condition was that Davie had to be able to cover all its debts to qualify for the work. For awhile it looked like an Italian company might buy the shipyard, but those talks collapsed last week.
That left Davie scrambling to get a deal done. Negotiations to keep the company afloat went well into Wednesday evening before a Quebec Superior Court judge approved a deal to sell the shipbuilder to Ontario's Upper Lakes Group.
Upper Lakes is comprised of five independent companies - including Seaway Marine and Industrial, one of the original five short-listed bidders.
Upper Lakes Group is involved in a consortium with SNC Lavalin (TSX:SNC) and the South Korean firm Dae Woo. But Upper Lakes is the only buyer of all the assets of Davie, a transaction valued at about $28 million.
Bureaucrats say they'll decide soon if Davie qualifies as an eligible bidder. If it does, the company's pitch will be considered along with proposals from Irving Shipbuilding and Seaspan Marine.
"We are very confident in our bids, our facilities, our partnerships and, most importantly, our workforce and their ability to build the best ships to meet the needs of the federal government well into the future," Irving Shipbuilding CEO Jim Irving said in a statement.
Seaway Marine did not bid on the contracts and another short-listed company, Kiewit Offshore Services, dropped out this spring.
Two major contracts are up for grabs. One is for $25 billion to build about 20 large combat vessels for the navy. A second is for $8 billion to build smaller vessels for the coast guard and supply ships. A further $2 billion will be spent on other small craft and repair contracts.
The federal government wants to have its two shipyards picked by the fall.
The shipbuilding deals have been the focus of heavy lobbying by the premiers of British Columbia and Nova Scotia. In recent months, B.C. Premier Christy Clark and Nova Scotia Premier Darrell Dexter have made trips to Ottawa to talk shipbuilding with Prime Minister Stephen Harper.
The political boosting continued after all the bids were in.
Dexter reiterated his belief that Halifax's Irving yard -- builder of the navy's current fleet of frigates -- would be the best choice to tackle the new ships.
"It is an operating shipyard," he said from Vancouver, where he was attending a meeting of premiers.
"The Halifax yard and Halifax have been the home of the Canadian navy for 100 years. ... Eighty per cent of the warships that are currently being used by the Canadian navy were built by Irving Shipbuilding.
"This is a legacy we are obviously proud of, but it is also a future we want to continue."
Dexter wouldn't say if he thought the last-minute Davie bid should be given the greenlight, but suggested it shouldn't.
"Canada needs a reliable partner who is going to be able to provide for its shipbuilding needs and that would be a yard that's actually building ships," he said. "And that currently is not Davie."
