Canada gives Lockheed Martin first chance to bid on warships design

OTTAWA (Reuters) – The Canadian government on Friday said Lockheed Martin Corp (LMT.N) would be given first chance to bid on a contract to design 15 warships that will end up costing Canada around C$60 billion ($46 billion).

Trade visitors are seen walking over a road crossing covered with Lockheed Martin branding at Farnborough International Airshow in Farnborough, Britain, July 17, 2018. REUTERS/Toby Melville

The ministries of procurement and defense said Ottawa and Irving Shipbuilding, a Canadian firm which will actually build the vessels, had identified Lockheed Martin Canada as the “preferred bidder to provide the design and design team.”

The ministries said in a joint statement that Lockheed Martin would have to go through a due diligence process before a contract was awarded later this year. It did not say how much the design deal could be worth.

Last year, Defence Minister Harjit Sajjan said Canada would spend between C$56 billion and C$60 billion on 15 ships to be known as Canadian Surface Combatants. Construction of the first vessel is due to begin in the early 2020s.

“These ships will form the backbone of our Royal Canadian Navy and will be Canada’s major surface component of maritime combat power for decades to come,” the ministries’ statement said.

Lockheed Martin is also a contender to supply the Canadian air force with a fleet of 88 fighter jets.

Reporting by David Ljunggren; editing by Grant McCool

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