Submarine bidders open to Ottawa splitting contract, say procurement speed setting new standard
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Oliver Burkhard, CEO of German submarine maker TKMS, one of the two contenders for the multibillion-dollar contract to build Canada’s next submarine fleet. Mr. Burkhard says Ottawa’s economic approach to the contract may set a new standard for similar deals moving forward.Justin Tang/The Canadian Press
The companies bidding to build Canada’s next submarine fleet say they would support any decision by Ottawa to split the multibillion-dollar contract, after submitting their final proposals in a procurement they say has moved at a speed previously unseen in Canada.
Completed bids for the order of up to 12 diesel-electric submarines were due on Monday, with a decision expected from the federal government by the end of June. The Canadian Patrol Submarine Project, which was established in 2021, has moved at a record speed since its initial request for information closed in February, 2025, with 25 responses.
In August, the federal government narrowed the finalists down to Germany’s ThyssenKrupp Marine Systems, with its Norwegian partner Kongsberg Defence & Aerospace, and South Korea’s Hanwha Ocean.
Irrespective of who ends up building the subs, all three companies said the pace at which Canada has moved through this massive procurement is unlike anything they’ve seen before from the country.
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The procurement itself is no small feat. Oliver Burkhard, chief executive officer of TKMS, said the average submarine order for the company, which has signed contracts for more than 180 of the vessels, is between two and four. With Canada’s procurement, and other orders from Norway and Germany combined, the company could be looking at building 24 submarines within the next 15 years. “This, I’ve never seen,” he said.
Add the fact that the procurement is being overseen by Ottawa’s newly created Defence Investment Agency, designed to handle procurements valued at $100-million or more, and you have a lot of firsts for Canada in one go.
Compared to anything he’s ever worked on before Glenn Copeland, head of Hanwha Defence Canada, said “This one is absolute lightning speed.” Previously, Mr. Copeland served as a former senior officer in the Royal Canadian Navy and a general manager at Lockheed Martin Canada.
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A man walks past an ad for military submarines in the downtown core near Parliament Hill, Jan. 15.Adrian Wyld/The Canadian Press
Timelines that typically last six to eight years were cut down to less than a year and the number of pages in the government’s request for proposal was slashed from its typical hundreds to only about 58 pages, Mr. Copeland said.
The economic approach to the contract is also unique, likely owing to the world in which Canada finds itself making the purchase, and it may set a new standard for similar deals moving forward, Mr. Burkhard said.
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With U.S. President Donald Trump’s imposition of tariffs on Canada and rhetoric about the country becoming a 51st state, Mr. Burkhard said Canada has been forced to look well beyond submarines and at the broader industrial benefits it can glean through this procurement.
“This is a new dimension of debating what’s beyond a defence deal for a country,” he said.
For example, both the Europeans and South Koreans are speaking with Canadian companies, such as Maritime Launch Services and NordSpace, to determine how the bidders could support Canada’s efforts to establish a sovereign space launch capability through this procurement.
The final bids submitted by the two contenders range from around 1,000 to 1,500 pages each. Over the next four to six weeks, federal government officials will be busy reading them and returning to the companies with questions.
According to a Globe and Mail report on Monday, Ottawa hasn’t ruled out splitting the contract worth more than $24-billion, buying an equal number from both Europe and South Korea to reap industrial benefits from both bidders. TKMS, Kongsberg and Hanwha said they would respect Ottawa’s decision to split the order and could still fulfill the contract if it was only for six submarines each.
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But Mr. Burkhard cautioned a reduction in the order size could come with risks, such as changes to Canadian industry’s share of participation in the company’s submarine program, which it’s operating jointly with Norway and inviting Canada to join.
“It could be a political decision,” Mr. Burkhard said about the potential splitting of the contract. “But let me say that very frankly. Is this the time?”
Neither bidder has been told the contract will be split.
Mr. Copeland said Hanwha would rather be contracted to build all 12 submarines but would wholly support Ottawa’s decision to split the contract.
“We believe it’s a pretty good chance for us to still prove our technology and deliver systems and platforms to Canada on time and on budget,” he said.
Kjetil Reiten Myhra, executive vice-president of defence systems at Kongsberg, said Ottawa should pay attention to the training and maintenance costs that come with having multiple platforms. But the reduced order size wouldn’t change anything for the TKMS partner.
