Feds, Irving ask trade tribunal to toss challenge to warship contract

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The federal government and Halifax-based Irving Shipbuilding are asking a trade tribunal to throw out a challenge to their handling of a high-stakes competition to design the navy’s new $60-billion fleet of warships.

In separate submissions to the Canadian International Trade Tribunal, the federal procurement department and Irving say the challenge filed by Alion Science and Technology of Virginia does not meet the requirements for a tribunal hearing.

Alion was one of three companies, along with U.S. defence giant Lockheed Martin and Spanish firm Navantia, vying to design the new warships, which are to be built by Irving and serve as the navy’s backbone for most of this century.

While Lockheed was selected as the preferred bidder and is negotiating a final design contract with the government and Irving, Alion alleges the company’s design did not meet the navy’s requirements and should have been disqualified.

Two of those requirements related to the ship’s speed, Alion alleged, while the third related to the number of crew berths. Alion has asked both the trade tribunal and the Federal Court to stop any deal with Lockheed.

But the government and Irving say the contract is exempt from normal trade laws, which the tribunal is charged with enforcing, because of a special « national security exception, » meaning there is « no jurisdiction for the tribunal to conduct an inquiry. »

Another reason the challenge should be quashed, they argue, is that Alion is not a Canadian company, which is a requirement for being able to ask the tribunal to consider a complaint.

Alion’s challenge has been formally filed by its Canadian subsidiary, but the government and Irving say that subsidiary was never actually qualified to be a bidder in the competition — only its American parent.

The responses from the government and Irving are the latest twist in the largest military purchase in Canadian history, which will see 15 new warships built to replace the navy’s 12 aging Halifax-class frigates and three already-retired Iroquois-class destroyers.

The trade tribunal ordered the government last month not to award a final contract to Lockheed until it had investigated Alion’s complaint, but rescinded the order after a senior procurement official warned that the deal was « urgent. »

The procurement department has not explained why the deal is urgent.

Workers look on from the bow of a ship as former prime minister Stephen Harper addresses the crowd at the Halifax Shipyard in Halifax on Thursday, Jan. 12, 2012. (Andrew Vaughan/Canadian Press)

Lockheed’s bid was contentious from the moment the design competition was launched in October 2016.

The federal government had originally said it wanted a « mature design » for its new warship fleet, which was widely interpreted as meaning a vessel that has already been built and used by another navy.

But the first Type 26 frigates, upon which Lockheed’s proposal was based, are only now being built by the British government and the design has not yet been tested in full operation.

There were also complaints from industry that the deck was stacked in the Type 26’s favour because of Irving’s connections with British shipbuilder BAE, which originally designed the Type 26 and partnered with Lockheed to offer the ship to Canada.

Irving, which worked with the federal government to pick the top design, also partnered with BAE in 2016 on an ultimately unsuccessful bid to maintain the navy’s new Arctic patrol vessels and supply ships.

That 35-year contract ended up going to another company.

Government confident it did no wrong

Irving and the federal government have repeatedly rejected such complaints, saying they conducted numerous consultations with industry and used a variety of firewalls and safeguards to ensure the choice was completely fair.

But industry insiders had long warned that Lockheed’s selection as the top bidder, combined with numerous changes to the requirements and competition terms after it was launched — including a number of deadline extensions — would spark lawsuits.

Government officials acknowledged last month the threat of legal action, which has become a favourite tactic for companies that lose defence contracts, but expressed confidence that they would be able to defend against such an attack.

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Number of injured from Irving refinery explosion higher than initial reports

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The number of workers injured in the explosion and fire at the Irving Oil refinery in Saint John on Monday is higher than the four initially reported.

Family doctor Mike Simon says he treated five workers that day alone, including two who were thrown by the blast.

He expected to see at least six more injured by the explosion or fallout by the end of the day Wednesday.

And there could be many more with psychological scars, Simon said.

« It’s almost like you’re being in a war zone, right? Because suddenly, the explosion, a lot of guys are running for their life.

« It’s extremely scary ’cause you’re in a situation, you don’t know what’s going to happen. Big bang, the force knocking you over, you know, blowing your … hard hat off your head, blowing your desk around, throwing you off a chair. You know, it’s significant. So these are real-life events. »

Irving Oil and Saint John Emergency Measures Organization officials have said four workers were treated at the Saint John Regional Hospital for minor injuries after the 10:15 a.m. blast that sent flames shooting an estimated 30 metres high and left a plume of black smoke billowing over the city’s east side for hours.

The Horizon Health Network has said the hospital treated five people for non-life-threatening injuries that day, but declined to elaborate, citing patient confidentiality.

The flames and plume of black smoke towered over the stacks at the Irving Oil refinery in Saint John Monday morning. (Submitted by Doug McLean)

Officials have not provided any updates on injured workers since Tuesday, but WorksafeNB’s assistant director of investigations suggested Wednesday « the number seems to be growing. »

Eric Brideau, who visiting the site Tuesday and met with employees, said he could not confirm the total number of workers injured.

The cause of the explosion has not yet been determined, but officials believe it stemmed from a malfunction in the unit that removes sulphur from diesel.

Brideau described the investigation as « technical and complex. » He expects it will take two to three months to complete.

The Irving Oil refinery is the largest in Canada. It employs about 1,400 people and is capable of producing more than 320,000 barrels per day at the sprawling site, which covers more than 300 hectares.

Close to 3,000 people were working at the time of the holiday Thanksgiving explosion because of a massive turnaround maintenance project that’s underway. About 100 of them were the normal operations crew, while the rest were contracted tradespeople from across New Brunswick and other provinces.

Variety of injuries

Simon, who’s the go-to doctor for some of the contractor companies, says they called him about an hour after the fiery explosion, asking him to open his office in the city’s north end for incoming patients.

« There was a fellow [who] hurt his ear because the blast sort of hit him on the side. There was a guy who was blown off a ladder and twisted his ankle.

« There was a guy, who again, was blown off his desk, and fell into a railing and he had some contusions, injuries on his arm.

« Another guy, a little bit of inhalation injury because of the smoke and the dust and stuff from the explosion, he was very close to the blast. And he hurt his shoulder as well. Mostly musculoskeletal things like that. »

Boilermaker Terry MacEachern was rattled by Monday’s blast at Irving Oil facility, but is ready to return to the job. 1:31

Simon said treating less serious injuries at his office helped free up the emergency room to deal with anything more serious that came up and saved the workers from facing long waits.

The Saint John Regional Hospital went into « code orange » after the explosion was reported, meaning it was prepared for a possible mass casualties influx.

« They plan for these events well in advance » and run mock drills, said Simon, who has worked in the emergency room over the years.

There are protocols about calling in extra doctors and nurses, if necessary, as well as administrative and janitorial staff, and surgical specialists would be on-call, he said.

It takes a while for that shock to sort of percolate through somebody.– Mike Simon, family doctor

Trauma rooms would be prepped, patients discharged to clear beds, and medications readily available.

« So you’re going to get the best care available in the 21st century. »

Simon said it could take a few days for workers to even realize they’re injured after such a traumatic incident.

« It happens so quick. And it’s shock effect. And so it takes a while for that shock to sort of percolate through somebody. »

As their experience sinks in, some might find they’re having nightmares or struggling with worries, he said, calling it « normal human nature. »

« You get hit in the arm, you get a contusion or a cut, that’s the way the arm heals. You get a shock value like this, it takes a while for your brain to bounce back too. » 

He encourages the affected workers to seek counselling or at least find someone they can talk to as they work their way through any issues.

With files from Rachel Cave

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Saint John mayor wants focused industry talks after Irving Oil explosion and fire

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Saint John Mayor Don Darling says he plans to have « focused discussions » with industry officials after an explosion and fire at the Irving Oil refinery Monday shook area homes, and sent at least five people to hospital with non-life threatening injuries.

Irving Oil officials are still trying to determine the exact cause of the « bed-shaking » morning blast that saw flames shooting an estimated 30 metres high and a plume of black smoke billowing over the city’s east side for hours, but believe it stemmed from a malfunction in a diesel-treating unit.

The incident comes on the heels of a « significant » explosion last month at the American Iron & Metal Company Inc. scrap-metal recycling plant on the city’s waterfront, an apology from Irving Oil in June for the release of a mystery product from the refinery, and a butane leak at the refinery in January that forced 65 people from their homes for days.

In a Facebook video post, Darling said Monday was « a bit of a scary day for everyone » and he has heard from « many » concerned residents.

« And I’ll assure you that we will have those next phase conversations at the right time, » he said.

« The days, weeks and months ahead, will give us the time to have focused discussions and look for a new relationship going forward, » Darling posted on Twitter.

The Irving Oil facility is the largest refinery in Canada. It employs about 1,400 people and is capable of producing more than 320,000 barrels per day at the sprawling site, which covers more than 300 hectares.

Although the explosion occurred on the Thanksgiving holiday, close to 3,000 people were working onsite due to a regularly scheduled maintenance project. About 100 were the normal operations crew, while the rest were tradespeople working on the turnaround project, officials said.

Evacuation not required

The refinery, which is less than five kilometres from the city centre and surrounded by residential neighbourhoods, was evacuated and shut down following the 10:16 a.m. explosion.

No evacuation order was issued for area residents, but Saint John Emergency Measures Organization (EMO) officials did encourage people to stay in their homes up until about 6 p.m., when the situation was deemed stabilized.

No evacuation order was required, EMO manager Mike Carr told reporters during a news conference Monday afternoon.

« We work under the direction of the boots on the ground … We go by the people that are onsite that can make that situational assessment and at no point in time did they think that we should actually evacuate the area, » he said.

« It seemed to be contained to that [diesel-treating] unit for the duration. »

The Irving Oil refinery, which opened in 1960, covers more than 300 hectares on Saint John’s east side and is surrounded by residential neighbourhoods. (Google Maps)

Darling said he stands by that decision.

« Had there been the need for [evacuation, fire] Chief [Kevin] Clifford, the head of our EMO with 40 years of experience, would have made that call with is team, » he said.

Air quality monitoring is ongoing. As of late Monday night, no concerns to public health had been identified, officials said.

The mayor commended emergency officials for doing a « stellar job » and said he’s grateful no one was killed or seriously injured.

« Today was a big test and I’m thankful everyone goes home tonight, » he tweeted.

It’s unclear how long the refinery will remain shut down. Irving Oil is working with WorkSafeNB, the Department of Environment and EMO officials to « understand what happened » and decide on next steps, said chief refining and supply officer Kevin Scott.

The company is offering counselling to any employees or contractors shaken by the incident, he said.

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