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Failed navy supply ship bid costs Harper government up to $8 million

OTTAWA - The Harper government paid as much as $8 million to settle legal claims arising from the first failed attempt to build new supply ships for the navy.

One of the companies that received payment has since been hired to work with Vancouver-based Seaspan Shipyards to provide the design for the new program, which hopes to deliver vessels by 2018-19.

The bid to replace the navy's two existing replenishment ships has been long and fraught with complications.

The first program was started in 2004 by Paul Martin's Liberal government, but it was shut down in 2008 when the bids exceeded the Harper government's cost limit.

It has now been incorporated into the new national shipbuilding strategy and relaunched.

However, National Defence documents obtained under the Access to Information Act show the existence of a previously unknown litigation fund related to the first failed procurement.

A spokeswoman for the Department of Public Works confirms one of the bidders, ThyssenKrupp Marine Systems of Germany, filed a statement of claim that was quietly settled through negotiation.

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