HALIFAX – The federal government and the Irving shipyard in Halifax have reached an agreement in principle to build the navy’s next fleet of warships.

Prime Minister Stephen Harper made the announcement Thursday at the Irving shipyard.

“I’m proud to look each and every shipbuilder in the eye and say that merit and merit alone – that is why this shipyard won the contract,” Harper told a news conference in the port city.

Harper said the agreement is a milestone of Ottawa’s national shipbuilding procurement strategy, which was announced in October.

Under the program, the Irving shipyard will get the lion’s share of the federal government’s $35-billion shipbuilding program.

The Halifax shipyard will build 21 combat vessels under its $25-billion deal.

The Seaspan Marine Corp. shipyard in Vancouver will construct seven vessels under its $8-billion contract for non-combat ships.

Another $2 billion for smaller vessels is yet to be allocated to another shipyard.

Harper is also scheduled to make an announcement at the Vancouver shipyard later Thursday.

Ottawa’s goal in rolling out the national shipbuilding procurement program is to end the boom and bust cycle that has hampered shipbuilding in Canada in the past. The industry has struggled since the last major warship project ended in the 1990s.

The plan aims to see a steady flow of work over the next 20 to 30 years in order to sustain highly skilled jobs.

Negotiations are expected to continue in the coming months on specific contracts, and Irving has already indicated that it hopes to begin cutting steel on its first new vessel by the end of this year.

The procurement has been hailed by government and opposition MPs alike for its arms-length process.

The Harper government promised to keep politics out of the process by having four senior bureaucrats evaluate the bids, and hiring a fairness monitor and an accounting firm to ensure an unbiased selection process.

Politicians were even cut out of the October announcement on the winning bids, which was delivered by the deputy minister of Public Works.

The process could serve as a model for future military procurements, which have for years been plagued by delays and cost overruns.