The federal government announced last month that U.S. defence giant Lockheed Martin beat out two rivals in the long and extremely sensitive competition to design replacements for the navy's frigates and destroyers.

The multibillion-dollar effort to replace the navy's warship fleet is being buffeted by concerns about a potential conflict of interest involving the Halifax company that is leading the project.

Government officials say they are in a race against the clock when it comes to building new warships for the navy, with little flexibility for further delays or hangups in the multi-billion-dollar project.