Health Canada Procurement Plan (Assets and Acquired Services) 2016-2017

Purpose of the Procurement Plan

Health Canada's (HC) Procurement Plan complements the Department's activities in support of proactive disclosure. The Plan is designed to provide a high level summary of the Departments planned procurement activities for the fiscal year 2016-2017. The Plan does not represent a solicitation or constitute a request for proposal, nor is it a commitment by the Government to purchase any of the described property or services.

The Objective of Government Procurement

Government contracting must be conducted in a manner that will:

  1. Stand the test of public scrutiny in matters of prudence and honesty, facilitate access, encourage competition and reflect fairness in the spending of public funds.
  2. Ensure the pre-eminence of operational requirements.
  3. Support long-term industrial and regional development and other appropriate national objectives, including aboriginal economic development.
  4. Comply with the government's obligations under the North American Free Trade Agreement, the World Trade Organization - Agreement on Government Procurement, the Agreement on Internal Trade.

Key Procurement Drivers

HC has a Program Alignment Architecture (PAA) and a supporting performance measurement framework. The PAA aligns departmental programs along the Department's three business lines: Health System Innovation, Consumer Protection and Environmental Health and First Nations and Inuit Health. The strategic outcomes reflected in the PAA are the primary procurement drivers:

  • A Health System Responsive to the Needs of Canadians
    • The first program under this strategic outcome focuses on HC's leadership and funding roles and its contributions to health policy. The second encompasses occupational health services that are provided to employees of the Government of Canada. The third highlights federal contributions to the health aspects of official language minority communities.
  • Health risks and benefits associated with food, products, substances, and environmental factors are appropriately managed and communicated to Canadians.
    • This strategic outcome incorporates the Department's role to inform Canadians of health risks and regulate products such as pharmaceuticals, consumer products and pesticides, as well as departmental responsibilities in areas such as tobacco control. It also incorporates the role that HC increasingly plays in relation to the links between health and the environment.
  • First Nations and Inuit communities and individuals receive health services and benefits that are responsive to their needs so as to improve their health status
    • Program activities under this outcome include efforts to strengthen First Nations and Inuit health programming by increasing First Nations and Inuit control of health program delivery, as well as integration of First Nations and Inuit programming with existing provincial health systems and programming to leverage efficiencies and avoid duplication. This health systems approach includes Supplementary Health Benefits, Primary Health Care and Health Infrastructure Support.

A key consideration for the Department is the need for flexibility and agility in its procurement planning and execution within the confines of Government of Canada legislation and policies related to procurement as well as national and international trade agreements.

Governance and Procurement Standards

Governance

HC has a robust governance structure in place for monitoring and controlling its procurement activities. The structure includes automatic electronic standardized business process mapping through the departmental financial system (SAP), which includes, a procurement specialist review and functional oversight through a two-tier Contract Review Committee for ensuring compliance to policies and regulations.

Procurement management activities (planning, tendering, acquisition and closure) are subject to reviews and audits by various organizations including the Office of the Auditor General, HC's Audit and Accountability Bureau, and the Office of the Procurement Ombudsman. Findings that strengthen the Department's procurement processes are addressed through an audit Management Report Action Plan and its implementation is subject to oversight through the Department's Executive Committee on Planning and Accountability and HC's Departmental Audit Committee.

Procurement Standards

HC is committed to ensuring that competitive procurement is standard practice whenever possible. To support this, the Department adheres to the following practices:

  • Seeks tender proposals from potential suppliers using the Buy and Sell Website for all procurements subject to national and international trade agreements, including:
    • The Agreement on Internal Trade (AIT);
    • The World Trade Organization Agreement on Government Procurement (WTO-AGP);
    • North American Free Trade Agreement (NAFTA) - Brought into force: January 1, 1994
  • Utilizes competitively issued standing offer agreements, supply arrangements, and other tools put in place both by the Department (i.e., translation Services, French language training, nursing services, printing, employee assistance program, etc.) and by the Government of Canada's primary procurement body, Public Services and Procurement Canada (i.e., furniture, office machines, text processing systems and visible record equipment, office supplies and devises, task based informatics professional services, task and solutions professional services, professional services online, temporary help services, etc.) ; and
  • Ensures that all requirements, whenever benefits from competition are attainable, seek tender proposals from three or more potential suppliers for requirements not subject to the trade agreements or where there is an obligation to publish a requirement on the Buy and Sell Website.

Tendering Process

Buy and Sell

The Buy and Sell Website is an on-line system that advertises government contracting opportunities to potential bidders.

HC publishes Advanced Contract Award Notices (ACAN) through the Buy and Sell Website to notify suppliers of the intent to award a contract directly to a supplier and to consider statements of qualifications from any suppliers capable of fulfilling the requirement.

Planned Procurement Volumes

The Department's procurement planning process is included in HC's Departmental Integrated Operational Planning (DIOP) process and performance reporting regime, which allows the Department to identify economies of scale through consolidation of acquisitions, resulting in increased flexibility and avoiding delays through greater use of Standing Offer Agreements and identifying opportunities for enhanced service delivery.

As part of the annual DIOP process, all branches within the Department are requested to identify their planned expenditure activity for assets and acquired services. For the 2016-2017 fiscal year this exercise resulted in the identification of planned expenditures with an estimated value of $327 million, as follows:

Figure 1.0 - Planned Procurement Summary - Assets and Acquired Services

A pie chart illustrating the dollar value of the Department’s planned procurement of Capital Assets, Acquired Services, Materials and Supplies by GL grouping.

  • Professional and Special Services $179,990,770
  • Transportation & Telecommunications $30,928,246
  • Materials and Supplies $24,503,446
  • Repairs and Maintenance $23, 684,790
  • Rentals $18,342,423
  • Information Services $16,783,957
  • Other Services $15,715,062
  • Capital Assets $10,692,562
  • Acquisitions <$10k Machinery, Equipment & Tools $6,190,302
  • Grand Total $326,831,558

Figure 1.0 - Planned Procurement Summary
Source: Integrated Planning and Performance Reporting System (IPPRS) Templates March 2016

Figure 2.0 Planned Procurement Summaries - Capital Assets

A pie chart illustrating the dollar value of the Department’s planned procurement of Capital Assets by GL Group.

  • Acquisitions >$10,000 of Machinery, Equipment and Parts $9,562,596
  • Acquisitions >$10,000 of Vehicles $852,535
  • Acquisitions >$10,000 of Buildings $167,240
  • Acquisitions >$10,000 of Computer Equip & Software $60,190
  • Acquisitions >$10,000 of Engineering Works $50,000
  • Grand Total $10,692,562

Figure 2.0 - Planned Capital Assets
Source: Integrated Planning and Performance Reporting System (IPPRS) Templates March 2016

Professional and Special Services account for approximately 55% of planned procurement activities broken down as follows:

Figure 3.0 Planned Professional Services by GL Group

A pie chart illustrating the dollar value of the Department’s planned procurement of Professional and Special Services by GL grouping.

  • Health and Welfare Services $73,701,618
  • Other Professional Services $42,297,397
  • Informatics Services $36,824,864
  • Engineering, Architectural and Scientific Services $10,732,198
  • Training and Educational Services $7,456,412
  • Accounting and Legal Services $5,739,325
  • Protection Services $3,156,694
  • Internal Support Professional Services $82,262
  • Grand Total $179,990,770

Figure 3.0 - Planned Professional and Special Services by General Ledger Group
Source: Integrated Planning and Performance Reporting System (IPPRS) Templates March 2016

While these figures are only an indicator of planned procurement activity within the Department, they represent a significant portion of the volume of procurements likely to be undertaken, based on the following historical figures:

Table 1.0 - Historical Volumes of Contracting Commitments $10K and Greater Undertaken by the Department (2012-2016)
Item Description 2012-2013 2013-2014 2014-2015 2015-2016
Number of Contracts 3092 2994 2325 1783
Total Dollar Value of Agreements $149.2 $177.2 $283.2 $166.7

The higher dollar value and fewer number of contracts is indicative of a trend towards multi-year omni bus contracts being issued to meet operational requirements, ensure consistency and maintain the integrity of a competitive and transparent process. For example, during fiscal year 2014-15, 596 multi-year contracts with a value of $10 thousand or greater were issued with a total value of $207 million, that extended past the fiscal year-end date (March 31, 2015).

Procurements outside of those forecasted herein include the following:

  • Procurements <$5,000. paid through acquisition cards;
  • Agreements with other federal departments or other levels of government, including medical and academic institutions; and
  • Procurements arising from unanticipated operational requirements.

Items that are frequently procured for the Department include:

  • Professional Services such as scientific research, medical, mental, dental, vision care, management consulting services, training and translation;
  • Other Services including temporary help services acquired for general help and cleaning services for buildings;
  • Materials and Supplies such as medical instruments, pharmaceutical and other medicinal products, stationary and office supplies;
  • Rentals of office equipment, machinery, warehousing and office space; and
  • Agreements with Hospitals and Universities to perform research studies provide data, and other consultation services.

Rationale for Procurement Decisions

Procurement decisions are based upon a number of factors. A main consideration is a life cycle approach to materiel management, and includes:

  • Evergreening of laboratory equipment, Information Technology (IT) equipment and real property based on asset condition and expected life of the assets;
  • Renewal of expiring contracts for service to support our asset holdings and major projects, where appropriate; and
  • Maintenance and renewal of IT Infrastructure to ensure adequate, secure, reliable access and interoperability for electronic information and transactions.

Procurement decisions also reflect the need for program integrity, such as:

  • Continuing requirements for specialized health science consultants and other professionals to meet operational requirements; and
  • Consideration of business intelligence and other tools to support health and organizational information needs.

HC supports the objectives of the Policy on Green Procurement, including incorporating environmental performance considerations and value for money into the procurement decision-making process.

Cost savings, synergies, and value added considerations, such as "greening", are also factored and contribute to the procurement decisions made by program managers.

Additional Information for Suppliers

For more information on becoming a supplier to the Government of Canada please refer to Public Services and Procurement Canada.

Suppliers are also encouraged to consult the Public Service and Procurement Canada Buy and Sell Website on a regular basis to seek opportunities to become suppliers to HC and the Government of Canada.

For any additional enquiries related to procurement at HC, please contact:

Chief, Procurement and Contracting
Materiel and Assets Management Division
Health Canada
200 Eglantine Driveway,
Ottawa, Ontario K1A 0K9
Telephone: 613-957-3819
Fax: 613-941-2645

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