Archived - Health Canada procurement plan (assets and acquired services) 2017 to 2018

Purpose of the procurement plan Health Canada’s procurement plan complements the department’s activities in support of proactive disclosure. The plan is designed to provide a high level summary of the department’s planned procurement activities for the fiscal year 2017 to 2018. The plan neither represents a solicitation or a request for proposal, nor is it a commitment by the government to purchase any of the described property or services.

Key procurement drivers
Heath Canada 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:

1. A health system responsive to the needs of Canadians
   • The programs under this strategic outcome provide strategic policy advice, research, and analysis to support decision-making on health care system issues, as well as program support to provinces and territories, partners, and stakeholders on health care system priorities; supports the Government of Canada's obligation to protect the health and safety of its employees and the health of visiting dignitaries; and administrates Health Canada's responsibilities under Section 41 of the Official Languages Act
2. Health risks and benefits associated with food, products, substances, and environmental factors are appropriately managed and communicated to Canadians
   • This strategic outcome includes the department's role to develop, maintain, and implement a regulatory framework associated with a broad range of health products that affect the everyday lives of Canadians, including pharmaceutical drugs, biologics, radiopharmaceuticals, medical devices, and natural health products; to develop, maintain, and implement a regulatory framework associated with the safety and nutritional quality of food: to assess and manage the health risks associated with climate change, air quality, drinking water quality, and new and existing substances; to support efforts to protect Canadians from unsafe products and chemicals; to monitor, regulate, advise, and report on exposure to radiation that occurs both naturally and from man-made sources; and too regulate and register pesticides
3. 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 strategic outcome provide the authority for the delivery of the First Nations and Inuit Primary Health Care program to First Nations and Inuit in Canada to improve the health and safety of First Nations and Inuit individuals, families, and communities; provides registered First Nations and recognized Inuit residents in Canada with a specified range of medically necessary health-related goods and services, which are not otherwise provided to eligible clients through other private or provincial/territorial programs; and to administer contribution agreements and direct departmental spending to support the delivery of health programs and services

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

Health Canada 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, Health Canada’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 Heath Canada's departmental audit committee.

Procurement standards

Heath Canada 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 Buyandsell.gc.ca for all procurements subject to national and international trade agreements, including:
  • Canadian Free Trade Agreement (CFTA)
  • 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.)
• 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 Buyandsell.gc.

Tendering process

Buy and sell

Buyandsell.gc.ca is an online system that advertises government contracting opportunities to potential bidders.

Health Canada publishes Advanced Contract Award Notices (ACAN) through Buyandsell.gc.ca 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 Health Canada’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 2017 to 2018 fiscal year, this exercise resulted in the identification of planned expenditures with an estimated value of $352.3 million, as follows:

 

 

Figure 1: planned procurement summary by general ledger (G/L) group 2017 to 2018

A pie chart illustrating the dollar value of the department’s planned procurement of capital assets, acquired services, materials and supplies by G/L grouping

• Professional and special services: $181,107,874
• Capital assets: $30,461,958
• Repairs and maintenance: $28,961,808
• Transportation and telecommunications: $26,890,396
• Materials and supplies: $25,389,050
• Other services: $19,606,991
• Information services: $17,206,640
• Rentals: $15,277,431
• Acquisitions greater than $10,000 in machinery, equipment and tools: $4,980,234
• Capital leases and leasehold improvements: $2,375,194
  Total: $352,257,576

Figure 2: planned capital assets by G/L group 2017 to 2018

A pie chart illustrating the dollar value of the department’s planned procurement of capital assets by G/L group

• Acquisitions greater than $10,000 in machinery, equipment and parts: $15,178,459
• Acquisitions greater than $10,000 in engineering works: $14,225,541
• Acquisitions greater than $10,000 in vehicles: $741,907
• Acquisitions greater than $10,000 in buildings: $167,240
• Acquisitions greater than $10,000 in computer equipment and software: $148,811
  Total: $30,461,958

Figure 3: summary of planned professional and special services by G/L group 2016 to 2017

Figure 3: summary of planned professional and special services by G/L group 2016 to 2017
A pie chart illustrating the dollar value of the department’s planned procurement of professional and special services by G/L group

• Health and welfare services: $81,462,041
• Informatics services: $36,113,358
• Other professional services: $35,921,488
• Engineering, architectural and scientific services: $11,296,302
• Accounting and legal services: $6,392,471
• Training and educational services:  $5,721,773
• Protection services: $4,114,633
• Internal support professional services: $85,808

Total $181,107,874       

 

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: historical volumes of contracting commitments undertaken by the department (2012 to 2016)

	2013 to 2014	2014 to 2015	2015 to 2016	2016 to 2017
Number of contracts	2,994	2,389	1,808	1,689
Total dollar value of agreements	$177,2 M	$330,8 M	$181,1 M	$158.2 M

 

Table 1 - Text Equivalent

Table 1: the historical volume of contracting commitments $10,000 and greater undertaken by the department (2013 to 2017)
A chart illustrating the historical volume of procurement commitments that have been undertaken by the Department during the fiscal years 2013 to 2017 with a value of ten thousand dollars and greater (in $ millions)

• 2,994 contracts for $177.2 in fiscal year 2013 to 2014
• 2,389 contracts for $330.1 in fiscal year 2014 to 2015
• 1,808 contracts for $181.1 in fiscal year 2015 to 2016
• 1,689 contracts for $158.2 in fiscal year 2016 to 2017

 

Source: Materiel Management Module in SAP May 2017

The higher dollar value and fewer number of contracts is indicative of a trend towards multi-year omnibus 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 to 2015, 596 multi-year contracts with a value of $10,000 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:

• procurements of less than $5,000 paid through acquisition cards
• agreements with other federal departments or other levels of government, including medical and academic institutions
• 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
• 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 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
• maintenance and renewal of information technology 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
• consideration of business intelligence and other tools to support health and organizational information needs

Health Canada 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’s buy-and-sell website on a regular basis to seek opportunities to become suppliers to Health Canada and the Government of Canada.

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

Chief, Assets and Data Management Unit Materiel and Assets Management Division
Health Canada
200 Eglantine Driveway,
Ottawa, Ontario K1A 0K9
Telephone: 613-941-3724
Fax: 613-941-2645