Amazon COVID-19 supply distribution deal: Committee of the Whole—July 8, 2020
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Context
On April 1, 2020 the Government of Canada entered into an agreement with Amazon to help manage the distribution of personal protective equipment (PPE) and supplies purchased by the government, to support the COVID-19 response. Amazon is providing these services to Canadians at cost, without profit until June 30.
Suggested response
- The health and safety of Canadians is our top priority, and that means ensuring life-saving medical supplies reach our frontline healthcare providers as quickly as possible
- We have entered into an agreement with Amazon, providing us with an access to its technology interface to allow provincial and territorial health authorities to order PPE purchased by the federal government
- Canada Post and Purolator are delivering the PPE and supplies ordered
- This agreement will enhance distribution capabilities of the federal government to help ensure that supplies make it into the hands of healthcare workers across the country as quickly as possible
If pressed on the rationale for Amazon:
- this agreement will support the distribution of vast quantities of masks, gloves and other equipment purchased by the federal government
- this is about getting life-saving medical equipment into the hands of our frontline workers as quickly as possible
If pressed on Public Health Agency of Canada’s (PHAC) role:
- PHAC will maintain oversight of all orders from provinces and territories to ensure supplies are distributed appropriately
If pressed on Amazon’s role:
- these services are being provided at cost, without profit until June 30
- Amazon provided an adapted customer interface that allows provincial and territorial health authorities to request supplies directly
If pressed on Canada Post and Purolator’s role:
- Canada Post is currently handling warehousing through its subcontractor Maritime Ontario, with Purolator assisting in getting the supplies to the warehouse from airports. Canada Post and Purolator, through their distribution networks, are delivering the supplies across Canada
If pressed on the letter of interest (LOI) / request for information (RFI) for extended logistics services in Canada:
- on May 4, to facilitate the intake and distribution of large volumes of PPE and medical supplies, a LOI / RFI notice was posted on the Public Services and Procurement Canada (PSPC) Buy and Sell website to solicit interest from major logistics service providers
- this new expression of interest relates to a multimodal logistics solution in Canada, going beyond distribution and includes warehousing, customs documentation and brokerage, and inventory management
- the LOI / RFI closed on May 7, and the review of the expressions of interest is now underway
If pressed on the health and safety of workers:
- We fully expect Amazon to follow the guidelines put forward by Canada’s public health organizations and protect their workers during this crisis
Background
On April 1, 2020, PSPC, on behalf of PHAC, signed a $5 million contract with Amazon to get health care professionals the PPE and supplies they need to protect themselves and continue caring for Canadians during the COVID-19 pandemic. PHAC will maintain oversight of all orders from provinces and territories to ensure supplies are distributed appropriately.
The delivery of the PPE and supplies ordered is being done by Purolator and Canada Post. PPE and supplies were initially warehoused at the facility of Maritime Ontario in Brampton, where the technology of Amazon has been installed for the orders of provincial and territorial health authorities. Maritime Ontario is an on-going key sub-contractor of Canada Post. As Maritime Ontario has started running out of space to warehouse the PPE ordered for PHAC, other facilities have also started being used.
Amazon is offering their assistance to Canada for no profit until June 30, 2020. Fees beyond June 30, 2020 will be less than Amazon’s standard commercial fees. The bulk of the $5 million announced is to pay Purolator or Canada Post for transportation charges.
Pricing for after June 30 with Amazon was anticipated to be finalized by May 31, but Amazon has requested additional time to validate costs to date. Proposed revised pricing is anticipated by June 5.
Amazon has agreed that the current price structure will remain in place until such a time that a new one has been agreed upon.
Furthermore, Amazon has reiterated its intention to continue to offer the service at cost, without profit for the duration of the agreement.
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