Procurement of medical supplies: Committee of the Whole—July 8, 2020

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Context

Public Services and Procurement Canada (PSPC) has been working aggressively with domestic and international suppliers, along with provincial and territorial governments to procure medical supplies and personal protective equipment (PPE).

Suggested response

• We remain steadfast in our efforts to get safe and effective supplies to the frontlines as quickly as possible
• Good progress is being made, despite challenges posed by a highly competitive market and constrained supply chains
• PSPC continues to ramp up procurement efforts domestically and abroad
• We have ordered and received millions of swabs, large amounts of reagent, millions of medical gowns, millions of litres of hand sanitizer, millions of surgical masks and gloves, and the N95 respirators that have passed testing are now being distributed to provinces
• All products we are buying continue to be subject to stringent controls at various points in the process, including testing by the Public Health Agency of Canada (PHAC)

If pressed on hand sanitizer recalls:

• Health Canada is advising Canadians that certain hand sanitizers are being recalled from the market because they contain industrial-grade ethanol that has not been authorized for use in hand sanitizers in Canada
• Health Canada has directed companies to stop the sale of these products and is monitoring the effectiveness of the recalls
• if Health Canada identifies additional products or manufacturers using ethanol that does not meet Health Canada requirements, it will take appropriate action and inform Canadians

If pressed on material shortages:

• the Government of Canada is purchasing supplies from a number of sources and countries, both internationally and domestically
• we are taking an aggressive approach to buying, especially when it comes to PPE for frontline healthcare workers, this includes:
  • ordering ahead in bulk on behalf of provinces and territories
  • supplementing those orders by purchasing limited-availability supplies that are immediately available
  • ramping up the domestic manufacturing capacity, through the Plan to Mobilize Industry to fight COVID-19, being led by Innovation, Science and Economic Development Canada (ISED)
• this is over and above the efforts provinces and territories are taking to secure their own supply

If pressed on domestic suppliers:

• industry and suppliers have absolutely stepped up and a dedicated team of procurement specialists are actively assessing responses as they come in
• this assessment takes time, but we are completing it as quickly as possible and pursuing all viable leads

If pressed on general request for proposal process:

• PSPC is increasingly using open competitions to procure necessary PPE
• the department has issued numerous competitive processes including for cloth and disposable masks
• these procurements are undertaken to obtain the goods and services that PSPC and other federal departments and agencies need to respond to the COVID-19 pandemic
• they require quick turn-around times and we have seen many companies submit proposals to these tenders. Officials work diligently to review the proposals and award contracts as quickly as possible
• consistent with our commitment to increase the participation of Indigenous companies in procurements related to our COVID-19 response, there are currently 2 active tenders (one for cloth masks and one for non-medical disposable masks) which are open only to Indigenous companies

If pressed on PPE for the Government of Canada departments and agencies:

• since March, PSPC has been procuring PPE on behalf of departments and agencies to support maintaining their essential services
• as the country moves toward broader economic and social activity, including a gradual return to the workplace, the government will require access to PPE and disinfectants to ensure the safety of its employees and facilities
• the department has already placed orders for most of the needed goods requested by other departments and agencies

If pressed on Buy and Sell:

• industry and suppliers have responded positively to the call to action. By May 18, we had received more than 26,000 submissions, including nearly 17,000 domestic submissions
• we have contacted nearly all domestic companies who submitted forms, and continue to reach out to those submitting forms
• given the progress we have made to secure vast quantities of PPE, we will gradually be moving toward more typical procurement vehicles, such as competitive processes

If pressed on provincial and territorial collaboration:

• from the outset we have been working directly with provincial and territorial governments to ensure that we are capturing their needs, and purchasing supplies with a “Team Canada” approach
• I am in regular contact with my provincial and territorial counterparts to ensure that we are working cohesively and collaboratively, and that they are getting the support they need
• our goal is to be over prepared and we are ordering supplies in anticipation of future needs, to ensure they are available for provinces, territories, frontline health workers and Canadians

If pressed on providing the private sector with PPE:

• our top priority remains protecting the health and safety of Canadians
• our government, in consultation with provinces and territories and industry, is actively exploring opportunities to support organizations beyond the healthcare system in accessing PPE supplies to meet the needs of Canadian workers

If pressed on the supply hub:

• as organizations re-open for business, they need reliable information on how to buy and sell the necessary PPE required to keep themselves and others safe
• on June 9, the Prime Minister announced the launch of a new web hub to connect organizations with federal, provincial, territorial, and other resources on buying and selling PPE
• buyers will find best practices to keep people safe, where to find PPE for purchase, consumer advice, and additional health and safety resources. For suppliers looking to sell PPE, information includes product specifications, procurement and donation opportunities, and business guidance and programs
• as we continue to engage with our partners and advisory groups, the hub will evolve to include additional resources

If pressed on national security exception (NSE) contracting:

• the NSE is invoked to remove procurements from the obligations of Canada’s trade agreements for reasons of national security
• the procurement itself must either be indispensable for national security or indispensable for national defence purposes
• in the case of COVID-19, after the World Health Organization (WHO) declared the pandemic, PHAC made a request on behalf of the federal government that PSPC invoke the NSE with respect to the acquisition of goods and services required in order to respond to the COVID-19 pandemic
• some of the procurements being carried out in response to COVID-19 are being done under a NSE, meaning that many solicitation documents are not published on Buy and Sell. This allows us to move rapidly as we purchase goods and services to protect the health and safety of Canadians as we face this pandemic

If pressed on treatment of workers:

• Canada recognizes that millions of people are in situations of forced labour worldwide in a multitude of industries. The Government of Canada is not exempt from the risk of purchasing goods that have been made by forced labour
• as outlined in the 2019 National Strategy to Combat Human Trafficking, Canada will launch a national public awareness campaign to raise awareness of human trafficking, including forced labour
• Canada will encourage industry partners to act ethically by implementing changes in their supply chains to prevent and reduce the risk of forced labour
• as one of the first phases of a multi-pronged approach to ensure that federal procurement supply chains are free from human trafficking and labour exploitation, Canada is working to revise the Code of Conduct for Procurement to include expectations for suppliers regarding human rights and labour standards

If pressed on logistics to handle large imports of PPE:

• on May 4, a notice was posted on the PSPC Buy and Sell website to solicit interest from major logistics service providers to facilitate the intake and distribution of large volumes of PPE and medical supplies
• this notice seeks a logistics solution going beyond distribution and includes warehousing, customs documentation and brokerage, and inventory management in Canada
• the notice closed on May 7, and we are now reviewing the expressions of interest

If pressed on Deloitte:

• PSPC had minimal capacity to identify, screen and support acquisition of COVID-19 related products from suppliers located outside of Canada specifically with an emphasis on China
• PSPC issued a contract with Deloitte to identify, review and support the acquisition of COVID-19 related products from suppliers located outside of Canada with an emphasis on China
• specifically, Deloitte’s contract focused on overseas sourcing, logistics support to track and manage orders and reporting, and help ensure Canada obtain needed PPE items
• Deloitte augmented PSPC’s capacity to identify, review products and support acquisition of COVID-19 related products from suppliers
• Deloitte’s contract also included the establishment of an integrated control tower to track and manage logistics, allocation fulfillment and order tracking and help ensure Canada obtains needed PPE items

If pressed on Fluid Energy labels:

• to assist in the fight against COVID-19, Fluid Energy Group Ltd has retooled their production line to be able to produce hand sanitizer
• the company distributed units of Triton hand sanitizer without all required information on the label
• this hand sanitizer contains technical-grade ethanol, which Health Canada recently authorized on a temporary basis for use in hand sanitizers in Canada to help address the increased demand in response to COVID-19
• Health Canada recently conducted an assessment of the risks and benefits of using specific sources of technical-grade ethanol in hand sanitizers. The department determined that when used as directed and for a limited period, the public health benefits of using hand sanitizers containing approved sources of technical-grade ethanol to limit the spread of COVID-19 outweigh the risks
• the company has contacted all of its customers and is working to correct the labelling issue for any remaining product in stock and has also updated the information posted on its website

Background

Deloitte

The sole sourced contract to Deloitte was awarded for $8,625,000.

The contract included the following scope of work: the contractor shall provide professional services related to acquisition and supply of materials in support of the Government of Canada’s response to COVID-19

These professional services include, but are not limited to the following areas:

• establish an integrated control tower to track and manage logistics, allocation fulfillment and order tracking, this includes, but is not limited to the following:
  • developing and delivering the stack for logistics and visibility of order queue
  • creating a centralized control tower to track all inbound orders, dates, quantities, quality and logistics for all sourced items
  • monitoring and tracking domestic allocation fulfillment
  • monitoring and tracking factory production fulfillment for pending production, this includes manufacturing plant and traceability to provide insight into knowing which order is at risk and/or likely to be at risk and delivery
  • other related services, as required
• acquire pandemic response supplies from global market, this may include, but is not limited to the following:
  • working with PSPC and other resources to identify, screen and support acquisition of COVID-19 related products from suppliers located outside of Canada (with initial emphasis on China)
  • conducting initial screening and review(s) of new supplier solicitations and offers received by the Government of Canada
  • assisting, as an expert resource, in support of negotiations to conclude procurement transactions as required
  • conducting local supplier inspections and plant monitoring in China or other markets, as required
  • other related services
• develop and maintain demand and supply forecasts for pandemic supplies, and associated inventory allocation models, this may include, but is not limited to the following:
  • developing a national demand forecast for COVID-19 response materials to support both the health care system and broader public needs
  • coordinating and synchronizing national forecasts with those being developed by provincial and territorial governments and relevant health authorities
  • supporting the development of allocation guidelines for national supplies both inside and outside the health care system
  • other related services
• create screening and qualification process(es) for alternative (not previously qualified) suppliers, this may include, but is not limited to the following:
  • developing guidelines and processes to source fit-for-purpose products, including qualifications of newly emergent suppliers
  • developing screening process(es) to identify viable supply sources from new and existing producers that do not have existing regulatory approval from Canada or equivalent regulators
  • other related services
• additional services and taskings may be required as the COVID-19 situation and Government of Canada requirements evolve, other deliverables required may include, but are not limited to:
  • reports
  • visual aids in the form of deck presentations, info graphics or interactive maps
  • market and financial assessments of supply sources
  • demand forecast models and reports
  • documented processes for new supplier solicitation screening
  • oral briefings
  • research, data and information both qualitative and quantitative
  • other related deliverables, as required

Other support

Through this contract, Deloitte is providing some targeted PPE support work for PHAC, Health Canada, and ISED, to help in the effort to ensure Canada has the necessary products:

• PHAC’s extension of the supply chain control tower:
  • extend the supply chain control tower to track and manage logistics, distribution, and order fulfillments from product source to the provincial and territorial locations
  • process improvement support to enable control tower to handle master data management, inventory control and logistics and distribution
  • provide additional, as-and-when required services, relating to and in support of the Government of Canada’s COVID-19 response efforts
• Health Canada demand and supply forecasts for PPE:
  • developing and maintaining demand and supply forecasts for PPE and associated inventory allocation models
  • developing a national demand and supply forecast for COVID-19 response materials to support both the health care system (wave 1) and broader public needs (wave 2)
  • developing a model to monitor private sector supply markets to enable planning, procurement and investment decisions
  • coordinating and synchronizing national forecasts with those being developed by provincial and territorial governments and relevant health authorities; including providing access to provincial data subject to permission from provincial and territorial partners
  • work with federal government partners to incorporate available data on supply and demand, as well as disease progression
  • ongoing steady state support to enhance and maintain the models (wave 3)
• ISED N95 respirator research and analysis:
  • identify N95 demand scenarios and assessment of potential new supply requirements
  • identify shortlist of top 3 industry proposals with the most credible business plans and potential to address Canada’s supply requirements
  • conduct accelerated and more fulsome due diligence on the shortlisted proposals
  • provide advice on how procurement and/or support measures could best be structured in order to facilitate project proposals in a manner that respects government’s needs to manage public resources responsibly

Supply hub

On June 9, 2020, the Prime Minister announced the launch of a new web hub to connect organizations with federal, provincial, territorial, and other resources on buying and selling PPE. For suppliers looking to sell PPE, information includes product specifications, procurement and donation opportunities, and business guidance and programs.

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