Procurement: Committee of the Whole—August 12, 2020
Document navigation for "Committee of the Whole: August 12, 2020"
On this page
Procurement modernization and improving e-procurement
Context
Public Services and Procurement Canada (PSPC) is delivering on government commitments to modernize and simplify procurement, and to establish an e-procurement solution (EPS).
Suggested response
- The government is committed to modernizing procurement practices so they are simpler, less administratively burdensome, and include practices that support our social and economic policy goals
- The government is simplifying and streamlining PSPC contractual documents based on findings and recommendations of a review of our practices
- We are implementing a simplified contract model to remove barriers to supplier participation in public procurement
- We are also taking action by:
- establishing a procurement policy framework to achieve positive social and environmental outcomes
- implementing an electronic platform to make procurement easier and increase opportunities for suppliers
- improving existing procurement tools
- piloting a risk-based approach for procurement decisions and developing new tools for determining contract pricing
- We will continue to support other procurement commitments including better vendor management tools, clear data metrics, and increased opportunities for Indigenous businesses
If pressed on diversifying procurement (Black-owned businesses):
- our government is committed to diversifying the base of suppliers obtaining contracts from federal organizations
- in support of this, PSPC through the Office of Small and Medium Enterprises (OSME) continues to reach out to under-represented groups across Canada, including Black-owned businesses
- we have and continue to work and collaborate with the United Nations Decade of Persons of African Decent (UNDPAD) Push Coalition and the Canadian Black Chamber of Commerce to raise awareness of the services offered by OSME, to encourage participation in federal procurement, and to identify and remove barriers
If pressed on Indigenous procurement:
- we are committed to increasing the participation of Indigenous businesses in federal procurement
- to do so, we are working with Indigenous Services Canada and the Treasury Board of Canada Secretariat to create a new target to have 5% of federal contracts awarded to businesses managed and led by Indigenous Peoples
- Indigenous business organizations are represented on both the newly established COVID-19 Supplier Council and the national Supplier Advisory Council that has been in place since 2013
- OSME works with Indigenous businesses directly, as well as through partner Indigenous organizations, to provide information, support and practical guidance on how to participate in federal procurement
Background
A substantial part of public investment is managed through public sector acquisition of goods and services, representing 13% of Canada’s gross domestic product (GDP footnote 1 ), making it a fundamental lever to achieving social and economic objectives.
The government has committed to modernize and simplify procurement, and to establish an electronic procurement solution. A key step towards this goal was the purchase of a new electronic procurement system, as announced in budget 2018, at a cost of $196.8 million over 5 years. Procurement processes will also be easier, faster and more accessible for suppliers and buyers through:
- simpler, less administratively burdensome, user friendly procurement practices:
- improvements to the existing Buy and Sell system for all government departments
- more accessible and intuitive complement of industrial security services
- contract modernization initiatives and a simplified contract model are being implemented. This is in response to concerns from the supplier community regarding the complexity of the Government of Canada’s contracts and related processes. This complexity can represent barriers to supplier participation in public procurement, including reducing competition and supplier diversity, which impacts Canada’s ability to achieve best value for money
- as this work is ongoing, timelines for full implementation of contact simplification initiatives will be determined as the project definition and scope is clarified
- deployment of modern comptrollership:
- piloting a risk-based approach for procurement decisions
- ensuring fair pricing in defence contracts (sustainment initiative, pricing guide)
- encouraging greater competition and by including practices that support our economic policy goals, including innovation, as well as green and social procurement:
- developing a framework for leveraging socio-economic outcomes, including environmental outcomes, in federal procurement
- adopting a more inclusive approach to procurement, raising awareness of how to give consideration to the needs of persons with disabilities when procuring on behalf of the federal government
- reducing our environmental footprint through strategic sourcing decisions such as measures that support the conversion of government fleets to zero-emission vehicles
The government will also support other procurement commitments including better vendor management tools, clear data metrics, and increased opportunities for Indigenous businesses.
Energy Services Acquisition Program
Context
On June 4, 2019, the Government of Canada announced that on May 31, 2019 it entered into a contract with a public-private partner (P3) for the modernization of the district energy system in the National Capital Region (NCR). Innovate Energy will complete the design and construction by 2025 and will operate the system until 2055.
Suggested response
- The Government of Canada is committed to reducing greenhouse gas emissions which includes leading by example to green its own operations
- This initiative aims to improve the overall efficiency and cost-effectiveness of the heating and cooling infrastructure that supplies federal buildings in the NCR
- The project is expected to reduce operating costs for the Government of Canada over the 35 year life of the operations and maintenance contract
- Modernizing the district energy system will reduce greenhouse gas (GHG) emissions in 80 buildings located in the NCR by over 60% compared to our 2005 baseline
If pressed on timelines and budget:
- construction began in May 2020 and is expected to end in October 2025
- at present, the phase I modernization project is on time and on budget despite the fact that work started 1 month later than planned due to the COVID-19 Ontario ban on construction
- the project is expected to reduce operating costs for the Government of Canada over the 35 year life of the operations and maintenance contract
Background
As the federal authority for real property, Public Services and Procurement Canada (PSPC) is responsible for the delivery of essential heating services to 80 federal buildings in the NCR and cooling services to 67 of these buildings, including mission-critical sites within the Parliamentary Precinct. As such, PSPC operates 5 central heating and cooling plants (CHCPs) which were designed and built from 1916 to 1971.
In 2009, Energy Services Acquisition Program (ESAP) was established to explore potential new business models for the provision of energy services in the NCR. In 2018, PSPC issued a request for proposal for the modernization of the heating and cooling energy service capability.
Budget 2016 reaffirmed Canada’s commitment to modernizing the delivery of heating and cooling services by implementing more efficient technologies. This will reduce both long-term costs for Canada and greenhouse gas (GHG) emissions. In addition, the new technology will enable Canada to explore the feasibility of using alternative “low or no carbon” sources of energy, the adoption of which could further reduce GHG emissions.
For this project, Canada selected Innovate Energy through competitive tender, to be the private partner that will deliver a technologically superior and efficient solution on time and in a manner that ensures the best value for Canadians.
The contract is valued at $2.6 billion and is broken down into 2 parts. The first, valued at $1.1 billion, is for the design and construction of the new system, to be completed by 2025. The second portion is for the operation and maintenance, which includes energy and fuel costs, of the new system over a 35 year period, valued at $1.5 billion.
Design has been initiated, construction began in May 2020 and is expected to end in October 2025. At present, the phase I modernization project is on time and on budget despite the fact that work started 1 month later than planned due to the COVID-19 Ontario ban on construction. The project is expected to reduce operating costs for the Government of Canada over the 35 year life of the operations and maintenance contract. Precise cost savings will be recalculated once Phase II determines greener sources of energy for the district energy system and after the Phase 1 construction period is completed.
Canada has taken all steps necessary to ensure that the procurement process for the project was open, fair and transparent. The public private partnership contract with Innovate Energy was finalized in May 2019.
Due to the modernization of the NCR heating and cooling plants under ESAP, several plant employees’ services are no longer required due to discontinuance of their particular functions.
PSPC is following the guidelines outlined in the work force adjustment (WFA) agreement and will support all employees through their transition to new roles emerging within the service management areas.
Each employee will have the support of their union and human resource services in PSPC to ensure that they have all the information necessary to understand their available options based on their career objectives and specific circumstances.
Indigenous procurement process
Context
Public Services and Procurement Canada (PSPC) has been procuring medical supplies and personal protective equipment (PPE), and is working to increase the participation of Indigenous businesses in federal procurement.
Suggested response
- The Government of Canada is committed to increasing the participation of Indigenous businesses in federal procurement
- We are working with Indigenous Services Canada and the Treasury Board Secretariat to create more opportunities for Indigenous businesses to succeed and grow, by creating a new target to have 5% of federal contracts awarded to businesses managed and led by Indigenous Peoples
- As we move forward, we will continue to look to increase business opportunities for companies managed and led by Indigenous Peoples
If pressed on Indigenous participation in federal procurement for COVID-19:
- to date our focus has been on putting PPE in the hands of front line health employees as quickly as possible
- as part of these efforts, we have awarded a number of contracts to Indigenous businesses worth millions of dollars
- on June 4, PSPC launched a request for proposal (RFP) for the purchase of 25 million disposable non-medical face coverings. This RFP is strictly limited to Indigenous businesses. Proposal evaluations are underway
- as we move forward, my department will continue to work with other federal organizations and Indigenous groups to increase the participation of Indigenous businesses in federal procurement
Background
In response to the COVID-19 pandemic, PSPC has awarded 12 contracts to 11 self-identified Indigenous businesses, collectively worth nearly $40 million including for logistics and air charter services, accommodation and cleaning services, information technology (IT) professional services, masks and thermometers.
PSPC is working actively with Indigenous groups to increase their participation in federal procurement more broadly. This includes ongoing work with the Indigenous Business COVID-19 Taskforce, which brings together numerous Indigenous groups, including the Canadian Council for Aboriginal Business (CCAB), National Aboriginal Capital Corporation Association (NACCA), Inuit Tapiriit Kanatami (ITK) and Pauktuutit Inuit Women of Canada. The taskforce seeks to identify and mobilize Indigenous businesses to provide medical equipment and supplies, including by creating a database of Indigenous businesses. Indigenous Services Canada is the lead department federally, with PSPC supporting the taskforce’s work. PSPC will seek to leverage the database, once it has been made available by the taskforce, to increase the participation of Indigenous businesses in federal procurement.
In addition, PSPC works in close collaboration with the Council for the Advancement of Native Development Officers (CANDO), a national Indigenous organization involved in community economic development. The partnership is focused on helping the council and its economic development officers support Indigenous businesses across Canada by providing information, focused access, and services from the Office of Small and Medium Enterprises.
The Minister’s Supply Council includes the CCAB. This council provides the minister with ideas for strengthening and streamlining the government’s efforts to support essential services organizations in accessing supplies in the context of the COVID-19 pandemic.
In addition, the minister’s Supplier Advisory Committee contributes to understanding and addressing barriers that smaller businesses face in federal procurement, including those faced by Indigenous-owned businesses. The Canadian Aboriginal and Minority Suppliers Council (CAMSC), represented by its President Cassandra Dorrington, has been an active and contributing member since the Supplier Advisory Committee’s first meeting in 2013.
Over the last 2 fiscal years, PSPC under its own delegation, has awarded 465 contracts (including call ups and amendments) on average per year, valued at $18.3 million annually to Indigenous suppliers, which represent 3% of PSPC total awarded procurement (based on value under its own delegation). During that same timeframe, PSPC, as a common service provider, has awarded 867 contracts (including call ups and amendments) on average per year, valued at $323 million annually to Indigenous suppliers, which represents 1.9% of its total awarded procurement (based on value).
Document navigation for "Committee of the Whole: August 12, 2020"
Page details
- Date modified: