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Procurement: Standing Committee on Government Operations and Estimates—May 15, 2020

Document navigation for "Standing Committee on Government Operations and Estimates: May 15, 2020"

On this page

Overview of Public Services and Procurement Canada purchases and expected delivery of critical items

In this section

Key messages

The Government of Canada remains focused on responding to the COVID-19 outbreak, and working with partners at all levels of government, and with industry, to secure life-saving medical supplies.

Status: As of May 8

Table 1: Purchases and expected delivery
Item Confirmed orders to date (as of May 8, 2020) Items received to date Delivery status
Gloves (pairs) 1,084,581,298 12,723,625 Delivery underway
Face shields 55,303,000 3,123,284 Delivery underway
N95 respirators 141,561,720 11,538,730 Delivery underway
Surgical masks 331,178,000 33,469,500 Delivery underway
Gowns 131,141,529 222,526 Delivery underway
Hand sanitizer Over 20 million litres 71,542 bottles Delivery underway
Ventilators 29,570 53 Delivery underway

In addition to these critical goods, Public Services and Procurement Canada has also been purchasing goods and services such as personal protective equipment for other government departments. These are intended to ensure the safety of front line workers, such as Canada Border Services Agency officers, Royal Canadian Mounted Police officers, and Canadian Food Inspection Agency meat inspectors.

Historical procurement of key commodities

In this section

National Emergency Strategic Stockpile

In 2004, following the severe acute respiratory syndrome (SARS) outbreak, the Public Health Agency of Canada (PHAC) was established to provide a focal point for federal leadership in managing public health emergencies and improved collaboration within and among jurisdictions. Canada's National Emergency Strategic Stockpile (NESS) assets were transferred from Health Canada to the newly created PHAC, which remains part of the Health portfolio.

In managing the NESS, Health Canada/PHAC has worked closely with Public Services and Procurement Canada (PSPC) to purchase goods in order to replenish the NESS, such as purchasing directly from existing standing offers/supply arrangements established by PSPC, or when the dollar value of the purchase was higher, asking PSPC to contract on their behalf to acquire the goods needed, including personal protective equipment (PPE).

Public Services and Procurement Canada acquisition of personal protective equipment

Over the last 10 years, PSPC has procured a total of $99,272,097 on PPE-related items. Of this total, $5,165,603 has been purchased on behalf of PHAC. These figures do not include what has been spent on COVID-19 related PPE.

Descriptions/commodities of what was purchased on behalf of PHAC is as follows:

The remaining $94 million were purchased on behalf of other departments, including National Defence and Health Canada:

Note

These descriptions/commodities cannot be broken down further.

Supplying the Canadian response to COVID-19

In this section

Given the extremely high global demand for COVID-19 related goods, there are many risks and challenges associated with procurement of these supplies. This situation is further complicated by export restrictions on personnel protective equipment (PPE) and other goods.

Contract negotiations have also evolved rapidly, with a number of terms being requested by suppliers that do not come up in the normal course of business, including:

Public Services and Procurement Canada (PSPC) has been working closely with central agencies and the Department of Justice to ensure that risk is appropriately identified and managed for the Government of Canada so that front line workers get the equipment they need.

We have had challenges with respect to quality of goods for both N95 respirators and with test swabs. In both cases we took immediate action including suspending orders with certain manufacturers, and working closely with others to ensure that production issues are identified and corrected as soon as possible. PSPC, Public Health Agency of Canada (PHAC), and Health Canada are taking strong measures to ensure that defective product will not be distributed to frontline workers.

Public Services and Procurement Canada actions taken to equip essential service workers with the supplies and equipment they need to combat COVID-19

The Government of Canada is collaborating with provinces and territories on an ongoing basis to identify their needs and purchase required equipment, supplies, and services to combat COVID-19.

As the Government of Canada's central purchaser, we are awarding contracts in order to ensure we are acquiring the goods and services that front line workers need, including personnel protective equipment, medical equipment, nursing and support services, air charters, accommodations, transportation, and security.

Repatriation effort

With increasing border restrictions and fewer commercial air carrier options for Canadian travellers, the department has put in place contracts with air charters on behalf of Global Affairs Canada to transport Canadian citizens home from around the world. Given that domestic airlines now have capacity, the government is negotiating with them to repatriate Canadian nationals and/or family members and permanent residents. Opportunities with other airlines are also being established to bring Canadians home, such as the flight operated by Ethiopian Airlines, which brought Canadians home in a non-stop flight from Cameroon to Toronto on May 2, 2020.

Roles and responsibilities of other federal departments and agencies

The Government of Canada is leading a coordinated approach to provide needed supplies and equipment across the country. This involves PSPC, the PHAC, Health Canada, Innovation, Science and Economic Development Canada (ISED), the National Research Council of Canada, Crown-Indigenous Relations and Northern Affairs Canada (CIRNA), Indigenous Services Canada (ISC), and Public Safety Canada. Global Affairs Canada is also implicated in the repatriation of Canadians, among other activities.

Public Services and Procurement Canada

Public Health Agency of Canada

Health Canada

Innovation, Science and Economic Development Canada

National Research Council of Canada

The National Research Council's Industrial Research Assistance Program will build on its existing relationships with thousands of Canada's most innovative small and medium-sized businesses to facilitate innovative marketplace solutions to fight COVID-19.

Public Safety Canada

Lead federal department with respect to the co-ordination of all government efforts with respect to addressing an emergency. It has a government operations committee that all other federal department and agencies feed into, as well as a federal/provincial/territorial committee to co-ordinate/manage efforts with provinces and territories.

Global Affairs Canada

COVID-19 Supply Council in support of Canada's response and recovery

In this section

Key messages

Mandate

The Government of Canada has created a COVID-19 Supply Council which will bring together a diverse group of leaders to provide the government with advice on the procurement of critical goods and services required as part of Canada's COVID-19 response and recovery.

The council will provide advice on building innovative and agile supply chains for goods in wide use such as masks, gloves and disinfectants, including production, sourcing, shipping and distribution strategies as the situation surrounding COVID-19 continues to evolve.

Structure of the council

The council is an advisory body reporting to the minister of Public Services and Procurement, who serves as the chair of the council. The council consists of 17 members from across the public, private and non-profit sectors. Members were selected for their expertise and leadership in their respective fields and their work on the council will be on a voluntary basis.

The council will be convened until the end of 2020, a term that the minister can extend if circumstances require it.

Current status

The council held its first meeting on May 8, 2020.

The minister of Public Services and Procurement outlined Public Services and Procurement Canada (PSPC)'s role and procurement efforts to date. The meeting focused on discussions around planning for the future phases of the COVID-19 pandemic. The minister noted that with most jurisdictions already turning their attention to developing plans to restart their economies and the return to work which is expected to put additional pressure on personal protective equipment (PPE) inventories and create new sources of demand for commonly used medical items such as masks, gloves, and disinfectant.

The goal of the meeting was to identify opportunities for collaboration to help ensure that Canada has an agile supply chain that is well positioned to support the production, sourcing, shipping, and distribution of key goods needed to respond to and recover from this pandemic.

Meetings

The council will meet regularly at the call of the Chair, and will meet by teleconference or videoconference given current travel restrictions.

Council members may recommend that the Minister invite experts as guest speakers for specific council meetings where additional input may be warranted.

The council will be convened until the end of 2020, a term that the minister can extend if the circumstances require it.

Remuneration and other expenses

The members of the council will be appointed by the minister and will volunteer their time for the work of the council.

Should members of the council be required to travel, they are eligible to be reimbursed for their travel, living and other expenses related to their work while absent from their ordinary place of work or residence. This reimbursement will be made in accordance with Treasury Board directives.

Secretariat

The secretariat led by PSPC will provide the council with the administrative services and facilities it needs to perform its duties and functions. The secretariat will support the minister in developing agendas for council meetings and identifying key public policy issues on which the minister would seek the council's advice. The secretariat will also engage in fact-finding to inform the deliberations of the council, including interviewing experts who are not members of the council.

Communications

The minister will be the sole spokesperson for the work of the council and will be responsible for approving all communications material that would be made available publicly. Following council meetings, the minister may direct the secretariat to issue a public read-out of key recommendations or decisions.

Confidentiality and conflict of interest

Council members are responsible for maintaining the confidentiality of all proprietary, confidential or privileged information that they are provided and will be expected to sign a non-disclosure agreement to that effect prior to volunteering their time for the work of the council. Members should also disclose to the secretariat any instances where their involvement in the council could lead to a conflict of interest.

Changes to terms of reference

These terms of reference may be reviewed periodically, and amendments may be made when deemed appropriate by the chairperson. Changes cannot, however, cause the terms of reference to deviate significantly from the council's intent.

Membership

The following is a list of the COVID-19 Supply Council members:

Partnerships

In this section

Amazon, Purolator and Canada Post

Key messages

If pressed on the rationale for Amazon:

If pressed on Public Health Agency of Canada's role:

The Public Health Agency of Canada (PHAC) will maintain oversight of all orders from provinces and territories to ensure supplies are distributed appropriately.

If pressed on Amazon's role:

If pressed on Canada Post and Purolator's role:

Canada Post is currently handling the 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 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, Public Services and Procurement Canada (PSPC), on behalf of PHAC, signed a $5 million contract with Amazon to efficiently 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 PPE and supplies ordered by PSPC will typically be done by Purolator for large shipments on pallets and by Canada Post for smaller shipments. PPE and supplies have been warehoused to date 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.

Amazon is offering their assistance to Canada for no profit until June 30, 2020. Fees beyond June 30 will be less than Amazon's standard commercial fees, and will be determined before May 30. The bulk of the $5 million announced is to pay Purolator or Canada Post for transportation charges.

Canadian Embassy in China

With the global market being challenged by the overwhelming need for medical supplies, PSPC has been working closely with Global Affairs Canada (GAC) in Ottawa, the Canadian Embassy in Beijing and the Canadian consulates in Shanghai and Guangzhou. This collaboration is intended to help navigate and expedite the rapidly changing environment in China when it comes to the supply of PPE such as masks, gowns, swabs, test kits, and other products needed in Canada in support of the COVID-19 pandemic.

To support these efforts, PSPC has engaged a third-party logistics provider and various experts to help officials navigate what had suddenly become the world's most competitive industry. They are assisting Canada to identify sources of supply that will meet Canadian standards, secure the supply chain and to help through the export process.

Through daily teleconferences, we are taking stock of the status of planned shipments to assist with flights from Shanghai to Canada, identify issues and find solutions or mitigations. This provides 24/7 coverage.

As of end of day May 6, 2020, we have had 24 flights from Shanghai to Canada and we have entered into contractual arrangements with Cargojet and Air Canada to provide sufficient capacity going forward.

Logistics services

At the end of March, PSPC entered into a contract with Bolloré Logistics Canada Inc. using established emergency contracting authorities to provide urgent logistics and transportation services related to the procurement of PPE and medical supplies from China.

Bolloré Logistics Canada Inc is on a standing offer with the Government of Canada for freight and cargo services and was selected due to its previous experience providing logistics services to Canada and its significant footprint in China. The decision was based on minimizing risks and on the urgency of the requirement.

We have also recently issued a competitive request for proposal to add a second third-party logistics provider. We expect to have a second third-party logistics provider under contract around mid-May 2020.

Flights: Key statistics related to personal protective equipment

On April 19, one of our chartered cargo flights returned from China to Canada without its intended shipment of federally purchased PPE on board. This occurred because the cargo could not be cleared through the handling protocols in time to be loaded. As a result, the intended cargo was not loaded on the plane before its required takeoff time.

Air Canada took quick action to load standby shipments belonging to other customers, bringing much needed goods back to Canada. Air Canada has credited the Government of Canada with the costs they recovered as a result of that transport flight.

The table below provides flight schedule and content, as at May 8, 2020.

Table 2: Flight schedule
No. Status Airline Departure Departure date/time Arrival Arrival date/time Load
(estimated for flight planning)
See load list and PHAC for actual numbers
1 Completed Bolloré Shanghai 31 Mar 11:45 pm Pearson 01 Apr 9:55 pm GC: 500K N95 masks, 40K surgical masks
2 Completed Bolloré Shanghai 05 Apr 7:55 am Pearson 06 Apr 7:55 am GC: 8M surgical masks
3 Completed Cargojet Shanghai 10 Apr 12:05 am Hamilton 11 Apr 5:23 pm GC: 1.5M N95
Quebec: masks, protective clothing, nitrile gloves
4 Completed Air Canada Shanghai 12 Apr 12 am Pearson 12 Apr 4:35 pm GC: 250K N95
Quebec: masks and gowns Canadian Red Cross (CRC) (via Hawktree): masks
5 Completed Air Canada Shanghai 12 Apr 2 am Montréal 12 Apr 6:20 pm Quebec: gowns
6 Completed Air Canada Shanghai 12 Apr 3 am Pearson 12 Apr 7:20 pm GC: 750K N95
Quebec: masks
7 Completed Cargojet Shanghai 17 Apr 8:14 am Hamilton 17 Apr 9:04 pm GC: 2M N95 [Redacted], 100K surgical masks [Redacted] + 35K coverall [Redacted]
Quebec, Ontario, NS: Various load masks and gowns
CRC via Hawktree: masks + isolation suits
8 Completed Bolloré Shanghai 17 Apr 6 pm Hamilton 17 Apr 9:12 pm GC: 750K N95 [Redacted], 30K coverall [Redacted]
Quebec: various load masks/medical accessories
CRC (via Hawktree): masks
9 Completed Air Canada Shanghai 19 Apr Pearson 19 Apr No GC load due to airport congestion
10 Completed Cargojet Shanghai 19 Apr Hamilton 19 Apr 11:57 pm GC: 600K M N95 [Redacted]
Quebec: masks
Other: medical supplies (Bolloré customers)
11 Completed Cargojet Shanghai 21 Apr 5:25 am Hamilton 21 Apr 10:44 pm GC: 1.5M N95
12 Completed Cargojet Shanghai 22 Apr 5:33 am Hamilton 22 Apr 10:16 pm GC: 100K N95, 8M surgical masks
Quebec: mix load of masks, swabs, gowns and face shields
13 Completed Cargojet Shanghai 23 Apr 5:58 am Hamilton 23 Apr 10:54 pm This aircraft will have PPE primarily for other jurisdictions due to delays of GC orders resulting from congestion at the airport and new export rules that required repackaging of orders.
Quebec: masks and gowns
14 Completed Cargojet Shanghai 24 Apr 5:38 am Hamilton 24 Apr 10:16 pm This aircraft will have PPE primarily for other jurisdictions due to delays of GC orders resulting from congestion at the airport and new export rules that required repackaging of orders.
Ontario: masks
Quebec: gowns
Canadian Red Cross: masks
15 Completed Air Canada Shanghai 25 Apr 6:41 am Pearson 25 Apr 9:05 am Includes load that did not make it on the empty flight
GC: 750K N95 masks
Quebec: face shields and swabs
Ontario: Masks
16 Completed Cargojet Shanghai 25 Apr 8:45 am Hamilton 26 Apr 10:35 am GC: 900K N95 masks
Quebec: swabs and isolation gowns
17 Completed Cargojet Shanghai 27 Apr 5:21 am Hamilton 27 Apr 9:42 pm GC: 700K N95 masks
Quebec: isolation gowns
Includes 180 cubic metres partial loads from on 25 Apr flight
18 Completed Cargojet Shanghai 28 Apr 4:54 am Hamilton 28 Apr 10:45 pm GC: 650K N95
Quebec: face shields and gowns
19 Completed Cargojet Shanghai 29 Apr 7:55 am Hamilton 30 Apr 7:26 am GC: 950K N95
Quebec: gowns, masks, sewing machine
20 Completed Cargojet Shanghai 30 Apr 5:29 am Hamilton 30 Apr 10:25 pm GC: 700K N95, 6M surgical masks
Quebec: masks
21 Completed Cargojet Shanghai 1 May 5:01 am Hamilton 1 May 10:28 pm GC: 170K gowns
22 Completed Cargojet Shanghai 5 May 5:13 am Hamilton 5 May 10:52 pm Through Shanghai airport UPS
GC: 8M surgical masks
23 Completed Air Canada Shanghai 6 May 12 am Pearson 6 May 5:52 pm Through Shanghai airport UPS
GC: 8M surgical masks
24 Completed Cargojet Shanghai 6 May 7:01 am Hamilton 6 May 11:25 pm Through Shanghai airport UPS
GC: 6M surgical masks, 31K gowns
25 a In flight Cargojet Shanghai 6 May 7:01 am Hamilton 6 May 11:25 pm Through Shangai airport UPS
GC: 6M surgical masks, 31K gowns
25 b In flight Air Canada Shanghai 7 May 1:57 am Pearson 7 May 5:39 pm Not a GC chartered flight. For partial cargo from AC-2284 06 May. GC: 2M surgical masks
26 Booked Cargojet Shanghai 8 May 5:25 am Hamilton 8 May 10:45 pm Through Shanghai airport UPS
GC: 3.6M surgical masks
Benchmark: tools and masks
Long term care consortium: gowns
27 Booked Cargojet Shanghai 9 May 5:25 am Hamilton 9 May 10:45 pm Load being finalized
GC: 5M surgical masks, 1.5M gloves
28 Booked Cargojet Shanghai 10 May 5:25 am Hamilton 10 May 10:45 pm Load being finalized
GC: 54K Googles, 4M surgical masks, 20K disposable facemasks with shields
29 Booked Cargojet Shanghai 11 May 5:25 am Hamilton 11 May 10:45 pm Unavailable
30 Booked Cargojet Shanghai 12 May 5:25 am Hamilton 12 May 10:45 pm Unavailable
31 Booked Cargojet Shanghai 13 May 5:25 am Hamilton 13 May 10:45 pm Unavailable
32 Booked Cargojet Shanghai 14 May 5:25 am Hamilton 14 May 10:45 pm Unavailable
33 Booked Cargojet Shanghai 15 May 5:25 am Hamilton 15 May 10:45 pm Unavailable
34 Booked Cargojet Shanghai 16 May 5:25 am Hamilton 16 May 10:45 pm Unavailable
35 Booked Cargojet Shanghai 17 May 5:25 am Hamilton 17 May 10:45 pm Unavailable
36 Booked Cargojet Shanghai 18 May 5:25 am Hamilton 18 May 10:45 pm Unavailable
37 Booked Cargojet Shanghai 19 May 5:25 am Hamilton 19 May 10:45 pm Unavailable
38 Booked Cargojet Shanghai 20 May 5:25 am Hamilton 20 May 10:45 pm Unavailable
39 Booked Cargojet Shanghai 21 May 5:25 am Hamilton 21 May 10:45 pm Unavailable
40 Booked Cargojet Shanghai 22 May 5:25 am Hamilton 22 May 10:45 pm Unavailable
41 Booked Cargojet Shanghai 23 May 5:25 am Hamilton 23 May 10:45 pm Unavailable
42 Booked Cargojet Shanghai 24 May 5:25 am Hamilton 24 May 10:45 pm Unavailable
43 Booked Air Canada Shanghai 24 May Pearson 24 May Unavailable
44 Booked Cargojet Shanghai 25 May 5:25 am Hamilton 25 May 10:45 pm Unavailable
45 Booked Cargojet Shanghai 26 May 5:25 am Hamilton 26 May 10:45 pm Unavailable
46 Booked Cargojet Shanghai 27 May 5:25 am Hamilton 27 May 10:45 pm Unavailable
47 Booked Cargojet Shanghai 28 May 5:25 am Hamilton 28 May 10:45 pm Unavailable
48 Booked Cargojet Shanghai 29 May 5:25 am Hamilton 29 May 10:45 pm Unavailable
49 Booked Cargojet Shanghai 30 May 5:25 am Hamilton 30 May 10:45 pm Unavailable
50 Booked Air Canada Shanghai 31 May Hamilton 31 May Unavailable
51 Booked Cargojet Shanghai 31 May 05:25 Hamilton 31 May 10:45 pm Unavailable

Domestic capacity

In this section

Key message

Our goal is to be over prepared and we are ordering supplies in anticipation of future needs, while at the same time directly supporting Canadian industry to scale-up and re-tool to build domestic capacity.

Background

Thousands of firms and individuals have reached out in response to the government's call to action to offer support for personal protective equipment.

Companies with a viable product or service are being triaged into 1 of 3 places:

Procurement (Public Services and Procurement Canada)

Companies with a viable product to see that meets Canada's public health needs.

Assessment (Public Health Agency of Canada)

Companies with a potentially viable product that needs to be assessed rapidly by the technical advisory team before being approved for purchase.

Innovation (National Research Council Canada, Innovation, Science and Economic Development Canada, Business Development Bank of Canada, Export Development Canada)

Companies with a potentially viable product that needs technical or financial support to serve Canada's public health needs or scale up.

Innovation, Science and Economic Development Canada (ISED) is leading the Plan to Mobilize Industry to fight COVID-19 that has a number of important components, such as:

On May 3, the minister of Innovation, Science and Industry, announced a contribution of $175.6 million to AbCellera Biologics, a Canadian biotechnology company that researches and discovers next-generation antibody drugs to fight infection and disease.

This contribution is part of Canada's Plan to Mobilize Science to fight COVID-19, announced on March 23, 2020, which includes significant investments in Canada's world-class research community to develop vaccines and treatments for COVID-19 and to diagnose the disease. These investments in research, combined with investments in innovation and manufacturing capacity, will help stop the spread of COVID-19 and, ultimately, facilitate our return to work and economic recovery.

To date, Public Services and Procurement Canada (PSPC) has placed orders for millions of key items, such as masks, test kits, and ventilators, and we have established agreements with Canadian companies that are stepping up to support Canada's efforts to combat COVID-19:

Canadian entrepreneurs: Pivoting to personal protective equipment production

Canada Goose

Canada Goose has ramped up domestic production of personal protective equipment (PPE) for frontline healthcare workers across Canada. The company has begun to reopen all of its 8 Canadian facilities. Once operating at full capacity, as many as 900 employees will be working to support these efforts.

Canada Goose has signed supply contracts directly with the provinces. Additionally, it is expected to deliver approximately 168,000 gowns by end of May to the Government of Canada. Any unintentional profits potentially derived from efficiencies will be donated to national COVID-19 relief funds.

This announcement builds on its commitment to manufacture and donate 14,000 units of gowns and scrubs at no charge. Produced in 2 of its Toronto and Winnipeg facilities, product shipments to hospitals and healthcare facilities across Canada began in April.

Bauer

Located in Blainville, Quebec, Bauer has shifted its ice-hockey skate production lines to make face shields. Canada has ordered 1 million face shields from Bauer. More than 400,000 units have already been delivered. It is expected that the delivery will be completed by the end of May.

Stanfield's Ltd.

An historic Canadian undergarment factory famed for long johns and boxer shorts is reinventing itself as a domestic producer of medical gowns. Jon Stanfield, the chief executive of the fifth-generation family firm, said in an interview he has already sourced approved fabric from nearby Intertape Polymer.

A contract was put in place to produce 2.6 million gowns. Delivery started early May and will continue until the end of October 2020. Canada received the first delivery May 8.

CAE Inc.

CAE Inc. (formerly Canadian Aviation Electronics) is a Canadian manufacturer of simulation technologies, modelling technologies and training services to airlines, aircraft manufacturers, healthcare specialists, and defence customers. CAE was founded in 1947 and is located in Quebec.

CAE has proposed an innovative ventilator design that will leverage its capability as a powerhouse manufacturer and vast supply chain. PSPC has put a contract in place to develop and manufacture 10,000 ventilators. CAE has engaged over 100 of its employees to work on engineering, procurement, manufacturing facilities, testing, configuration management, etc.

HP Canada

HP Canada has been working with its local value added resellers and manufacturer partners to create a "Made in Canada" capability to supply COVID-19 3D print applications and essential supplies to bolster the capacity of the existing traditional personal protection equipment supply chains and keep Canadians employed. PSPC has put in place a contract for the supply of 540,000 units of face shields using the 3D printing technology. Delivery is expected from May to October 2020.

Ford Canada

Ford Motor Co. of Canada Ltd. has announced plans to increase the production of face shields at its Windsor site operations in Ontario. The plant is working to assemble face shields for distribution across Canada. PSPC has put in place a contract for the supply of 2,500,000 units of face shields. Delivery is expected from May to August 2020.

Letters of intent

In response to the Government of Canada's call to action seeking support for personal protective equipment, the following letters of intent (LOIs) have been issued to date.

38 LOIs issued by ISED and PSPC:

Details:

Supply chain for personal protective equipment

In this section

Key messages

If pressed on N95 masks:

Quality assurance

Our main priority is making sure we get safe, effective equipment and supplies into the hands of front-line healthcare workers. Given the high level of complexity in the global supply chain due to extremely high demand, new suppliers entering the market, and multiple countries competing for the same items, ensuring quality of the product Public Services and Procurement Canada (PSPC) is purchasing is extremely important.

Quality assurance is happening at multiple points. First, manufacturers are required to certify that they are meeting specific standards and requirements. Second, new controls introduced by the Chinese government require additional oversight before products are cleared for export. And third, PSPC is working closely with the Public Health Agency of Canada and Health Canada on all purchases, to ensure they meet standards and requirements. Once products are delivered, the Public Health Agency of Canada unpacks and inspects items before they are distributed for use.

We have had challenges with respect to quality of goods for both N95 respirators and with test swabs. In both cases we took immediate action including suspending orders with certain manufacturers, and working closely with others to ensure that production issues are identified and corrected as soon as possible. PSPC, PHAC, and Health Canada are taking strong measures to ensure that defective products will not be distributed to frontline workers.

With regard to the N95 respirators that arrived with strap and air filtration issues, we took immediate action to suspend all orders from certain manufacturers, and are working to address quality issues through the supply chain.

On April 9, 2020 PSPC received 380,000 swabs that were not sterile. The company recalled the swabs from circulation and offered to pay any disposal costs. The company is replacing the non-sterile swabs at no additional charge to Canada. In the interim, given the ongoing need for swabs, Canada is sterilizing the non-sterile swabs at a cost of approximately $160,000.

Testing of material in Canada: Public Health Agency of Canada

PHAC is the lead with respect to testing material in Canada, and specific questions on this matter should be directed to PHAC officials.

Background on testing of respirators

Health Canada has contacted companies that may be importing or distributing certain respirators, including KN95 respirators that may not meet expected performance standards in Canada to request that they stop sale and relabel the products as face masks instead of respirators.

This follows the recent US Food and Drug Administration (FDA) communication regarding concerns that certain filtering face piece respirators from China may not provide consistent and adequate respiratory protection conducted by the National Institute for Occupational Safety and Health (NIOSH)—National Personal Protective Technology Laboratory (NPPTL) of the Centers for Disease Control and Prevention (CDC).

Health Canada has asked importers and distributors that may have imported respirators that do not meet performance standards to notify their customers and relabel products to indicate that while these masks may not meet the standards required for frontline healthcare workers, they could be used as face masks in settings where a 95% filtration is not needed. The products are not being removed from the market.

This action does not implicate KN95 respirators purchased by the Government of Canada and tested by the Public Health Agency of Canada (PHAC). Before allocating any personal protective equipment to the provinces or territories for frontline healthcare workers, PHAC conducts a quality verification. For KN95 respirators, this includes a visual inspection to check for defects in design and construction, and testing to confirm that they meet filtering specifications. KN95 respirators distributed to provinces and territories by PHAC meet the Government of Canada's technical specifications for healthcare settings for COVID-19 response.

Health Canada is following up with companies that may have imported and distributed respirators that were tested by the CDC NPPTL and did not meet performance standards.

Health Canada will ensure that any companies that have distributed impacted products take appropriate action to stop selling any impacted products, notify customers and relabel existing stock as face masks instead of respirators. Should additional safety concerns be identified, Health Canada will take appropriate action and inform Canadians, as necessary.

Testing and quality assurance process:

Buy and Sell website

In this section

Key messages

If pressed on timelines:

We must make sure that the equipment that our frontline workers rely on is high quality, so they can stay safe, and keep us safe too. That is why we have strong processes in place to ensure that the supplies we procure meet the necessary standards.

Role

Public Services and Procurement Canada (PSPC) is proactively engaging industry to help meet Canada's needs and ensure suppliers have a clear pathway through our Buy and Sell website to connect with the Government of Canada if they are able to supply goods and services that may be of use.

The Government of Canada needs information about products and services that businesses can supply in support of Canada's response to COVID-19. This includes personal protection equipment (PPE), like disposable N95 masks, vinyl gloves and hand sanitizer. It also includes different services, such as security, nursing, and food services. The full list is posted on Buyandsell.gc.ca. Information regarding product specifications is also available on the website.

A call to suppliers was posted to the Government of Canada's Buy and Sell webpage on March 12. As of May 8, we have received more than 26,000 responses to the call-out, of which nearly 17,000 are domestic responses.

Process for receiving, assessing and triaging requests

A centralized approach allows us to receive, assess and triage information in a systematic manner.

Forms submitted online are uploaded into a database that identifies company names, product(s) available, quantities and contact information.

Additional Background—Not to be shared publicly

The information provided by domestic suppliers is assessed and triaged into 4 tiers. A total of 16,981 unique domestic forms, comprising all domestic forms submitted up to and including May 7, 2020. Note this excludes duplicates and amended forms. The unique domestic forms were triaged (triaging done by PricewaterhouseCoopers; numbers in brackets represent companies in each tier):

Contacting companies

An email was sent to domestic applicants on April 23, 2020, to inform them that they should expect to hear from PSPC officials shortly in order to obtain more information on their submission.

Note

Not all domestic applicants received the email. We found roughly 300 to 500 email addresses that were invalid or problematic, and we are exploring options to deal with these in an alternate manner. PSPC officials have communicated with nearly all domestic companies who submitted forms.

Status of contacts (as of May 8):

(Not for public disclosure: total contacted amounts to 17,124, which is 143 more than the 16,981 cited above. Discrepancy is being explored, and is likely due to the Office of Small and Medium Enterprises (OSME) contacting companies that reached out to PSPC but did not submit forms online.)

In addition, we have responded to more than 6,500 (6,853) emails to our generic inbox (bpme.osme@tpsgc-pwgsc.gc.ca) and thousands of phone calls (6,446) to our hotline (1‑800‑811‑1148) since the start of the pandemic.

Domestic companies defined

A response is considered to be from a domestic company (or source) when:

Additional Information: Suppliers communicating with Public Services and Procurement Canada

Communication with suppliers is centralized through a generic email address (bpme-osme@tpsgc-pwgsc.gc.ca) on the COVID-19 Buy and Sell webpage. Companies can ask questions, check on the status of their submission or provide new information (quantities, specifications, etc.) to be included in the database.

As communication with suppliers is key to the success of this initiative, we have sent an email to all domestic applicants, and are working to contact each one of them to obtain more information on their submissions.

For companies offering goods or services that are not urgent at the moment but may be in time (for example editing or translation services, or offering artificial intelligence (AI) solutions), we are contacting them to acknowledge their submission, keep their information on file and to encourage them to register to the automated email notification service on Buy and Sell. We are also encouraging them to avail themselves of the services provided by OSME to learn about how to participate in federal procurement.

National security exception

In general, the national security exception (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. The rationale for the need to invoke any NSE is considered on a case-by-case basis and is documented in the exchange of letters which, in accordance with the Canadian International Trade Tribunal Procurement Inquiry Regulations, occurs at the assistant deputy minister (ADM) level.

In the case of COVID-19, after the World Health Organization (WHO) declared the pandemic, Public Health Agency of Canada (PHAC) made a request on behalf of the federal government that Public Services and Procurement Canada (PSPC) invoke the NSE with respect to the acquisition of goods and services required in order to respond to the COVID-19 pandemic. That invocation is time-limited and applies only until the WHO no longer declares the COVID-19 pandemic a public health emergency of international concern. It covers a broad range of goods and services and includes but is not limited to:

PHAC and PSPC considered it necessary to remove these procurements from the application of the trade agreements for the following reasons:

Once invoked, no further decision is required on whether or not to apply the invocation to a specific procurement as it applies to all procurements required in order to respond to the COVID-19 pandemic. However, even when the NSE has been invoked, contracting officers generally try to adhere to the disciplines of the trade agreements to the extent possible and particularly to the fundamental principles of the trade agreements of fairness, transparency and openness. Many of the obligations Canada has undertaken under the trade agreements are also obligations at common law, and PSPC must continue to fulfill those obligations.

This general invocation regarding COVID-19 applies only to procurements conducted by PSPC, and not to procurements conducted by other departments under their own authorities.

To date, there are 2 other NSE invocations related to the COVID-19 pandemic that we concluded required a separate invocation:

Donations: How they are being used

The Government of Canada is receiving donations of medical supplies both internationally and domestically from companies and is working to make them available for use by frontline healthcare workers.

Public Health Agency of Canada (PHAC) is leading the co-ordination of donations of medical supplies and equipment in partnership with a number of key partners including the Canadian Red Cross, and the Canadian Armed Forces.

Individuals, businesses and other organizations can contact PHAC, which will then trigger a series of activities from their partners, depending on whether the donations are located domestically, or internationally. Once donations have been identified, they will be transported to Canada, sorted by the Canadian Red Cross, and then provided to provinces and territories for distribution.

Interested donors with sealed personal protective equipment (PPE) purchased in Canada should consider donating directly to their local hospital, healthcare authority, or other provider. If donors are unsure about the quality, or require assistance transporting and/or importing large orders, PHAC has established testing processes to ensure all PPE equipment meets Canadian standards.

PHAC assesses all donations to ensure they meet Canadian standards. This assessment will also determine whether the products we receive are suitable for medical use or better suited for community use (for example, for critical infrastructure workers, or other locations where the likelihood of infection is lower).

All donated PPE is allocated collaboratively with provinces and territories on a per capita basis, though may be diverted to meet specific requests for assistance as needed. Each province has complete discretion over how to allocate PPE across their healthcare systems.

To date, PHAC has distributed millions of gloves, masks, and other PPE from generous donors such as:

Looking forward to post COVID-19 for procurement

In this section

Procurement activities

Looking forward beyond the immediate emergency brought on by COVID-19, procurement will play a critical role in ensuring a quick and full recovery of the Canadian economy. Public Services and Procurement Canada (PSPC) will continue working with other government departments to ensure that their procurement needs are actioned quickly.

For example, partnerships with Innovation, Science and Economic Development (ISED) will continue as the government continues to leverage Canadian innovation and ingenuity through the innovative solutions Canada programs. There will also be contracts established, such as the one awarded to Medicom Canada, to continue to strengthen Canada's domestic capacity to respond to another pandemic, or a potential re-appearance of COVID-19.

The current challenges and constraints to the procurement of personal protective equipment (PPE) are providing a number of lessons learned that will likely impact future procurement activities:

Domestic supply

Canada has been very reliant on foreign supply, particularly Chinese supplies of PPE, medical devices and medications. In the future, there could be more emphasis on sourcing essential products within Canada.

Supply chains

Globalization has contributed to the development of complex international supply chains. To better manage the risk of obtaining goods and services when facing an emergency, a deeper understanding of global supply chains that produce these essential goods and services is required.

Logistics

Outside of an emergency situation, it has been the responsibility of a client department and the suppliers to manage logistics, including delivery of products to the end user. In order to effectively respond to the pandemic crisis, PSPC has played a lead role in logistics to successfully get product to Canada, which could impact how we do things in the future.

Contingency

The challenges of ramping up supply of PPE and equipment suggest the potential for additional contingency measures in the future, such as changes to the National Emergency Strategy Stockpile, contingent contracts and emergency procurement authorities.

In addition to potential changes in procurement activities, it can be expected that the guidelines being developed to support the transition back to work will drive demand for new and additional PPE, equipment and goods.

As overall government operations resume, PSPC will continue playing an important role in ensuring that contracts are competed, awarded, and managed so that the critical goods and services being delivered to Canadians continue.

Future reporting requirements

PSPC will be working closely with central agencies and other government departments to ensure that appropriate measures have been put in place to deliver on reporting requirements.

From a procurement standpoint, there are a number of existing requirements that PSPC will continue to meet including those for the Public Accounts, departmental reporting, as well as other requirements to report on specific activities to central agencies, such as the use of an emergency contracting authority.

The response to COVID-19 procurement has necessitated the use of tracking tools and the development of different tracking reports. As an example, new reports have been developed to track supplies through the logistical process, from production to export and custom inspections, shipments and deliveries.

Post COVID-19, PSPC will draw lessons learned from these reporting activities and carry forward best practices.

Future audit requirements

It is anticipated that future audits and evaluations could focus on the use of non-traditional procurement authorities with an emphasis on the documentation, due diligence and controls used in exercising special authorities granted during this COVID-19 period.

Another potential avenue of audit activity could involve work on lessons learned on COVID-19, to continue efforts that worked well and to identify potential areas to better prepare for the next emergency and/or pandemic.

Document navigation for "Standing Committee on Government Operations and Estimates: May 15, 2020"

 

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