Procurement: Standing Committee on Government Operations and Estimates—June 16, 2020

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

Key message

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 June 10

• 12.5 million N95 masks have been delivered to Canada through federal orders (around 121 million on order)
• We have received over 107 million surgical masks (orders total more than 340 million)
• Canada has received over 30 million pairs of medical gloves, and in addition to the tens of millions of litres of hand sanitizer that we have ordered so far that are sourced from a number of domestic and international suppliers, including Fluid Energy in Alberta
• We have orders in place for over 125 million medical gowns including domestic contracts with Stanfield’s in Truro, Nova Scotia and Canada Goose in Toronto and Winnipeg for millions more
• On top of the ventilator capacity that the provinces have to respond to a surge situation, we have received 203 ventilators, are ordering thousands more, and are working with Canadian companies to produce close to 40,000 made-in-Canada ventilators
• We have ordered test kits to test millions more Canadians over and above the over 1.1 million Canadians that have already been tested, and we have signed contracts for additional rapid testing capability, including the technology offered by Canada’s Spartan Bioscience

Table 1: Purchases and expected delivery

Item	Confirmed orders to date (as of June 10, 2020)	Items received to date	Delivery status
Gloves (pairs)	1,075,693,980	34,542,975	Delivery underway
Face shields	55,653,000	13,784,030	Delivery underway
N95 respirators	121,861,800	12,546,070	Delivery underway
Surgical masks	340,803,750	107,879,500	Delivery underway
Gowns	126,625,441	3,862,593	Delivery underway
Hand sanitizer	Over 20 million litres	6,646,100 units	Delivery underway
Ventilators	39,928	203	Delivery underway

In addition to these critical goods, Public Services and Procurement Canada (PSPC) 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 (CBSA) officers, Royal Canadian Mounted Police (RCMP) officers, and Canadian Food Inspection Agency (CFIA) meat inspectors.

Supplying the Canadian response to COVID-19

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:

[Redacted]

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’s 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.

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 (CIRNAC), 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

• PSPC is leveraging existing supply arrangements, as well as engaging with the broader domestic and international supply communities to identify and purchase required products. It manages coordinated, consolidated bulk buying
• The department is also working to leverage the offerings of the suppliers that came forward with products and/or services they could offer to support Canada’s response
• The department is now posting competitive request for proposals on Buy and Sell for the procurement of selected PPE such as cloth masks, disposable face covering and face shields
• The minister of Public Services and Procurement has established a Federal-Provincial-Territorial Ministerial Procurement Working Group with her counterparts across the country, to ensure a coordinated approach to purchasing equipment and supplies needed to fight COVID-19 in the global marketplace
• The minister has also established the COVID-19 Supply Council which brings 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 is also providing 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

Public Health Agency of Canada

• PHAC leads collaboration with federal partners, provinces and territories to identify needs and requirements of front line health care workers for the COVID-19 response and is responsible for distribution of essential goods
• The agency also oversees Canada's National Emergency Strategic Stockpile, which contains supplies that provinces and territories can request in emergencies
• PHAC has played a critical role in ensuring that the testing of goods and equipment is undertaken to ensure that it meets the standards established by Health Canada before being delivered to front line health care workers

Health Canada

• As the regulatory body for health products, Health Canada is working to expedite access to the supplies Canadians need to help limit the spread of COVID-19, as well as set out the standards and requirements for the goods and equipment being brought in to fight the pandemic
• On March 18, the minister of Health signed an interim order to allow expedited access to COVID-19 related medical devices. Health Canada also introduced an interim measure to help facilitate access to certain products, such as personal protective equipment

Innovation, Science and Economic Development Canada

• ISED is leading Canada’s Plan to Mobilize Industry to fight COVID-19. ISED is introducing new measures to directly support businesses seeking to rapidly scale up production or re-tool their manufacturing lines to develop products made in Canada that will help in the fight against COVID-19. On March 20, ISED issued a call to action for manufacturers and business
• On May 8, the minister of Innovation, Science and Industry, announced the new Industry Strategy Council, chaired by Monique Leroux—a strong business leader with a distinguished career in Canadian finance. This council serves as an advisory board to assess the scope and depth of COVID-19’s impact on industries and inform government’s understanding of specific sectoral pressures. By enlisting senior business leaders, the council will build on Canada’s strong partnerships between government and industry, notably the Economic Strategy Tables, to support Canadians and their jobs. This proactive and strategic approach is designed to bring the private sector to the table to directly share its perspective on the scope of the challenges being faced across industries

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

• Continues to provide consular services and leads efforts on the repatriation of Canadians. PSPC has put in place contracts with air charters on behalf of Global Affairs Canada to transport Canadian citizens home from around the world
• In addition, the department has played a critical role in providing consular services to PSPC with trade contracts, vetting suppliers, and assisting with international logistics

Indigenous Services Canada

• ISC collaborating with PHAC, other Government of Canada departments, and provincial and territorial governments as well as Indigenous partners to protect the health and safety of Indigenous Peoples. This includes supporting Indigenous partners in responding to public health threats
• ISC's network of regional health emergency management coordinators, communicable disease nurses, environmental public health officers and medical officers advises and supports First Nation communities and leads on public health emergency preparedness and response south of 60. ISC funds or directly employs public health, home care and primary care nurses across many First Nation communities
• ISC is working closely with Indigenous partners as well as with Government of Canada departments to support the new Indigenous Business COVID-19 Response Task Force which will create a comprehensive and searchable Indigenous business database that can be used by federal government departments that are looking for COVID-19 related suppliers.

Crown-Indigenous Relations and Northern Affairs Canada

• CIRNAC continues to renew the nation-to-nation, Inuit-Crown, government-to-government relationship between Canada and First Nations, Inuit and Métis; modernize Government of Canada structures to enable Indigenous Peoples to build capacity and support their vision of self-determination; and lead the Government of Canada's work in the north
• In response to the impact of the COVID-19 pandemic on First Nations, CIRNAC is working collaboratively with the First Nations Finance Authority to provide financial relief so that the First Nations can focus on the health and safety needs of their communities during the pandemic

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

Key messages

• The Government of Canada has created a COVID-19 Supply Council which brings together a diverse group of leaders to provide the government with advice on the procurement of critical goods and services to fight the pandemic
• The council is providing advice on building innovative and agile supply chains for goods in common use, such as masks, gloves and disinfectants
• We continue to support Canadians and take the necessary steps to supply Canada with the goods and services to combat COVID-19

Mandate

The Government of Canada has created a COVID-19 Supply Council which brings 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 is also providing 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 16 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 is on a voluntary basis.

The council first met on May 8, 2020, and will be convened until the end of the year, a term that the minister can extend if circumstances require it.

Current status

The council held its first meeting on May 8, 2020. The focus of the meeting was a roundtable discussion during which each council member provided a brief overview of the work their organization or sector was playing in supporting the supply of goods required to respond to the COVID-19 crisis. Topics raised included the procurement of PPE in various regions and sectors, the need for PPE in various sectors, and innovative practices to manage through this crisis, including establishing partnerships and new approaches.

The council’s second meeting was held on May 28, 2020. The council’s discussion focused on efforts underway to support buyers and sellers of PPE in the Canadian market. Council members discussed existing initiatives in provinces, territories, private sector and non-profit organizations to help link buyers and sellers of PPE, as well as the importance of providing information such as product specifications and guidance on the appropriate use of PPE in workplaces. Council members provided feedback and ideas for additional supports and tools that may be of assistance to Canadian buyers and sellers of PPE.

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.

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.

Selection of members

Council members were selected by the Chair to represent a diverse range of private and not-for-profit organizations. This inherently means that they have links with organizations that may have sought or received government funding, engaged in lobbying activities on matters of public policy or, very rarely, bid on or been awarded contracts with the Government of Canada.

However, the Supply Council has no involvement in decisions related to legislative proposals, policy or program design, awarding of financial benefits, or awarding of contracts on behalf of the federal government. It is common practice for PSPC to engage suppliers in discussions on general matters related to procurement policies and practices, and the Supply Council builds on best practices for managing stakeholder engagements with organizations that may have commercial interests in Government of Canada procurement processes.

PSPC has reviewed the affiliations of Supply Council members to ensure awareness of areas where there may be risk of a real or perceived conflict of interest between members’ affiliations and the topics being raised for discussion at the Supply Council. Care is taken to ensure that agenda items are general in nature and do not disclose privileged information related to matters such as funding programs or active contracting processes that could lead to potential conflicts of interest. As a further precaution, members have signed an agreement requiring them to recuse themselves in the event that an agenda item inadvertently poses a potential risk of real or perceived conflict of interest.

Indigenous representation

Tabatha Bull, President and chief executive officer (CEO) of the Canadian Council for Aboriginal Business was selected to ensure that Indigenous businesses have a voice at the Supply Council table. Her input helped PSPC include information on Indigenous businesses involved in supplying PPE in the recently launched PPE supply hub website.

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:

• Bramwell Strain, President and CEO of the Business Council of Manitoba
• Dave McHattie, Vice President, Institutional Relations Tenaris Canada; Chair of the Board of Canadian Manufacturers and Exporters
• The Honourable Perrin Beatty, PC, OC, CEO and President, Canadian Chamber of Commerce
• Tabatha Bull, President and CEO of the Canadian Council for Aboriginal Business
• Diane J. Brisebois, President and Chief Executive Officer of the Retail Council of Canada (RCC)
• Tina Lee, CEO, T&T Supermarkets
• Christine Hrudka, Chair of the Canadian Pharmacists Association
• Jodi Hall, Chair of the Canadian Association of Long Term Care; Executive Director, New Brunswick Association of Nursing Homes (NBANH)
• Sue Paish, CEO, Digital Supercluster and leads BC Supply Hub
• Eric Edmondson, President and CEO, Air Georgian; Chair of the Board of the Air Transport Association of Canada
• François Laporte, President of Teamsters Canada
• Joyce Carter, President and CEO of Halifax International Airport Authority (HIAA); Elected Chair of the Canadian Airports Council (CAC)
• Stephen Laskowski, President, Canadian Trucking Alliance (CTA)
• Sylvie Vachon, President and CEO of the Port de Montréal
• Conrad Sauvé, President and CEO of the Canadian Red Cross
• Paulette Senior, President and CEO, Canadian Women's Foundation

Partnerships

Amazon, Purolator and Canada Post

Key messages

• 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 personal protective equipment (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 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:

• 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, as well as other facilities, with Purolator assisting in getting the supplies to the warehouses from airports. Canada Post and Purolator, through their distribution networks, are delivering the supplies across Canada

If pressed on letter of interest /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 letter of interest/RFI notice was posted on the 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 letter of interest/RFI closed on May 7, and the review of the expressions of interest is now underway

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 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 the 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.

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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.

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 (RFP) to add a second third-party logistics provider. Five bids were received in response to the RFP and on June 9, 2020, we issued the contract to the winning bidder, Overseas Express Consolidators (OEC) Montreal Inc. This contract will provide additional capacity and contingency, when required, for services like the ones currently being provided by Bolloré Logistics Canada Inc. 

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.

Building domestic capacity

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 one of 3 places:

• procurement (Public Services and Procurement Canada): companies with a viable product that meets Canada’s public health needs
• assessment (Public Health Agency of Canada): companies with a potentially viable product that needs the 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:

• building the industrial capability needed to manufacture critical supplies at scale in Canada, this will be done either by re-tooling the manufacturing lines of existing Canadian businesses or rapidly scaling up the production of others that already produce these products
• refocusing Canada’s existing industrial and innovation programs, by adding to their mandate a requirement that they prioritize the fight against COVID-19, this includes:
  • the Strategic Innovation Fund to deliver direct support to Canadian companies for large-scale projects
  • National Research Council of Canada to expedite research and development with small and medium-sized enterprises
  • innovation superclusters to tap into a national network of 1,800 members, and Innovative Solutions Canada to help companies commercialize products more quickly

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:

• 16 contracts with Canadian textile manufacturers for the production of over 21.5 million medical grade gowns; mostly level 1 and 2
• Fluid Energy: a contract for a quantity of 10 million litres of hand sanitizer is in place, delivery started in April and will be completed by end of June 2020
• Medicom: a contract was awarded to scale up domestic production of medical and respirator masks, a company that has already delivered some of the more than 16 million surgical masks that Canada has received 
• Thornhill Medical: immediate purchase of 20 in-stock ventilator units (received May 7), with requirement to produce 1,000 additional units, Thornhill Medical has partnered with Linamar to support manufacturing of the ventilators
• 19 contracts with Canadian manufacturers have been put in place for the purchase of 43,653,000 units of face shields
• Stryker: contract in place for 82 units for the sterilization of N95 masks, technology is already being used and deployed in small and large health centres who currently have Sterrad units, which were recently approved for the sanitization of N95 masks
• LuminUltra: a contract was awarded to LuminUltra of Fredericton, NB, for the production and distribution of reagent to all provinces and territories, the contract will allow that every week, 1,042 extractions kits will be distributed (represents 500,000 extractions per week)
• Spartan Bioscience: a contract was awarded to Spartan Bioscience of Ottawa, Ontario for the delivery of 700 testing platforms and 1,920,000 test kits, on May 3, concerns regarding the efficacy of the proprietary swab for Spartan’s COVID-19 testing product was reported, consequently, Spartan has voluntarily recalled its COVID-19 product to performed additional clinical studies
• General Motors of Canada: a contract was awarded to General Motors of Canada for the production of 10,000,000 face masks, the contract is for a period of 12 months
• A contract was awarded to GL Chemtec for the production and delivery of 10 tonnes of guanidine thiocyanate, this ingredient is required to produce reagent to undertake lab-based molecular tests

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 1.5 million gowns by end of October to the Government of Canada.

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 1.5 million face shields from Bauer, and delivery of the first million is already complete.

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 157,000 gowns in May.

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 PPE 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 Company 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 as of May 26, 2020:

• 44 LOIs issued by ISED and PSPC:
  • masks (2 LOIs)
  • test kits (5 LOIs)
  • ventilators (5 LOIs)
  • sanitizer (2 LOIs)
  • fabric (2 LOIs)
  • gowns (22 LOIs)
  • key products for testing (6 LOIs)
• Details:
  • 27 contracts have been awarded (2 awarded with same company)
  • 3 are in contract negotiations (test kits)
  • 1 is in discussions with Health Canada (test kits)
  • 2 have yet to submit proposals (gowns)
  • 4 have opted not to proceed (gowns)
  • 2 were to manufacturers of medical material—no contract will be awarded to them, instead they form part of the manufacturing of gowns supply chain
  • 6 LOI are recently signed (testing products)

Buy and Sell website

Key messages

• Industry and suppliers have responded positively to the call to action posted to the Government of Canada’s Buy and Sell webpage on March 12, we have received more than 26,000 unique responses, including nearly 17,000 unique domestic responses
• We have contacted nearly all domestic companies who submitted forms, and continue to reach out to those submitting forms
• We are contacting companies to obtain additional details regarding the products that they have, particularly when it comes to PPE:
  • for companies that are offering PPE, we are seeking additional information in terms of types of products, quantities available, specifications of product, and information on if they have all the necessary licences and certifications
  • for companies offering goods or services outside of PPEs, we are keeping their information on file and encouraging them to register for an automated email notification service, this service will alert them when a tender is posted on our Buy and Sell website specific to the good or service they are selling
• It is a detailed and time-consuming process to contact each unique entity that submitted forms, and to assess the viability of each, our officials and procurement specialists are working all-out in assessing forms as they come in
• We will continue working through every form, and pursuing all viable leads

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

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 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.

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.

The information provided by domestic suppliers is assessed and triaged into 4 tiers. A total of 16,831 unique responses, comprising all domestic forms submitted up to and including June 9, 2020. Note this excludes duplicates and amended forms. The unique domestic forms were triaged (triaging done by PricewaterhouseCoopers (PWC); numbers in brackets represent companies in each tier):

• Tier 1 (54)
• Tier 2 (2,152)
• Tier 3 (9,592)
• Tier 4 (5,033)

Tier 1 (54)

In essence, companies that are in the medical field. These are companies in the medical/surgical/laboratory or related products category; professional (business) email address; in the Canadian importers database or the Dun & Bradstreet Canadian entity database.

Tier 2 (2,152)

In essence, companies in other lines of business. These are companies that provide other goods or services, but which may be able to provide PPEs (for example, health product companies that could provide hand sanitizer). Professional (business) email address, and in Dun & Bradstreet database.

Tier 3 (9,592)

These are submissions from professional (business) email addresses, but not found in Dun & Bradstreet database.

Tier 4 (5,033)

Submissions that use public domain emails (for example, hotmail, gmail), not found in Dun & Bradstreet; no information indicating these are businesses.

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 that PSPC officials have communicated with nearly all domestic companies who submitted forms.

In addition, we have responded to 7,652 emails to our generic inbox (bpme.osme@tpsgc-pwgsc.gc.ca) and 7,874 phone calls 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:

• the phone number and address are both confirmed to be in a Canadian province or territory:
  • if no address was provided, confirmation that the phone number (area code) is in Canada
  • if no phone number was provided, confirmation that the address is in Canada
• if we are unable to match the phone number and address to the same province or territory, but the email domain is in Canada, the response is categorized as domestic
• if the information is found in the Dun & Bradstreet database

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 the Office of Small and Medium Enterprises (OSME) to learn about how to participate in federal procurement.

Supply chain for personal protective equipment

Key messages

• We are working with established suppliers and distributors, as well as quality assurance experts, and we have strong processes in place to help ensure that the supplies we receive meet all necessary standards
• In addition, the Public Health Agency of Canada (PHAC) has robust testing measures in place, and they are in place for the very purpose of ensuring quality control of these essential products before they go out to provinces and territories
• 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
• We have encountered situations where supplies were found to be substandard, and we have acted quickly to address these issues, and to ensure that replacement supplies are rolled out where they were needed most
• These actions include suspending orders with certain manufacturers, and working closely with others to ensure that production issues are identified and corrected as soon as possible

If pressed on N95 respirators:

• Our priority is making sure that we get safe, effective equipment and supplies into the hands of frontline healthcare workers as we face COVID-19. We are working with a range of suppliers and distributors, and we have strong processes in place to help ensure that the supplies we receive meet all necessary standards. In particular, PHAC conducts stringent testing of items such as respirators before they go out to provinces and territories
• There was one order where a significant portion of N95 respirators did not meet our standards for this respirators type. Of the close to 11 million N95 respirators received and tested from this supplier, roughly 9.8 million have not met our contractual specifications
• Further assessment of testing results is underway, but, in the meantime, we have suspended further shipments of N95 respirators from this supplier. We can confirm that none of these respirators that failed our standards were distributed by PHAC for medical use, however, assessment is ongoing for other uses. Approximately 1.8 million respirators thus far have been redirected for use by other organizations
• Canada will continue to receive plane loads of personal protective equipment (PPE), as consistent deliveries are planned in the days and weeks ahead to meet both our short and long-term needs. The large majority of the products received have met PHAC standards for use
• While we continue to receive significant shipments of PPE from international manufacturers, we are also putting in place made-in-Canada solutions. We are receiving orders from domestic manufacturers for gowns, face shields and hand sanitizer among other products. This also includes a contract awarded to Medicom, based in Pointe-Claire, Quebec, for the production of 20 million N95 respirators and 24 million surgical masks per year for the next 10 years, starting this summer

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 product 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 based on testing 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 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.

As part of its ongoing surveillance and assessment of KN95 respirators, Health Canada published in its medical device establishment licence (MDEL) bulletin of June 9, 2020 a list of KN95 particle respirators manufacturers that do not meet the required standards for filtration or the design features related to achieving an adequate fit.

Testing and quality assurance process

The Technical Assessment Committee, led by the PHAC, establishes the technical specifications for various types of COVID-19 related PPE. The technical specifications are established in consideration of, but not limited to, the following internationally recognized bodies:

• World Health Organization Disease Commodity Package for COVID-19
• United States Centre for Disease Control and Prevention
• United States Food and Drug Administration

The product specifications are published on PSPC Buy and Sell website. PSPC and/or Innovation, Science and Economic Development Canada (ISED) identify legitimate vendors based on the technical specifications for COVID-19 related PPE. Vendors with established and credible history of supplying standard PPE in Canada are referred to procurement immediately.

For new foreign and domestic suppliers, and vendors offering new products (that is, new design or manufactured with alternative fabrics or materials), PSPC and/or ISED requests specifications of the product the company is selling

PSPC and ISED concurrently validate whether the supplier/vendor has the necessary regulatory authorizations, such as a MDEL, as well as consulting with Global Affairs Canada (GAC) who is assisting in the due diligence review of suppliers/vendors sourcing from outside Canada

When product specifications are received and pending positive results from the validation of regulatory authorizations, PSPC and/or ISED refers the new products to the Technical Assessment Committee for technical assessment

PHAC triages the concurrent technical assessment of the new products to the Technical Assessment Committee, which is comprised of multi-disciplinary representatives from PHAC, Health Canada, ISED, and the National Research Council of Canada (NRC)

Factors considered in the PPE technical assessments include:

• Clinical use: determined by the type of anticipated exposure, such as touch, splashes or sprays, or large volumes of blood or body fluids that might penetrate the PPE, and by the category of isolation precautions for the COVID-19 patient
• Durability and ease of use: may include assessment of comfort, and resistance to tears and snags, visual inspection of a new product prototype or new materials may also be required to verify presence of defects in design and construction
• Meeting safety and regulatory requirements: including a product review under the Medical Devices Regulations and a determination whether a Health Canada MDEL is in place or required

Integrity check process for COVID-19 contracts

In the fast-faced and constant shifting market to secure necessary supplies to respond to COVID-19, Public Services and Procurement Canada (PSPC) is working to ensure that appropriate due diligence measures are being applied throughout the procurement process.

Integrity Regime for contracting

In addition to a framework of legislation, regulations, programs and Treasury Board policies which guide the procurement process, PSPC administers the government-wide Integrity Regime. The regime is a rules-based debarment system that is designed to help ensure that the federal government does business with ethical suppliers in Canada and abroad.

PSPC has been applying the Integrity Regime to COVID-19 contracts and has been verifying suppliers’ status under the regime throughout. No contracts have been issued to ineligible supplier under the Integrity Regime.

Human trafficking: Ethical procurement

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 part of the 2019 National Strategy to Combat Human Trafficking, PSPC is working to revise the Code of Conduct for Procurement to include expectations for suppliers regarding human rights and trafficking. This is one of the first steps in a multi-pronged approach to ensure that federal procurement supply chains are free from human trafficking and labour exploitation.

PSPC also has a policy on the ethical procurement of apparel whereby suppliers selling apparel to the Government of Canada must self-certify that they and their first-tier subcontractors comply with local laws and international standards on labour and human rights. These rights include freedom from child labour, forced labour, discrimination and abuse, and access to fair wages and safe working conditions.

Due diligence process

In order to ensure that Canada gets the goods and services it needs to combat the pandemic, and that the risks in the procurement process are managed, the following due diligence measures are being applied:

• exceptions to PSPC standard terms and conditions of contracts are submitted to senior officials and departmental legal services for review
• where appropriate, ensuring that Health Canada has verified that the suppliers had a medical devices establishment license and that the offered equipment was approved by the Public Health Agency of Canada
• in cases where suppliers requested advanced payment, a financial risk assessment of the requesting firm is performed
• for overseas suppliers, PSPC with Deloitte and Global Affairs Canada has implemented a verification and vetting process to ensure that the supplier is a trusted and credible source of the goods being procured

Use of 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:

• personal protection equipment (such as sanitizer, respirator masks, ventilation masks, and gloves)
• ventilators and laboratory equipment
• health care providers and other health related services
• accommodations, including leases (for example, for Canadians under quarantine, as well as for health care providers
• real property services
• food services
• cleaning and laundry services
• information technology (IT) support services
• communications and telecommunications services
• food
• clothing and personal items
• transportation, such as the flights that have already brought Canadians home from China
• guard and security services

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

• there may be some work that PSPC requires to be performed in Canada. The need to access goods and services domestically, in light of the demand across the world for the same types of goods and services, was considered necessary to respond to the pandemic. Also, further border closures mean that, in some cases, contracting with foreign suppliers might ultimately mean having to cancel a contract and re-procure, thus impacting Canadians with further delays to access such supplies. Domestic sourcing also reduces transportation problems and shipment delays
• in almost all cases, the acquisitions of these goods and services is urgent. Normal procurement procedures, including publication, posting periods (40 days under the North American Free Trade Agreement (NAFTA)), and formal questions and answers exchanges, would interfere with the real-time contracting required in order to respond to the pandemic

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.

As of June 11, 2020, PSPC Acquisitions Program has carried out 3 NSE invocations related to the COVID-19 pandemic that are separate from the initial NSE invocation requested by PHAC on behalf of the federal government:

• at the request of PHAC, PSPC invoked the NSE with respect to a contract for a long-term, strategic, domestic supply of personal protective equipment, including surgical masks and respiratory masks. The NSE was invoked separately with respect to this procurement because the long-term nature of the contract goes beyond what is necessary to respond to the current pandemic, but was still considered necessary for national security purposes over the longer term
• at the request of Economic and Social Development Canada (ESDC), PSPC invoked the NSE with respect to acquisitions related to its various programs, benefits and services for Canadians during the COVID-19 national crisis. Because the need to provide benefits relating to unemployment, for example, is not a direct response to COVID-19, PSPC determined that the NSE should be invoked separately
• at the request of Canada Border Services Agency (CBSA), PSPC invoked the NSE with respect to the procurement of goods and services, for a 3 month period, which will allow CBSA personnel to perform their various functions using new low-touch/no-touch processes. As this requirement is not directly related to the initial response to the virus, PSPC invoked this NSE separately

Proactive disclosure of COVID-19 related contracts

Issue

As part of its response to COVID-19, Public Services and Procurement Canada (PSPC) is aggressively procuring supplies and equipment in the global marketplace, while facing the risks posed by fragile supply chains, the fluidity of the current situation, and a surge in demand. The global nature of this pandemic and demand for supplies has meant that it faces severe competition for goods and a highly volatile supply chain. The government is exercising caution at this time about divulging procurement information that could compromise its negotiating position.

Key messages

• The Government of Canada is engaged in an unprecedented effort to acquire supplies and equipment to ensure that front-line healthcare workers and Canadians stay safe and healthy
• In order to protect the integrity of procurement processes, as well as the integrity of global supply chains, PSPC needs to exercise caution at this time about divulging procurement information
• PSPC is nevertheless posting some solicitation documents for COVID-19 related procurements on Buy and sell, particularly where the timeline to secure the particular good or service allows for more flexibility
• Several contracts have also been publicly announced over the past few weeks and PSPC is posting details about orders and deliveries of personal protective equipment, online

Background

PSPC is procuring significant amounts of protective equipment and medical supplies on behalf of the Public Health Agency of Canada (PHAC). In response to the current COVID-19 emergency response, the vast majority of contracts PSPC has put in place have included a National Security Exemption (NSE).

The application of an NSE removes the obligation for tenders to stay open for a set period of time, thereby maximizing the speed with which urgent procurements can be completed.

NSE application also means that the government is not required to publicly post tender notices, which is important given the volatility of the marketplace and the intense world-wide competition to secure needed personal protective equipment and other supplies. In this environment, the disclosure of procurement information, such as supplier name and contract value, could jeopardize orders and compromise Canada’s negotiating position, in particular in international markets. Consequently, while some general information has been released regarding Canada’s COVID-19 purchases, most contract information has not been disclosed to date.

The application of an NSE does not absolve a department of its obligation to proactively disclose contracts; however, the Access to Information Act contains provisions that provide heads of organizations discretion around disclosure.

Specifically section 18 (b) of the act states that “the head of a government institution may refuse to disclose any record requested under this Part that contains information the disclosure of which could reasonably be expected to prejudice the competitive position of a government institution or to interfere with contractual or other negotiations of a government institution”.

These risks are expected to continue until supplies and equipment become less difficult to secure. Additional information will be made publicly available as soon as PSPC’s competitive position is no longer prejudiced so that transparency is maximized.