Company specific notes: Standing Committee on Government Operations and Estimates—November 16, 2020

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Medicom N95: Information on deliveries

Context

Public Services and Procurement Canada (PSPC) entered into a contract with Medicom on April 26 2020 to supply Canada with 20 million N95 masks annually, to be manufactured in Canada. Medicom has commenced production of masks but delivery was contingent on 2 approvals: first, receiving Health Canada interim order approval, and secondly, receiving respirator quality assessment testing approval from the Public Health Agency of Canada (PHAC). On October 30 2020, Medicom confirmed to PSPC that Health Canada had approved their interim order application for their N95 respirators. On November 13 2020, Medicom received quality assessment testing approval from PHAC.

Suggested response

If pressed on the delivery schedule for surgical masks

Background

PSPC awarded a 10-year contract to Medicom for domestic production and distribution of surgical masks and N95 respirators for the Public Health Agency of Canada.

Production ramp-up for N95 respirators began in August 2020. Medicom applied for Health Canada’s interim order (IO) certification. Health Canada approval was obtained on October 30.

Medicom has also received quality assessment testing approval from the PHAC on their N95 respirator.

Quality assessment testing is a standard requirement to confirm the masks meet the mandatory 95% filtration standard for N95 respirators. This quality assessment testing process was performed by the National Research Council, on behalf of the PHAC. The National Research Council performed the testing using the filtration testing machine TSI8130A, which is the same machine used by the National Institute for Occupational Safety and Health. Quality assessment testing typically takes 7 to 10 business days depending on the number of sample masks being tested.

While Medicom was finalizing quality assessment testing, they provided 700,000 FFP2 (N95 equivalent) from Europe. Medicom has provided PSPC with a delivery schedule for the N95 respirators, with deliveries beginning in late November.

Deloitte fact sheet

Deloitte is one of the largest consulting/accounting firms in the world. Deloitte Canada has more than 12,330 employees.

Supplier:

Deloitte 1600-100 Queen St Ottawa ON Canada

Contract total value: $ 12,887,500.00

Given urgent needs, Public Services and Procurement Canada (PSPC) issued a sole sourced task-based contract to Deloitte on April 10, 2020 to provide professional services related to the acquisition and supply of materials in support of the Government of Canada’s response to COVID-19.

The initial contract period was 6 months, from April 10, 2020 to October 10, 2020. On October 6, 2020, a 3 month option period was exercised to extend the contract until January 9, 2021.

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

Currently, Deloitte has received 6 tasks from the Government of Canada under this contract:

General Motors of Canada company fact sheet

General Motors of Canada (GM) is a company that was referred via a letter of intent (LOI). To help Canada meet the need for surgical masks for health care professionals and for other Canadians, GM Canada has retooled its Oshawa plant to produce surgical masks. More than 50 GM employees have been recalled for this task.

Supplier:

General Motors of Canada Company 1908 Colonel Sam Dr Oshawa ON L1H 8P7

Contract total value: $10,847,507.32.

The contract period is May 21, 2020 to May 20, 2021.

The contract was issued on May 21, 2020 to manufacture 10,000,000 masks, of which 3,000,000 were to be face coverings and 7,000,000 were to be level 1 surgical masks. The original contract value was $10,870,600.

A contract amendment issued on September 17, 2020 increased the quantity of face coverings to 3,340,600 and decreased the quantity of level 1 surgical masks to 6,659,400. The contract value was decreased to $10,847,507.32.

During the contract negotiation, GM requested some exceptions to Public Services and Procurement Canada’s standard contract terms and conditions:

Spartan Bioscience fact sheet

Spartan Bioscience is an Ottawa based company that was referred via a letter of interest (LOI). Spartan, founded in 2005, has grown into a leading biotechnology company that has developed the world's smallest DNA analyzer.

Supplier:

Spartan Bioscience Inc. 500-2934 Baseline Rd Ottawa ON K2H 1B2

An initial contract was issued on March 25, 2020 for the purchase of 100 Spartan COVID-19 testing platforms (Cube) and 1,020,000 test kits. 40,000 test kits were to be delivered monthly from April to June, ramping up to 100,000 test kits per month from July to March.

A contract amendment was issued on April 9, 2020 to purchase 600 additional testing platforms, and 900,000 additional test kits. 100,000 test kits were to be delivered monthly from July to March.

On May 1, 2020, the National Microbiology Laboratory provided Health Canada with a final report of clinical testing performed. This report identified that the Spartan Cube had performance issues related to the swabs, which may not successfully collect appropriate mucosal material for the test.

On May 4, 2020 Spartan announced that it would be voluntarily recalling its COVID-19 product and performing additional clinical studies to assess the sampling method and proprietary swab.

Since the recall, Spartan is believed to have developed a fix for the swab issue; enhanced performance has been demonstrated utilizing banked COVID-19 patient specimens. 

Spartan has received Health Canada (HC) investigational testing authorization (ITA) to run clinical studies at the Ottawa Hospital and Toronto's Humber River Hospital to evaluate the fix in COVID-19 patients in real-time.

On October 29, 2020, Spartan received HC investigational testing authorization to conduct a clinical trial on their point of care test and generic swab, to obtain data to support its effectiveness.

Spartan continues to work with its contract manufacturing partner so that it will be in position to produce the necessary quantities of tests once HC approval is obtained.

Fluid Energy Group fact sheet

Fluid Energy Group is a company that was referred via a letter of interest (LOI). The Calgary-based chemical processing and manufacturing firm has experienced rapid growth. In the current events of COVID-19, the company has retooled their production line to be able to produce hand sanitizer.

Supplier:

Fluid Energy Group 1500-140 – 10 Ave SE Calgary AB Canada

Contract total value: $105,236,328.

The contract was issued on April 6, 2020 for the production of 10 million litres of hand sanitizers. As of October 14, 2020, all 10 million litres were delivered.

Fluid Energy Group received its license to produce hand sanitizer from Health Canada (HC) on March 23, 2020.

The Province of Ontario raised concerns with the hand sanitizer produced by Fluid Energy Group, specifically with respect to labelling. Labels were not getting to the end-users in hospitals as they were included as inserts as opposed to directly on the containers.

Fluid Energy Group Ltd. distributed units of Triton hand sanitizer that contained technical-grade ethanol, which HC recently authorized on a temporary basis for use in hand sanitizers in Canada to help address the increased demand in response to COVID-19. It did so without the required risk information on the label; however, the approval process for use of technical-grade ethanol was not in place at the time of distribution.

Fluid Energy Group Ltd. sought a no objection letter from HC for the use of technical-grade ethanol, which was issued on May 1, 2020. Required labelling was implemented following the issuance of the no objection letter, and Fluid Energy Group Ltd. has worked closely with Health Canada to address the labelling issues for hand sanitizer containing technical-grade ethanol that was previously distributed.

The company has contacted all of its customers and has corrected the labelling issue for any remaining product in stock. The company has also updated risk information posted on its website.

HC recently conducted an assessment of the risks and benefits of using specific sources of technical-grade ethanol in hand sanitizers. The department determined that, when used as directed and for a limited period, the public health benefits of using hand sanitizers containing approved sources of technical-grade ethanol to limit the spread of COVID-19 outweigh the risks.

The federal government has purchased 10 million litres of hand sanitizer from Fluid Energy Group Ltd. made with technical-grade ethanol. Distribution of the inventory is being discussed to find potential users such as the Department of National Defence, the Royal Canadian Mounted Police, the Red Cross and emergency response workers.

Logistics fact sheet

Cargojet

On April 2, 2020, Public Services and Procurement Canada (PSPC) entered into a task-based emergency services contract with Cargojet for charter airline services. The contract provides for the transport of personal protective equipment (PPE) and related supplies to Canada from Asia.

As of November 5, 2020, Cargojet has flown a total of 96 chartered flights carrying PPE to Canada.

Cargojet offers reliable, regular flights and good value in comparison to prices available from international carriers.

Air Canada

On April 2, 2020, PSPC entered into a task-based emergency services contract with Air Canada for charter airline services. The contract provides for the transport of PPE and related supplies to Canada from Asia.

As of November 5, 2020, Air Canada has flown 23 chartered flights carrying PPE to Canada.

Air Canada continues to offer a consistent and reliable source of supply and good value in comparison to prices available from international carriers.

Bolloré

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 Asia.

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.

The Bolloré contract has a term to April 30, 2021 and includes 1, 6-month extension option.

For details of Bolloré’s warehousing capacity and current product storage details refer to fact sheet “15) Public Health Agency of Canada additional warehouse space”.

Overseas Express Consolidators

In June 2020, PSPC issued a competitive contract to Overseas Express Consolidators (OEC) Montreal Inc. as our second third-party logistics provider. This contract provides additional capacity and contingency, when required, for the same suite of services currently being provided by Bolloré Logistics Canada Inc.

The OEC contract has a term to April 30, 2021 and includes 1, 6-month extension option.

For details of O.C.s warehousing capacity and current product storage details refer to fact sheet “15) Public Health Agency of Canada additional warehouse space”.

Amazon

On April 1, 2020, PSPC signed, on behalf of the Public Health Agency of Canada (PHAC), a 1-year contract with Amazon to use their on-line technology for provinces to order material directly. Canada Post and Purolator were delivering the equipment to provinces and territories as a subcontractor of Amazon. To date, only $200,000 has been spent under this contract.

This agreement was primarily put in place for Amazon’s easy-to use online interface which allowed individual health establishments to order supplies directly from PHAC. As provinces and territories requested for PHAC to deliver the supplies directly rather than awaiting for orders from them, the requirement for getting PPE to the provinces and territories evolved beyond what was covered in the Amazon agreement. As a result, the contract with Amazon was suspended mid-July 2020.

To support this contract, a separate agreement between PHAC and Canada Post allowed for the warehousing of the PPE at Maritime Ontario, a key on-going subcontractor of Canada Post.

Purolator

Purolator was previously used by PHAC to transport PPE from Cargojet or Air Canada airport facilities to various warehouses used by PHAC or its partners, as well as to deliver PPE to provinces and territories.

Contracts with Purolator have been issued directly by PHAC as call-ups against the PSPC carrier and freight services standing offer.

Groupe Robert

On June 13, 2020. PSPC awarded a 6-month contract to Groupe Robert Inc for inventorying, transportation and warehousing in the Greater Toronto Area and the Greater Montreal Area. Groupe Robert was identified as the best firm for this work based on their response to the letter of intent (LOI)/request for information (RFI) for a long-term multimodal logistics solution for PHAC. The warehousing space available under this contract reached its capacity in late July. Work is now under way to transfer the PPE out of such warehouses as they are gradually coming to an end from now until the end of December.

On July 31, PSPC entered into a 2-year contract with Groupe Robert Inc to provide PHAC with logistic services to manage and equip a 350,000 square feet warehouse that PHAC has separately leased.

For details of Groupe Robert Inc's warehousing capacity, refer to fact sheet “15) Public Health Agency of Canada additional warehouse space”.

Metro Logistics Inc.

On September 11, PSPC awarded a 2-year competitive contract to Metro Logistics Inc. of Montreal, as a long-term multimodal logistics solution for PHAC, to inventory, warehouse and distribute PPE to provinces and territories. The contract also has an additional 1-year option period.

Under this contract, Metro is responsible for handling receipt of PPE supplies via all modes of transportation, stocktaking, warehousing in the Greater Toronto Area, Greater Montreal Area, and Alberta as well as preparing and delivering PPE to all provinces and territories.

For details of Metro’s warehousing capacity refer to fact sheet “15) Public Health Agency of Canada additional warehouse space”.

Procurement of medical gowns from Proline Advantage Inc.

Context

Public Services and Procurement Canada (PSPC) has been working aggressively with domestic and international suppliers to procure medical gowns. A high volume contract was awarded to Proline Advantage Inc. for the supply of medical gowns based on the company’s capacity to source and deliver gowns in a very aggressive timeframe at a reasonable price.

Suggested response

If pressed about the selection of Proline Advantage Inc.:

If pressed on the volume of gowns procured from Proline Advantage Inc.:

If pressed on the supplier’s pricing:

If pressed on the supplier’s performance:

If pressed on advance payment made to Proline Advantage Inc.:

If pressed on material shortages:

If pressed on domestic suppliers:

If pressed on the general request for proposal process:

Background

The surge in global demand for PPE and medical supplies due to the pandemic has resulted in a highly competitive marketplace and volatile supply chains. An urgent and accelerated timeline for contracting has been required in many cases, and when solicitation documents were not being published on the Government of Canada’s Buy and Sell website, PSPC engaged the domestic and international supply communities through other means.

Notably, a call to action was posted on the Buy and Sell web page from March 12 to July 10, 2020, to seek information on the ability of suppliers to provide emergency products and services. More than 26,000 unique responses were received, including nearly 17,000 from Canadian suppliers. PSPC has signed nearly 150 contracts with companies around the world as a result of the call to action; the majority of these were awarded to Canadian suppliers.

There is a very high demand for gowns globally. Material usually used for the production of gowns is being diverted to the production of masks. Manufacturers are proposing alternative material for the production of gowns in Canada. On the domestic front, there is also great competition amongst the suppliers for the same resources, resulting in an impact on the price.

Product compliance is reviewed against the technical specifications released by the World Health Organization (WHO). All proposed gowns are reviewed by the PHAC technical team. PHAC has implemented a robust quality assurance program. For domestic suppliers, samples are being assessed before production begins and then again once they are delivered to PHAC and prior to distribution to provinces and territories.

As PSPC enters the next phase of the response for COVID-19 related procurements, the priority is to revert to competitive procurement processes and post solicitation documents on the Buy and Sell web page, particularly where the timeline to secure a particular good or service allows for more flexibility or the search for information or sources of supply needs to be broadened. For example, recent competitive procurements for goods such as non-medical masks and face shields have received hundreds of bids. New content has been published on the Buy and Sell website to help suppliers find COVID-19 related competitive procurement opportunities. This includes support for suppliers who may be new to federal procurement.

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