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Company notes and profiles: Standing Committee on Health—February 5, 2021

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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. However, 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

Background

PSPC awarded a 10-year contract to Medicom for domestic production and distribution of surgical masks and N95 respirators for PHAC.

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

Medicom has also received quality assessment testing approval from the Public Health Agency of Canada (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 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 (NIOSH) in the United States. 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 masks (N95 equivalent) from Europe. Medicom has provided PSPC with a delivery schedule for the N95 respirators. Deliveries began in November.

Deloitte Inc. fact sheet

Deloitte Inc. provides audit and assurance, consulting, financial advisory, risk advisory, tax and related services to public and private clients spanning multiple industries. It is also one of the largest consulting/accounting firms in the world.

Deloitte is a pre-qualified supplier under several Public Services and Procurement Canada (PSPC) supply arrangement (SA) vehicles, including the task based informatics professional services (TBIPS) and the solutions based informatics professional services (SBIPS) SAs.

As part of the Government of Canada’s response to the COVID-19 pandemic, Deloitte Inc. was awarded 2 contracts for professional services: the first a contract designed for departments to obtain expertise and consulting services related to the acquisition and supply of materials; and, the second a contract for a national vaccine management information technology (IT) platform. The first is completed and the second is active.

Contract for professional services in support of COVID-19 response

The contract expired in early January 2021. The total estimated value of the contract was $14,471,112.50.

Given the urgent response requirements, PSPC issued a sole-sourced, task-based contract to Deloitte in April 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 professional services provided on an as-and-when requested basis through the issuance of task authorizations included, but were not limited to the following areas:

Four government departments issued task authorizations against the contract as follows:

Contract for national vaccine management information technology platform

The contract awarded to Deloitte in January 2021 is for $16,138,945.90, taxes included.

The Government of Canada is doing everything possible to protect Canadians from COVID-19. This includes enhancing the Public Health Agency of Canada’s (PHAC) existing information management systems to help manage vaccine distribution, administration and reporting.

Due to the emergency nature of this requirement, PSPC solicited competitive bids directly from a source list of 7 suppliers developed as part of an industry capability assessment conducted by an independent third party expert (Gartner) as well as qualification under PSPC’s solutions based informatics professional services supply arrangement. Three firms submitted bids and Deloitte was awarded a contract based on its proposal.

The requirement, a new national vaccine management IT platform (NVMIP), builds further functionality into PHAC’s current operational and well-developed surveillance and coverage IT systems.

The procurement of the NVMIP emphasizes the Government of Canada’s ability to support rapid change. The platform will supplement existing operational PHAC systems to ensure rapid and successful management of the COVID-19 vaccine administration program across the nation.

While the NVMIP solution will evolve as the vaccine roll-out moves through various phases, it is expected to begin operating and supplementing PHAC’s existing and comprehensive data and IT systems when in production.

PHAC is currently leveraging and enhancing its information management systems to support COVID-19 vaccine roll-out requirements. Specifically, these systems will support the immediate and urgent need for ordering, tracking and delivery capabilities as well as provide strengthened monitoring and reporting functionality.

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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. As of January 2021, all medical gowns have been delivered.

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.

Palantir Technologies Canada Inc.

Palantir Technologies designs, develops, and deploys software products that optimizes human interaction with massive-scale data, enabling critical institutions to understand, analyze, and act on their data.

Artificial Intelligence Source List

Palantir Technologies is qualified as a band 3 supplier (work up to $9M before taxes) on the artificial intelligence (AI) source list. The company’s qualification was published on Public Services and Procurement Canada’s (PSPC) buyandsell website on January 15, 2019.

The AI source list is a prequalified list of suppliers who meet all of the mandatory criteria, as was stipulated within an invitation to qualify, to provide Canada with responsible and effective AI services, solutions and products. Solicitation opportunities are competed amongst the prequalified suppliers on the list.

To date, Palantir Technologies has not been awarded a contract for any of the solicitations that have been issued under the AI source list.

Contracts awarded to Palantir Technologies

In March 2019, PSPC put into place a non-competitive 1-year contractual arrangement on behalf of the Department of National Defence (DND) for the provision of the Palantir information management software at a cost of $997,434 (CAD). A contract award notice was published on PSPC’s buyandsell website. The contract was awarded on a non-competitive basis in accordance with section 6(d) of the Government Contracts Regulations. The section allows contracts to be entered into without soliciting bids when only 1 supplier is capable of performing the work. This is the case for Palantir Technologies, which owns the intellectual property and is the only supplier of the software required by DND. This contract was in support of a pilot project.

Baylis Medical Company

Background

Baylis Medical Company is a Canadian corporation that develops and distributes high-technology products used to treat patients in cardiology, radiology, and minimally invasive spine procedures.

Note

For messaging concerning the FTI contract for the procurement of ventilators, please see the question period note on ventilator procurement.

Contract with the Build in Canada Innovation Program

On November 29, 2017, Baylis was awarded a research and development contract for its AnchorKnot tissue approximation kit. The AnchorKnot tissue approximation kit is a set of surgical spinal devices that enable orthopedic surgeons and neurosurgeons to perform herniated disc repair for the lumbar spine. The contract value is $374,288.29 CAD.

Baylis was awarded this contract under the Build in Canada Innovation Program (BCIP), which was a competitive first purchase program offered by PSPC with a mandate to bolster Canadian innovation and promote economic growth through the purchase and testing of late-stage innovations in federal organizations. The BCIP was consolidated into Innovation, Science and Economic Development Canada’s (ISED) Innovative Solutions Canada in spring 2018.

Baylis’ AnchorKnot tissue approximation kit pre-qualified for the BCIP under call for proposals 007, which was published on January 11, 2017 and remained open until May 28, 2018, with continuous intake of proposals. Of the over 1,100 proposals submitted against BCIP call 007, 260 proposals were prequalified, and to date, 195 contracts have been awarded.

All proposals were evaluated against the same criteria, which addressed innovation and readiness, commercialization and merits of the proposed test plan. The evaluation team was composed of the National Research Council—Industrial Research Assistance Program (NRC-IRAP), PSPC and/or subject matter experts from other government departments.

Innovation, Science and Economic Development Canada is acting as the testing department for the innovation in partnership with Toronto’s Sunnybrook Hospital.

The contract was set to expire on December 30, 2020, however, due to the COVID-19 pandemic affecting access to hospitals, final training with the innovation has been slightly delayed. As a result, the contract end date has been extended to November 30, 2021.

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 January 11, 2021, Cargojet has flown a total of 95 chartered flights carrying PPE to Canada.

Cargojet offers reliable, regular flights and good value in comparison to prices available from international carriers. The Cargojet contract has a term to April 30, 2021, and could be used for approximately 12 more flights within its current limitation of expenditures.

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 January 11, 2021, 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. The Air Canada contract has a term to April 30, 2021, and could be used for approximately 10 more flights within its current limitation of expenditures.

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 one 6-month extension option.

For details of Bolloré’s warehousing capacity and current product storage details refer to fact sheet Additional warehouse space in Canada for Public Health Agency of Canada.

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 March 31, 2022.

For details of O.C.s warehousing capacity and current product storage details refer to fact sheet Additional warehouse space in Canada for Public Health Agency of Canada.

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.

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.

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.

Groupe Robert Inc.

On June 13, 2020, PSPC awarded a 6-month contract to Groupe Robert Inc. for inventorying, transportation and warehousing in the [Redacted] and the [Redacted]. Groupe Robert Inc. 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. In December 2020, the contract was extended to January 31, 2021 to allow additional time needed to transfer the PPE from the warehouses to provinces and territories or other PHAC storage facilities.

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 Additional warehouse space in Canada for Public Health Agency of Canada.

Urban Valley

On July 28, 2020, PSPC awarded a 6-month contract to Urban Valley Transport Ltd. for short-term warehousing in various locations across Canada. The contract included an option to extend the term for an additional one-year period. In December 2020, the contract was extended to January 31, 2022, to allow additional time needed to transfer the PPE from the temporary storage warehouses to provinces or other PHAC storage facilities.

For details of Urban Valley’s warehousing capacity, refer to fact sheet Additional warehouse space in Canada for Public Health Agency of Canada.

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 Logistics Inc. is responsible for handling receipt of PPE supplies via all modes of transportation, stocktaking, warehousing in the [Redacted], [Redacted], and [Redacted] as well as preparing and delivering PPE to all provinces and territories.

For details of Metro Logistics Inc.’s warehousing capacity refer to fact sheet Additional warehouse space in Canada for Public Health Agency of Canada.

Additional warehouse space in Canada for Public Health Agency of Canada

Prior to the COVID-19 pandemic, the Public Health Agency of Canada’s (PHAC) National Emergency Strategic Stockpile (NESS) warehouse network comprised of [Redacted] warehouses totalling approximately 167,000 square feet. This included [Redacted] warehouses (119,000 square feet) and [Redacted] regional warehouses (48,000 square feet). While these warehouses were relatively full prior to the pandemic, not all of its material was relevant in addressing the current situation.

The volume of personal protective equipment (PPE) ordered in response to the pandemic was well beyond the PHAC’s capacity to receive and store such supplies. Public Services and Procurement Canada (PSPC) has supported PHAC by entering into leases and service contracts to provide it with additional warehousing capacity.

Leases

PSPC initially entered into short-term leases for PHAC for [Redacted] additional warehouses in [Redacted] totalling approximately 187,000 square feet. These warehouses are expected to be vacated upon expiry of the leases in March 2021. These warehouses are currently relatively full, but some further material continues being delivered to them.

A new lease was secured to replace these expiring leases with a start date of January 1, 2021, for a fixed period of 8 years with a total of 127,000 square feet of warehouse. This warehouse has not started receiving material.

A 350,000-square-foot facility in [Redacted] was also leased for 3 years until July 2023, with an additional 1-year option until July 2024. The warehouse is currently at 88% of the 20,000 pallet capacity. Once racking is completed, at the end of February, to add 15,000 pallet positions of space, shipments to that location will increase.

A warehouse in [Redacted] is being used by the National Microbiology Laboratory (NML) to store surplus equipment and other response related materials that NML does not need to access frequently. This site provides a long-term solution for 73,000 square feet of warehousing space, which is available immediately. Current usage is at 25%.

Services contracts

Initially, when PHAC started receiving large quantities of additional PPE in April 2020, they leveraged 100,000 square feet of warehouse space in [Redacted] from [Redacted] a key ongoing subcontractor of Canada Post. This warehouse, however, quickly ran out of space and was only available for the short term. The operations at that warehouse also relied on personnel from the Canadian Armed Forces. This is no longer being used.

On May 4, 2020, a letter of interest/request for information (LOI/RFI) was published on buy and sell to gather information regarding a longer-term warehousing, inventory management and transportation solution. This notice closed on May 7, 2020 and the review of the expressions of interest resulted in PHAC directly awarding a short-term contract to Groupe Robert Inc. on May 22, 2020 to support immediate warehousing needs.

Further to the LOI/RFI process, PSPC then awarded a 6-month contract to Groupe Robert Inc. on June 13, 2020. The contract has since been extended to the end of January 2021.This contract provided 215,000 square feet of warehousing space in the [Redacted] Area, and 150,000 square feet in the [Redacted] Area, transportation capabilities and a warehouse management system capability. These warehouses quickly filled as the volume of PPE delivered at the time was significant. Of these warehouses, 1 in [Redacted] is in the final stages of being emptied by shipping its content to the provinces. Another adjacent warehouse in [Redacted] and 2 in the [Redacted] area are available until the end of January 2021. Transition of PPE product out of these warehouses to provinces or other PHAC facilities is underway and expected to be completed by the end of January 2021, at which point the contract will come to its end.

Additionally, a 2-year service contract was awarded to Groupe Robert Inc. on July 31, 2020, to operate the 350,000-square-foot facility leased by PSPC on behalf of PHAC in [Redacted].

As further warehousing capacity was required during the summer, existing and new contracts were utilized with different suppliers, including Overseas Express Consolidators, Bolloré Logistics Canada and Urban Valley Transport Ltd. to meet the required warehousing capacity.

For Overseas Express Consolidator (OEC), we have access to a dedicated 100,000-square-foot warehouse in [Redacted] until July 2021. This warehouse is currently 95.3% full with 8.8 million gowns for a total of 6,352 pallets. OEC also provides some space in the [Redacted] Area where 32.6 million nitrile gloves are currently in short-term storage before being distributed across Canada.

For Bolloré Logistics Canada, they are currently storing 32,623 pallets including 34 million gowns and 416,700 litres of hand sanitizer. The move of these products to our longer-term service provider, Metro Logistics Inc., has been initiated and is expected to take 3 to 4 months to complete. The Bolloré contract does not provide committed warehouse space for a given period but rather provides transitional space as and when required and if available. The contract allows the flexibility for additional space to be provided, if needed.

For Urban Valley Transport Ltd., they are currently storing 21,431 pallets including 8 million gowns, 9.1 million face shields and 3.3 million litres of hand sanitizer across 5 different warehouses in [Redacted] and [Redacted] in total representing approximately 120,000 square feet of space usage. The Urban Valley contract does not provide committed warehouse space for a given period but rather provides transitional space as-and-when required and if available. The contract allows the flexibility for additional space to be provided if needed.

In parallel with the above work, PSPC proceeded with a request for proposal for national logistics and warehousing services on July 16, 2020, to provide for warehousing, inventory management and distribution services. As a result of this competitive process, PSPC awarded a contract to Metro Logistics Inc. on September 11, 2020. The contract is for a period of 2 years until August 2022, with an option for a further 1-year extension until August 2023.

Under this contract, PHAC is being provided with 2 dedicated warehouses in the [Redacted] Area [Redacted] with 463,000 square feet to store 58,000 pallets; 2 dedicated warehouses in the [Redacted] Area [Redacted] with 174,000 square feet to store 15,000 pallets; and, 1 dedicated warehouse in [Redacted] with 154,000 square feet to store 13,000 pallets. Under this contract, hand sanitizer is also being stored in each region at subcontractor facilities as it requires special handling procedures given it is a dangerous goods/hazardous product. In total, warehousing capacity of approximately 120,000 square feet to store 10,000 pallets of hand sanitizer will be made available at such subcontractor’s facilities. To date, their various warehouses are approximately 55% full with more than 53,244 pallets of the total capacity of 96,000 pallets having been shipped to Metro. This contract also provides national distribution to all provinces and territories and a warehouse management system capability to facilitate the reporting and control of material.

In August 2020, the Government of Canada announced the creation of the Essential Services Contingency Reserve (ESCR), an emergency backstop of PPE and other critical supplies, managed by PSPC. The ESCR includes a number of warehouses across Canada, managed under a separate contract by SCI Logistics, a subsidiary of Canada Post, with Purolator serving as the distribution and delivery agent.

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