Procurement: Standing Committee on Public Accounts—May 27, 2021

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Procurement modernization

Context

Public Services and Procurement Canada (PSPC) is delivering on government commitments to modernize and simplify procurement.

Suggested response

• The government is committed to modernizing procurement practices so they are simpler, less administratively burdensome
• Budget 2021 proposes $87.4 million over 5 years starting in 2021 to 2022, and $18.6 million ongoing, to modernize federal procurement and create opportunities for specific communities such as Indigenous Peoples, women, racialized Canadians, young people, lesbian, gay, bisexual, transgender, queer and two-spirit plus (LGBTQ2+) Canadians, etc.
• Budget 2021 funding would be used to:
  • implement a program focused on procuring from Black-owned businesses
  • continue to work to meet Canada’s target of 5% of federal contracts being awarded to businesses managed and led by Indigenous peoples
  • improve data capture, analytics, and reporting
  • incorporate accessibility considerations into federal procurement, ensuring goods and services are accessible by design
• PSPC is working to develop and implement initiatives to bring more diversity and inclusiveness in federal supply chains
• In addition to supporting economic growth and diversity among small- and medium- enterprises, and more specifically those owned by underrepresented groups, we are also working to reduce barriers that have historically prevented them from participating in federal procurement
• Specific actions include:
  • implementing a simplified contract model
  • establishing a social procurement policy framework to achieve positive socio-economic outcomes
  • improving and making existing procurement tools more accessible to diverse suppliers
  • formalizing a risk-based approach for procurement decisions
  • developing new tools to determine contract pricing and support best value
  • expanding support to bidders with limited or no success bidding on government opportunities, from coaching service to personalized assistance

If pressed on diversifying procurement (Black-owned businesses):

• our government is committed to diversifying the base of suppliers and expanding bidding opportunities for Black-owned or operated businesses to obtain contracts from federal organizations
• as part of this effort, PSPC launched the Black businesses pilot to open select bidding opportunities in several regions for various goods and services, targeting Black-owned or operated businesses
• the Black businesses pilot is a tangible first step to expand procurement opportunities for Black entrepreneurs
• PSPC is assessing these procurements and drawing lessons learned to inform additional targeted approaches to increase diversity in future procurements, including support for greater inclusion and representation of Black-owned or led businesses and other underrepresented suppliers in federal procurement
• this demonstrates PSPC’s leadership role in advancing social procurement, working closely with other government departments to increase bidder and supplier diversity in federal procurement
• in addition, Budget 2021 recently announced funding of $87.4 million over 5 years starting in 2021 to 2022, and $18.6 million ongoing to PSPC which will be used to modernize federal procurement and create opportunities for specific communities by diversifying the federal supplier base. Part of this funding will be used to implement a program focused on procuring from Black-owned businesses
• to support of efforts to increase the participation of Black businesses in federal procurement, our Office of Small and Medium Enterprises continues to deliver education and provide assistance to underrepresented groups across Canada, including Black-owned or operated businesses. Examples include supporting the rise up pitch competition, a Black women entrepreneurs pitch competition and program for entrepreneurs across Canada to join and receive support for their businesses, and ongoing webinars provided in partnership with the United Nations Decade of Persons of African Descent Push Coalition
• we continue to work and collaborate the United Nations Decade of Persons of African Descent Push Coalition, the Black Business and Professional Association (BBPA), the Canadian Aboriginal and Minority Suppliers Council, and the Canadian Black Chamber of Commerce to raise awareness of the services offered by the Office of Small and Medium Enterprises, to encourage participation in federal procurement, and to identify and reduce barriers

If pressed on the policy on social procurement:

• our government is committed to finding ways to enable the inclusion of socio-economic outcomes into federal procurement
• on May 3, 2021, the Policy on Social Procurement developed by PSPC came into effect, which allows us to create targeted approaches to increase diversity in PSPC procurement and leverage trade agreements that permit socio-economic procurement
• the policy enables PSPC to collect personal data, including information on ethnicity, gender and other socio-economic characteristics of suppliers to establish a baseline on the participation of underrepresented suppliers in federal procurement and monitor progress over time
• PSPC, in collaboration with the Treasury Board of Canada Secretariat, will be working towards developing government-wide initiatives to increase the diversity of bidders on government contracts
• these initiatives will seek to bring a positive economic impact for thousands of Canadian small businesses, including those led by Indigenous Peoples, Black and racialized Canadians, women, lesbian, gay, bisexual, transgender, queer and two-spirit (LGBTQ2) Canadians and other groups who are often underrepresented in federal procurement supply chains

If pressed on Indigenous procurement:

• we are committed to increasing the participation of Indigenous businesses in federal procurement
• this commitment was reinforced in Budget 2021, which announced funding of $87.4 million over 5 years starting in 2021 to 2022, and $18.6 million ongoing to modernize federal procurement and create opportunities for specific communities by diversifying the federal supplier base. This will support efforts to meet Canada’s target of 5% of federal contracts being awarded to businesses managed and led by Indigenous Peoples
• my department is working in close collaboration with Indigenous Services Canada and the Treasury Board of Canada Secretariat on this important commitment of meeting a target of at least 5% of federal contracts awarded to businesses managed and led by Indigenous Peoples
• the Office of Small and Medium Enterprises works with Indigenous businesses directly, as well as through partner Indigenous organizations, to provide awareness, education and assistance on how to participate in federal procurement
• Indigenous business organizations are represented on both the newly established COVID-19 Supplier Council and the national Supplier Advisory Council that has been in place since 2013

If pressed on the procurement ombudsman’s annual report citing the “unnecessarily complex nature of the federal procurement process”:

• the government has committed to modernize and simplify procurement
• one of our primary goals is to make buying processes less burdensome for both suppliers and government buyers. That’s why we are taking a number of steps to improve the supplier experience, including:
  • contract modernization initiatives to simplify and streamline our contracting documents to make procurement less burdensome for suppliers
  • improvements to the existing buyandsell website for suppliers, as well as for buyers
  • efforts to encourage greater competition, as well as moving forward on initiatives that support our economic policy goals, including innovation, green and social procurement, and increasing the diversity of bidders
  • implementation of the electronic procurement solution, which will align our processes with those of our suppliers and eliminate paper-based processes

Background

A substantial part of public investment is managed through public sector acquisition of goods and services, representing 13% of Canada’s gross domestic product (GDP) according to Organisation for Economic Co-operation and Development (OECD) data from 2015. This makes it a fundamental lever to achieving social and economic objectives.

The government has committed to modernize and simplify procurement, and to establish an electronic procurement solution. A key step towards this goal was the March 2020 soft launch of Canada Buys, our new electronic procurement system, as announced in Budget 2018, at a cost of $196.8 million over 5 years. Procurement processes will also be easier, faster and more accessible for suppliers and buyers through:

• simpler, less administratively burdensome, user-friendly procurement practices:
  • improvements to the existing buyandsell website for buyers as well as for suppliers were introduced to enhance their user experience and make it easier for them to find relevant procurement information
  • more accessible and intuitive complement of industrial security services have been made available
  • contract modernization initiatives and a modernized contract model are being piloted. This is in response to concerns from the supplier community regarding the complexity of the Government of Canada’s contracts and related processes. This complexity can represent barriers to supplier participation in public procurement, including reducing competition and supplier diversity, which impacts Canada’s ability to achieve best value for money
• deployment of modern comptrollership:
  • formalizing a risk-based approach for procurement decisions
  • to ensure fair pricing in defence contracts (sustainment initiative, pricing guide)
• encouraging greater competition and including practices that support our economic policy goals, including innovation, as well as green and social procurement:
  • developing a framework for leveraging socio-economic outcomes in federal procurement
  • increasing the participation of underrepresented groups such as women-owned businesses, Indigenous businesses, Black businesses, disability-owned businesses and other minority businesses
  • adopting a more inclusive and accessible approach to procurement, raising awareness of how to give consideration to the needs of persons with disabilities when procuring on behalf of the federal government
  • developing rigorous, science-based methodologies and tools to measure the reduction of greenhouse gas emissions in federal procurement and establish targets for specific goods and services

Notably, an Accessible Procurement Resource Centre (APRC) was established in June 2018 to support government buyers in integrating accessibility criteria into their procurement requirements for goods and services. Work includes examining how we can ensure that procurement is accessible to all so that suppliers with disabilities can become part of the government’s supply chain, and to ensure that persons with disabilities are able to work as government suppliers.

The government will also support other procurement commitments including better vendor management tools, clear data metrics, and increased opportunities for Indigenous businesses.

Agile procurement process

Context

Public Services and Procurement Canada is developing and implementing agile procurement practices in line with the Minister of Public Services and Procurement’s mandate to modernize procurement.

Key messages

Agile procurement is a new collaborative approach that focuses on outcomes. It brings together government and industry to design procurements in an iterative manner to achieve results. PSPC formally established an Innovation and Agile Procurement Centre in May 2020, though PSPC had been developing and promoting agile procurement practices since June 2019. The centre supports contracting officers and their clients on agile and innovative procurement practices by developing tools and training. The centre is currently staffed with 4 full-time employees (including the director). Since 2019, the centre has delivered over 15 training and engagement sessions to various PSPC sectors and regions, and other government departments and agencies.

In July 2020, the centre released the agile procurement playbook. The playbook provides high-level guidance on agile procurement. It identifies principles, best practices and the benefits of using an agile approach. Some key principles of using an agile approach include:

• being open to new approaches
• involving users throughout the procurement journey
• focussing on early and frequent deliverables

This can be achieved by following some best practices which involve:

• creating a collaborative, cross-functional team
• engaging early and constructively with stakeholders
• working incrementally and iteratively

The key benefits of this approach comprise of higher user buy-in and increased chances for success as continuous course corrections can save time and money. The centre is developing additional documents and tools to provide further guidance and training to contracting officers and clients.

The centre also presented agile procurement approaches and guidance at 2 events hosted by the Canadian Institute for Procurement and Materiel Management (CIPMM). These events include the June 2019 CIPMM National Workshop and the December 2019 CIPMM Agile and Innovation Procurement Symposium. Furthermore, on October 1, 2020, the centre presented at the Industry Day for the Correctional Service of Canada’s offender management system modernization project.

Status update on e-procurement solution

Context

As part of the Government of Canada’s efforts to modernize procurement, in July 2018, Public Services and Procurement Canada awarded a contract to Infosys Public Services, Inc. to implement and manage an electronic procurement solution. This followed the Budget 2018 commitment to allocate $196.8 million over 5 years to establish an e-platform for simpler, better procurement.

PSPC’s response to the Auditor General’s Report on Procuring Complex Information Technology Solutions identifies that the “implementation of the electronic procurement solution is underway” and “will further improve the capture of procurement data and information associated with decision making.”

Key messages

• Canadian companies have long asked the federal government to improve its relationship with suppliers by making opportunities easier to find, simpler to navigate and faster to award, with less administrative burden. Government procurement to date has been heavily paper-based with limited self-serve options for suppliers
• CanadaBuys is a new suite of online procurement services launched in March 2020 by PSPC. It significantly improves and streamlines how we do business and makes our procurement processes simpler, more efficient, and easier to use and access by moving everything online and going paperless
• As of May 2021, more than 3,500 suppliers have registered on CanadaBuys
• The transition from buyandsell to CanadaBuys is taking place gradually and following a pragmatic, progressive and agile approach. This means taking small steps while assessing and addressing challenges, if they arise, along the way. This approach has provided opportunities to take stock of our progress and make adjustments as needed
• Since summer 2020, CanadaBuys has been used for a number of procurements, including those supporting the government’s pandemic response such as masks, gowns, and gloves. Our suppliers have also provided positive feedback following the initial procurements on the ease of use, the guided bidding process, and the excellent support services available to help them
• As of May 2021, over 450 (out of approximately 1,350) procurement professionals have been trained on the new solution. All of PSPC’s procurements are expected to be conducted through CanadaBuys by end of 2021
• In fall 2021, a new Government Electronic Tendering Service (GETS) is scheduled to launch on CanadaBuys and will replace buyandsell.gc.ca/tenders. The new tendering service is designed to make it easier for suppliers to find and understand government opportunities
• Through the new online procurement services, PSPC will continue its open, fair and transparent competitive processes to procure goods and services on behalf of government departments, designated agencies and Crown corporations
• CanadaBuys highlights PSPC’s ability to successfully deliver large, complex information technology (IT) projects. The project remains on scope, within budget and the anticipated benefits are expected to be fully realized

Supporting Public Services and Procurement Canada’s COVID-19 response

PSPC leveraged the electronic procurement solution’s infrastructure to rapidly deliver critical systems in support of the Government of Canada’s COVID-19 response. This included rapidly deploying:

• the Government of Canada personal protective equipment (PPE) Catalogue to provide government departments and agencies with easy access to critical PPE required to support service delivery and to facilitate rapid distribution and fulfillment of orders across the country
• the Essential Services Contingency Reserve’s (ESCR) case management system to provide essential service organizations access to personal protective equipment
• the COVID-19 supplier response tracker to manage the tens of thousands of responses from business offering essential supplies and services needed to respond to the pandemic

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