General items: Standing Committee on Public Accounts—February 10, 2022
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Opening statement
In this section
Opening statement by:
Paul Thompson, Deputy Minister
Public Services and Procurement Canada
Standing Committee on Public Accounts
Office of the Auditor General (OAG) Report on the Securing of Personal Protective Equipment and Medical Devices during the COVID-19 pandemic.
February 10, 2022
Length: 630 words
Opening
Thank you, Mr. Chair and good afternoon.
I am pleased to appear before the committee for the first time as Deputy Minister of Public Services and Procurement Canada (PSPC) to discuss the auditor general’s Report on securing personal protective equipment and medical devices during the COVID-19 pandemic.
I’d also like to provide an update on Public Services and Procurement Canada’s action plan regarding the one recommendation provided to our department.
At the outset of the pandemic, my department was tasked with an extraordinary responsibility: to procure essential supplies to protect the health and safety of all Canadians at an unprecedented scale and pace.
Mr. Chair, procuring the goods and services required to respond to the pandemic, particularly in the first 100 days, was an around-the-clock effort. The global nature of this situation meant that we were competing with all countries, many with far greater purchasing power, for scarce supplies.
PSPC took an aggressive approach to fulfil immediate, emerging, and long-term medical supply needs, including buying in bulk from distributors in Canada and internationally on behalf of—and at the request of—the provinces and territories.
Mr. Chair, with the explosive increase in demand for medical equipment in the first few months of the pandemic, PSPC used all available tools to protect Canadians.
This included making use of existing pre-qualified suppliers, using PSPC’s emergency contracting authorities for shortened tendering periods and sole-sourcing, and in some instances, making advance payments to secure scarce personal protective equipment (PPE). I would note for committee members that we continue to use some of these approaches where needed—for example to secure hundreds of millions of rapid tests that are in such high demand around the world.
The vast majority of our contracts were successfully carried out, and this approach allowed us to secure over 2.7 billion pieces of PPE and medical supplies.
Office of the Auditor General report: One recommendation for Public Services and Procurement Canada
As the auditor general’s report notes, PSPC mobilized its workforce and adapted quickly to deliver on urgent procurement requirements for Canadians.
The report also acknowledges that PSPC accepted and mitigated risks in order to procure large quantities of equipment in a very competitive market.
Our response was effective, but as with most emergency situations, there are lessons to learn.
In her report, one recommendation was identified for PSPC regarding financial checks of suppliers involving advance payments, which we accept.
I can report that PSPC has since identified a number of measures to strengthen procurement in an emergency, including improved processes for due diligence before issuing advance payment.
We have also updated tools and processes to further manage and mitigate risk, including the development of an emergency procurement checklist to better document decision-making when awarding contracts.
A stabilizing personal protective equipment marketplace
Today, we are in a vastly different situation. The market has stabilized and domestic production of PPE has increased.
Our department has also returned to the use of competitive bidding processes wherever possible.
Conclusion
Mr. Chair, from day one, PSPC has worked tirelessly to acquire supplies and equipment to support Canada’s front-line health care workers, and all Canadians.
As we continue to support Canada’s COVID-19 response, the auditor general’s observations have helped refine our approach and will enhance our response to future emergency situations.
Thank you. I am happy to take your questions.
Public Services and Procurement Canada Management Action Plan
| Report reference Number | OAG recommendation | Departmental response | Description of final expected outcome/result | Expected final completion date | Key interim milestones (description/dates) | Responsible organization/ point of contact (Name, position, Telephone number) | Indicator of achievement |
|---|---|---|---|---|---|---|---|
| 102 | Public Services and Procurement Canada, while addressing urgent needs and accepting procurement risks, should conduct checks of the financial strength of suppliers before awarding contracts that involve advance payment. | Agreed. The audit acknowledges that Public Services and Procurement Canada mobilized its workforce and adapted quickly to deliver on urgent procurement requirements for Canadians. Procuring the goods and services required to combat the pandemic, particularly in the first 100 days (the focus of this audit), was an around-the-clock effort, undertaken in an unprecedented environment of extremely tight global supply chains. This presented challenges ranging from being able to action contracts outside of regular business hours, address logistics, and undertake new critical activities such as the Essential Services Contingency Reserve. While PSPC established processes at the outset of the pandemic aimed at ensuring oversight and due diligence processes, we recognize that procurement processes can be improved, and in the context of advance payments this includes undertaking financial checks. Over the course of the last year, PSPC has continuously evolved its approaches. Going forward, the department will further update its processes related to emergency procurements to address lessons learned, while continuing to deliver on its mandates and prioritize the health and safety of Canadians. | Improved processes for assessing suppliers in an emergency before awarding contracts that involve advance payment. | September 30, 2022 | PSPC has identified a number of measures to strengthen procurement processes in an emergency. Action 1.1
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Michael Mills, Assistant Deputy Minister, Procurement Branch 613-769-3738 | For committee use only |
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