Frequently Asked Questions
- Defence Procurement Strategy
- Defence Procurement Strategy Secretariat
- Industry Engagement
- Industrial and Technological Benefits and Value Proposition
- Defence Acquisition Guide
- Independent Review Pane
- Export Strategy
1. Defence Procurement Strategy
Q1. What is the Defence Procurement Strategy?
The Defence Procurement Strategy was announced February 5, 2014. The Strategy has three key objectives: delivering the right equipment to the Canadian Armed Forces and the Canadian Coast Guard in a timely manner; leveraging our purchases of defence equipment to create jobs and economic growth in Canada; and streamlining defence procurement processes.
The Strategy is informed by the Government’s extensive engagement with the industry and by the recommendations found in the Jenkins and Emerson reports commissioned by the Government of Canada. It also builds on the experiences with the National Shipbuilding Procurement Strategy and the Seven-Point Plan for the replacement of Canada’s CF-18 fighter fleet.
Q2. How will the Defence Procurement Strategy create economic benefits for Canadians?
The Strategy will create benefits by:
- supporting the long-term sustainability and growth of Canada's defence sector;
- fostering an environment to increase exports from Canada,
- supporting the growth of prime contractors as well as suppliers in Canada, including small and medium-sized enterprises (SMEs) in all regions of the country; and
- enhancing innovation through research and technological development (R&D) in Canada.
2. Defence Procurement Strategy Secretariat
Q1. What is the role of the Defence Procurement Strategy Secretariat?
The Secretariat provides a central coordinating function for the implementation of the Defence Procurement Strategy. Specifically, the Secretariat is responsible for undertaking and/or supporting the following activities:
- Ensuring a coordinated and streamlined approach to implementation of the Strategy across multiple departments, including PWGSC, National Defence, Industry Canada, Foreign Affairs, Trade and Development Canada, and Fisheries and Oceans Canada;
- Ensuring rigorous advice is provided to Defence Procurement Strategy governance committees to enable timely, effective discussions and decisions on critical issues such as trade-offs between capabilities, costs and benefits to Canada;
- Supporting the early and continuous engagement of industry throughout the procurement process;
- Engaging independent advice to strengthen the integrity of the procurement process or individual procurement projects;
- Monitoring progress of procurements to support the timely, effective resolution of issues; and,
- Assessing and evaluating the performance of the Defence Procurement Strategy.
3. Industry Engagement
Q1. How will suppliers be notified of procurement opportunities and of the Government’s intention to start the engagement process?
Suppliers can ensure their capabilities are known by taking advantage of early engagement opportunities such as Industry Days, following the government procurement website, reviewing the Defence Acquisition Guide published by the Department of National Defence, and engaging with their Regional Development Agencies.
4. Industrial and Technological Benefits and Value Proposition
Q1. What are Industrial and Technological Benefits and Value Propositions?
Under the Defence Procurement Strategy, Canada’s Industrial and Regional Benefits (IRB) policy has been transformed into the Industrial and Technological Benefits policy. Like the IRB policy, the ITB policy requires that bidders invest in Canada equivalent to 100 percent of contract value. Bidders are still required to submit regional plans to balance benefits across all regions of Canada. The key change under the new ITB policy is the introduction of the value proposition. The introduction of the value proposition represents one of the most fundamental changes under the new Defence Procurement Strategy.
Bidders will be asked to submit value propositions that will be a weighted and rated element during a bid evaluation alongside technical (capability) and price elements. The intent is to encourage companies to invest in Canada and create high value jobs for Canadians.
The Industrial and Technological Benefits Policy: Value Proposition Guide describes the approach for assessing Value Propositions. In particular, the Guide outlines four criteria that could be used to evaluate value propositions: support to the development of Canada’s defence sector across the country including small and medium-sized enterprises; enhancing the participation of Canadian companies in global supply chains; investing in research and development in Canada; and demonstrating export potential.
The approach described in the Guide will serve as a framework and starting point for discussions with industry on a procurement-by-procurement basis.
Q2. When will the Industrial and Technological Benefits Policy including Value Proposition apply to procurement?
The ITB Policy, including the Value Proposition (VP) will apply on a procurement by procurement basis in accordance with the following thresholds:
- All eligible defence procurements over $100 million will require a VP as part of a comprehensive ITB plan; and
- All eligible Canadian Coast Guard procurements over $100 million and for which the National Security Exception applies will require a VP as part of a comprehensive ITB plan.
- Eligible procurements valued at $20 million and above will be reviewed for the application of a VP to determine whether applicability is consistent with achieving the appropriate balance between capability, cost and benefit to Canada;
Q3. How will the Industrial and Technological Benefits Policy and Value Proposition impact procurements that began prior to the launch of the Defence Procurement Strategy?
In cases where procurement processes began prior to the launch of the Defence Procurement Strategy and are at an advanced stage, some elements of the approach set out in the ITB Policy may apply so as not to delay those procurements or disrupt significant efforts that companies may already have undertaken to create partnerships and draft bids. This approach will respect the Government's goal to achieve the three objectives of the Defence Procurement Strategy.
5. Defence Acquisition Guide
Q1. What is the purpose of the Defence Acquisition Guide?
The Defence Acquisition Guide (DAG) is a key component of the Government of Canada’s Defence Procurement Strategy and is designed to provide greater transparency on potential defence capability requirements of the Canadian Armed Forces over the next 20 years.
The DAG will enable Canadian industry and potential bidders/suppliers to make informed research and development investments and strategic partnering decisions based on these anticipated needs.
Q2. How frequent will the Defence Acquisition Guide be updated?
The Guide will be updated with new projects and proposals annually. It will be refreshed every three years to remain relevant as strategic circumstances evolve, new technologies emerge and priorities are adjusted to reflect the changing needs of the Government of Canada and the Canadian Armed Forces.
6. Independent Review Panel
Q1. What will be the role of Department of National Defence’s Independent Third-Party Review Panel?
The Independent Review Panel for Defence Acquisition within the Department of National Defence will provide a third-party challenge function of the requirements for major defence procurement projects with a cost of $100 Million or more, and select others.
This third-party challenge function will help to validate National Defence’s requirements and ensure that they are stated in a clear and appropriate manner.
7. Export Strategy
Q1. How will the Export Strategy improve economic opportunities for Canadians?
Canada's defence sector is export intensive, which is a measure of its innovation and competitiveness. Forty-nine percent of the revenue for the sector was derived from exports in 2011.
A key objective of the Defence Procurement Strategy is to strengthen Canada's effectiveness in tapping traditional and non-traditional export markets and share in the long-term economic benefits that result from success in those markets.
Success in penetrating global markets from Canada will result in jobs and growth and ensure that Canadians share in long-term success following the procurement.
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