Supplier Advisory Committee meetings

Record of Discussion
Supplier Advisory Committee

July 12, 2017
9:30 am to 4:00 pm





Co-Chair opening remark

Committee co-chairs Arianne Reza and Hicham Adra, welcomed and thanked everyone for their participation. Ms. Reza extended a warm welcome to new member, André Leduc, Vice-President, Government Relations and Policy, Information Technology Advisory Council (ITAC), who replaced Kelly Hutchinson. She hoped that the full-day meeting format would provide members with a greater opportunity to dialogue on industry and government's challenges and successes. Ms. Reza then welcomed and invited Steven MacKinnon, Parliamentary Secretary to the Minister of Public Services and Procurement to provide the opening remarks and lead the group in a roundtable discussion.

Welcome remarks and roundtable discussion with the Parliamentary Secretary

Steven MacKinnon, Parliamentary Secretary to the Minister of Public Services and Procurement, opened the meeting by expressing his pleasure at returning for a second time to meet with committee members and to hear first-hand their views on procurement.

In his remarks, Mr. MacKinnon expressed a need for continued collaboration between government and industry leadership to modernize procurement. Key themes include creating an environment to foster creativity in procurement; incorporating socio-economic benefits in procurement such as diversifying the supplier base to be more inclusive; reviewing how government manages risk; and ensuring that Subject Matter Expert (SME)s are well informed and aware of how to access contracting opportunities.

Mr. MacKinnon noted that these themes had arisen in many of his discussions with suppliers, client departments and the public. He emphasized that government was continuing to make strides to achieve its goals in these areas. Mr. MacKinnon cited the recent and ongoing work to develop a framework to leverage procurement for socio-economic benefits. In addition he promoted the signing of additional collaborative procurement agreements with provinces and territories which provides greater purchasing power to other governments and more contracting opportunities for suppliers. He also made reference to the recent signing of the Canadian Free Trade Agreement and that work continued on moving to a paperless procurement process through the E-Procurement Solution.

Mr. MacKinnon noted that the Innovation agenda was a big part of the 2017 Budget providing $50 million to Industry, Science and Economic Development Canada, to create the Innovation Solutions Canada initiative. This initiative will provide the government access to early stage innovations and encourage businesses to continue to innovate, grow and prosper in Canada. Another discussion centred on the Research and Development (R&D) Strategy, the importance of innovation in context to North American Free Trade Agreement (NAFTA) negotiations, and how it applied to Intellectual Property (IP). Generally, it was felt that Canada needed to be mindful of how to grow and safeguard IP and in-source innovative technology solutions. Ms. Reza added that a fall Supplier Advisory Committee (SAC) meeting pertaining to the Innovations agenda, with Institute for Social and Economic Development (ISED) representatives, was being planned.

A discussion ensued on performance based procurement with members suggesting that incentives be used to encourage businesses to innovate through challenges to provide solutions to the "what" rather than the "how".

Mr. MacKinnon thanked the members for the open and frank discussion and for providing their ongoing feedback and comments which are critical for improvement.

Seeking Supplier Advisory Committee views on procurement

Next, Ms. Reza welcomed Kent Aitken, 2016 Prime Ministers of Canada Fellow. Mr. Aitken thanked the committee for the invitation to present on his research activities related to public policy for procurement partnerships in the digital age.

Mr. Aitken commented that the collaborative and partnership model demonstrates that the impact of the Internet is foundational on government decision-making. Over the last year, Mr. Aitken carried out 100s of interviews regarding procurement reform, including a series of roundtables with industry. These engagement activities gathered information on various topics including accountability; procurement solutions that support a partnership model; and a culture of risk adversity.

Members commented they were unaware of any procurement development or training programs for the senior executive in government and that this was an area of concern. Mr. Aitken noted that it was important that senior executives gain an understanding of project risk by working with industry through partnership models, early in the project process. In closing, he cited that government is seen as making progress as demonstrated through its approach of transparency and fairness, which he felt was very promising.

Mr. Aitken's thanked the committee for the opportunity to address the committee and join the conversation.

City of Toronto's Social Procurement Strategy

Ms. Reza welcomed Mr. Michael Pacholok, Director of Procurement, with the City of Toronto, who provided details, insights and lessons learned about the City's social procurement program. In his remarks, Mr. Pacholok noted that the City Council had adopted the Toronto Social Procurement Framework in May 2013, and in May 2016, adopted the City of Toronto Social Procurement Program. This program is an opportunity to use the City's purchasing power to address poverty and inequality and focusses on equity-seeking groups, including Aboriginals, youth, women, visible minorities, newcomers, lesbian, gay, bisexual, transgender, queer and two-spirit (LGTGQ2S), and persons with disabilities.

Mr. Pacholok described the program's two components:

A Diverse Supplier was described as any business that is certified by a Supplier Certification Organization that is more than 51% owned, managed or controlled by an equity-seeking group, or a social purpose enterprise, in which the enterprise's primary purpose is to create social, environmental or cultural value and impact, and where more than 50% of the persons who are full-time equivalent employees or are participating in, or have completed, transitional employment training, or experience economic disadvantage. Mr. Pacholok explained that lists of certifying bodies and of diverse suppliers were ever growing. These lists were not prioritized by groups, nor did one group have precedence over another. They were based on diversity being the City's strength, showing no favouritism and focusing on poverty reduction. The City of Toronto will track groups to reveal which ones are being used more than others, and tracking by commodities is ongoing.

Mr. Pacholok noted that their procurement professionals had received training on how to incorporate the program objectives in their procurement processes. Suppliers are encouraged throughout the City's procurement processes to develop a supply chain diversity policy.

Mr. Pacholok advised that with the Supply Chain Diversity Policy, Toronto will continue to become more diverse. A priority for the program is to develop and implement improved data collection processes, to monitor progress, and track areas for improvement.

Ms. Reza thanked Mr. Pacholok for an informative presentation and sharing the City of Toronto's experiences with committee members.

To learn more about the program, members and the public are invited to visit the City of Toronto Social Procurement Program website.

Supplier Diversity Alliance Canada

Ms. Reza then welcomed Cassandra Dorrington, President, Canadian Aboriginal and Minority Supplier Council (CAMSC) and Mary Anderson, President, WBE Canada, who jointly introduced the Supplier Diversity Alliance of Canada (SDAC), its mandate and its services.

SDAC is a non-profit organization that was founded in 2016, and is currently comprised of founding organizations CAMSC, the Canadian Gay & Lesbian Chamber of Commerce (CGLCC) and Women Business Enterprises Canada Council (WBE Canada). SDAC was established for the intention of advancing supplier diversity in Canada. SDAC is comprised of national supplier diversity organizations that specialize in certifying diverse suppliers. SDAC focuses on three core activities: Advocacy, Research and Learning.

The Alliance has noted change at the municipal level and cited examples of supplier diversity programs including the City of Toronto Social Procurement, the US' Women-Owned Small Business Federal Contract Program, and government programs in Ontario and Manitoba have Procurement strategies for aboriginal businesses. These are self-identified with no validation processes.

Ms. Dorrington noted that it was important to define diversity within the public and private sectors, to identify diverse suppliers, and to promote the successes of supplier diversity programs. She suggested that government could provide greater access to public contracting opportunities for diverse suppliers through inclusive procurement practices. It was noted that the Alliance is working to put a list together and members suggested that perhaps industry associations could contribute to this list by nominating diverse suppliers.

A discussion ensued on recognizing businesses who had been reaching milestones in social procurement practices through proven diversity practices. An award of recognition could be considered for businesses who demonstrate diversity practices that help facilitate departmental objectives related to social inclusiveness. The idea could create positive reinforcement if awarded by the Minister or even the Prime Minister, thus inciting businesses to introduce a supplier diversity program within their organizations.

Ms. Reza and Mr. Adra thanked Ms. Dorrington and Ms. Anderson for highlighting their current certification process as well as some current supplier diversity in procurement practices.

Next steps—Social procurement pilots at Public Services and Procurement Canada

Ms. Reza informed members that Public Services and Procurement Canada (PSPC) had been collaborating with Treasury Board Secretariat (TBS) to add social procurement to the procurement policy framework. This includes exploratory conversations with procurement experts to find opportune initiatives that would encourage businesses to participate in pilots. PSPC was also reviewing opportunities to include social procurement within current and re-negotiated trade agreements.

Ms. Reza introduced Mark Schizkoske, Director Operations Policy, Procurement Policy, TBS, to provide his observations on the social procurement initiative. Mr. Schizkoske identified the existence of approximately 26 to 29 interest groups, with 12 new groups soon to onboard. He explained that a framework was being drafted to find solutions to complex issues including trade agreements, organizational capacity, development of performance measurements, and how to simplify the procurement process.

TBS is also working on an initiative that would create a repository of businesses who meet the supplier diversity certification requirements. Extra consideration would be given to these businesses for contracting opportunities below trade threshold agreements (less that 25K for goods, and less than 90K for services).

Members discussed the measurement of supplier diversity benchmarks in businesses, options included; developing a sliding scale of diverse readiness in federal tender opportunities; providing incentives to businesses for supplier chain diversity; carrying out a procurement pilot; the ability to self-identify as a certified diverse supplier when registering through the Supplier Registration Information, to name a few.

Ms. Reza informed members that PSPC was responsible for G7 procurement, and committed to investigating whether this project could advance the department's work on social procurement and pilot implementation. She thanked everyone for their insights, comments and suggestions.

Panel discussion with Public Services and Procurement Canada Senior Directors

In addition to introducing the senior directors, Ms. Reza set the stage to allow for an informal exchange of ideas and discussion between Industry and PSPC officials.

The panelists included:

The panel responded to a variety of members' questions as well as provided their own observations on topics which included: G7 procurement opportunities; ways to reduce barriers for SMEs; change management activities and challenges; procurement officer training; risk-taking; and how to measure results and vendor performance.

The discussion was lively and the idea of a panel was suggested to be placed as a permanent topic for upcoming SAC meetings.

What's new at Public Services and Procurement Canada

Ethical Procurement, Eric German, Senior Director, Commercial and Consumer Products Directorate

Mr. German provided an update on the work being done on ethical procurement of apparel at the factory level. The proposal requires suppliers to certify that they meet a minimum acceptable standard to respect labour and human rights in their supply chains. This certification addresses human trafficking, child labour, freedom of association and collective bargaining, unsafe work conditions, workers not being paid living wages, excessive work hours, and discrimination and harsh or inhumane treatment. The standard is based on international standards and will apply to suppliers and their first-tier subcontractors for apparel procurement.

This initiative supports the Minister's mandate to modernize procurement and support social procurement, and for Canada to fulfill its obligations to various international organization principles.

The goal is to move to third-party certification and ensure an approach consistent with other jurisdictions' apparel industry practices. Next steps include engagement with other government departments to learn about their best practices and the publication of a request for information to collect feedback from industry stakeholders regarding the initiative. Once the initiative is applied to all apparel PSPC contracts, and key performance indicators (KPI)s are assessed, the next step would be to expand ethical procurement standards to other commodity purchases such as IT (hardware, mobile devices), food, and textiles.

Electronic Transmission of Bids (epost Connect), Robin Dubeau, Director General, Procurement Business Management Sector

Mr. Dubeau provided details of the recently launched epost Connect pilot project by the Bid Receiving Unit running from July to November 2017. Epost Connect enables suppliers to use an electronic file submission service to submit their bids. This service would complement the existing traditional bid submission methods of delivery in person, by fax, mail or courier services. The on-line cloud service, offered through Canada Post Corporation, is expected to be fully implemented by December 2017. The service allows suppliers to submit up to 1GB per file at protected B level and will improve operational efficiencies, lower Bid receipt risks, and support the reduction of paper consumption. It will also improve supplier accessibility to opportunities and their experience with bid receiving. enhancements – email notification and Standing Offers and Supply Arrangement (SOSA) Application (App), Desmond Gray, Director General, Office of Small and Medium Enterprises

Mr. Gray provided details on two initiatives that had been recently launched on the website in support of the procurement modernization agenda. The first, the email notification service, allows, visitors to subscribe to receive new tender notices issued and amendments to existing tenders, as well as receiving updates on customized search results performed. The second, the Standing Offer and Supply Arrangement (SOSA) Application, was initially designed for Provincial and Territorial authorized users and their municipalities, academia, schools and hospitals (MASH). This applications allowed users to view and search through PSPC procurement instruments available to them through their signed user agreements. Federal procurement officers may now use the tool to create and maintain their standing offers and supply arrangements. The Application (App) will replace the Standing Offer Index and enables the immediate publishing of updates to the Standing Offer and Supply Arrangement (SOSA)s as well as the ability to generate reports. The tool will eventually be migrated to the E-Procurement Solution. Mr. Gray advised the SOSA App is available to federal and authorized provincial governments.

Members requested that when new initiatives are ready to be announced, that they be informed in advance of release. This will allow them the time to create and issue information to their membership or to the media with the goal to promote and support the use of PSPC's new initiatives or enhancements.

e-Procurement Solution, Arianne Reza, Assistant Deputy Minister, Procurement

Ms. Reza reviewed a chart of current and future activities in support of the e-Procurement Solution. The various activities included supplier engagement and registration through a single point of access, as well as monitoring supply chain risk. Ms. Reza also advised members that the use of independent advisory boards was being applied throughout the e-Procurement Solution process.

Members re-iterated it was important to involve suppliers early and throughout the process. It is key to ensure that suppliers understand the changes, and how the new service will impact them. Members cited the tenders transition from MERXFootnote 1 as an experience to learn from. The loss of the document request list was seen as a negative change by suppliers and not well explained or supported during the transition. tender service was designed to align with open government, and provide free, unlimited and unregistered access to tender information. In response to feedback from suppliers on this issue, a new service, the List of Interested Suppliers was introduced on

Supplier Relationships and Performance Management initiative

Matthew Sreter, Executive Director, Strategic Policy, thanked the committee for inviting him to provide an update on the Supplier Relationships and Performance Management (SRPM) regime.

Mr. Sreter noted 20 key departments and agencies made up the working group who participated in extensive and regular consultations. The goal is to have the regime adopted by all federal departments and agencies, to ensure: all suppliers are evaluated on their performance; suppliers past performance information will be used to inform future contract awards; provide optimal value to Canadians; and to serve as a model of procurement excellence.

He noted that the Vendor Performance Corrective Measure Policy (VPCMP), now known as the Vendor Performance Policy (VPP), was only for PSPC contracts. The contract to design and create this regime had been awarded to Interis|BDO. Mr. Sreter introduced Carrie Gallo, Partner, and Laura Spriggs, Senior Manager of Interis to provide the progress report.

Ms. Spriggs advised the draft policy had been completed and PSPC was currently reviewing it. The scope elements included: best practices, to ensure clear expectations and that it is understood by government employees and suppliers; alignment with performance assessment requirements; and the capacity for commodity-specific customization. Work was being done with legal services to include the policy in the Standard Acquisition Clauses and Conditions (SACC) Manual. The requirements for a central repository of past performance information had been drafted and PSPC was reviewing it.

Discussion ensued on a number of points including: the use of supplier references; the use of scorecards and evaluation grids to evaluate supplier performance; and applying best practices for engaging key stakeholders throughout the development of the regime.

Comments and concerns pertaining to the number of components currently being proposed and as well as needing to manage relationships strategically was noted.

Ms. Reza commented on the complexity of the issue, and noted that while significant advancements were being made, she would work with Mr. Sreter to build some of the key messages to present to the Minister. Ms. Reza noted that more work was required, and that she could possibly attend a future meeting of the Working Group. It was also suggested that Interis report back to the committee on their findings

Ms. Reza thanked Ms. Spriggs, Ms. Gallo, and Mr. Sreter for an informative session, and looked forward to hearing about the ongoing work on this initiative.

Forward agenda, roundtable and closing remarks

Committee co-chairs, Ms. Reza and Mr. Adra thanked participants for their attendance and for providing constructive comments and feedback on topics discussed. They noted a number of great takeaways and good ideas that had been generated.

Participants were extremely appreciative of the all-day format, as it provided a greater opportunity to engage with various organizations and federal government officials, learn about new and upcoming initiatives, and share feedback and viewpoints on topics presented. Members were also open to holding future meetings in other cities and requested they be able to provide their input and be engaged in the building of future meeting agendas. For panel sessions, it was suggested that a theme be selected in advance so that participants could prepare their questions.

Next steps

The draft record of discussion for the meeting will be prepared and shared with members for approval at the next meeting. An informal SAC meeting to discuss the Innovations Canada Solutions will be held in the fall 2017 via teleconference. The next formal, all-day SAC agenda and meeting date will be announced after email consultations with members.

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