Supplier Diversity Action Plan

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The federal government spends about $22 billion per year and as the central purchaser for the Government of Canada, Public Services and Procurement Canada (PSPC) annually manages the procurement of goods and services valued at approximately $15 billion. Through its Better Buying initiative, PSPC is improving procurement, both for government purchasers and businesses supplying goods and services. A key part of Better Buying is increasing the participation of businesses from underrepresented groups in government procurement, which is being advanced through the Supplier Diversity Action Plan.

Budget 2021 reconfirmed the government’s commitment to supplier diversity with funding to support procurement opportunities for specific communities. For example, investments will allow PSPC to implement a program focused on procuring from Black-owned businesses. This and the other elements of the Supplier Diversity Action Plan will help build a more inclusive economy and boost the competitiveness and prosperity of Canadian businesses.

1. Continual testing for ongoing improvement

Since 2018, PSPC has been using pilot projects to test how to best provide procurement opportunities for underrepresented groups. Through these pilots, which have led to actual contracts, we have learned a lot about some of the barriers faced by underrepresented groups, as well as the support they may require when competing for federal contracts.

As part of these pilot projects, specific pilots have been run targeting women, persons with disabilities and racialized Canadians. Recently, PSPC administered a Black Business Procurement Pilot to expand procurement opportunities for Black entrepreneurs. This pilot included 12 procurement opportunities across Canada aimed at Canadian Black businesses. Feedback from the Black Business Procurement Pilot is being used to inform the development of social procurement and supplier diversity initiatives, including a program focused on procuring from Black-owned or -led businesses as noted in Budget 2021.

In addition, PSPC is currently working closely with Black-led organizations and Black entrepreneurs from across Canada to learn more about their experiences with federal procurement. As part of this work, PSPC is invited Canadian Black-owned or led businesses to complete an online questionnaire through a request for information (RFI) in June 2021 to provide information about their businesses and their experience with federal procurement. The results of the RFI are helping us develop initiatives to increase the participation of Black businesses in federal procurement opportunities.

As part of our ongoing efforts to engage with other underrepresented groups, PSPC launched a similar request for information on November 30, 2021, to obtain information on businesses owned or led by persons with disabilities. We also launched a third request for information on December 8, 2021, to obtain information on procurement experiences from members of the Lesbian, Gay, Bisexual, Trans, Queer or Questioning, Two-Spirit and additional sexual orientations and gender identities (LGBTQ2+) community. These 2 RFIs will ensure PSPC gets feedback directly from business owners and leaders in these 2 specific communities on their experience with the federal procurement process and their business environment, ensuring departmental initiatives reflect the realities and needs of their businesses.

2. Establishing social procurement

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Policy on Social Procurement (spring 2021)

PSPC is building on the lessons learned from the pilots and is implementing a Policy on Social Procurement, which came into effect on May 3, 2021. We are transforming procurement to meet departmental commitments toward diversity, inclusion, procurement modernization and the achievement of socio-economic policy goals, while fighting COVID-19 and rebuilding the economy.

This policy establishes a clear, public statement of direction on the part of the department to leverage government purchasing power to achieve socio-economic objectives and increase supplier diversity. The policy will contribute to increasing the diversity of suppliers and reducing barriers and enhancing economic and social opportunities for underrepresented groups, such as Black and racialized Canadians, women and LGBTQ2+ Canadians. The policy applies to all procurements led by PSPC, including those on behalf of client departments. It allows PSPC to enhance best value by considering both financial and non-financial factors in its procurement decisions. Under the policy, contracting authorities, in cooperation with the client, should consider where socio-economic measures could be included in each procurement. With this Policy, PSPC is transforming procurement to meet departmental commitments toward diversity, inclusion, procurement modernization, and the achievement of socio-economic policy goals. Moreover, the implementation of the policy is the first step toward establishing a Program on Social Procurement, which aims to enhance our supplier diversity.

Development of a Program on Social Procurement (winter 2022)

PSPC is developing a Program on Social Procurement to outline how the policy will be implemented. This will also be an opportunity to engage with industry, underrepresented groups, businesses and associations, as well as the procurement community, other government departments, the Parliamentary Black Caucus, the Federal Black Employee Caucus (FBEC), LGBTQ2+ representatives, racialized Canadians and networks for employees with disabilities to identify expectations, challenges, and measures of success. We will also solicit feedback and lessons learned from industry associations and businesses.

The Program on Social Procurement will articulate how to incorporate socio-economic objectives into procurement by:

  • leveraging existing opportunities within the legislative, regulatory, and policy framework that enable and encourage the inclusion of socio-economic objectives
  • identifying procurements where best value can be enhanced through the inclusion of socio-economic objectives
  • determining the appropriate procurement strategy
  • determining how and when to use the relevant set-aside provisions in the trade agreements
  • addressing issues such as data collection, and subcontracting

Suppliers in underrepresented groups will also have increased access to federal procurement opportunities.

Development of the program will include options around identification and certification of underrepresented suppliers. For its social procurement pilots so far, PSPC has used a self-certification process where bidders attest that they are owned or led by a person who identifies as a member of an underrepresented group. As third-party certification options exist, whereby organizations will certify that businesses are owned or led by an individual or individuals who are members of 1 or more underrepresented groups, these will be explored as part of the development of the Program.

PSPC will engage industry and underrepresented, groups, businesses and associations to develop the Program on Social Procurement, which will set out how best to incorporate socio-economic objectives into procurement.

3. Additional support to suppliers

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Procurement Assistance Canada (formerly Office of Small and Medium Enterprises) (July 2021)

In recent years, through education and assistance to businesses, Procurement Assistance Canada (PAC), formerly known as the Office of Small and Medium Enterprises, has focused significant efforts on supporting businesses looking to become government suppliers. Moving forward, PAC will continue this important work, with increased focus on underrepresented groups to help them successfully participate in federal procurement.

Launch of Coaching Service (April 2022)

PSPC’s Procurement Assistance Canada (PAC) designed a new coaching service to provide assistance to experienced bidders from diverse socio-economic groups who have had limited success bidding on federal government opportunities, via a series of personalized sessions within a formalized program. The coaching service is designed to help participants understand how they can address some of the most commonly perceived barriers in procurement. Participation will help increase the confidence of businesses in their ability to bid on future tender opportunities and thereby increase the likelihood of participation for diverse businesses in federal procurement. PAC piloted the coaching service from May to November 2021. After implementing revisions based on the outcomes of the pilot, the coaching service was launched as 1 of PAC’s core outreach services in April 2022.

CanadaBuys (2022)

The transition from the Buyandsell government electronic tendering service to CanadaBuys, the new electronic procurement solution, will make it easier for potential suppliers to bid on federal procurements.

4. Measuring outcomes and expanding our reach

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Data-driven decisions

The Policy on Social Procurement provides PSPC with the authority to collect, protect, use, disclose, retain, and dispose of suppliers’ personal information for the purposes of social procurement. PSPC will collect and analyze data regarding the participation of underrepresented groups in its procurements. The collection of personal information related to a suppliers’ diversity characteristics will be done in accordance with the Privacy Act to establish baselines, monitor progress over time and modify if needed. Also, in addition to improving the supplier bidding experience, CanadaBuys will enable PSPC to better assess data on the socio-economic characteristics of its suppliers. This information, along with lessons from procurement pilots, will allow us to measure efforts to diversify our supplier base and to make adjustments where needed, to ensure the diversity of federal bidders and suppliers better reflects the Canadian population.

Supplier outreach and engagement

PSPC will undertake regular engagement with associations, industry and other stakeholders to promote and refine our Supplier Diversity Action Plan initiatives as well as various guidelines, tools, and education material that describe how and when to include socio-economic objectives in procurements.

Expansion of the Program on Social Procurement (2022 and beyond)

PSPC will establish baselines and key performance indicators to monitor and track progress on supplier diversity and social procurement through the Departmental Results Report and to refine the Program on Social Procurement. We will also work with Treasury Board of Canada Secretariat and other departments to explore options around government-wide social procurement programs.

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