Procurement services: Standing Committee on Government Operations and Estimates—March 12, 2020

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Procurement modernization

In this section

With the support of the President of the Treasury Board, the Minister of Public Services and Procurement Canada (PSPC) will continue the modernization of procurement practices so that they are simpler, less administratively burdensome, user friendly, deploy modern comptrollership, encourage greater competition and include practices that support our economic policy goals, including innovation, as well as green and social procurement. The implementation of the electronic procurement solution (EPS) will be central to this priority.

Key messages

Secondary key messages


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) Footnote1 , making procurement a fundamental lever to achieving social and economic objectives.

The Government of Canada has committed to modernize and simplify procurement, and to establish an electronic procurement solution. A key step towards this goal was the purchase of a new electronic procurement system, announced in Budget 2018 with $196.8 million allocated over 5 years. Procurement processes will also be easier, faster and more accessible for suppliers and buyers through:

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

Electronic procurement solution

The EPS is a cloud-based system that will help shift administratively burdensome, paper-based processes to a digital marketplace. This system aims to cover the end-to-end procurement process from the time a need is identified to when an order is placed. The e-procurement solution further aims to reduce the cost and complexity for suppliers competing for government contracts and providing buyers with agile access to the commercial marketplace and promote value.

Next steps

Work is underway at PSPC to:

The successes and achievements of PSPC’s work in the area of procurement modernization will continue to be promoted through various fora (for example, regional visits to engage PSPC and client departments, outreach with suppliers and other government departments via the Supplier Advisory Committee, Client Advisory Board, social media, and through the Better Buying and BuyandSell websites).

Electronic procurement

Public Services and Procurement Canada will begin implementing the e-procurement solution in 2020. The onboarding of suppliers will follow a phased approach, with an initial round of selected suppliers expected to be invited to register and onboard in spring 2020.

The solution will allow users to search electronic catalogues for goods and services from pre-qualified suppliers and will allow the government to review bids electronically. The contract to implement and manage the electronic procurement solution was awarded to Infosys Public Services, Inc. in July 2018 for a value of $80.3M.

Questions and answers

Question 1: How is PSPC taking action to modernize federal procurement?

Answer 1: Modernization of federal procurement is a key priority. It recognizes the business imperative for improving how we deliver our federal procurement services, and also recognizes the tremendous opportunity to leverage federal spending power to support socio-economic goals, in particular seeking better outcomes for small and medium enterprises (SMEs), women-owned and Indigenous businesses and communities.

PSPC has identified 4 key priorities to focus the department’s efforts:

These initiatives are expected to make federal procurement easier, faster, and less-expensive for government and for suppliers wishing to do business with the Government of Canada. The department is also working in collaboration with Treasury Board Secretariat to renew the government’s procurement policy suite.

Question 2: How is PSPC progressing against the EPS project?

Answer 2: We are making progress. In 2018, PSPC awarded a contract for an electronic procurement solution that will change the way we interact with the supplier community.

The onboarding of suppliers to the EPS will follow a phased approach, with an initial round of selected suppliers expected to be invited to register and onboard in spring 2020. The solution will start to be implemented within PSPC in March or April 2020.

Question 3: In July 2018, PSPC awarded a contract for the implementation and maintenance of an e-procurement platform. Why is the value of this contract only $80.3 million when budget 2018 allocated $196.8 million over 5 years to establish an e-procurements platform?

Answer 3: $196.8 million is representative of the overall project costs over 5 years which includes a contract component of $80.3 million (including taxes) for the deployment of the e-procurement platform as a managed service. Other project related costs over and above the contract costs includes:

Question 4: Following the Phoenix fiasco, how can you assure Canadians the electronic procurement solution will be successfully implemented?

Answer 4: We have learned from the pay administration (Phoenix) project and are applying those lessons to the electronic procurement solution.

We are implementing the electronic procurement solution following a pragmatic, incremental and agile approach. This means taking small steps at a fast pace, while assessing and addressing challenges along the way.

We have in place a solid governance and oversight. We are also ensuring that internal audits provide the deputy minister (DM) with the appropriate assurances, oversight and management and that the DM has access to independent advice.

We are piloting the solution within PSPC first. We will test the technology until it works properly before proceeding with deployment across the Government of Canada.

We are making sure that users are aware of how it will change the way they work, and ensuring that a good change management approach is in place, where feedback and views from the people who will interact with the system are taken seriously.

Finally, working with our partners inside and outside government we are simplifying business practices to align with international best practices.

Question 5: Will the electronic procurement solution replace

Answer 5: Once successfully established, the electronic procurement solution will be implemented in other federal departments and agencies. It will become the single window for federal procurement and eventually replace

Question 6: How is Public Services and Procurement Canada working to make the procurement process simpler and easier?

Answer 6: My department is responding to suppliers’ concerns that the procurement process is too complex and administratively burdensome. We have launched a contract modernization initiative which consists in assessing the structure of our current contracts, identifying and testing new approaches to streamline and simplify our contracts.

We have also developed contract modernization concepts that are being considered for integration into our upcoming EPS.

Question 7: What will be the impact on suppliers?

Answer 7: We are reviewing our contract documents by using clearer and simpler language, removing duplicate and outdated information, while applying commercial best practices. This work will make it easier and faster for suppliers to prepare a bid as well as understand and comply with the requirements within our tenders.

To date we have examined large volumes of contractual documents. We have tested simplification concepts in the recent artificial intelligence and software-as-a-service tenders. Feedback from the supplier community has been positive and we are continuing to refine procurement documents.

Modernizing contracts will also contribute to improving the efficiency of procurement.

Women Entrepreneurship Strategy and supplier diversification

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Budget 2018 announced the government’s intent to increase the participation rate for women-owned small and medium enterprises (SMEs) in federal procurement by 50% from the current rate of 10% to 15%.

Furthermore, the minister of Public Services and Procurement is mandated to develop initiatives to increase the diversity of bidders on government contracts.

Key messages


Research consistently shows that women-owned businesses are less likely to contract with the federal government than their male counterparts. Studies have identified obstacles to participation in federal procurement experienced by women-owned businesses and other SMEs. Barriers include problems finding suitable opportunities and the emphasis on price in requests for proposals.

In addition to ongoing procurement modernization initiatives, an action plan has been developed to address barriers faced by women-owned businesses.

On June 20, 2018, the Standing Committee on Government Operations and Estimates (OGGO) tabled its report, Modernizing Federal Procurement for Small and Medium Enterprises, Women-owned and Indigenous Businesses. The government tabled its response in October 2018. The government recognizes the importance of women in federal procurement and is taking actions to better assist them, and is:

Next steps

In 2020, the department will implement and test a mentoring initiative for select women-owned businesses to guide them through the procurement journey.

Questions and answers

Question 1: How will PSPC close the gender gap in government suppliers?

Answer 1: To support the Women Entrepreneurship Strategy, PSPC is working to make procurement more accessible to women entrepreneurs so they can leverage their experience as government suppliers to further succeed in the marketplace. PSPC is also working closely with Global Affairs Canada (GAC), the Business Development Bank of Canada and other government departments that are working in partnership to fulfill the strategy. These measures will also contribute to closing the gender gap in government suppliers, increasing the participation of women businesses in government procurement by 50%.

Question 2: How is PSPC encouraging women and underrepresented groups to participate in procurement?

Answer 2: The Office of Small and Medium Enterprises (OSME) works to remove barriers created and unintended consequences by such factors as the cost of bidding and experience requirements in federal procurement, to help level the playing field for SME suppliers, including those that are currently under-represented, to compete on procurement opportunities.

Office of Small and Medium Enterprises conducts inclusive outreach activities with social enterprises and under-represented businesses including businesses led by women, persons with disabilities, visible minorities and members of the lesbian, gay, bisexual, transgender, queer and two-spirit (LGBTQ2+) community across Canada.

Office of Small and Medium Enterprises also partners with professional organizations and national associations that support under-represented communities to promote and encourage participation in government procurement among their membership.

Question 3: What actions are being taken to increase supplier diversification in procurement?

Answer 3: PSPC has consulted with industry about approaches to incorporate social procurement measures in the temporary services method of supply and in the selection method for architects and engineers. PSPC is conducting a number of pilots and is planning to launch more.

For example, there are 2 pilots underway for catering services in the National Capital Region and the Atlantic Region. These pilots have created a list of under-represented suppliers and social enterprises that can provide catering or hospitality services. A third catering services pilot is also underway in Western Region.

Budget 2018 announced the government’s intent to increase the participation rate for women-owned small and medium enterprises (SMEs) in federal procurement by 50 percent from the current rate of 10 percent to 15 percent.

Indigenous procurement strategy

In this section


The minister of Public Services and Procurement is mandated to work with the minister of Indigenous Services and the president of the Treasury Board to create more opportunities for Indigenous businesses to succeed and grow by creating a new target to have at least 5% of federal contracts awarded to businesses managed and led by Indigenous Peoples.

Key messages

If pressed on Directive on government contracts, including real property leases in the Nunavut settlement area:


Over the last 2 fiscal years, PSPC under its own delegation, has awarded 465 contracts (including call ups and amendments) on average per year, valued at $18.3M annually to Indigenous suppliers, which represent 3% of PSPC total awarded procurement (based on value under its own delegation).

Furthermore, over the last 2 fiscal years, PSPC, as a common service provider, has awarded 844 contracts (including call ups and amendments) on average per year, valued at $492M annually to Indigenous suppliers, which represents 3.8% of its total awarded procurement (based on value).

There are currently 25 modern treaties, also known as comprehensive land claims agreements, in effect and most contain economic obligations which impact federal procurement activities. For example, the Nunavut Land Claims Agreement embeds a specific obligation to develop a Nunavut-specific federal procurement policy aimed at providing Inuit businesses the opportunity to compete for government contracts, including real property leases, and for Inuit to participate in employment, training and business opportunities created by those activities.

PSPC’s Office of Small and Medium Enterprises (OSME) helps Canadian enterprises, including Indigenous businesses, understand the federal procurement process through seminars, awareness sessions and presentations. OSME outreach activities in support of Indigenous businesses, in fiscal year 2018 to 2019 (up to third trimester), included:

In addition, the minister’s Supplier Advisory Committee contributes to understanding and addressing barriers that smaller businesses face in federal procurement, including those faced by Indigenous-owned businesses. The Canadian Aboriginal and Minority Suppliers Council, represented by its President Cassandra Dorrington, has been an active and contributing member since the committee’s first meeting in 2013.

Next steps

PSPC is working with Indigenous Services Canada and the Treasury Board of Canada Secretariat to create more opportunities for Indigenous businesses to succeed and grow.

Question and answers

Question 1: What is PSPC doing to help Indigenous businesses?

Answer 1: While it’s critical to improve our tools and processes, we are also leveraging our purchasing power for the greater good. We are leveraging federal procurement to support Indigenous businesses by providing increased opportunities to access the federal government market. For example, we are increasingly incorporating requirements for benefits for Indigenous Peoples and the businesses they run into federal procurement. Departments that procure more than $1 million annually have been asked to increase the value of contracts awarded to Indigenous businesses, with the objective of 5%.

We are also partnering with professional organizations that support Indigenous business to encourage participation in government procurement, including the Canadian Aboriginal and Minority Supplier Council (CAMSC) and the Council for the Advancement of Native Development Officers (CANDO).

Federal procurement is widely recognized as an important lever for increasing socio-economic benefits for Indigenous businesses and peoples.

Question 2: What are the procurement vehicles to increase Indigenous businesses participation in federal procurement?

Answer 2: The Government of Canada relies on a number of mechanisms for increasing Indigenous participation in federal procurement, including mandatory and voluntary set-asides, joint-venturing, subcontracting, Aboriginal participation components and Aboriginal benefit requirements.

An Indigenous Benefits Plan to address socio-economic benefits to Indigenous people in the community can also be included in procurement strategy. The plan can include sub-contracting, employment or training components.

Question 3: What is PSPC’s role in the implementation of the Directive on government contracts?

Answer 3: PSPC will provide support and advice to departments on implementing the directive. The department will develop new procurement and leasing guides and tools which will be accessible to all government departments.

The department will act as a point of contact for federal procurement officials in providing advice and support on individual procurements.

PSPC, through its Office of Small and Medium Enterprises (support for smaller businesses), is working to make it easier for smaller businesses to bid on federal contracting opportunities through awareness and information services. PSPC will work with federal partners and key stakeholders to ensure Inuit firms are aware, and taking advantage, of OSME’s services by creating a new target to have at least 5% of federal contracts awarded to businesses managed and led by Indigenous Peoples.

In measuring our performance in meeting this target, PSPC will include all contracts awarded under the Procurement Strategy for Aboriginal Business (PSAB) Policy, and all other contracts, such as those awarded on an open, competitive basis. PSPC is pursing efforts to expand procurement opportunities for Indigenous businesses, notably via enhanced use of Indigenous benefit plans embedded in contracts, and through the new Treasury Board Directive on Government Contracts, including Real Property Leases, in the Nunavut Settlement Area.

The directive represents a shift in Canada’s contracting policy for procurement in the Nunavut Settlement Area. Going forward, PSPC will continue to leverage its role and expertise as the common service provider for federal procurement services and as the main contact for federal contracting professionals for procurement advice, guidance, and training on the new directive.

Outreach and engagement will also increase through a number of activities, including:

Zero emission vehicles

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In line with the minister of Public Services and Procurement’s mandate, Public Services and Procurement Canada (PSPC) is committed to exploring measures that support the conversion of government fleets to zero emission vehicles.

Key Messages: Inter-departmental fleet inventory

Background and current status

The Government of Canada is always exploring opportunities to enhance environmental outcomes in federal procurement, including reducing its carbon footprint in its own operations as well as in the federal supply chain.

This includes setting targets for government administrative and executive vehicles:

PSPC internal fleet-inventory is aligned with the above targets.

In parallel to this, the ministers of Environment and Climate Change; Innovation, Science and Industry; Transport; and Natural Resources are mandated to work in partnership towards targets for the sale of zero emission vehicles in Canada:

The market and technologies supporting the conversion to zero emission vehicles is still in evolution and the infrastructure required to support zero emission vehicles is also reliant on numerous stakeholders (for example, province/territories, municipalities, manufacturers).

Next steps

PSPC has exclusive authority for the purchase of vehicles for the federal government's light-duty vehicle fleet. In order to reach its targets, PSPC is committed to continue working in partnership with all stakeholders, including industry, to address shared priorities and as a way to collect feedback and product information from vehicle manufacturers. PSPC is also incorporating procurement categories for zero emissions and green vehicles to facilitate and accelerate the greening of Canada’s fleet. A standing offer for charging stations has been established to facilitate the adoption of electric vehicles by departments and agencies.

PSPC is working with the Treasury Board Secretariat and other departments to promote the use of green executive and departmental vehicles and facilitate the installation of charging stations on Parliament Hill and elsewhere, where feasible.

Question and answers

Question 1: What is PSPC doing to help transitioning it’s vehicles to zero emission?

Answer 1: In 2019 to 2020, the department began implementing a greening strategy by replacing its aging fleet with newer and cleaner technology to reduce hazardous emissions while meeting operational requirements.

Question 2: How many zero emission vehicles does PSPS currently have?

Answer 2: PSPC currently has 6 zero emission vehicles on hand with an additional 9 purchased in 2020 which have not been delivered yet.

Vendor performance management

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The minister of Public Services and Procurement is mandated to continue the development of better vendor management tools to ensure the government is able to hold contractors accountable for poor performance or unacceptable behaviour, particularly in large-scale procurements.

Key messages

Next steps

In early 2019, the department consulted with industry and other stakeholders on a draft Vendor Performance Management Policy. PSPC is now moving towards small-scale tests of the policy, for selected goods and services, so that we can learn from experience before pursuing broader implementation. The department will seek feedback throughout this process, including from industry and from federal departments, and use the results to refine the policy.


In developing tools to better manage vendor performance, PSPC’s goal is to keep suppliers accountable while continuing to do business with good performers. The department is aiming to do this in a way that fosters better communication with vendors and clarifies expectations.

Key tools will include the creation and development of a PSPC Vendor Performance Management Policy, a change in management strategy, and various communications, engagement and training activities. The policy will include:

Questions and answers

Question 1: How can you ensure that the new Vendor Performance Management Policy will be fair and transparent to vendors?

Answer 1: PSPC undertook extensive research and consultation in the development of the Vendor Performance Management Policy. Numerous approaches to managing vendor performance in other jurisdictions, within Canada and across the world, were examined and the department actively engaged with vendors and procurement experts from coast to coast. The department paid specific attention to considerations impacting the fair treatment of vendors. We will continue to engage with Canadians as we move forward with the initiative.

Question 2: How will the Vendor Performance Management Policy provide value?

Answer 2: Through performance evaluations, the initiative will allow for better identification, tracking, and communication of information on the quality, cost, schedule, and management of our contracts. This should reinforce a focus on value.

The effective management of vendor performance will mean strengthened stewardship of resources by ensuring that Canada continues to do business with suppliers who deliver. It will improve contract outcomes through strengthened communication on expectations and proactively addressing performance issues.

Question 3: Will evaluations be done fairly and consistently?

Answer 3: PSPC is developing standardized indicators for each good, service, and construction project while working with industry and government stakeholders. These will form the basis of performance evaluations, thus reducing bias and helping to ensure that performance is consistently scored the same way. Government employees managing contracts will provide justification when needed for the scoring, and vendors will have the opportunity to provide feedback during the evaluation processes.

Furthermore, vendors who do not agree with their evaluations will have recourse to an independent body which will oversee appeals.

Question 4: How will vendor performance management affect small and medium sized businesses?

Answer 4: Many small and medium sized businesses participated in vendor performance management consultation sessions that were held in March 2019 and are included in our ongoing engagement with industry.

Specific attention is being given to the fair treatment of new suppliers and small and medium size businesses under the new oversight, governance and appeals process now being developed.

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