Procurement: Standing Committee on Government Operations and Estimates—April 24, 2020
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Supplying the Canadian response to Covid-19
Given the extremely high global demand for Covid-19 related goods, there are many risks and challenges associated with procurement of these supplies. This situation is further complicated by export restrictions on personnel protection equipment (PPE) and other goods, which many countries have begun implementing.
In response Public Services and Procurement Canada (PSPC) is actively engaged in identifying and strengthening a domestic supply chain for critical supplies, services and equipment and is working closely with Innovation, Science and Economic Development Canada (ISED) to identify and strengthen domestic manufacturing capacity.
As a result of the highly competitive marketplace, the negotiating of contracts has also evolved rapidly, with a number of terms being requested by suppliers that do not come up in the normal course of business including: [Redacted]. PSPC has been working closely with central agencies and the Department of Justice to ensure that risk is appropriately identified and managed for the Government of Canada so that front line workers get the equipment they need.
Public Services and Procurement Canada actions taken to equip essential service workers with the supplies and equipment they need to combat Covid-19
The Government of Canada is collaborating with provinces and territories on an ongoing basis to identify their needs and purchase required equipment, supplies, and services to combat Covid-19.
As the Government of Canada’s central purchaser, PSPC is spearheading the consolidated purchase of emergency supplies and services required for Canada, including at the federal, provincial and territorial levels.
PSPC has stood-up a dedicated team of procurement specialists who are implementing flexible procurement approaches to best meet Canada’s needs. We are awarding contracts in order to ensure we are acquiring the goods and services that front line workers need, including personnel protective equipment, medical equipment, nursing and support services, air charters, accommodations, transportation, and security.
In addition to leveraging existing supply sources, we are proactively engaging industry to help meet Canada’s needs and ensure suppliers globally have a clear pathway through our BuyandSell website to connect with the Government of Canada if they are able to supply goods and services that may be of use.
A call to suppliers was posted to the Government of Canada’s BuyandSell webpage on March 12. To date we have received more than 26,000 responses to the call-out. (buy and sell)
By working directly with both new and existing suppliers and manufacturers, mobilizing Canadian industry and ensuring that suppliers have a clear pathway to supply goods and services that may be of use in response to Covid-19, we have placed orders and received millions of PPE supplies including masks, gloves and gowns.
PSPC is negotiating contracts with manufacturers who have stepped up with offers to retool their facilities to meet Canada’s needs. To date, we’ve established 13 contracts with Canadian manufacturers and negotiations are underway with others.
As the Covid-19 crisis has evolved rapidly, with increasing border restrictions and fewer commercial air carrier options for Canadian travellers, we changed our approach to securing transportation for stranded Canadians. The department has put in place contracts with air charters on behalf of Global Affairs Canada to transport Canadian citizens home from around the world. Given that domestic airlines now have capacity, the government is negotiating with them to repatriate Canadian nationals and/or family members and permanent residents.
Roles and responsibilities of other federal departments and agencies
The Government of Canada is leading a coordinated approach to provide needed supplies and equipment across the country. This involves PSPC, the Public Health Agency of Canada, Health Canada, ISED, the National Research Council of Canada, and Public Safety Canada. Global Affairs Canada is also implicated in the repatriation of Canadians.
Public Services and Procurement Canada
- PSPC is leveraging existing supply arrangements, as well as engaging with the broader domestic and international supply communities to identify and purchase required products
- The department is asking all suppliers to come forward with products and/or services they could offer to support Canada’s response
- PSPC manages coordinated, consolidated bulk buying by working with both domestic and international suppliers to help meet supply needs, and ensure that frontline healthcare workers across the country are equipped and protected in the fight against Covid-19
- Our Minister has also established a federal-provincial-territorial ministerial procurement working group with her counterparts across the country, to ensure a coordinated approach to purchasing equipment and supplies needed to fight Covid-19 in the global marketplace
Public Health Agency of Canada
- The Public Health Agency of Canada leads collaboration with federal partners, provinces and territories to identify needs and requirements for the Covid-19 response and is responsible for distribution of essential goods
- The Agency also oversees Canada's National Emergency Strategic Stockpile, which contains supplies that provinces and territories can request in emergencies
- As the regulatory body for health products, Health Canada is working to expedite access to the supplies Canadians need to help limit the spread of Covid-19
- On March 18, the Minister of Health signed an Interim Order to help facilitate access to certain products, such as personal protective equipment
Innovation, Science and Economic Development Canada
- ISED is leading Canada’s Plan to Mobilize Industry to fight Covid-19 for manufacturers and business
National Research Council of Canada
- The National Research Council's Industrial Research Assistance Program will build on its existing relationships with thousands of Canada's most innovative small and medium-sized businesses to facilitate innovative marketplace solutions to fight Covid-19
Public Safety Canada
- Lead federal department with respect to the co-ordination of all government efforts with respect to addressing an emergency. It has a Government Operations Committee that all other federal department and agencies feed into, as well as a federal/provincial/territorial committee to co-ordinate/manage efforts with provinces and territories
Global Affairs Canada
- Continues to provide consular services and leads efforts on the repatriation of Canadians. PSPC has put in place contracts with air charters on behalf of Global Affairs Canada to transport Canadian citizens home from around the world.
Our procurement approach has evolved with respect to responding to the Covid-19 pandemic and our efforts have provided important experience for future emergency planning, including the need to continue to leverage a combination of international and domestic supply chains.
We must also continue to work closely and collaboratively with our provincial and territorial partners.
These activities are key to making sure that Canada stands ready.
- We are operating in a highly competitive global environment, and international logistics are challenging
- We are working closely with our partners around the world, including embassies, as well as with on the ground logistics expertise in the private sector to get these supplies into the hands of health care workers on the front lines of this crisis
- We are taking a 2-pronged approach by ensuring that Canada has diversified sources of supply, while at the same time directly supporting Canadian industry to scale-up and re-tool to build domestic capacity
Amazon Canada, Purolator and Canada Post
- The health and safety of Canadians is our top priority, and that means ensuring life-saving medical supplies reach our frontline healthcare providers as quickly as possible
- We have entered into an agreement with Amazon Canada, in coordination with Canada Post and Purolator, to help manage the distribution of personal protective equipment and supplies purchased by the federal government
- This agreement will enhance the logistics and distribution capabilities of the federal government to help ensure that supplies make it into the hands of healthcare workers across the country as quickly as possible
Health and safety
Our government believes that every Canadian has the right to a safe and healthy workplace. We fully expect Amazon Canada to follow the guidelines put forward by Canada’s public health organizations and protect their workers during this crisis.
On April 1, 2020, PSPC, on behalf of the Public Health Agency of Canada (PHAC), signed a $5 million contract with Amazon Canada to efficiently get health care professionals the personal protection equipment (PPE) and supplies they need to protect themselves and continue caring for Canadians during the COVID-19 pandemic. PHAC will maintain oversight of all orders from provinces and territories to ensure supplies are distributed appropriately.
The agreement with Amazon Canada allows access to its technology interface where supplies will be catalogued and registered to allow provincial and territorial health authorities to order them directly through the Amazon business store.
The delivery of PPE and supplies ordered by PSPC will be done by Purolator for large shipments on pallets and by Canada Post for smaller shipments such as a box. PPE and supplies will be warehoused at the facility of Maritime Ontario in Brampton, where the technology of Amazon has been installed for the orders of provincial and territorial health authorities. Maritime Ontario is an on-going key sub-contractor of Canada Post.
Amazon Canada is offering their assistance to Canada for no profit until June 30, 2020. Fees beyond June 30 will be less than Amazon Canada’s standard commercial fees, and will be determined before May 30. The bulk of the $5M announced is to pay Purolator or Canada Post for transportation charges.
Canadian Embassy in China
With the global market being challenged by the overwhelming need for medical supplies, Public Services and Procurement Canada (PSPC) has been working closely with Global Affairs Canada (GAC) in Ottawa, the Canadian Embassy in Beijing and the Canadian consulates in Shanghai and Guangzhou. This collaboration is intended to help navigate and expedite the rapidly changing environment in China when it comes to the supply of personal protection equipment (PPE) such as masks, gowns, swabs, test kits, and other products needed in Canada in support of the COVID-19 pandemic.
To support these efforts, PSPC has engaged a broker and various experts to help officials navigate what had suddenly become the world's most competitive industry. They are assisting Canada to identify sources of supply that will meet Canadian standards, secure the supply chain and to help through the export process.
Through 2 morning and evening teleconferences, we are taking stock of the status of planned shipments to the warehouse at the airport to assist with the planning of flights from Shanghai to Canada, identify issues and find solutions or mitigations. This provides 24/7 coverage.
As of end of day April 19, 2020, we have had 10 flights so far from Shanghai to Canada and we have entered into contractual arrangements with CargoJet and Air Canada to provide sufficient capacity going forward.
At the end of March, PSPC entered into a contract with Bolloré Logistics Canada Inc using established emergency contracting authorities to provide urgent logistics and transportation services related to the procurement of PPE and medical supplies from China.
Bolloré Logistics Canada Inc is on a standing offer with the Government of Canada for freight and cargo services and was selected due to its previous experience providing brokerage services to Canada and its significant footprint in China. The decision was based on minimizing risks and on the urgency of the requirement.
We are making adjustments as we go based on the evolving situation on the ground. Given the urgency of delivering products to Canada and the challenging procurement circumstances in China, we are proceeding cautiously to avoid inserting additional complexity into the process, keeping in mind that our immediate priorities are expediency and minimizing risks.
Airlift from China
As of end of day April 17, 2020, we have had 8 flights so far from Shanghai to Canada and we have entered into contractual arrangements with CargoJet and Air Canada to provide sufficient capacity going forward. The first 2 flights organized as part of this effort arrived in Toronto on April 1 and April 6, delivering a resupply of personal protective equipment. The April 6 flight arrived with approximately 8 million surgical masks ordered by the federal government, and other orders made directly by the governments of Ontario, Nova Scotia and Quebec. When Cargojet flight 1392 touched down in Hamilton on April 11, along with 3 Air Canada flights on April 12 and 13, it brought in large quantities of N95 respirator masks to help in the fight against COVID-19.
More flights are being arranged on a regular basis.
On April 11, Air Canada publicly announced that it was boosting its cargo capacity by stripping the seats out of 3 of its enormous Boeing 777 aircraft to double their cargo capacity. "Bringing critical medical and other vital supplies rapidly to Canada and helping distribute them across the country is imperative to combating the COVID-19 crisis," Tim Strauss, vice-president of cargo at Air Canada, said in a statement.
Our goal is to be over prepared and we are ordering supplies in anticipation of future needs, while at the same time directly supporting Canadian industry to scale-up and re-tool to build domestic capacity.
Thousands of firms and individuals have reached out in response to the government’s call to action to offer support for personal protective equipment.
Companies with a viable product or service are being triaged into one of 3 places:
- procurement (Public Services and Procurement Canada): Companies with a viable product to see that meets Canada’s public health needs
- assessment (Public Health Agency of Canada): Companies with a potentially viable product that needs the be assessed rapidly by the technical advisory team before being approved for purchase
- innovation (National Research Council Canada, Innovation, Science and Economic Development Canada, Business Development Bank of Canada, Export Development Canada): Companies with a potentially viable product that needs technical or financial support to serve Canada’s public health needs or scale up
Innovation, Science and Economic Development Canada (ISED) is leading the Plan to Mobilize Industry to fight Covid-19 and is introducing new measures to directly support businesses to rapidly scale up production or retool their manufacturing lines to develop products made in Canada that will help in the fight against COVID-19. Amongst these measures, the Strategic Innovation Fund will deliver direct support to Canadian companies for large-scale projects; and Innovative Solutions Canada will be helping companies commercialize products more quickly.
To date, PSPC has placed orders for millions of key items, such as masks, tests, and ventilators, and we have established agreements with Canadian companies that are stepping up to support Canada’s efforts to combat COVID-19:
- Stanfield’s: A contract was put in place to produce a quantity of 2.6M gowns. Delivery will be from early May until the end of October 2020
- Fluid Energy: A contract for a quantity of 10M liters of hand sanitizer was put in place. Delivery started last week and will be completed by end of June 2020
- Medicom: Scale up domestic production of masks, a company that has already delivered some of the more than 16 million surgical masks that Canada has received
- Thornhill Medical: Immediate purchase of 20 in-stock ventilator units, with requirement to produce 1000 additional units. Thornhill Medical has partnered with Linamar to support manufacturing of the ventilators
- Spartan: Purchase of testing kits
- Stryker: Contract in place for 82 sterilization units of N95 masks. Technology is already being used and deployed in small and large health centres who currently have Sterrad units, which were recently approved for the sanitization of N95 masks
Canadian entrepreneurs: Pivoting to personal protective equipment production
Canada Goose has announced its plans to ramp up domestic production of personal protection equipment (PPE) for frontline healthcare workers across Canada. Over the next 2 weeks, the company will begin to reopen all of its 8 Canadian facilities. Once operating at full capacity, as many as 900 employees will be working to support these efforts.
Canada Goose has signed supply contracts directly with the provinces. Additionally, it will be delivering 246,000 gowns by May 22, at cost, to the Government of Canada. Any unintentional profits potentially derived from efficiencies will be donated to national COVID-19 relief funds.
This announcement builds on its commitment to manufacture and donate 14,000 units of gowns and scrubs at no charge. Produced in 2 of its Toronto and Winnipeg facilities, product shipments to hospitals and healthcare facilities across Canada began this week.
Located in Blainville, Quebec, Bauer has shifted its ice-hockey skate production lines to make face shields for front-line healthcare workers. Canada has ordered a quantity of 1M face shields from Bauer.
An historic Canadian undergarment factory famed for long johns and boxer shorts is about to rapidly reinvent itself as a domestic producer of medical gowns.
Jon Stanfield, the chief executive of the fifth-generation family firm, said in an interview he’s already sourced approved fabric from nearby Intertape Polymer, and is ready to be producing medical clothing within days. Stanfield said the firm has patterns and machinery that would initially produce more than 2,000 gowns daily per shift to help feed a Canadian demand for garments that emerged after the pandemic sliced supply from China.
In the 1890s, the company invented shrink-proof heavy woolen underwear used by workers during the Klondike gold rush; in the First World War, the factory was converted to provide wool blankets to keep soldiers warm in the trenches; and in Second World War, it supplied base layers of underclothing.
CAE Inc. (formerly Canadian Aviation Electronics) is a Canadian manufacturer of simulation technologies, modelling technologies and training services to airlines, aircraft manufacturers, healthcare specialists, and defence customers. CAE was founded in 1947 and is situated in Quebec.
CAE has proposed an innovative ventilator design that will leverage its capability as a powerhouse manufacturer and vast supply chain, while leveraging 3D printing technology. PSPC has put a contract in place for 10,000 units. To develop and manufacture this ventilator, CAE has engaged over 100 of its employees to work on engineering, procurement, manufacturing facilities, testing, configuration management, etc.
Supply chain for personal protective equipment
- From the outset we have been working directly with provincial and territorial governments to inform our bulk buying approach
- I am in regular contact with my provincial and territorial counterparts to ensure that we are working cohesively and collaboratively, and that they are getting the support they need
If pressed on faulty medical supplies
- We are working with established suppliers and distributors, as well as quality assurance experts, and we have strong processes in place to help ensure that the supplies we receive meet all necessary standards
- In addition, PHAC has robust testing measures in place, and they are in place for the very purpose of ensuring quality control of these essential products before they go out to provinces and territories
- We must make sure that the equipment that our frontline workers rely on is high quality, so they can stay safe, and keep us safe too
- We have encountered situations where supplies were found to be substandard, and we have acted quickly to address these issues, and to ensure that replacement supplies are rolled out where they were needed most
International context: Buying in China
Countries around the world are competing aggressively to acquire personal protection equipment (PPE) from a finite number of suppliers, many of which are located in China. This is resulting in a complex and unpredictable supply chain. At the same time, industry is trying to scale up to meet the demand, which means new players are emerging rapidly.
Normally, Public Services and Procurement Canada (PSPC) would procure goods exclusively through Canadian distributors, but given the rapidly changing market conditions, the emergence of new players, and the shortage of supply, PSPC can no longer rely solely on Canadian distributors to obtain these goods. Departmental officials are working closely with partners in other countries, including embassies. This on-the-ground support and expertise is proving invaluable as diplomatic staff and external partners assist in vetting companies in advance to better ensure quality.
Additional on-the ground support is in place to ensure product delivery, as well as logistics and warehousing expertise that help to secure our shipments and bring them to Canada. This support includes receiving product as it comes off production lines, quickly inspecting for quality, arranging for shipment to a warehouse PSPC has secured at the airport and actively securing customs clearance.
Countries have begun implementing export restrictions on the goods critical to combating COVID-19, such as PPE. This environment has made it increasingly challenging to source and acquire the PPE that Canada needs. This is why we have been collaborating with provinces and territories on an ongoing basis to identify their needs and establish bulk buys to purchase required equipment, supplies, and services to combat COVID-19.
By working directly with both new and existing suppliers and manufacturers, mobilizing Canadian industry and ensuring that suppliers have a clear pathway to supply goods and services that may be of use in response to COVID-19, we have placed orders and received millions of PPE supplies including masks, gloves and gowns.
Our main priority is making sure we get safe, effective equipment and supplies into the hands of front-line healthcare workers. Given the high level of complexity in the global supply chain due to extremely high demand, new suppliers entering the market, and multiple countries competing for the same items, ensuring quality of the product PSPC is purchasing is extremely important.
Quality assurance is happening at multiple points. First, manufacturers are required to certify that they are meeting specific standards and requirements. Second, new controls introduced by the Chinese government require additional oversight before products are cleared for export. And third, PSPC is working closely with the Public Health Agency of Canada and Health Canada on all purchases, to ensure they meet standards and requirements. Once products are delivered, the Public Health Agency of Canada unpacks and inspects items before they are distributed for use.
We have had challenges with respect to quality of goods for both N95 respirators and with test swabs. In both cases we took immediate action including suspending orders with certain manufacturers, and working closely with others to ensure that production issues are identified and corrected as soon as possible. PSPC, PHAC, and Health Canada are taking strong measures to ensure that defective product will not be distributed to frontline workers.
With regard to the N95 respirators that arrived with strap and air filtration issues, we took immediate action to suspend all orders from certain manufacturers, and are working to address quality issues through the supply chain.
With respect to the contaminated testing swabs received, we have signed a contract with PAMA Manufacturing of Mirabel, Quebec, for the sterilization of up to 960,000 swabs.
Testing of material in Canada: Public Health Agency of Canada
PHAC is the lead with respect to testing material in Canada, and specific questions on this matter should be directed to PHAC officials.
Buyandsell website: COVID-19 activities
- Industry and suppliers have responded positively to the call to action. To-date we have received more than 28,000 submissions, including more than 16,000 domestic submissions
- We are contacting all domestic companies who submitted forms, and hope to have this completed in the coming weeks
- We are contacting companies to obtain additional details regarding the products that they have, particularly when it comes to personal protective equipment (PPE):
- For companies that are offering PPE, we are seeking additional information in terms of types of products, quantities available, specifications of product, and information on if they have all the necessary licences and certifications
- For companies offering goods or services outside of PPEs, we are keeping their information on file and encouraging them to register for an automated email notification service. This service will alert them when a tender is posted on our Buyandsell website specific to the good or service they are selling
- It is a detailed and time-consuming process to assess the viability of each submission, and our officials and procurement specialists are working all-out in assessing submissions as they come in
- We will continue working through every offer, and pursuing all viable leads
If pressed on timelines: We must make sure that the equipment that our frontline workers rely on is high quality, so they can stay safe, and keep us safe too. That is why we have strong processes in place to ensure that the supplies we procure meet the necessary standards.
Public Services and Procurement Canada (PSPC) is proactively engaging industry to help meet Canada’s needs and ensure suppliers have a clear pathway through our BuyandSell website to connect with the Government of Canada if they are able to supply goods and services that may be of use.
The Government of Canada needs information about products and services that businesses can supply in support of Canada’s response to COVID-19. This includes personal protection equipment (PPE), like disposable N95 masks, vinyl gloves and hand sanitizer. It also includes different services, such as security, nursing, and food services. The full list is posted on Buyandsell.gc.ca. Information regarding product specifications is also available on the website.
A call to suppliers was posted to the Government of Canada’s BuyandSell webpage on March 12. As of April 21, we have received more than 28,000 responses to the call-out, of which more than 16,000 are domestic responses.
Process for receiving, assessing and triaging requests
A centralized approach allows us to receive, assess and triage information in a systematic manner.
Forms submitted online are uploaded into a database that identifies company names, product(s) available, quantities and contact information.
The information provided by domestic suppliers is assessed and triaged into 4 tiers. A total of 16,277 domestic forms, comprising all domestic forms submitted up to 5 pm (Eastern daylight time (EDT)/Ottawa time) on April 21, have been triaged (triaging done by PwC; numbers in brackets represent total companies in each tier):
- Tier 1 (56): In essence, companies that are in the medical field. These are companies in the medical/surgical/laboratory or related products category; professional (business) email address; in the Canadian Importers Database or the Dun & Bradstreet Canadian Entity database
- Tier 2 (1,385): In essence, companies in other lines of business. These are companies that provide other goods or services, but which may be able to provide PPEs (for example, health product companies that could provide hand sanitizer). Professional (business) email address, and in Dunn & Bradstreet database
- Tier 3 (9,989): These are submissions from professional (business) email addresses, but not found in Dunn & Bradstreet database
- Tier 4 (4,847): Submissions that use public domain emails (for example, hotmail, gmail), not found in Dunn & Bradstreet; no information indicating these are confirmed businesses
An email was sent to domestic applicants on April 23, 2020, to inform them that they should expect to hear from PSPC officials shortly in order to obtain more information on their submission.
Not all domestic applicants received the email. We found roughly 800 to 1,000 email addresses that were invalid or problematic, and we are exploring options to deal with these in an alternate manner.
Note that PSPC officials have communicated with nearly all tier 1 companies and most tier 2 companies. We are also contacting, tier 3 companies. To-date we have contacted more than 6,300 (nearly 39%) of all domestic companies who have submitted forms.
Status of contracts (as of 3 pm EDT April 23)—6,305 total:
- answered: 4,024
- left message: 1,663
- no answer: 529
- wrong number: 89
In addition, we have responded to just over 6,000 (6,037) emails to our generic inbox (firstname.lastname@example.org) and thousands of phone calls to our hotline (1-800-811-1148) since the start of the pandemic.
Officials from Public Services and Procurement Canada are currently contacting domestic companies who submitted proposals to obtain additional information. This is particularly true of those offering PPE. In those situations officials are contacting companies to obtain information such as:
- the company’s business number
- the company’s medical device establishment licence (MDEL) number
- confirmation of product quantities and availabilities
- confirmation that the products completely meet the specifications outlined on the Buyandsell website (specifications that are established by the Public Health Agency of Canada)
Assessed and prioritized submissions are then provided to a dedicated procurement team for further review and action. In those instances, procurement officers will directly contact companies for commodities that are needed in order to:
- obtain more information or details on availabilities, potential delivery schedules, and price
- if appropriate, establish a contract once availabilities, conformance with applicable standards and price have been confirmed and where appropriate
To date, the focus has been on procuring PPEs and other commodities deemed urgent or critical (for example, transportation services to repatriate Canadians).
Domestic companies: Defined
A response is considered to be from a domestic company (or source) when:
- the phone number and address are both confirmed to be in a Canadian province or territory
- if no address was provided, confirmation that the phone number (area code) is in Canada
- if no phone number was provided, confirmation that the address is in Canada
- if we are unable to match the phone number and address to the same province or territory, but the email domain is in Canada, the response is categorized as domestic
- if the information is found in the Dun & Bradstreet database
To date, approximately 286 contracts have been awarded (primarily for PPE). Of these 137, 129 (48%) have been awarded to companies that submitted forms through the COVID-19 call to action page.
Additional Information: Suppliers communicating with Public Services and Procurement Canada
Communication with suppliers is centralized through a generic email address (email@example.com) on the COVID-19 Buyandsell webpage. Companies can ask questions, check on the status of their submission or provide new information (quantities, specifications, etc.) to be included in the database.
As communication with suppliers is key to the success of this initiative, we have sent an email to all domestic applicants, and are working to contact each one of them to obtain more information on their submissions.
For companies offering goods or services that are not urgent at the moment but may be in time (for example, editing or translation services, or offering artificial intelligence (AI) solutions), we are contacting them to acknowledge their submission, keep their information on file and to encourage them to register to the automated email notification service on Buyandsell. We are also encouraging them to avail themselves of the services provided by the Office of Small and Medium Enterprises (OSME) to learn about how to participate in federal procurement.
Donations: How they are being used
The Government of Canada is receiving donations of medical supplies both internationally and domestically from companies and is working to make them available for use by frontline healthcare workers.
Public Health Agency of Canada (PHAC) is leading the co-ordination of donations of medical supplies and equipment in partnership with a number of key partners including the Canadian Red Cross, and the Canadian Armed Forces.
Individuals, businesses and other organizations can contact PHAC through the Donations to help combat COVID-19 portal on the Government of Canada website. A representative of the PHAC personal protection equipment (PPE) donation team will follow-up with the potential donor to guide them through the process.
Donated medical supplies received by PHAC are reviewed by an interdepartmental, multidisciplinary technical assessment committee to verify that they meet the Government of Canada technical specifications for COVID-19 as available on the Public Services and Procurement Canada’s buy and sell website.
The process for verification varies depending on the medical device. For example, KN95 respirators, as an accepted alternative to N95 respirators, are visually inspected to verify for defects in design and construction, and tested to confirm they meet specifications for filtering face pieces. Gowns and surgical masks are visually inspected and tested for fluid penetration.
Assessed supplies that meet the appropriate technical specifications are deployed to provinces and territories following an agreed upon allocation strategy. Donations are shipped with documentation that identifies the contents as donated material and confirms that the specifications are met. Where necessary, documentation is included offering instructions for use.
For example, donations received from China will have labeling in Mandarin. To ensure rapid deployment, PHAC is not able to re-label each individual item. To that end, provinces and territories are advised to follow the PHAC instructions provided with the donated supplies, conducting the appropriate training with frontline healthcare workers.
PHAC has received some supplies that do not meet Government of Canada specifications. Although such products are non-compliant for frontline healthcare response, they are subsequently assessed to determine potential use in non-healthcare settings.
To date, PHAC has received donations of gloves, masks, and other PPE from generous donors such as the Jack Ma Foundation/Alibaba, Home Depot, Apple, CBC/Radio-Canada, Shell, AstraZeneca, Bell Canada, Shell and many others. We expect this number to grow as Canadians and our friends answer the call to make a difference.
Department of Public Works and Government Services Act
Sections 6 and 7 of this legislation outline in detail the powers, duties and functions of the minister including the acquisition and provision of services for departments; planning and organizing of the provision of materiel and services required by departments; acquisition and provision of printing and publishing services for departments; and construction, maintenance and repair of public works, and federal real property. In addition, section 9 gives the minister the exclusive authority for the acquisition of goods.
Sections 20 and 21 provide the necessary contracting powers of the minister, including the power to fix terms and conditions of contracts, and instructions, terms and conditions with respect to other documents relating to contracts and their formation. Section 22 gives the minister the power to incorporate contractual clauses by reference.
Order in Council—Expanded application of ministerial procurement authorities.
March 2020—An order in council was approved so that during the COVID-19 emergency, the Minister of PSPC may procure on behalf of any person or any body. This is an expansion of her current authority to procure on behalf of other federal departments/agencies, provincial/territorial/municipal governments, and international bodies
Treasury Board Policy—Expanded emergencies contracting limits:
- March 2020—Contracting Policy was amended in order to provide the Minister of PSPC with enhanced authorities to combat COVID-19 including a contracting limit of up to $500M to purchase goods or services to support efforts to address the pandemic and unlimited contracting authority to purchase goods and services related to the design, development, research, production and manufacturing of vaccines
Defence Production Act
With respect to the Defence Production Act (DPA), this only applies to the military defence of Canada—not to a pandemic. Unlike the Defense Production Act in the United States, our act does not provide powers over industry and sources of supply in times of national emergency.
The Minister of Public Services and Procurement is responsible for the administration of the DPA and the exclusive authority to buy or otherwise acquire defence supplies and construct defence projects required by the Department of National Defence, subject to exceptions listed at subsection 10(2) of the DPA. All PSPC contracts for defence supplies or projects are governed by the provisions of the DPA.
The DPA includes the following 3 parts:
- procurement of defence supplies
- regulations of access to controlled goods
- offence and punishment
Under Part 1 of the DPA, section 11 permits the minister, if authorized by the governor in council, to do or undertake, on behalf of an associated government, any act or thing that the minister is empowered to do or undertake under the act. Sections 12 to 15 deal with the minister's mandate to organize and control the Canadian defence industry. Section 16 provides wide powers to the minister with respect to the procurement, production or disposal of defence supplies or defence projects. Sections 21 to 25 deal with the administration of defence contracts including an ability to set price, and require audits.
Each province has its own legislation on emergencies, which usually specify the responsibility of each level of government (municipal, provincial and federal). At the federal level, the Emergencies Act sets out the roles of each federal department, to assure an effective response.
The Emergencies Act was passed by Parliament in 1988 and is a federal law that can be used in the event of a national emergency. It replaced the War Measures Act, which was repealed when the Emergencies Act become law in 1988. To date, the Emergencies Act has never been used.
There are 4 types of national emergencies: a public welfare emergency, a public order emergency, an international emergency and a war emergency. The federal government, under the leadership of the Department of Public Safety, can assist with any type of emergency.
In the context of the COVID-19 situation, the applicable emergency is that of public welfare dealing with threats to the life, health or safety of Canadians: “an urgent and critical situation of a temporary nature that seriously endangers the lives, health and safety of Canadians and is of such proportions or nature as to exceed the capacity or authority of a province to deal with it … and that cannot be effectively dealt with under any other law of Canada”.
Under the Emergencies Act, once the government makes a formal declaration, the declaration is in place for a limited period of time, subject to oversight by parliament. In the case of COVID-19, that time limit is 90 days, however parliament can revoke it at any time, as can the government. Any extension of the declaration must be confirmed by parliament.
In addition, the Canadian Charter of Rights and Freedoms applies during a declaration of an emergency, and continues to protect fundamental individual rights as the Government of Canada takes the necessary steps to safeguard the health and safety of Canadians.
Looking forward to post COVID-19 for procurement
Looking forward beyond the immediate emergency brought on by COVID-19, procurement will play a critical role in ensuring a quick and full recovery of the Canadian economy.
Public Services and Procurement Canada (PSPC) will continue working with other government departments to ensure that their procurement needs are actioned quickly. For example, partnerships with Innovation, Science and Economic Development (ISED) will continue as the government continues to leverage Canadian innovation and ingenuity through the Innovative Solutions Canada programs. There will also be contracts established, such as the one awarded to Medicom Canada, to continue to strengthen Canada’s domestic capacity to respond to another pandemic, or a potential re-appearance of COVID-19.
The current challenges and constraints to the procurement of personal protection equipment (PPE) are providing a number of lessons learned that will likely impact future procurement activities:
- Domestic supply—Canada has been very reliant on foreign supply, particularly Chinese supply of PPE, medical devices and medications. In the future, there could be more emphasis on sourcing essential products within Canada
- Supply chains—Globalization has contributed to the development of complex international supply chains. To understand supply risk will require a better understanding of global supply chains that produce essential products
- Logistics—Previously, PSPC’s role focused on sourcing products while clients and suppliers were typically responsible for managing the logistics and delivering products to clients. PSPC has had to play a direct role in logistics to successfully get product to Canada, which could impact how we do things in the future
- Contingency—The challenges of ramping up supply of PPE and equipment suggest the potential for additional contingency measures in the future, such as changes to the National Emergency Strategy Stockpile, contingent contracts and emergency procurement authorities
In addition to potential changes in procurement activities, it can be expected that the guidelines being developed to support the transition back to work will drive demand for new and additional PPE, equipment and goods.
As overall government operations resume, PSPC will continue playing an important role in ensuring that contracts are competed, awarded, and managed so that the goods and services that are provided to Canadians continue to be provided. PSPC will pursue delivering on the government’s mandate in a number of key procurement areas:
- Include practices that support green and socio-economic policy goals
- Implement the e-procurement solution
- Publish clear metrics and make government data available
- Continue the development of better vendor management tools
- Increase the diversity of bidders
- Bring forward analysis and options for the creation of Defence Procurement Canada
- ensure that Canada’s biggest and most complex National Defence and Canadian Coast Guard procurement projects are delivered on time and with greater transparency to parliament
- Support National Defence in
- selecting a supplier and entering into a contract to construct Canada’s fighter aircraft fleet
- renewing the Canadian Coast Guard fleet and the Canadian Navy fleet
Create a new target to have at least 5% of federal contracts awarded to businesses managed and led by Indigenous Peoples
- Explore measures that support the conversion of government fleets to zero-emission vehicles
- Support Environment and Climate Change Canada in
- implementing the plan to ban harmful single-use plastic products
- positioning Canada as a global leader in clean technology
Skills and trade
Develop a proposal to require that government suppliers participate in the Canadian Apprenticeship Service, and require that federal construction contracts meet targets for greater inclusion of women in the trades.
Future reporting requirements
PSPC will be working closely with central agencies and other government departments to ensure that appropriate measures have been put in place to deliver on reporting requirements.
From a procurement standpoint, there are a number of existing requirements that PSPC will continue to meet including those for the Public Accounts of Canada, departmental reporting, as well as other requirements to report on specific activities to central agencies, such as the use of an emergency contracting authority.
The response to COVID-19 procurement has necessitated the use of tracking tools and the development of different tracking reports. As an example, new reports have been developed to track supplies through the logistical process, from production to export and custom inspections, shipments and deliveries.
Post COVID-19, PSPC will draw lessons learned from these reporting activities and carry forward best practices.
Future audit requirements
It is anticipated that future audits and evaluations could focus on the use of non-traditional procurement authorities with an emphasis on the documentation, due diligence and controls used in exercising special authorities granted during this COVID period.
Another potential avenue of audit activity could involve work on lessons learned on COVID, to continue efforts that worked well and to identify potential areas to better prepare for the next emergency and/or pandemic.
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