Procurement: Standing Committee on Government Operations and Estimates—March 24, 2021

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Procurement of COVID-19 vaccines

Context

Public Services and Procurement Canada (PSPC) is working with the Public Health Agency of Canada (PHAC), Health Canada and Industry, Science and Economic Development Canada (ISED), along with the COVID-19 Vaccine Task Force to prepare for the procurement of COVID-19 vaccines and related supplies.

Suggested response

• Given intense global competition, the government has taken an aggressive approach to secure access to 245 million doses, 121 million of which have received regulatory approval
• By the end of September, Canada will have received enough doses for every eligible person who wants one
• As an ongoing priority, PSPC continues to work with vaccine suppliers to negotiate the early delivery of doses to Canadians

If pressed on the details of advance purchase agreements:

• as permitted by contract and law, the Government of Canada is committed to transparency and accountability, and has been publicly disclosing contracting information to the fullest extent possible
• we continue to seek opportunities to be as transparent as possible about our procurements in support of Canada’s COVID-19 response, while respecting confidentiality agreements and protecting our negotiating position. Every contract is different as they reflect specific requests and requirements put forth by the supplier
• we fully support the release of contract details that do not harm Canada’s capacity to secure doses for Canadians and continue to work with suppliers to release as much information as possible

If pressed on spending on vaccines:

• starting last year, we invested a little over $1 billion in upfront payments to suppliers in order to support vaccine development, testing and at-risk manufacturing prior to regulatory approval
• we are unable to disclose financial details due to confidentiality terms within our agreements. We will continue to provide Canadians with as much information as possible and as our vaccine strategy unfolds

If pressed on the executive order in the US:

• suppliers have indicated that the executive order has not changed their existing arrangements with countries like Canada and they will continue to work towards target delivery dates
• Canada does not anticipate any disruption of COVID-19 vaccine supplies as a result of the order and is working closely with officials at Global Affairs Canada to monitor the situation
• with its diverse portfolio of vaccine candidates, Canada continues to work with suppliers to maintain supply of vaccine shipments, especially as supply ramps up in the coming months

If pressed on European Union (EU) export controls:

• Canada is closely monitoring the situation in the EU following the extension of its export transparency mechanism for COVID-19 vaccines produced within its borders
• since these measures were first introduced, Canadian officials have been working with suppliers and EU officials to ensure that there will be no disruptions of vaccine exports to Canada
• as a result of these discussions, the EU has continued to grant authorization of Pfizer and Moderna shipments to Canada
• we will continue to work closely with suppliers to ensure that Canada’s vaccine supply from Europe continues to arrive without any delays

If pressed on new variants:

• Canada is engaging its vaccine suppliers to ensure that we mitigate any emerging risks in the face of these new variants and continues to evolve its procurement strategy around future supply based on the best scientific advice available
• we have raised the issue of boosters with our suppliers and will factor this into our planning
• PSPC will continue to follow the advice put forward by Health Canada, PHAC and the COVID-19 Vaccine Task Force to make procurement decisions. This includes monitoring the effectiveness of our current vaccine portfolio through clinical trials on the new variants

If pressed on contractual implications of off-label use:

• Canada’s priority remains to ensure that the vaccines in its portfolio are administered in a safe and effective manner
• we continue to engage suppliers to secure early delivery of vaccine doses

If pressed on delivery of AstraZeneca doses:

• following the regulatory approval of the AstraZeneca vaccine on February 26, Canada is expecting to receive all 20 million doses of its bi-lateral agreement by September 30 of this year
• PSPC is working with AstraZeneca to solidify its delivery schedule in the coming weeks, in advance of delivery starting in the second quarter

If pressed on delivery of the 1.5 million AstraZeneca doses offered from the United States:

• following the announcement that the U.S will send Canada 1.5 million doses of the AstraZeneca vaccine, officials have been working around the clock to finalize the details of this exchange
• through this exchange, the 1.5 million doses will count as part of Canada’s 20 million doses secured through its bi-lateral agreement with AstraZeneca. Canada expects to receive 1.5 million doses by the end of March and an equal number of doses will be provided to the US at a later date
• we continue to work closely with the United States and AstraZeneca to ensure that these doses arrive as soon as possible

If pressed on delivery of Johnson & Johnson:

• following the regulatory approval of the Johnson & Johnson vaccine, we continue to work with them to firm up delivery schedules for an expected delivery starting as soon as possible

If pressed on accelerated delivery of doses:

• PSPC continues to work with suppliers to successfully accelerate the delivery of vaccines so that Canada meets its target of providing a vaccine to all Canadians who want one by the end of September
• on March 5, the Prime Minister announced the accelerated delivery of 1.5 doses into the first quarter and another 1 million accelerated doses in both April and May. In total 3.5 million doses have been shifted for earlier delivery and we are now expecting 12.8 million doses of Pfizer from April to June alone
• other successful efforts to accelerate Pfizer and Moderna doses have yielded positive results. Canada is now on track to receive all 40 million of its Pfizer doses and all 44 million of its Moderna doses before the end of September

If pressed on disruptions to supply of the Pfizer and Moderna vaccines:

• while unfortunate, such delays and issues are to be expected when global supply chains are stretched well beyond their limits. It was with precisely these types of issues in mind that Canada put in place 7 agreements with leading vaccine manufacturers and developers in order to ensure we have diversity and flexibility when it comes to supply chains
• Pfizer has increased supply and is on track to meet its planned target of 4 million vaccines delivered in Canada by the end of March. In addition, it has accelerated the delivery of an additional 1.5 million doses into the first quarter, surpassing its original target
• Moderna has also confirmed that it will meet its target of 2 million vaccines delivered in Canada by the end of March
• as fluctuations may occur while suppliers scale up new production, Canada will continue to work closely with its vaccine suppliers to ensure that they meet their quarterly targets. These efforts will keep us on track to achieve our overall target of having enough vaccines for everyone who wants one by the end of September

If pressed on Canada’s agreement for 2 million doses from the Serum Institute of India:

• Canada successfully completed an agreement for 2 million doses of AstraZeneca’s COVID-19 vaccine, which is manufactured under license by the Serum Institute of India and distributed under the label COVISHIELD
• 500,000 of these doses arrived in Canada the week of March 1, and have been distributed to provinces and territories. The remaining 1.5 million will be delivered to Canada by the end of May
• this agreement for 2 million doses is in addition to the 20 million doses already secured through Canada’s agreement with AstraZeneca, which is expected to arrive in the summer

If pressed on Canada’s participation in the COVAX Facility:

• Canada supports the objectives and principles of the COVAX Facility, which supports equitable global access to safe, effective, and affordable COVID-19 vaccines, once developed
• on September 18, Canada signed an agreement to participate in the COVAX Facility
• this will allow us to diversify our portfolio of vaccine candidates, provide an additional mechanism to donate or sell surplus doses to other nations, potentially secure earlier access to vaccine doses, and reduce the risk of export controls preventing delivery of doses to Canada
• through this agreement, Canada will also have access to up to 15 million vaccine doses, if required, while supporting equitable global access to safe, effective, and affordable COVID-19 vaccines
• PSPC is working with COVAX and AstraZeneca to finalize the delivery details for its allocation of up to 5 million AstraZeneca doses, which is expected to start with an initial shipment by the end of this month of approximately 300,000 doses
• these doses would come in addition to the 20 million doses that Canada has secured through its bi-lateral agreement with AstraZeneca
• Canada is committed to global collaboration to end this pandemic and is contributing $220 million through the COVAX advance market commitment to purchase doses for low- and middle-income countries
• this facility allows us to accomplish together what none of us could accomplish alone

If pressed on potential delays to Sanofi/GSK:

• Canada is monitoring any potential delays arising from trials of Sanofi’s vaccine candidate
• our priority is the health and safety of Canadians and as such, no vaccine will be delivered prior to obtaining regulatory approval
• Canada has invested in one of the most diverse COVID-19 vaccine portfolios in the world to mitigate the risk of delays such as this, and continues to monitor the progress of all candidates in the context of regulatory reviews

If pressed on Novavax production in Canada (Innovation Science and Economic Development Canada (ISED)):

• as a result of bilateral negotiations for its vaccine candidate, Novavax agreed to enter into separate negotiations to build domestic capacity in Canada in the long-term
• negotiations were led by ISED
• as a result of these efforts, Canada will be enhancing its domestic capacity through this partnership with Novavax, operating out of the National Research Council’s Royalmount facilities in Montreal

If pressed on Pfizer’s change from 5 to 6 doses per vial:

• on February 9, Canada authorized Pfizer to change the product monograph and label for its COVID-19 vaccine to reflect that each vial contains 6 doses of vaccine
• Canada’s contract with Pfizer is based on the number of doses and must be aligned with the applicable legislation and regulatory framework. As such, we continue to monitor the situation with our colleagues at Health Canada in order to ensure that the requirements are consistently met and Canada receives the supply that it has been promised in its contract
• to extract a sixth dose reliably and consistently the Government of Canada has already ordered 160 million low dead volume syringes, which are recommended in the case of a change from 5 to 6 doses per vial
• the first deliveries have already arrived in Canada and will continue through August 2021 

If pressed on provincial and territorial collaboration:

• from the outset, the Government of Canada has been working directly with provincial and territorial governments to ensure that we are considering their needs
• we are in regular contact with 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 Manitoba’s deal for the vaccine candidate from Providence Therapeutics:

• Canada continues to work closely with provinces and territories to ensure that they have the vaccines, supplies and support required to administer vaccines to Canadians
• the federal government has never prevented provinces and territories from undertaking their own procurements throughout the pandemic and will continue its efforts to provide vaccinations to every Canadian who wants one by September of this year

If pressed on critical drug shortages:

• Health Canada has identified a need for a vendor-managed stockpile of critical drugs in anticipation of possible shortages related to the COVID-19 pandemic
• the reserve is accessible to the provinces and territories to ensure hospitals have adequate supply

If pressed on material shortages:

• the Government of Canada is purchasing supplies from a number of sources and countries, both internationally and domestically

If pressed on national security exception (NSE) contracting:

• the NSE is invoked to remove procurements from the obligations of Canada’s trade agreements for reasons of national security
• in the case of COVID-19, after the World Health Organization declared the pandemic, PHAC made a request on behalf of the federal government that PSPC invoke the NSE with respect to the acquisition of goods and services required to respond to the COVID-19 pandemic
• some of the procurements being carried out in response to COVID-19 are being done under a NSE, meaning that many solicitation documents are not published on buy and sell. This allows us to move rapidly as we purchase goods and services to protect the health and safety of Canadians as we face this pandemic
• in line with our commitment to transparency, we have published information on COVID-19 related contracts on the PSPC website

If pressed on the purchase of ultra-low temperature freezers:

• it is critical that vaccines are distributed and stored within their indicated temperature requirements, so we are making preparations for potential candidates
• ihe Government of Canada is actively pursuing the purchase of ultra-low temperature freezers to assist with the distribution and storage of vaccines in Canada
• contracts have been issued for the purchase of 600 freezers. Deliveries started in November and we have received 314 freezers as of March 18, 2021
• contracts have been issued for the purchase of 100 refrigerators. Deliveries started in February and we have received 69 refrigerators as of March 18, 2021

If pressed on the purchase of dry ice:

• PSPC has put in place 10 standing offers for the delivery of an estimated 30,000 kilograms of dry ice, on an as needed basis, to provinces and territories

If pressed on syringes:

• PSPC has put contracts in place for the purchase of 180M low-dead volume syringes

If pressed on vaccine logistics:

• the Government of Canada has successfully secured an end-to-end logistics solution that will support the physical distribution of vaccines to provincial and territorial authorities or points of administration
• a contract for up to $90.4 million, including taxes, was awarded to Federal Express Canada Corp. and Innomar Strategies Inc. in joint venture on December 4, 2020
• FedEx and Innomar, Canada’s logistics provider, successfully completed the initial delivery of the Moderna vaccine in December 2020
• work is underway to support the ongoing delivery of vaccines to provinces, territories and Indigenous communities

If pressed on barcode technology for vaccine tracking:

• PSPC continues to work to ensure that provinces and territories are provided the necessary support to distribute vaccines to Canadians in a safe and efficient manner
• our colleagues at PHAC are working directly with provinces and territories to manage the implementation of this system and ensure that it effectively supports Canada’s vaccination efforts

If pressed on IT solution for vaccines:

• the Government of Canada is doing everything possible to protect Canadians from COVID-19. This includes enhancing PHAC’s existing information management systems to help manage vaccine distribution, administration and reporting
• to this end, on January 7, 2021, a competitive contract was awarded, on behalf of PHAC, to Deloitte Inc. with a value of $16,138,945.90, taxes included, to develop a new national vaccine management IT platform (NVMIP), which builds further functionality into PHAC’s current operational and well-developed surveillance and coverage IT systems
• the procurement of the NVMIP emphasizes the Government of Canada’s ability to support rapid change. The platform will supplement existing operational PHAC systems to ensure rapid and successful management of the COVID-19 vaccine administration program across the nation
• core NVMIP system functionality was delivered to PHAC on February 2, 2021, and the NVMIP solution will continue to add more functionality as the vaccine roll-out moves through various phases. It is inoperation and supplementing PHAC’s existing and comprehensive data and IT systems
• PHAC is currently leveraging and enhancing its information management systems to support COVID-19 vaccine roll-out requirements. Specifically, these systems will support the immediate and urgent need for ordering, tracking and delivery capabilities, as well as provide strengthened monitoring and reporting functionality

Background

The Government of Canada has signed agreements in principle with the following companies to obtain access to their vaccines and vaccine candidates:

• AstraZeneca, which will supply 20 million doses of its viral vector vaccine candidate ADZ1222 and up to an additional 5.08 million doses as part of Canada’s COVAX allocation of the AstraZeneca vaccine
• Sanofi and GSK, which will supply up to 72 million doses of their protein subunit vaccine candidate
• Johnson & Johnson, which will supply up to 38 million doses of its viral vector vaccine candidate Ad26.COV2.S
• Novavax, which will supply up to 76 million doses of its protein subunit vaccine candidate NVX-CoV2373
• Pfizer, which will supply up to 76 million doses of its mRNA vaccine BNT162
• Moderna, which will supply 44 million doses of its mRNA vaccine mRNA-1273
• Medicago, which will supply up to 76 million doses of its plant-derived Coronavirus virus-like particle (CoVLP)
• Serum Institute of India/Verity Pharmaceuticals which will supply 2 million doses of the Oxford-AstraZeneca vaccine produced under license and marketed at COVISHIELD

Currently, Pfizer, Moderna, AstraZeneca and Johnson & Johnson have been approved to prevent COVID-19. Many vaccines are in clinical trials or under development. When additional studies have been completed, Health Canada will review the evidence of safety, efficacy, and manufacturing quality for each vaccine to determine whether individual vaccines will be approved for use in Canada, before they are used to vaccinate Canadians.

COVID-19 Vaccine Task Force

The COVID-19 Vaccine Task Force, supported by a secretariat housed at the National Research Council of Canada, provides advice to the Government of Canada on COVID-19 vaccines, which can include the following:

• prioritizing vaccine projects seeking support for activities in Canada
• attracting to Canada promising non-Canadian vaccine candidates, or partnering with developers of non-Canadian vaccine candidates
• optimizing the tools needed to develop vaccines
• supporting effective research and development, and supply chain coordination for COVID-19 vaccine projects
• facilitating solutions to manufacture the most promising COVID-19 vaccines in Canada
• identifying opportunities to enhance business connectivity globally to secure access to vaccines with key commercial sponsors

Procuring vaccines for COVID-19 (March 5, 2021)

Public Services and Procurement Canada (PSPC) is working with the Public Health Agency of Canada (PHAC), Health Canada and Innovation, Science and Economic Development Canada to identify and procure potential vaccine candidates and supplies.

COVID-19 vaccine agreements

On behalf of PHAC, and based on advice from the COVID-19 Vaccine Task Force, PSPC is leading negotiations and finalizing agreements with suppliers of COVID-19 vaccine candidates.

To date, the Government of Canada has invested over $1 billion to secure access to promising vaccine candidates.

This includes up-front payments that companies require to support vaccine development, testing and at-risk manufacturing. Subsequent payments are contingent on vaccines passing clinical trials and obtaining regulatory approval.

These investments ensure Canada’s earliest possible access to the production of an approved COVID-19 vaccine.

All vaccine candidates will require Health Canada authorization prior to being used to vaccinate anyone in Canada.

COVID-19 Vaccine Global Access Facility

The Government of Canada is participating in the COVID-19 Vaccine Global Access (COVAX) Facility, a global procurement mechanism that will help develop and deliver safe, equitable and accessible COVID-19 vaccines. Participation in the COVAX Facility also provides Canadians potential access to 6 additional vaccine candidates.

The Government of Canada is committing approximately $220 million to the facility to procure up to 15 million vaccine doses for everyone in Canada. An additional $220 million will be channeled through the COVAX advance market commitment to purchase doses for low and middle income countries, increasing their access to a safe and effective COVID-19 vaccine.

Vaccine-related supplies

The Government of Canada also continues to purchase the necessary supplies for the administration of different vaccines. Contracts are in place for personal protective equipment and ancillary supplies, such as:

• needles
• syringes
• swabs
• gauze

We have put in place contracts for the supplies required to administer nearly over 75 million doses of COVID-19 vaccines, including syringes, needles and gauze. To date, we have received enough supplies to administer more than 43.5 million doses.

Canada has ordered over 205 million syringes of varying sizes to accommodate a range of requirements in the administration of vaccines. This includes 115 million 1 millilitre syringes of which 102.5 million are low-dead volume syringes.

End-to-end logistics

The Government of Canada has awarded a contract to FedEx Express Canada and Innomar Strategies Inc., for an end-to-end COVID-19 logistics solution for COVID-19 vaccines.

Government of Canada awards contract to distribute COVID-19 vaccine from coast to coast to coast

The contract will support the distribution of vaccines across Canada. Specifically, working under the direction of PHAC’s National Operations Centre, led by Major-General Dany Fortin, FedEx Express Canada and Innomar Strategies Inc. will provide a variety of services that will assist in warehousing and transportation to provincial and territorial authorities and Indigenous partners to support timely and efficient vaccine administration across the country.

Freezers and dry ice

Given the complexity of vaccine distribution, including the need to transport and store vaccines at specific temperatures, PSPC is also procuring other goods and services required to support the eventual distribution of a vaccine to everyone in Canada.

Freezers and refrigerators

The Government of Canada has now purchased 594 freezers and 100 refrigerators.

PSPC, on behalf of PHAC, has awarded contracts for the purchase of:

• 383 freezers at -80 degrees celsius
• 100 freezers at -20 degrees celsius
• 111 fridge/freezers combo at -20 degrees celsius
• 100 refrigerators

Dry ice

The Government of Canada has awarded standing offers for the national delivery of tens of thousands of kilograms of dry ice weekly, on an as-needed basis to 10 Canadian companies:

• ATES Medical, located in Quebec, with national delivery capacity
• Biogivre Inc., located in Quebec, with national delivery capacity
• Calgary Dry Ice, located in Alberta, delivering to southern Saskatchewan, Alberta, and British Columbia
• Camelyon Group, located in Ontario, with national delivery capacity
• Co2blast Ltd., located in Alberta, delivering to Manitoba, Saskatchewan, Alberta, and British Columbia
• Dry Ice & Gases Co., located in Ontario, delivering to Quebec, Ontario, and Manitoba
• Fraser Valley Dry Ice Inc., located in British Columbia, with national delivery capacity
• ICE-ASAP, located in Ontario, delivering to southern Ontario
• Praxair Canada Inc., located in Ontario, with national delivery capacity
• VitalAire Canada Inc., located in Ontario, with national delivery capacity

The provinces and territories are able to issue call-ups against these offers directly, to meet immediate needs without delay.

National vaccine management information technology platform

On behalf of PHAC, PSPC is contracting a service provider to build further functionality into PHAC’s current operational and well-developed surveillance and coverage information technology (IT) systems. This enhanced national vaccine management IT platform (NVMIP) will help manage vaccine rollout, administration and reporting on a go forward basis, as the volume of deliveries increases:

• requests for proposals for the NVMIP were issued directly to qualified suppliers on December 12, 2020
• on January 7, 2021, a contract was awarded for the NVMIP to Deloitte Inc. with a value of $16,138,945.90, taxes included

News

• Canada to receive 2 million doses of AstraZeneca’s COVID-19 vaccine manufactured by the Serum Institute of India (February 26, 2021)
• Public Services and Procurement Canada has signed agreements with 7 companies to secure access to seven COVID-19 vaccine candidates (November 19, 2020)
• AstraZeneca: New agreements to secure additional vaccine Candidates for COVID-19 (September 25, 2020)
• Sanofi and GlaxoSmithKline: Government of Canada signs new agreement to secure additional vaccine candidate and treatment for COVID-19 (September 22, 2020)
• Medicago: Prime Minister announces funding to advance the development of Canadian COVID-19 vaccine technologies (October 23, 2020)
• Johnson & Johnson and Novavax: New measures to ensure the supply of future vaccines and therapies against COVID-19 (August 31, 2020)
• Pfizer and Moderna: Government of Canada announces major steps in treating and preventing COVID-19 through vaccines and therapies (August 5, 2020)

Related links

• COVID-19 Vaccine Task Force
• COVID-19 Vaccine Global Access Facility
• Regulating vaccines for use in Canada

Supplying Canada’s response to COVID-19

The Government of Canada is taking a whole-of-government approach in response to the coronavirus disease (COVID-19), including major investments in equipment and supplies for the health sector, as well as research, science and innovation.

Coordinated response to purchasing equipment and supplies

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.

Canada is taking an aggressive approach to buying, especially when it comes to personal protective equipment for front-line healthcare workers. This includes:

• ordering in bulk on behalf of provinces and territories
• supplementing those orders by purchasing everything immediately available that meets requirements
• ramping up domestic manufacturing capacity, through the Plan to Mobilize Industry to fight COVID-19, being led by Innovation, Science and Economic Development Canada

This is over and above efforts provinces and territories are taking to secure their own supply.

The quantities ordered for personal protective equipment and medical supplies are intended to meet short-term needs and anticipate Canada’s long-term needs as we continue to respond to COVID-19 while preparing for any eventuality over the coming months.

The government is also coordinating shipments of supplies from other countries. Canada has established on-the-ground support in China for transportation, receiving, storage services and customs clearances. This will be an ongoing process as orders are ready to be shipped to Canada.

Overview of purchases and deliveries

This table provides an overview of the Government of Canada’s purchases of selected personal protective equipment and medical supplies to support 3 key areas:

• the healthcare sector
• federal government departments and agencies
• the Essential Services Contingency Reserve

“Quantities ordered” includes products scheduled for delivery by March 31, 2022.

Due to the current complex supply chain environment, “quantities ordered” may fluctuate because of new contracts, contract amendments and cancellations.

“Quantities received” includes the approximate number of products that have been shipped and are in transit or have arrived at a Government of Canada warehouse. These will require assessment prior to being accepted and inventoried.

While specific quantities change on a regular basis, the bulk of these supplies are directed to frontline healthcare workers.

Contract information

As part of our commitment to transparency and accountability, we are publicly disclosing contracting information to the fullest extent possible, supplier names and contract amounts can be found on our new COVID-19 contracting information page.

COVID-19 contract information

Working with Canadian companies

Public Services and Procurement Canada (PSPC), in collaboration with the Public Health Agency of Canada and Innovation, Science and Economic Development Canada, is exploring all options for securing the necessary equipment and supplies to fight COVID-19, including new and existing sources of supply—both here at home and internationally.

Below are examples of how domestic suppliers are stepping up to support the effort.

Bauer (Blainville, Quebec)

Bauer has shifted its hockey skates production lines to make face shields for front-line medical staff. The Government of Canada has signed an agreement to receive hundreds of thousands of face shields from Bauer.

Fluid Energy Group (Calgary, Alberta)

The Government of Canada has signed a contract with Fluid Energy Group for millions of litres of hand sanitizer to support the COVID-19 response.

More information

Fluid Energy making 10 million litres of hand sanitizer for the Government of Canada

General Motors Canada (Oshawa, Ontario)

General Motors (GM) Canada is using its manufacturing capability and skilled workforce to domestically produce surgical masks and face coverings. The Government of Canada has signed a contract with GM Canada to receive millions of surgical masks and face coverings for front-line health care workers.

Hawktree Solutions (Ottawa, Ontario)

The Government of Canada has signed a contract with Hawktree Solutions, a health and safety product company, to provide millions of masks and thousands of goggles and bottles of Quebec-made hand sanitizer.

More information

Hawktree Solutions providing the federal government with goggles, masks and hand sanitizer

HP Canada (Mississauga, Ontario)

The Government of Canada has signed a contract with HP Canada, which will use its 3D printing technology to provide hundreds of thousands of face shields to protect healthcare workers.

Irving Oil (Saint John, New Brunswick)

Irving Oil has retooled its production line to produce much needed hand sanitizer. The Government of Canada has signed a contract with Irving to provide hundreds of thousands of litres of hand sanitizer, with delivery already underway.

Jacobs & Thompson (Toronto, Ontario)

The Government of Canada has signed a contract with Jacobs & Thompson, which has added production lines to provide millions of face shields to protect healthcare workers.

Joseph Ribkoff (Dorval, Quebec)

The Government of Canada has signed a contract with Joseph Ribkoff, a Canadian women’s clothing company, to manufacture and provide millions of gowns for healthcare workers.

Logistik Unicorp (Saint-Jean-sur-Richelieu, Quebec)

Logistik Unicorp has mobilized its domestic supply chain and retooled production to produce medical gowns. The Government of Canada has signed a contract with Logistik Unicorp to provide millions of gowns for front-line healthcare workers.

Medicom (Pointe-Claire, Quebec)

The Government of Canada has signed a long-term agreement with Medicom to ramp up domestic production to provide millions of N95 respirators and surgical masks per year for the next 10 years.

More information

Medicom Group supporting Canada’s efforts to combat COVID-19

PRI-MED (Edmonton, Alberta)

The Government of Canada has signed a contract with PRI-MED, a medical product manufacturing company, to provide thousands of coveralls and millions of gloves, gowns and surgical masks for healthcare workers.

More information

Edmonton’s PRI-MED: A COVID-19 story like no other

Samuelsohn (Montreal, Quebec)

The Government of Canada has signed a contract with Samuelsohn, a men’s luxury clothing company, which has retooled its production lines to provide millions of medical gowns for healthcare workers.

SpiritRx Services (Winnipeg, Manitoba)

SpiritRx Services is an Indigenous owned company that has ramped up delivery of personal protective equipment and medical supplies to respond to both provincial and federal needs. The Government of Canada has signed a contract with SpiritRx Services to provide thousands of digital thermometers. The company is also providing the federal First Nations Inuit Health Branch with surgical masks and infrared thermometers.

More information

Indigenous-owned company delivering essential goods to help all Canadians

Sterling Industries (Concord, Ontario)

Sterling Industries, affiliated with Honda, has created a face shield that is designed and manufactured in Canada. The Government of Canada has signed a contract with Sterling Industries to provide millions of face shields to protect healthcare workers.

Stryker (Waterdown, Ontario)

The Government of Canada has signed a contract with Stryker to provide Health Canada-approved sterilization units that will sterilize equipment like N95 respirators and allow it to be reused.

More information

How one Canadian company extended the life of disposable N-95 masks

The Canadian Shield (Kitchener, Ontario)

The Canadian Shield was founded by InkSmith to produce personal protective equipment. The Government of Canada has signed a contract with The Canadian Shield to provide millions of face shields to protect healthcare workers.

More information

The Canadian Shield playing a key role in supporting the Government of Canada

The Stevens Company (Brampton, Ontario)

The Government of Canada has signed contracts with The Stevens Company to provide hard surface cleaners made in Oakville, Ontario, and shoe covers made in Montreal, Quebec, as well as other items to help combat COVID-19.

More information

The Stevens Company is helping the Government of Canada in the fight against COVID-19

Toronto Stamp (Toronto, Ontario)

Toronto Stamp has retooled its usual production of signs, badges, stamps and tags to produce face shields. The Government of Canada has signed a contract with Toronto Stamp to provide millions of face shields for front-line healthcare workers.

More information

From a WhatsApp message to a contract with the Government of Canada

Windsor Mold Group (Windsor, Ontario)

The Government of Canada has signed a contract with Windsor Mold Group, which has retooled its production to provide millions of face shields and thousands of head bands to protect healthcare workers.

WUXLY (Toronto, Ontario)

The Government of Canada has signed a contract with WUXLY, an outerwear clothing company, to provide over 1 million gowns for front-line healthcare workers.

More information

WUXLY: Warming to the made-in-Canada personal protective equipment

Yoga Jeans (Montreal and Beauce region, Quebec)

The Government of Canada has signed a contract with Yoga Jeans, a family-owned denim company that has retooled its manufacturing facility in Saint-Côme-Linière, Quebec, to provide millions of gowns for front-line health care workers.

Related links

• Calling all suppliers: Help Canada combat coronavirus disease (COVID-19)
• Interim order respecting the importation and sale of medical devices for use in relation to COVID-19
• Call to action: Canadian manufacturers needed to help combat COVID-19

Summary of changes: Personal protective equipment ordered and received between February 26 and March 15, 2021

Face shields

• Quantities ordered: Non applicable
• Quantities received: 0

Gloves (pairs)

• Quantities ordered: Non applicable
• Quantities received: +935,500

Gowns

• Quantities ordered: Non applicable
• Quantities received: +74,950

Hand sanitizer (litres)

• Quantities ordered: Non applicable
• Quantities received: 0

N95 respirators

• Quantities ordered: Non applicable
• Quantities received: +2,658,080

Non-medical masks: Face coverings

• Quantities ordered: Non applicable
• Quantities received: +440,000

Non-medical mask: Cloth masks

• Quantities ordered: Non applicable
• Quantities received: +634,986

Surgical masks

• Quantities ordered: Non applicable
• Quantities received: +13,209,500

Ventilators

• Quantities ordered: Non applicable
• Quantities received: +1,440

Rapid COVID-19 testing

Context

COVID-19 testing technologies are advancing quickly as the pandemic continues. On behalf of the Public Health Agency of Canada (PHAC), Public Services and Procurement Canada (PSPC) is actively exploring additional agreements to secure access to the most promising candidates.

Suggested response

• The health and safety of Canadians is our number 1 priority
• Since March 2020, we have procured a total of 45,474,950 rapid tests, for which 10,024,970 are polymerase chain reaction (PCR) tests and 35,449,980 are antigen tests
• The Government of Canada has received so far a total of 27,446,921 rapid tests. By March 31, 2021, the total received will reach 38.5 million rapid tests
• Since March 2020, we have awarded more than 100 contracts to support conventional laboratory testing across Canada. That includes swabs, equipment, reagents, consumables and plastics required to help provinces and territories meet the objective of conducting 200,000 tests per day nationally
• As new tests and instruments become available, approved and are considered effective, we will continue to bring them online so health authorities have access to all available resources needed to get us through this pandemic
• PSPC is preparing a competitive procurement process for the purchase of additional Health Canada approved point of care rapid tests with delivery starting as soon as April 1, 2021

If pressed on the delivery of Abbott Panbio and ID NOW tests:

• under the current agreement, delivery of up to 23 million Panbio antigen tests will be completed by March 31, 2021. I can confirm that so far we have received a total of 17,352,325 tests
• in addition, Abbott Rapid Diagnostics ULC is also supplying up to 7.9 million ID NOW rapid tests to the Government of Canada. We have already received 2,809,056 tests and 3,480 analyzers
• COVID-19 testing technologies are advancing quickly as the pandemic continues. PSPC is actively exploring additional agreements to secure access to the most promising candidates, in advance of regulatory approval

If pressed on the delivery of Becton Dickinson Veritor tests and analyzers:

• under the current agreement, delivery of 11.6 million Veritor antigen tests will be completed by March 31, 2021. We have already received 6,319,260 tests and 700 analyzers

If pressed on the delivery of Quidel Sofia 2 antigen tests and analyzers:

• under the current agreement, delivery of 850,000 Sofia 2 SARS antigen tests and 550 Sofia 2 instruments has been completed

If pressed on distribution:

• the Government of Canada continues to work with federal, provincial and territorial governments to assess ongoing needs for medical equipment and supplies
• PHAC is working with provinces and territories to ensure that the devices are allocated so as to have the most impact based on existing and future COVID-19 hotspots in Canada

If pressed on purchasing before Health Canada authorization:

• the contracts were structured so that the purchase of the tests was conditional on Health Canada authorization

If pressed on the purchase of analyzers for the Abbott ID NOW:

• under the agreement, we have purchased up to 3,800 analyzers
• analyzers are the devices that perform the test and deliver the rapid results
• the 3,800 analyzers could also be used for other types of testing

Background

Abbott Panbio antigen test

The Abbott Panbio COVID-19 antigen test is a rapid test that can detect SARS-CoV-2 directly from a nasopharyngeal or nasal swab in just over 15 minutes. It requires no instrumentation but must still be performed by a trained healthcare professional. This test is portable and lightweight and can easily be used in point of care in a variety of settings. The product does not require specialized storage temperatures.

As the procurement of more antigen tests is expected, we are not releasing the contract value at this time, in order to protect our negotiating position. In line with our commitment to transparency, the value of this agreement will be disclosed in due time.

On October 6, 2020, the Minister of Public Services and Procurement announced the purchase of up to 20.5 million Panbio COVID-19 antigen rapid tests. The Panbio antigen rapid test with nasopharyngeal swab, approved on October 5, 2020, was the first antigen test to be approved by Health Canada for use in Canada.

On November 20, an amendment was issued to procure an additional 2.5 million Panbio COVID-19 antigen rapid tests.

The Panbio antigen rapid test with nasal swab was approved by Health Canada on December 30, 2020.

In total, PSPC has purchased a total of up to 23 million Panbio tests to be delivered by March 31, 2021.

Becton-Dickinson Veritor antigen test

The BD Veritor SARS-CoV-2 antigen test is a rapid test that can detect SARSCoV-2 directly from a nasal swab in just over 15 minutes from patients that are within the first 5 days of the onset of symptoms. This testing requires a handheld analyzer and must be performed by a trained healthcare professional. This test is portable, lightweight and can easily be used in point of care in a variety of settings. It also does not require specialized storage temperatures.

On October 23, 2020, a contract was awarded to Becton Dickinson for the procurement of 7,599,990 Veritor antigen tests as well as 600 analyzers.

On January 29 and March 2, 2021, amendments were issued to procure an additional 4 million tests and 4,572 analyzers.

As of March 2, 2021, 6,319,260 BD Veritor tests have been delivered.

On March 3, 2021, Health Canada approved an amendment to the authorization of the BD Veritor test, extending the shelf-life of the test from 6 months to 12 months.

Abbott ID NOW point-of-care test

The Abbott ID NOW system is a rapid point-of-care test for COVID-19. The technology can detect the virus directly from a nasal swab, returning results in as little as 13 minutes. The testing device, or analyzer, is small and lightweight and can easily be transported to remote locations and operated with minimal training.

Abbott Rapid Diagnostics ULC is also supplying up to 7.9 million ID NOW rapid tests.

Spartan point-of-care test

The Spartan test involves inserting a cartridge containing a swab from a patient’s mouth into a test analyzer (Cube) that analyzes DNA for the presence of the coronavirus. The technology can detect the virus in as little as 30 minutes. The testing device, or analyzer, is small and lightweight and can easily be transported to remote locations.

On March 25, Public Services and Procurement Canada issued a contract to Spartan Bioscience Inc. for the purchase of 1,020,000 tests and 100 testing platforms (Cubes).

On April 9, the original contract was amended to purchase an additional 900,000 tests and 600 testing platforms (Cubes).

Execution of this contract was conditional of Spartan obtaining Health Canada approval.

On October 29, Health Canada issued an investigational testing authorization (ITA) to Spartan to conduct a clinical trial on their point-of-care test and generic swab, to obtain data to support its effectiveness. Health Canada approval was pending results of this clinical trial.

On December 11, Spartan submitted the results of the clinical trials to Health Canada.

On January 23, Health Canada approved the Spartan COVID-19 system, a rapid, on-site molecular diagnostic test for the qualitative detection of SARS-CoV-2. Delivery of the Spartan tests is to start in the coming weeks.

Quidel Sofia 2 SARS antigen test

The Sofia 2 SARS antigen test uses nasal swabs for sample collection (provided with the kit), which are easier to administer than nasopharyngeal swabs. The instruments test one sample at a time and test results can be obtained in 15 minutes. The Sofia 2 SARS antigen test has a sensitivity of 96.7% and a specificity of 100% and an expected shelf life of 12 months from the date of manufacturing.

On October 26, 2020, the Sofia 2 SARS antigen test obtained regulatory approval from Health Canada.

On February 14, 2021 a contract was awarded to Quidel for the procurement of 850,000 Sofia 2 SARS antigen tests as well as 550 Sofia 2 instruments.

Other point-of-care tests

Additional agreements have also been signed with Inter Medico (104,980 GeneXpert tests) on April 7, and on June 22 with bioMérieux (up to 699,750 tests).

Standard lab testing

Since March 2020, PSPC has awarded more than 100 contracts to support conventional laboratory testing across Canada. That includes swabs, equipment, reagents, consumables and plastics required to help provinces and territories meet the objective of conducting 200,000 tests per day nationally.

Contracts with major suppliers like Roche, bioMérieux, Life Technologies, Qiagen and Abbott have been awarded to secure quantities of products that are in very high demand worldwide.

Contracts with 12 different suppliers have been awarded to procure a total of 38.5M swabs.

Automated systems have been procured to increase testing capacity in surge labs located in Winnipeg, Guelph, Ottawa and Lethbridge.

Four mobiles trucks have been procured to increase testing capacity in hot spots and where there are outbreaks.

Ventilator procurement

Context

Recent questions have been raised about domestic contracting for ventilators.

Suggested response

• We remain steadfast in our efforts to ensure we have sufficient ventilators available for use should there be a surge in cases
• Canada currently has 15 contracts with 13 manufacturers to deliver 40,547 ventilators. This includes contracts with domestic suppliers that answered the call to action in March 2020
• Decision making around these contracts was based on technical assessments, science and our ongoing commitment to do everything possible to protect the health of Canadians
• As of March 3rd, 2021, the Government of Canada has successfully secured 25,585 ventilators

[Redacted]

If pressed on FTI:

• Ventilators for Canadians, a consortium of entrepreneurs, manufacturers and businesses, is 1 of 11 domestic suppliers that came forward with a proposal to supply ventilators to the government
• their proposal, based on an open source Medtronic design, was recommended by a review panel of technical experts, including respirologists, biomechanical engineers, and manufacturing professionals
• following this recommendation, on April 10, Public Services and Procurement Canada awarded a contract to FTI Professional Grade Inc., the corporate entity put forward by the consortium for the purposes of this contract, for the supply and delivery of ventilators
• Baylis Medical is a subcontractor to FTI Professional Grade Inc. and a partner to Ventilators for Canadians
• FTI Professional Grade Inc. has fulfilled its obligations under its contract

If pressed on pricing:

• ventilator pricing for domestic contracts takes into account a number of factors. This pricing reflects costs to quickly re-tool facilities, develop new manufacturing processes and seek Health Canada approval
• the pricing for the FTI ventilator contract is broadly consistent with that of other domestic suppliers
• as with other contracts through the Made-in-Canada call to action, companies such as FTI incurred costs to quickly re-tool their facilities, develop new manufacturing processes and seek Health Canada approval
• Public Services and Procurement Canada (PSPC) was also cognizant that pricing, at that time, could be impacted by the extreme demand for limited global supply chain for parts
• the model developed by FTI is based on the open source specifications of Medtronic’s PB560. Although Medtronic has indicated that the average selling price of this model is under $10,000 US, this is an unfair comparison, as it does not take into account expenses associated with ramping up manufacturing. These additional costs were built into the contract with FTI

If pressed on for the process that led to contract awards:

• a broad call to action was issued by Innovation, Science and Economic Development Canada (ISED) to solicit interest from Canadian companies that were able to support Canada’s COVID-19 response
• as part of this call to action, a number of companies identified their interest in supplying Canada with ventilators. Separately, potential ventilator suppliers had also come forward to the National Research Council and to the next generation (NGEN) supercluster
• all of these companies—11 in total—were subsequently invited to send proposals to ISED covering the design of the ventilator, its clinical functionality, and the manufacturing plan, including details on the supply chain
• proposals were reviewed by a panel of experts to assess the viability of technology and manufacturing approaches. The panel, which included medical clinicians, respirologists, biomechanical engineers, and manufacturing professionals, was asked to provide government with their best advice as to which designs would be most useful in the fight against COVID-19 and could be manufactured quickly to meet the needs of Canada’s public health system
• the review panel also included technical experts from within the Government of Canada (Health Canada and the Public Health Agency of Canada (PHAC)). Staff from PSPC participated in the panel, however, recommendations were based on feedback from technical experts
• based on the advice of this panel of experts, Government of Canada officials identified 4 Made-in-Canada ventilators, and contracts were subsequently awarded to CAE Inc., FTI Professional Grade Inc., Canadian Emergency Ventilators (Starfish), and Vexos for 37,500 ventilators
• each of the 4 companies subsequently worked with Health Canada officials through the regulatory process to ensure the ventilators met all the regulatory requirements to receive approval under the interim order

[Redacted]

Essential Services Contingency Reserve

Context

The Government of Canada created the Essential Services Contingency Reserve (ESCR) to provide essential services workers with access to personal protective equipment (PPE), non-medical masks and disinfection products to meet urgent, short-term needs.

Suggested response

• On August 3, 2020, the government launched the ESCR to ensure that essential service providers would have timely access to PPE, non-medical masks and disinfection products
• The contingency reserve is an emergency backstop to help prevent essential service disruptions that could arise due to shortages of PPE and other products on the open market
• Since the contingency reserve was introduced, a number of organizations have registered to access the inventory and orders have been placed in a variety of essential services sectors
• We have entered into an agreement with Canadian supplier SCI to provide warehousing and order fulfillment across Canada for the ESCR, including in northern and remote communities
• SCI is part of the Canada Post network, offering seamless integration with Purolator and Canada Post for shipping orders to businesses and organizations across essential services sectors

If pressed on contracts issued to operationalize the ESCR:

• 4 suppliers have been engaged to support the delivery of the ESCR
• a task authorization for approximately $3.7 million has been issued to InfoSys Public Services to create a case management system and order intake tool, leveraging work to date on the electronic procurement system
• a contract for approximately $3.9 million has been awarded to SCI, a subsidiary of Canada Post, for warehousing and inventory management
• Purolator and Day & Ross, both on the National Master Standing Offer, have been engaged to cover ground transportation for order fulfillment which is expected to cost approximately 2 million dollars

If pressed on supplier types for contracts issued to stock the ESCR:

• to stock the ESCR, Public Services and Procurement Canada (PSPC) is purchasing supplies from a number of sources, both internationally and domestically

If pressed on eligibility for the ESCR:

• to be eligible, businesses or organizations must be legally constituted, from 1 of the 10 critical infrastructure sectors, and reflected in Public Safety Canada’s “Guidance on Essential Services and Functions in Canada During the COVID-19 Pandemic”
• orders valued at $5,000 or above are assessed against the degree to which the sector is facing critical shortages of PPE, if the requested supplies are appropriate based on public health guidance as well as occupational health and safety requirements, and that requestors have been unable to secure PPE elsewhere

If pressed on cost-recovery:

• the cost of goods is established based on the average price paid by PSPC to purchase inventory for the ESCR and does not include overheard costs to acquire and warehouse the inventory
• costs are reviewed on a regular basis and updated accordingly
• shipping costs are applied to purchases from the ESCR

If pressed on inventory:

• inventory in the ESCR evolves due to supply and demand and includes items such as nitrile gloves, non-medical masks, thermometers, face shields, and disposable coveralls
• to date, approximately $153M worth of contracts have been put in place to purchase inventory for the ESCR
• efforts are being made to ensure that the inventory aligns with the needs of essential services sectors

Background

There is a 2-step process to access the ESCR:

• registration
• order placement

As of March 5, 2021, the ESCR has received a total of 246 requests for registration from the following sectors:

• health
• safety
• manufacturing
• information and communication technologies
• food
• government
• transportation
• energy and utilities
• water
• finance

Of the businesses registered, 27 have placed orders. Of those orders, 12 have been cancelled, and 15 approved. A portion of the cancelled orders have been redirected to supply available through provinces and territories.

To date, the ECSR has been mostly accessed by small- and medium-size enterprises rather than consolidated requests from critical sectors. As such, the approval process for orders valued at less than $5,000 has been streamlined to remain within PSPC to reduce processing times and ensure timely order fulfillment.

Supplementary Estimates B

PSPC sought access to $500 million (in both Vote 1—Operating Expenditures and Statutory Authority) in 2020 to 2021 to establish the ESCR, to which essential service organizations can apply for temporary, urgent access to PPE and other critical supplies.

Public Services and Procurement Canada’s role in acquisition of warehouse space and services for the National Emergency Strategic Stockpile

Context

Prior to COVID-19, the Public Health Agency of Canada’s (PHAC) National Emergency Strategic Stockpile (NESS) warehouse network was comprised of [Redacted] warehouses totalling approximately 168,500 square feet. This included [Redacted] warehouses (120,000 square feet) and [Redacted] warehouses (48,500 square feet). The amount and volume of personal protective equipment (PPE) ordered in response to the pandemic was well beyond PHAC’s capacity to receive and store. Public Services and Procurement Canada (PSPC) has supported PHAC by entering into service contracts and leases to provide them with additional warehousing capacity.

Suggested response

• 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
• To achieve this goal, multiple partnerships have been implemented to warehouse, inventory and distribute the PPE ordered by Canada
• On September 11, 2020, PSPC awarded a competitive contract to Metro Logistics Inc., on behalf of PHAC, as a primary source of services for warehousing and distribution of PPE to provinces and territories
• PSPC has awarded several other contracts for warehousing and distribution services to support PHAC’s requirements
• A total of approximately 2.3 million square feet of warehouse space has been added through service contracts or new leases

If pressed on PSPC’s role:

• PSPC is providing procurement services to PHAC to support them with the various logistics activities required to inventory, warehouse and distribute PPE
• PSPC is working closely with PHAC in managing the contracts awarded to various logistics suppliers
• PSPC has entered into leases to provide PHAC with additional warehousing capacity

If pressed on PHAC’s role:

• PHAC is responsible for managing the NESS
• PHAC is maintaining oversight on the amounts of PPE and supplies available, including the monitoring of expiry dates and distribution to provinces and territories

If pressed on request for proposal for national logistics and warehousing services:

• to facilitate the intake and distribution of large volumes of PPE and medical supplies, a notice was posted in spring 2020 on the PSPC buy and sell website to solicit interest from major logistics service providers
• this notice closed on May 7, 2020 and the review of the expressions of interest resulted in a short-term contract to Groupe Robert to support immediate warehousing needs
• a request for proposal was also published on the buy and sell website and on September 11, 2020, PSPC awarded a competitive contract to Metro Logistics Inc. on behalf of PHAC
• this contract ensures warehousing across the country to accommodate and best position supplies for distribution to the provinces and territories

If pressed on Metro’s role:

• Metro Logistics Inc. was awarded a contract for a period of 2 years until the end of September 2022, with an option for a further 1-year extension
• this contract provides significant warehousing capacity in the [Redacted] and in [Redacted]
• this contract also provides national distribution to all provinces and territories
• the contract also includes a warehouse management system capability to facilitate the reporting and control of material

If pressed on Groupe Robert’s role:

• on May 22, PHAC awarded a contract to Groupe Robert as an immediate temporary measure to store PPE
• subsequently, on June 13, after contacting several firms, we awarded a contract to Groupe Robert until end of December 2020 for warehousing, inventory management and transportation needs
• the contract has been extended to the end of March 2021 to complete the transition of PPE storage to Metro
• additionally, a separate 2-year contract was awarded to Groupe Robert on July 31st, 2020, to operate a warehouse facility leased by the Government of Canada in [Redacted]

If pressed on additional warehousing measures:

• a number of additional suppliers, including Urban Valley Transport Ltd., Overseas Express Consolidators and Bolloré Logistics Canada, have also been used to support inventory management, warehousing and distribution
• through such contracts, PPE is currently being warehoused in [Redacted] and [Redacted]

Background

Since the outset of the pandemic, the government has adapted to manage the volume of supplies. These measures have included service contracts and leases for additional warehouses, turning to the Canadian Armed Forces for assistance with logistics, and leveraging existing agreements.

A number of different suppliers, including Maritime Ontario, Groupe Robert Inc, Metro Logistics Inc, Urban Valley Transport Ltd., Overseas Express Consolidators and Bolloré Logistics Canada have been used to support inventory management, warehousing and distribution. Through such contracts, PPE is currently being warehoused in [Redacted].

PSPC also entered into short-term leases for PHAC for 2 additional warehouses [Redacted] totalling approximately 187,000 square feet. These warehouses are expected to be vacated upon expiry of the leases in September 2021 and March 2022 respectively. A new lease at the [Redacted] has been secured to replace these expiring leases with a start date of January 1, 2021, for a fixed period of 8 years with a total of 127,000 square feet of warehouse.

On April 1, 2020, PSPC signed, on behalf of PHAC, a 1-year contract with Amazon to use their on-line technology for provinces to order material directly. Canada Post and Purolator were delivering the equipment to provinces and territories as a subcontractor of Amazon. The agreement had primarily been put in place to access Amazon’s easy-to-use online interface, which allowed individual health establishments to order supplies directly from PHAC. As provinces and territories requested that PHAC deliver the supplies directly rather than awaiting for orders from them, the requirement evolved beyond what was covered in the Amazon agreement. As a result, the contract with Amazon was suspended in mid-July 2020. Prior to the suspension, only $200,000 has been spent under this contract.

A separate agreement between PHAC and Canada Post allowed for the warehousing of the PPE at [Redacted] a key on-going subcontractor of Canada Post. This warehouse quickly ran out of space. PHAC subsequently awarded, on May 22, 2020, a contract to Groupe Robert as a temporary measure while a long-term solution was being developed.

On May 4, 2020, PSPC published a letter of intent / request for information (LOI / RFI) on buy and sell to gather information in relation to a longer-term warehousing, inventory management and transportation solution. Further to the LOI / RFI process, PSPC awarded a 6-month contract to Groupe Robert Inc. on June 13, 2020. The contract has since been extended to the end of March 2021. This contract provided warehousing space in the [Redacted] and [Redacted] transportation capabilities and a warehouse management system capability. Transition of PPE product out of these warehouses to provinces or other PHAC facilities is underway and expected to be completed by the end of March 2021 at which point the contract will come to its end.

Additionally, a 2-year service contract was awarded to Groupe Robert Inc. on July 31, 2020, to operate the 350,000-square-foot facility leased by PSPC on behalf of PHAC in [Redacted].

As further warehousing capacity was required during the summer, existing and new contracts were utilized with different suppliers, including Overseas Express Consolidators, Bolloré Logistics Canada and Urban Valley Transport Ltd. to meet the required warehousing capacity.

PSPC also proceeded with a request for proposal for national logistics and warehousing services on July 16, 2020, to provide for warehousing, inventory management and distributions services. As a result of this competitive process, PSPC awarded, on behalf of PHAC, a 2-year contract, with an option for an additional year to Metro Logistics Inc. The contract, awarded on September 11, 2020, ensures warehousing across the country to accommodate and best position supplies for distribution to the provinces and territories.

In August 2020, the Government of Canada announced the creation of the ESCR, an emergency backstop of PPE and other critical supplies, managed by PSPC. The ESCR includes a number of warehouses across Canada, managed under a separate contract by SCI Logistics, a subsidiary of Canada Post, with Purolator serving as the distribution and delivery agent.

Integrity in federal procurement

Context

In the fast-paced and constantly evolving marketplace to secure necessary products and supplies to support the Government of Canada’s response to the pandemic, there have been reports of wrongdoing and fraudulent activity associated with the procurement of personal protective equipment (PPE) from around the world. Questions may arise as to the measures that Public Services and Procurement Canada (PSPC) has in place to protect the integrity of the federal procurement system during this period.

Suggested response

• The Government of Canada is committed to taking action against improper, unethical and illegal business practices and holding companies accountable for such misconduct
• To help ensure the Government of Canada does business with ethical suppliers, a government-wide Integrity Regime is in place. The regime holds suppliers accountable for their misconduct, and also encourages them to cooperate with law enforcement and take corrective action
• Under the regime, a supplier may be suspended or declared ineligible to do business with the government if, in the previous 3 years, it, members of its board of directors or its affiliates, have been charged with or convicted of one of the offences listed in the Ineligibility and Suspension Policy in Canada, or similar offences abroad
• PSPC has consistently applied the Integrity Regime to all COVID-19 related procurements
• To date, no contracts have been awarded to a supplier that is ineligible or suspended under the Integrity Regime

Background

The Government of Canada has a framework of laws, regulations and policies in place to protect the integrity of the federal procurement system. PSPC administers several programs under this framework, including the government-wide Integrity Regime, the federal contracting fraud tip line, and increased oversight for the detection of bid-rigging.

The Integrity Regime is designed to help ensure that the government does business with ethical suppliers and incentivizes suppliers to ensure strong ethics and compliance frameworks. Under the regime, a supplier may be suspended or declared ineligible to do business with the government if, in the previous 3 years, it, members of its board of directors or its affiliates, have been charged with or convicted of one of the offences listed in the Ineligibility and Suspension Policy in Canada or a similar offence abroad.

Under the current regime, 3 companies are ineligible to do business with the Government of Canada due to convictions for a listed offence (Les Entreprises Chatel Inc., R.M. Belanger Limited and Les Industries Garanties Limitée). One supplier has had their period of ineligibility reduced to 5 years pursuant to an administrative agreement which came into effect in December 2020 (Hickey Construction Ltd). The administrative agreement with SNC-Lavalin recently concluded in December 2020 in accordance with the terms of the agreement and the final disposition of criminal charges facing the supplier and relevant affiliates.

In 2018, the government announced its plans to enhance the Integrity Regime by increasing the number of triggers for debarment, broadening the scope of business ethics covered by the regime, and integrating greater flexibility within the debarment process. Following this announcement, there was considerable public discourse around corporate wrongdoing as well as governments’ response to such misconduct. As a result, the government announced that it was taking additional time to reassess elements of the proposed regime and potential next steps.

In the interim, the current Ineligibility and Suspension Policy remains in effect.

Labour exploitation in procurement

Context

The global nature of supply chains puts procurements at potential risk of having been produced using forced labour and human trafficking.

Suggested response

• The Government of Canada is committed to addressing the risk of forced labour and human trafficking in federal procurement supply chains through the National Strategy to Combat Human Trafficking
• A consultation process was recently completed to update the code of conduct for procurement in order to outline Canada’s expectations for suppliers regarding human and labour rights
• The feedback received is being analyzed by departmental officials, and a summary of the feedback received will be made available in spring 2021. Stakeholders will continue to be engaged as we look to update the code of conduct
• A request for proposals was launched in late 2020 to select a supplier to conduct a risk assessment to identify which goods purchased by Public Services and Procurement Canada (PSPC) are at risk of having been produced using human trafficking, forced labour, and/or child labour
• The contract was awarded in February 2021 to Rights Lab, a multidisciplinary group with significant expertise in human trafficking, based in the University of Nottingham, in the United Kingdom
• The findings of the risk assessment will enable us to develop an evidence-based approach to protect procurement supply chains from exposure to forced labour
• Additionally, the labour chapter of the Canada-United States-Mexico Agreement (CUSMA) established an obligation to prohibit the importation of goods that have been produced in whole or in part by forced labour
• Goods that are mined, manufactured or produced by forced labour will be prohibited from entering Canada pursuant to the Customs Tariff
• This import prohibition, which is under the purview of the Canada Border Services Agency (CBSA), applies to all goods regardless of their country of origin, and is an additional tool at Canada’s disposal to combat forced labour in global supply chains
• In March 2021, a communiqué was posted on buyandsell.gc.ca informing suppliers of the prohibition on the importation of goods made by forced labour that stems from the CUSMA, and highlighting other Government of Canada actions to combat forced labour, including updates to the code of conduct for procurement

If pressed on personal protective equipment (PPE) procurements linked to Xinjiang, China, and Malaysia:

• we are aware that the United States (US) Customs and Border Protection Agency issued a withhold release order against cotton products and tomato products from Xinjiang believed to be produced using forced labour in their production
• the Government of Canada announced new measures on January 12, 2021, to address human rights abuses in Xinjiang, China, including the adoption of a comprehensive approach to defend the rights of Uyghurs and other ethnic minorities
• measures to address the risk of forced labour from global supply chains include:
  • the prohibition of imports of goods produced wholly or in part by forced labour
  • export controls
  • enhanced advice to Canadian businesses
  • a third-party study on forced labour involving Uyghurs and supply chain risks
• the Government of Canada is aware of the recent media reports on human rights abuses in the production of disposable gloves in Malaysia, and takes these seriously
• specifically, the Government of Canada reached out to its nitrile glove suppliers that may be sourcing their gloves from manufacturers in Malaysia, to remind them of their obligations with regards to ethical practices and human rights
• PSPC is also a member of an international working group looking at human trafficking and forced labour in the personal protective equipment/medical supply chain. This working group is formed of representatives from the USA, United Kingdom, Australia, New-Zealand and Canada

If pressed on lack of compliance monitoring for existing measures:

• human trafficking and forced labour are clandestine crimes, often hard to detect as they tend to occur beyond tier one suppliers in the supply chain
• the global context in which most companies operate makes it challenging to directly monitor compliance with local laws and international human and labour rights in other countries
• the Government of Canada recognizes that addressing the risks of human trafficking and forced labour in our supply chains requires sustained effort, and we are working on a number of additional measures to enhance the integrity of our procurement system

If pressed on the risk assessment:

• the risk assessment is an important step for my department to understand where supply chains may be vulnerable to risks of forced labour and which goods are at a higher risk
• the assessment will also suggest an overall prioritization approach by sector (for example, apparel, electronics) to maximize the impact of future efforts
• the risk assessment is a key step in developing an evidence-based approach to address human trafficking in federal procurement supply chains

Background

The complexity of global supply chains enhances the vulnerabilities of those in precarious work situations in Canada and around the world. According to a 2017 joint report by the International Labour Organization (ILO) and the Walk Free Foundation, forced labour is present throughout all regions of the globe and most prevalent in manufacturing, construction, mining, agriculture, and domestic work. In a 2016 report, World Vision Canada found that over 1,200 companies operating in Canada are importing goods that may have been produced by child or forced labour.

Supply chains for PPE are spread across numerous countries with varying business practices and government regulations. Compounded by the global urgency to acquire PPE, this context may enable an environment where workers’ conditions are overlooked.

The Government of Canada is taking action, under the National Strategy to Combat Human Trafficking, to ensure that federal suppliers comply with international labour and human rights. As part of the national strategy, PSPC is leading the following initiatives:

• revising the PSPC code of conduct for procurement to include the expectations on human and labour rights for suppliers
• conducting an assessment of the risks of human trafficking and forced labour in federal procurement supply chains
• examining long-term approaches to address human trafficking for labour exploitation in federal procurement supply chains

As part of planned actions under the national strategy, PSPC will also create information resources for suppliers to become better aware of potential risks in their supply chains (2021 to 2022); and create requirements for suppliers of high-risk goods to address risks in their supply chain (2022 to 2023).

Moreover, in July 2020, clauses on ‘ethical procurement’ and ‘origin of work’ were added in new PPE contracts and in all newly issued request for proposals for PPE. The ‘origin of work’ clause requires bidders to provide the name, address and country of manufacturers of the item, including subcontractors. The ‘ethical procurement’ clause, requires bidders to certify that they and their first-tier subcontractors comply with the same human rights and labour standards set out in the Ethical Procurement of Apparel Policy.

Malaysian personal protective equipment

Suppliers sourcing gloves in Malaysia have been asked to provide information on due diligence processes and mitigation measures put in place to meet their labour and human rights responsibilities. Suppliers were also requested to detail how they identify, prevent, mitigate and improve on accounts of human rights concerns and ensure practices are in place to ensure protection of workers in their supply chain. Sedex Members Ethical Trade Audit report were also requested if available.

Canada-United States-Mexico Agreement

On November 30, 2018, Canada, the United States and Mexico signed the new CUSMA, which includes a comprehensive and enforceable labour chapter. The comprehensive labour chapter (article 23.6 specifically) includes a new obligation for Canada and its 2 CUSMA partners to prohibit the importation of goods produced, in whole or in part, by forced or compulsory labour. Paragraphs 201(i.1) and 204(8) of the CUSMA Implementation Act (the act) amended the Customs Tariff and the Schedule to the Customs Tariff to include a prohibition on the importation of goods that are mined, manufactured or produced wholly or in part by forced labour. The amendments made under the act came into force in Canada on July 1, 2020.

Prior to this new commitment, Canada did not restrict the entry of goods manufactured, mined and produced by forced labour into the country. The labour chapter also commits Canada, the US, and Mexico to work together to identify the movements of goods produced by forced labour. In order to implement this obligation under the CUSMA, the Government of Canada amended the Customs Tariff and the Schedule to the Customs Tariff to include a prohibition on the importation of goods produced by forced labour.

The CBSA plays a role in the interception of goods that are suspected of being produced by means of forced labour. Employment and Social Development Canada (ESDC) is the Government of Canada’s lead department for labour-related programs. The CBSA has been working with ESDC to identify goods that have been produced by forced labour entering Canada. Specifically, ESDC conducts research and analysis on companies that are suspected to be using forced labour to produce goods and are importing them to Canada. The CBSA may use this information to identify and intercept shipments containing goods produced that have been identified as suspected to have been produced by forced labour.

In this regard, it should be noted that the CBSA and ESDC are the lead departments in implementing the measures required to ensure that the Government of Canada is compliant with this CUSMA requirement. PSPC does not have a role in implementing the CUSMA forced labour provisions but is following this work closely to identify potential implications on procurement as these measures are implemented.

Shipments containing goods that are suspected of being produced by forced labour will be detained at the border for inspection by a CBSA border services officer. If in the judgement of the officer the goods were produced by forced labour, the officer will apply the tariff classification under chapter 98, item 9897 and prohibit the goods from entering Canada. Determinations are made on a case-by-case basis, based on all available supporting evidence and analysis.

Procurement of personal protective equipment

Context

The procurement environment for personal protective equipment (PPE) has evolved over the course of the pandemic.

Suggested response

• Given the high level of complexity in the global supply chain, ensuring quality of the product Public Services and Procurement Canada (PSPC) is purchasing is extremely important
• At the outset of the pandemic, surging global demand for PPE and medical supplies resulted in a highly competitive marketplace and volatile supply chains. The Government of Canada took an aggressive procurement approach to fulfill emergent and immediate as well as long-term medical supply requirements
• The Government of Canada’s response to the COVID-19 pandemic has progressed, and the procurement environment has also evolved
• We have secured more than 2.5 billion articles of various PPE, and we continue to receive steady, ongoing deliveries
• We are also continuing to leverage domestic supply chains wherever possible, with more than 40% of the total value of PPE contracts going to domestic companies
• Our goal is to ensure Canada has more than sufficient supplies on hand in anticipation of future needs for our provinces, territories, frontline health workers and Canadians

If pressed on quality issues of 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, the Public Health Agency of Canada (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
• although we have encountered situations where supplies were found to be substandard, we acted quickly to address these issues
• we are working closely with suppliers to ensure that products are fit for the intended use

If pressed on hand sanitizer:

• in the early days of the pandemic, accessing PPE, including hand sanitizer, proved to be challenging as demand far exceeded the available supply
• PSPC worked with Innovation, Science and Economic Development (ISED) to identify reliable Canadian manufacturers of hand sanitizers, and pivoted to issue contracts to those suppliers as the production within Canada increased
• PSPC procured more than 10.6 million liters of hand sanitizer from Canadian manufacturers

If pressed on the purchase of syringes:

• PSPC has purchased over 262 million syringes of varying sizes to accommodate a range of requirements in the administration of vaccines
• syringe procurements include over 192 million 1ml syringes, of which 179.7 million are low dead volume syringes, which minimize the volume of solution that remains in the needle after an injection

If pressed on disposable medical isolation gowns:

• following a competitive published request for proposal, PSPC recently awarded 10 contracts to 9 Canadian suppliers for the procurement of 20 million disposable gowns on behalf of PHAC
• though the request for proposal (RFP) requested 50 million gowns at time of publishing, following PHAC evaluation of inventory and client requirements, it was determined that the revised requirement was for 20 million gowns only
• the RFP was limited to Canadian goods and bidders had to certify that the gowns offered are wholly manufactured or originating in Canada

If pressed on Stanfield medical isolation gowns:

• in the early days of the pandemic, accessing PPE, including gowns, proved to be challenging as demand far exceeded the available supply. As a result, PSPC worked with ISED to identify reliable Canadian manufacturers
• on April 5, 2020, Stanfield was awarded a sole source contract, valued at $27,911,000.00, for the production of an initial 2.6 million gowns
• Stanfield also submitted a proposal in October 2020 in response to a solicitation limited to Canadian manufacturers. The company was shortlisted to submit a sample to assess the design, fit, overall feel, noise and electrostatic qualities of the proposed gowns
• after assessment, the gown samples provided by Stanfield did not meet certain required criteria and no further contract was awarded to the company

If pressed on a Canadian investment of $27M in Stanfield:

• PSPC did not invest $27M in Stanfield. PSPC awarded a contract in the amount of $27M for the procurement of gowns, a portion of which would have enabled the company to retool

Procurement of N95 masks

Context

Public Services and Procurement Canada (PSPC), on behalf of the Government of Canada, has awarded contracts with Medicom and 3M for the production of N95 masks.

Suggested response

• The health and safety of Canadians is our number one priority. We have established a domestic source of personal protective equipment (PPE) with Canadian manufacturing firms Medicom and 3M Canada
• PSPC has procured 307,707,540 respirators on behalf of the Government of Canada of which 121,407,540 were sourced from global suppliers
• Prior to establishing domestic capacity, Canada purchased 13 million N95 respirators from Canadian 3M distributer Acklands Grainger that were sourced from the United States. So far, Canada has received 6,277,336.00 respirators from Acklands Grainger
• Additionally, 3M Canada is providing 750,000 respirators per month directly to the health care system until domestic production begins in spring 2021
• Medicom has now started production of N95 respirators in Canada, and the Government of Canada has received 8,214,500 respirators from Medicom, with an additional 2,500,000.00 anticipated by the end of March

If pressed on fit testing (3M Canada):

• each size of respirator model must undergo a fit test
• 3M Canada is providing product samples directly to the provinces and territories in order for them to conduct fit testing
• distribution of model type will be dictated by the results of this end user face fit testing

If pressed on fit testing (Medicom):

• Medicom has conducted fit testing on a similar European model of N95 respirator to the model produced in Canada and Health Canada has accepted this testing as equivalent
• Medicom will implement support and training to end users for as long as needed to them to help them understand and adopt Medicom respirator models

Background

PSPC has procured 307,707,540 N95 respirators on behalf of the Government of Canada. Of this total quantity, 281,635,540 were procured for the Public Health Agency of Canada (PHAC), 6,072,000 were procured for other federal government departments, and 20,000,000 were procured for the essential services reserve. To date, we have received 112,573,016 respirators.

PSPC awarded a 10-year contract to Medicom for domestic production and distribution of surgical masks and N95 respirators for PHAC. Production ramp up for N95 respirators began in August 2020. In addition to the 8,214,500 respirators received to date, the Government of Canada anticipates receiving approximately 5 million respirators per month for the next year.

In November 2020, PSPC entered into a contract directly with 3M Canada to purchase domestically-produced N95 respirators. Under the contract, 3M will provide 25 million N95 respirators annually over an initial 5-year period (April 2021 to March 2026). Starting April 1, 2021, the Government of Canada will receive approximately 3 million respirators per month for the next year.

3M has confirmed that the Brockville plant will be fully operational starting April 1. As such, the 750,000 Interim supply commitment will end March 31.

Mobile health units for Ontario

Context

The Prime Minister announced on January 22, 2021, that Canada would provide 2 mobile health units (MHU) to Ontario in response to the province’s request. Canada continues to work with provincial officials to develop deployment plans for the MHUs to Ontario.

Suggested response

• The government is committed to supporting provinces and territories in their battle with COVID-19
• We are working with Ontario on the planning and deployment of federal MHU to provide surge capacity to local health authorities
• These federal MHU had been purchased in anticipation of such a request and Canada is pleased to work with Ontario in setting up this additional capacity
• Public Services and Procurement Canada (PSPC) is working closely with Public Safety in the deployment of the units as part of Public Safety’s emergency preparedness role

If pressed on location:

• Ontario is making the decisions related to where it requires the surge capacity created by the federal MHU
• currently, a MHU is being deployed to Sunnybrook Health Sciences Centre in Toronto with operational capability expected in the first week of April

Background

A MHU is a fully self-sufficient unit that can provide targeted care for persons with acute respiratory disease and distress. It was designed with the capability of providing a triage area, short stay evaluation area, 2 resuscitation bays, up to an 80 bed in-patient ward, up to a 20 bed intensive care unit (ICU), diagnostic imaging (portable x-ray), laboratory, pharmacy, and a separate low-risk zone which includes central supply and office space. Two firms (Weatherhaven Global Resources Ltd of Coquitlam, BC and SNC-Lavalin PAE Inc. of Ottawa, ON) were contracted to design and deliver Canada’s MHU. Both firms have a proven record on complex logistics work.

Integral to the design is a full water, sanitation, and hygiene (WASH) system of fresh potable water systems, latrines, showers, and hand washing stations. Should electrical hookup or compressed oxygen not be available at the deployment site, power can be provided through generators and oxygen through various O2 generators and concentrators. The self-sufficiency of the unit makes it extremely flexible to be able to deploy where the need is greatest, not just where the utilities exist for its support.

SNC-Lavalin

On December 8, 2015, PSPC entered into an administrative agreement under the government-wide integrity regime with SNC-Lavalin after SNC-Lavalin Group Inc., SNC-Lavalin Construction Inc., and SNC-Lavalin International Inc. were charged with 1 count of corruption under the Corruption of Foreign Public Officials Act and 1 count of fraud under the Criminal Code. Note that the contract for MHUs is with SNC-Lavalin PAE Inc and not with SNC-Lavalin.

This agreement outlined the conditions under which SNC-Lavalin was allowed to continue to do business with the Government of Canada while the judicial proceedings associated with these charges were underway. As per the terms of the agreement, SNC-Lavalin retained the services of a qualified independent third-party recognized by PSPC, to monitor compliance with the terms of the agreement, at their own cost.

On December 18, 2019, SNC-Lavalin Construction Inc. plead guilty in the Court of Quebec to 1 count of fraud contrary to paragraph 380(1)(a) of the Criminal Code, which is not a listed offence under the Ineligibility and Suspension Policy. The remaining charges were stayed against all 3 defendants as a result of the resolution. In accordance with its terms and conditions, the administrative agreement concluded 12 months following the stay of the charges.

Evolution of supplying Canada’s response to COVID-19

Since the beginning of the COVID-19 pandemic, the Government of Canada has been procuring personal protective equipment (PPE) in bulk quantities to protect Canadians against COVID-19. These efforts have enabled us to ensure that Canadian front line health care workers, and others, have access to much-needed supplies. Canada continues to collaborate with provinces and territories on an ongoing basis to identify their needs.

On March 12, 2020, Public Services and Procurement Canada (PSPC) in partnership with Innovation Science and Economic Development (ISED), launched a proactive call to action on buyandsell.gc.ca asking suppliers to come forward with products or services they could offer to support Canada's response and to expand the federal government’s supplier network for these life-saving goods in the face of a surge in global demand. In response, the Government of Canada received more than 26,000 unique responses, from both Canadian and international businesses.

Referred to as the Made in Canada project, it partnered with industry across all levels of government to secure domestic production of key PPE and medical supplies to equip frontline workers to fight COVID-19. These efforts have enabled us to ensure that Canadian front line health care workers, and others, have access to much needed protective equipment.

Through the overwhelming support of businesses that responded to the call to action as part of the Made in Canada project, and working directly with Canadian manufacturers, PSPC was able to meet the most urgent and immediate demands for PPE and medical supplies for the Public Health Agency of Canada (PHAC) and frontline healthcare workers across the country. PSPC commends and thanks Canadian companies that retooled production or offered innovative solutions to provide the equipment needed to fight COVID-19 during this critical time.

The government has dedicated approximately $7.4 billion as of December 31, 2020, including 4.5 billion as part of the Safe Restart Agreement to buy PPE, medical equipment and supplies for PHAC, federal departments and agencies (for example, to equip food inspectors, and border officers), and the Essential Services Contingency Reserve. The majority of these procurements are dedicated to equipping frontline health care workers through provincial and territorial health care agencies.

The majority of the total value of contracts for PPE, medical equipment, and supplies have been with Canadian companies that supply and distribute PPE, accounting for approximately 84% of overall contractual expenditures.

Current status

As the supply of PPE has improved (and where circumstances permit and the needs are not urgent), PSPC has moved from sole-sourced contracts to, in most cases, a competitive bidding process. This approach is in line with PSPC’s commitment to open, fair and transparent procurement processes.

Open competitions for goods and services required in response to COVID-19 have been run over the past months and continue to be launched on buyandsell.gc.ca for a range of PPE, medical equipment and supplies. In addition, to continue to support domestic manufacturing, PSPC has also issued some competitive procurement processes only for Canadian manufacturers. By securing products through these competitive processes, we continue to ensure that Canada is well equipped and prepared for any eventuality when it comes to this pandemic.

Going forward, PSPC will continue to seek to conduct procurements in a manner that encourages competition, treats suppliers equally and fairly, and delivers best value to Canada, in accordance with regulations and Cabinet-approved policies and directives.

As new needs are identified, PSPC will post competitive tendering opportunities on www.buyandsell.gc.ca where feasible.

Procurement modernization

Context

Public Services and Procurement Canada (PSPC) is delivering on government commitments to modernize and simplify procurement.

Suggested response

• The government is committed to modernizing procurement practices so they are simpler, less administratively burdensome
• In support of economic growth and diversity among small- and medium- enterprises, and under-represented groups, we are working to reduce barriers that have historically prevented them from participating in federal procurement
• Specific actions include:
  • implementing a simplified contract model
  • establishing a social procurement policy framework to achieve positive socio-economic outcomes
  • increasing opportunities for all suppliers, including piloting targeted approaches to expand supplier diversity
  • improving and making existing procurement tools more accessible to diverse suppliers
  • formalizing a risk-based approach for procurement decisions
  • developing new tools to determine contract pricing and support best value
  • expanding support to bidders with limited or no success bidding on government opportunities, from coaching service to personalized assistance

If pressed on diversifying procurement (Black-owned businesses):

• our government is committed to diversifying the base of suppliers and expanding bidding opportunities for Black-owned or operated businesses to obtain contracts from federal organizations
• as part of this effort, PSPC has launched the Black businesses pilot to open select bidding opportunities in several regions for various goods and services, targeting Black-owned or operated businesses. Since January 12, 2021, 11 procurements have been posted on the buyandsell website
• the Black Businesses Pilot is a tangible first step to expand procurement opportunities for Black entrepreneurs
• PSPC will assess these procurements and draw on success and lessons learned to inform additional targeted approaches to increase diversity in future procurements, including support for greater inclusion and representation of Black-owned or led businesses and other underrepresented suppliers in federal procurements
• this demonstrates PSPC’s leadership role in advancing social procurement, working closely with other government departments to increase bidder and supplier diversity in federal procurements
• in support of this, PSPC, through the Office of Small and Medium Enterprises (OSME), continues to deliver education and provide assistance to under-represented groups across Canada, including Black-owned or operated businesses to support their participation in federal procurements. Examples include supporting the rise up pitch competition, a Black women entrepreneurs pitch competition and program for entrepreneurs across Canada to join and receive support for their businesses, and ongoing webinars provided in partnership with the United Nations Decade of Persons of African Descent Push Coalition
• we continue to work and collaborate the United Nations Decade of Persons of African Descent Push Coalition, the Black Business and Professional Association (BBPA), the Canadian Aboriginal and Minority Suppliers Council , and the Canadian Black Chamber of Commerce to raise awareness of the services offered by the OSME, to encourage participation in federal procurement, and to identify and reduce barriers

If pressed on the policy on social procurement:

• our government is committed to finding ways to enable the inclusion of socio-economic outcomes into federal procurement
• we are developing a policy on social procurement, which will allow us to create targeted approaches to increase diversity in PSPC procurement, leverage trade agreements that permit socio-economic procurement, and provide the authorities necessary to collect personal data, including information on ethnicity, gender and other socio-economic characteristics of suppliers
• the policy on social procurement will also allow the government to establish a baseline on the participation of under-represented suppliers, such as Black entrepreneurs, in federal procurement and monitor progress over time
• PSPC, in collaboration with the Treasury Board of Canada Secretariat (TBS), will be working towards developing government-wide initiatives to increase the diversity of bidders on government contracts
• these initiatives will seek to bring a positive economic impact for thousands of Canadian small businesses, including those led by Indigenous Peoples, Black and racialized Canadians, women, lesbian, gay, bisexual, transgender, queer and two-spirit (LGBTQ2) Canadians and other groups who are often underrepresented in federal procurement supply chains

If pressed on Indigenous procurement:

• we are committed to increasing the participation of Indigenous businesses in federal procurement
• to do so, we are working with Indigenous Services Canada and TBS to establish a target of at least 5% of federal contracts awarded to businesses managed and led by Indigenous Peoples
• Indigenous business organizations are represented on both the newly established COVID-19 Supplier Council and the national Supplier Advisory Council that has been in place since 2013
• the OSME works with Indigenous businesses directly, as well as through partner Indigenous organizations, to provide awareness, education and assistance on how to participate in federal procurement

If pressed on the Procurement Ombudsman’s annual report citing the “unnecessarily complex nature of the federal procurement process”:

• the government has committed to modernize and simplify procurement
• one of our primary goals is to make buying processes less burdensome for both suppliers and government buyers. That’s why we are taking a number of steps to improve the supplier experience, including:
  • contract modernization initiatives to simplify and streamline our contracting documents to make procurement less burdensome for suppliers
  • improvements to the existing buyandsell website for suppliers, as well as for buyers
  • efforts to encourage greater competition, as well as moving forward on initiatives that support our economic policy goals, including innovation, green and social procurement, and increasing the diversity of bidders
  • implementation of the electronic procurement solution, which will align our processes with those of our suppliers and eliminate paper-based processes

Background

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) according to the Organization for Economic Co-operation and Development (OECD) data from 2015. This makes it a fundamental lever to achieving social and economic objectives.

The government has committed to modernize and simplify procurement, and to establish an electronic procurement solution. A key step towards this goal was the March 2020 soft launch of Canada buys, our new electronic procurement system, as announced in budget 2018, at a cost of $196.8 million over 5 years. Procurement processes will also be easier, faster and more accessible for suppliers and buyers through:

• simpler, less administratively burdensome, user-friendly procurement practices:
  • improvements to the existing buyandsell website for buyers as well as for suppliers were introduced to enhance their user experience and make it easier for them to find relevant procurement information
  • more accessible and intuitive complement of industrial security services have been made available
  • contract modernization initiatives and a modernized contract model are being piloted. This is in response to concerns from the supplier community regarding the complexity of the Government of Canada’s contracts and related processes. This complexity can represent barriers to supplier participation in public procurement, including reducing competition and supplier diversity, which impacts Canada’s ability to achieve best value for money
• deployment of modern comptrollership:
  • formalizing a risk-based approach for procurement decisions
  • ensuring fair pricing in defence contracts (sustainment initiative, pricing guide)
• encouraging greater competition and including practices that support our economic policy goals, including innovation, as well as green and social procurement:
  • developing a framework for leveraging socio-economic outcomes in federal procurement
  • increasing the participation of under-represented groups such as women-owned businesses, Indigenous businesses, Black businesses, disability-owned businesses and other minority businesses
  • adopting a more inclusive and accessible approach to procurement, raising awareness of how to give consideration to the needs of persons with disabilities when procuring on behalf of the federal government
  • developing rigorous, science-based methodologies and tools to measure the reduction of greenhouse gas emissions in federal procurements and establish targets for specific goods and services

Notably, an Accessible Procurement Resource Centre (APRC) was established in June 2018 to support government buyers in integrating accessibility criteria into their procurement requirements for goods and services. Work includes examining how we can ensure that procurement is accessible to all so that suppliers with disabilities can become part of the government’s supply chain, and to ensure that persons with disabilities are able to work as government suppliers.

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

Security screening equipment for Global Affairs Canada

Context

Public Services and Procurement Canada (PSPC) issued a national master standing offer (NMSO) for x-ray machines that did not include a security requirement. Global Affairs Canada (GAC) intended on using the established NMSO to replace its existing fleet of x-ray screening equipment for use in non-operational areas in Canadian missions abroad. The NMSO was issued to Nuctech Company Limited of Beijing, China, a Chinese state-owned company.

Suggested response

• In procuring goods and services for its clients, PSPC ensures that all security requirements identified by the purchasing department (the technical authority) are included in procurement tools and processes
• Where security requirements have been identified, PSPC will only contract with eligible firms that meet those security requirements
• No security requirements were identified for this procurement. However, in line with Canada’s commitment to the safety and security of our workplaces abroad, GAC is reviewing purchasing practices when it comes to security
• No equipment has been purchased from Nuctech Company Limited under the standing offer
• Moving forward, PSPC will implement measures to assess security requirements earlier in the procurement cycle through a more targeted security screening model and the introduction of a mandatory security in procurement template to assist departments in the identification of potential threats to national security in their procurement activities

If pressed on awarding the NMSO to Nuctech:

• following a competitive procurement process, PSPC awarded 2 standing offers for the supply of security screening equipment, one to a US firm for walk-through metal detectors, and one to a firm in China for x-ray machines
• Nuctech was selected because it was compliant with the mandatory technical requirements and had the lowest offer of all the firms that were compliant
• the various trade agreements to which Canada is a signatory applied and Nuctech was eligible to bid on this process
• a standing offer creates no obligation on the part of the government to buy the good or service.
• PSPC can confirm that there have been no call-ups issued against this standing offer
• the technical authority for this solicitation process did not identify any security requirements. No PSPC security services were identified as required and therefore none were invoked, nor were any requested by exception
• following an external review of the requirements for this work, GAC confirmed its applicable security requirements and PSPC and GAC worked together to determine next steps to fulfill GAC’s procurement needs
• on March 16, PSPC on behalf of GAC posted an invitation to qualify to create a list of qualified respondents that will be used to establish solicitations for contracts, standing offers and supply arrangements for conveyor-style baggage x-ray machines and walk-through metal detectors
• the invitation to qualify is the first stage of the procurement process and suppliers are invited to pre-qualify. This will require bidders to have or obtain security clearance and pass a supply chain integrity verification process conducted by the Communications Security Establishment

If pressed on the Integrity Regime:

• the government is committed to taking action against improper, unethical and illegal business practices and holding companies accountable for such misconduct
• PSPC has a framework of laws, regulations and policies in place to protect the integrity of the federal procurement system, including the government-wide Integrity Regime
• the regime has been in place since 2015. It holds suppliers accountable for their misconduct, and also encourages them to cooperate with law enforcement and take corrective action
• under the regime, a supplier may be suspended or declared ineligible to do business with the government if, in the previous 3 years, it, members of its board of directors or its affiliates, have been charged with or convicted of one of the offences listed in the Ineligibility and Suspension Policy in Canada
• suppliers may also be debarred if they have convictions for similar offences abroad
• prior to the award of a contract, the status of the proposed supplier is verified against the requirements of the Integrity Regime

If pressed on the Postmedia story on Nuctech—Integrity Regime implications:

• we are aware of allegations connected to Nuctech
• the Government of Canada’s Integrity Regime makes determinations of ineligibility or suspension based on convictions or charges associated with one of the offences listed in the Ineligibility and Suspension Policy
• In this instance, the verification process was followed and the supplier was found not to be ineligible under the regime as no charges or convictions were found

Background

The requirement was to establish 2 NMSO for the supply of security screening equipment (conveyor style x-ray machines and walkthrough metal detectors) for GAC and other federal departments on an as and when requested basis. The NMSOs will be in place for a period of 3 years from date of issuance with the option to extend for 2 additional 1-year periods under the same terms and conditions.

The request for standing offer was issued on December 16, 2019, and closed on April 3, 2020. An offer had to comply with the requirements of the request for standing offer and meet all mandatory technical evaluation criteria listed therein to be declared responsive. The responsive offer with the lowest evaluated price for each product group were recommended for issuance of a standing offer. No security requirements were originally identified for this standing offer by the technical authority (GAC). As such no PSPC security services were identified as required, nor were any requested by exception, and PSPC’s Contract Security Program was not engaged in the solicitation process. An external review of the security requirements for this work has since been completed for GAC by Deloitte. GAC is reviewing the report and will be confirming the security requirements with PSPC going forward.

Offerors had to meet mandatory technical requirements in order to be considered for the financial evaluation. Mandatory technical requirements included providing alerts for various dangerous materials like explosives and weapons, a variety of screening modes, and safety protocols.

As for all contracts, arrangements or offers, PSPC conducted an integrity check on Nuctech and no issues were identified.

The Canadian International Trade Tribunal (CITT) received a complaint from K’(Prime) Technologies Inc. (KPrime), of Calgary, Alberta, concerning this procurement. With respect to the conveyer x-ray machines, the CITT did not find any basis of validity for the complaint, thus there is no impact on the procurement that led to the Nuctech standing offer.

A story published by Postmedia (John Ivison) mentions adverse information relating to Nuctech operations in Taiwan, Namibia, and Europe. However, under the Integrity Regime, determinations of ineligibility and suspension can only be made on the basis of charges or convictions related to one of the listed offences in Canada or abroad. Adverse information alone would not be sufficient for declaring a supplier to be ineligible.

On March 16, PSPC on behalf of Global Affairs Canada posted an invitation to qualify to create a list of qualified respondents that will be used to establish solicitations for contracts, standing offers and supply arrangements for conveyor-style baggage x-ray machines and walk-through metal detectors. The invitation to qualify (ITQ) is the first stage of the procurement process. Suppliers are invited to pre-qualify in accordance with the terms and conditions of the ITQ in order to become a qualified respondent for the later phases of this procurement. This will require bidders to: have or obtain security clearance and pass a supply chain integrity verification process. The supply chain integrity assessments will be conducted by the Communications Security Establishment (CSE).

Committee study

The Standing Committee on Government Operations and Estimates (OGGO) met on November 18, 2020 to begin a study on the Nuctech Security Equipment contract. At this appearance, GAC official Dan Danagher (Assistant Deputy Minister of International Platform, Department of Foreign Affairs, Trade and Development) indicated that his department will not avail itself of the standing offer issued in July 2020.

This development was subsequently reported upon by the National Post following the appearance: Security scanners from a Chinese firm not the best plan for our embassies, government decides.

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Date modified:

2021-07-22