Company profiles and fact sheets: Standing Committee on Government Operations and Estimates—April 14, 2021
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Medicom N95: Information on deliveries
Context
Public Services and Procurement Canada (PSPC) entered into a contract with Medicom on April 26, 2020 to supply Canada with 20 million N95 masks annually, to be manufactured in Canada. Medicom has commenced production of masks. However, delivery was contingent on 2 approvals: first, receiving Health Canada interim order (IO) approval, and secondly, receiving respirator quality assessment testing approval from the Public Health Agency of Canada (PHAC). On October 30, 2020, Medicom confirmed to PSPC that Health Canada had approved their IO application for their N95 respirators. On November 13, 2020, Medicom received quality assessment testing approval from PHAC.
Suggested response
- The health and safety of Canadians is our number one priority
- The Government of Canada is working closely with our partners to ensure frontline workers have access to the supplies and personal protective equipment (PPE) they need to stay safe and healthy in response to COVID-19
- In order to provide frontline workers with much-needed PPE, PSPC began work to establish domestic production of PPE with partners like Medicom. The company has now started production of N95 respirators in Canada
- Following the letter of intent sent from Innovation, Science and Economic Development Canada (ISED), Medicom was awarded a contract in the amount of $93,564,000.00
- ISED engaged 2 companies to set up mask manufacturing capacity in Canada: Medicom and 3M. Both companies provided high-level proposals. Medicom’s plan allows for the establishment of a mask manufacturing capacity in Canada under a shorter timeline with production starting in August 2020
- There were 2 steps required before a delivery schedule of Medicom N95 respirators could be confirmed: an IO application and quality assessment testing
- Medicom received approval on November 13 under an IO application and quality assessment testing, allowing for the shipment of N95 respirators
- Medicom will have delivered 13.8 million N95 masks and 30.14 million surgical masks by end of April 2021
- Due to the pandemic and high demand on domestic National Institute for Occupational Safety and Health (NIOSH) approval, PSPC has issued an amendment to extend the deadline for Medicom in receiving NIOSH approval until June 30, 2021
Background
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. Medicom applied for Health Canada’s IO certification. Health Canada approval was obtained on October 30.
Medicom has also received quality assessment testing approval from PHAC on their N95 respirator.
Quality assessment testing is a standard requirement to confirm the masks meet the mandatory 95% filtration standard for N95 respirators. This quality assessment testing process was performed by the National Research Council (NRC), on behalf of PHAC.
NRC performed the testing using the filtration testing machine TSI8130A, which is the same machine used by the NIOSH in the United States. Quality assessment testing typically takes 7 to 10 business days depending on the number of sample masks being tested. There is an extension for NIOSH approval until the end of June 2021.
While Medicom was finalizing quality assessment testing, they provided 700,000 FFP2 masks (N95 equivalent) from Europe. Medicom has provided PSPC with a delivery schedule for the N95 respirators. Deliveries began in November 2020.
Deloitte Inc.
Deloitte Inc. provides audit and assurance, consulting, financial advisory, risk advisory, tax and related services to public and private clients spanning multiple industries. It is also one of the largest consulting and accounting firms in the world.
Deloitte is a pre-qualified supplier under several Public Services and Procurement Canada supply arrangement (SA) vehicles, including the task based informatics professional services and the solutions based informatics professional services SAs.
As part of the Government of Canada’s response to the COVID-19 pandemic, Deloitte Inc. was awarded 2 contracts for professional services:
- a contract designed for departments to obtain expertise and consulting services related to the acquisition and supply of materials
- a contract for a national vaccine management information technology (IT) platform
The first is completed and the second is active.
Contract for professional services in support of COVID-19 response
The contract expired January 9, 2021. The total amount expended under the contract was $14,074,441.05 (inclusive of taxes).
Given the urgent response requirements, PSPC issued a sole-sourced, task-based contract to Deloitte in April 2020 to provide professional services related to the acquisition and supply of materials in support of the Government of Canada’s response to COVID-19.
The professional services provided on an as-and-when requested basis through the issuance of task authorizations included, but were not limited to, the following areas:
- acquire pandemic response supplies from the global market
- establish an integrated control tower to track and manage logistics, allocation fulfillment and order tracking
- develop and maintain demand and supply forecasts for pandemic supplies, and associated inventory allocation models
- create screening and qualification process(es) for alternative (not previously qualified) suppliers
- additional services and tasking may be required as the COVID-19 situation and Government of Canada requirements evolve
Four government departments issued task authorizations against the contract as follows:
- task for PSPC: Strategic sourcing—Control tower and materials tracking
- tasks for the Public Health Agency of Canada:
- control tower and logistics
- conduct a risk assessment comprised of a review of physical and information security with respect to logistics
- tasks for Health Canada (HC):
- demand forecasting
- supply and demand modelling for drug shortages
- task for Innovation, Science and Economic Development Canada: N95 respirators market analysis
Contract for national vaccine management information technology platform
The contract awarded to Deloitte in January 2021 is for $16,138,945.90 (inclusive of taxes).
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.
Due to the emergency nature of this requirement, PSPC solicited competitive bids directly from a source list of 7 qualified suppliers.
The requirement, a new national vaccine management IT platform (NVMIP), 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 rollout moves through various phases. It is operating 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.
3M fact sheet
3M is a multi-national corporation and one of the largest manufacturers of N95 masks in the world.
Background
In March and April of 2020, Public Services and Procurement Canada entered into 3 contracts with 3M Canadian distributor Acklands Grainger to procure a total of 12.725 million N95 masks. The intent was that the phased deliveries would be entirely fulfilled by March 31, 2021. However, when the United States government implemented the Defense Production Act, 3M was restricted to shipping a maximum of 10% of its total production to non-US customers. As such, Acklands Grainger has been severely restricted in the amount of product available to fulfill these contracts. However, as part of an interim supply agreement reached with Canada in September 2020, 3M is providing a minimum of 750,000 units per month to Canada in order to expedite the fulfillment of the contracts.
In July 2020, PSPC entered into a contract directly with 3M Canada to purchase domestically-produced N95 masks. 3M had responded to a ‘call to industry’ posted by Innovation, Science and Economic Development Canada seeking industry engagement on establishing domestic manufacturing of N95 masks in Canada. Five proposals were received, and the 3M proposal was selected as the best value to Canada. Under the contract, 3M will provide 25 million N95 masks annually over an initial 5-year period (April 2021 to March 2026). Canada has also reserved the right to extend the contract by up to 5 optional years.
Canada is providing, through ISED’s Strategic Innovation Fund, capital investment funds of $23.33M towards costs of constructing a Brockville manufacturing plant. This investment represents a one-third equal share of project costs with Ontario and 3M.
Prior to establishing domestic capacity, Canada purchased 13 million N95 masks from Canadian 3M distributer Acklands Grainger that were sourced from the United States. So far, Canada has received 7,481,496 million masks from Acklands Grainger.
As of March 31, 2021, 3M’s domestic manufacturing plant in Brockville, Ontario was up and running. To date, this 3M facility has delivered 1,098,249 N95s:
- the federal government amended the 3M contract in March 2021 to purchase an additional 5 million units. These units will be delivered in April 2021
- in total, 3M will have delivered 30,000,000 N95s by the end of year 1 of the 3M domestic contract
Procurement of medical gowns from Proline Advantage Inc.
Context
Public Services and Procurement Canada worked aggressively with domestic and international suppliers to procure medical gowns. A high-volume contract was awarded to Proline Advantage Inc. for the supply of medical gowns based on the company’s capacity to source and deliver gowns in a very aggressive timeframe at a reasonable price. As of August 2020, Proline delivered all medical gowns and fulfilled all its obligations under its contract.
Suggested response
- In March and April 2020, contracts for medical gowns were awarded to suppliers based on their capacity to source and deliver gowns in a very aggressive timeframe at a reasonable price
- PSPC has worked hard to ramp up procurement efforts domestically and abroad to diversify its supplier base. Now that we are in the next phase of the response for COVID-19 related procurements, the priority has been to revert to competitive procurement processes and post solicitation documents on the buy and sell web page
- All products we are buying continue to be subject to stringent controls at various points in the process, including technical evaluation and testing of the proposed equipment, evaluation of the financial assessment of the suppliers, an integrity check, and ensuring that the supplier has a valid medical device establishment license
If pressed on the selection of Proline Advantage Inc.:
- Proline Advantage Inc. has been in the medical/supplement supply field since 2008. It has many years of experience with an international supply chain, and has access to several personal protective equipment manufacturers in China
- the company responded to the call to suppliers posted on buyandsell.gc.ca in March 2020
- Proline’s proposed gowns were assessed and approved by the Public Health Agency of Canada. Proline had a medical device establishment license, available quantities, integrity compliance and could meet the delivery timeline
- PSPC received numerous proposals from suppliers, however, very few were able to meet the required delivery timeframes
- the initial requirement from PHAC was to purchase 130 million gowns. Proline Advantage Inc. was one of the suppliers who sourced and delivered an important amount of level 1 and level 3 gowns of the overall requirement. The contract value is $371,318,000.00
If pressed on the volume of gowns procured from Proline Advantage Inc.:
- PSPC awarded 36 contracts to 27 suppliers for the supply of medical gowns, of which 26 contracts are with domestic manufacturers
- PSPC wanted to diversify its supplier base to efficiently manage risk of late or non-delivery. The quantity of gowns awarded to suppliers was determined by their capacity to source and deliver gowns in a very aggressive timeframe at a reasonable price
If pressed on Proline Advantage Inc. pricing:
- Proline Advantage Inc. offered pricing that was comparable to other contractual arrangements awarded at the time
If pressed on Proline Advantage Inc. performance:
- by late August 2020, all gowns had been delivered to the PHAC warehouses and Proline Advantage Inc. had fulfilled all its obligations under its contract
If pressed on advance payment made to Proline Advantage Inc.:
- from March until the end of June 2020, the pressure on the medical gown market was very high. In order to facilitate procurement, suppliers had to make security deposits in order to secure a spot on the manufacturers' production line
- PSPC and the PHAC decided to include clauses in the contracts allowing advance payment under certain circumstances
- a financial risk assessment was performed and Proline Advantage Inc. was considered a financially viable company
If pressed on domestic suppliers:
- PSPC has awarded contracts to 20 domestic suppliers for the production of gowns and, through Innovation, Science and Economic Development Canada, have connected these domestic suppliers with 2 domestic alternative material manufacturers
- delivery of domestically-made gowns started in early May 2020
If pressed on the general request for proposal process:
- industry and suppliers responded positively to the call to action. More than 26,000 submissions were received, including nearly 17,000 domestic submissions
- we contacted nearly all domestic companies who submitted forms, and continue to reach out to those submitting forms
- now that we are in the next phase of the response for COVID-19 related procurements, the priority is competitive procurement processes and posting solicitation documents on the buy and sell web page. This is specifically the case when the timeline to secure a particular good or service allows for more flexibility or the search for information or sources of supply needs to be broadened
- for example, a competitive request for proposal (RFP) for the purchase of an estimated quantity of 50 million gowns was posted on buyandsell.gc.ca. This RFP that closed on November 20, 2020 was limited to Canadian manufacturers of gowns. The requirement was reduced to 20 million gowns from PHAC. In total, 71 companies bid on the tender as part of the competitive bidding process of which we have awarded 10 contracts to 9 suppliers for 20 million gowns
Background
In the early days of the pandemic, the surge in global demand for PPE and medical supplies resulted in a highly competitive marketplace and volatile supply chains. An urgent and accelerated timeline for contracting was required in many cases, and when solicitation documents were not being published on the Government of Canada’s buy and sell website, PSPC engaged the domestic and international supply communities through other means.
Notably, a call to action was posted on the buy and sell web page from March 12 to July 10, 2020, to seek information on the ability of suppliers to provide emergency products and services. More than 26,000 unique responses were received, including nearly 17,000 from Canadian suppliers.
Now that we are in the next phase of the response for COVID-19 related procurements, the priority is competitive procurement processes and posting solicitation documents on the buy and sell web page. Competitive procurements for goods such as non-medical masks, face shields, nitrile gloves, and gowns have received hundreds of bids.
For each procurement, product compliance is reviewed against the technical specifications released by the World Health Organization (WHO) and by the PHAC technical team. PHAC has implemented a robust quality assurance program. Samples are being assessed before production or delivery begin then again once they are delivered to PHAC and prior to distribution to provinces and territories.
Baylis Medical Company
Background
Baylis Medical Company is a Canadian corporation that develops and distributes high-technology products used to treat patients in cardiology, radiology and minimally invasive spine procedures.
Note
For messaging concerning the FTI contract for the procurement of ventilators, please see the question period note on ventilator procurement.
Contract with the Build in Canada Innovation Program
On November 29, 2017, Baylis was awarded a research and development contract for its AnchorKnot Tissue Approximation Kit. The AnchorKnot Tissue Approximation Kit is a set of surgical spinal devices that enable orthopedic surgeons and neurosurgeons to perform herniated disc repair for the lumbar spine. The contract value is $374,288.29 CAD.
Baylis was awarded this contract under the Build in Canada Innovation Program (BCIP), which was a competitive first purchase program offered by PSPC with a mandate to bolster Canadian innovation and promote economic growth through the purchase and testing of late-stage innovations in federal organizations. The BCIP was consolidated into Innovation, Science and Economic Development Canada’s Innovative Solutions Canada in spring 2018.
Baylis’ AnchorKnot tissue approximation kit pre-qualified for the BCIP under call for proposals 007, which was published on January 11, 2017 and remained open until May 28, 2018, with continuous intake of proposals. Of the over 1100 proposals submitted against BCIP Call 007, 260 proposals were prequalified, and to date, 195 contracts have been awarded.
All proposals were evaluated against the same criteria, which addressed innovation and readiness, commercialization and merits of the proposed test plan. The evaluation team was composed of the National Research Council—Industrial Research Assistance Program (NRC-IRAP), PSPC and/or subject matter experts from other government departments.
ISED is acting as the testing department for the innovation in partnership with Toronto’s Sunnybrook Hospital. The contract was set to expire on December 30, 2020, however, due to the COVID-19 pandemic affecting access to hospitals, final training with the innovation has been slightly delayed. As a result, the contract end date has been extended to November 30, 2021.
Stanfield’s Limited fact sheet
Based in Truro, Nova Scotia, Stanfield’s Limited is an underwear manufacturer that has been in business since 1856. Before the pandemic hit, it had a workforce of approximately 200 employees.
In the early days of the pandemic, accessing personal protective equipment, including gowns, proved to be challenging as demand far exceeded the available supply. As a result, Public Services and Procurement Canada worked with Innovation, Science and Economic Development Canada to identify reliable Canadian manufacturers.
On April 5, 2020, Stanfield’s Limited was awarded a sole-source contract, valued at $27,911,000.00, for the production of an initial 2.6 million gowns, which have been delivered.
The government put out a new tender in October 2020 and 71 companies bid on the tender as part of the competitive bidding process.
Stanfield’s Limited also submitted a proposal in response to this request for proposal limited to Canadian manufacturers and the company was shortlisted to submit a sample to assess the design, fit, overall feel, noise and electrostatic qualities of the proposed gowns.
[Redacted]
Personal protective equipment logistics fact sheet
Transportation services
CargoJet
On April 2, 2020, Public Services and Procurement Canada entered into a task-based emergency services contract with CargoJet for charter airline services. The contract provides for the transport of personal protective equipment and related supplies to Canada from Asia.
As of March 3, 2021, CargoJet has flown a total of 95 chartered flights carrying PPE to Canada.
CargoJet offers reliable, regular flights and good value in comparison to prices available from international carriers. The CargoJet contract has a term to October 31, 2021, and could be used for approximately 12 more flights within its current limitation of expenditure.
Air Canada
On April 2, 2020, PSPC entered into a task-based emergency services contract with Air Canada for charter airline services. The contract provides for the transport of PPE and related supplies to Canada from Asia.
As of March 3, 2021, Air Canada has flown 23 chartered flights carrying PPE to Canada.
Air Canada continues to offer a consistent and reliable source of supply and good value in comparison to prices available from international carriers. The Air Canada contract has a term to October 31, 2021, and could be used for approximately 10 more flights within its current limitation of expenditures.
Purolator
Purolator was previously used by the Public Health Agency of Canada to transport PPE from CargoJet or Air Canada airport facilities to various warehouses used by PHAC or its partners, as well as to deliver PPE to provinces and territories.
Freight forwarding services
Bolloré
At the end of March 2020, PSPC entered into a contract with Bolloré Logistics Canada Inc. (Bolloré) using established emergency contracting authorities to provide urgent logistics and transportation services related to the procurement of PPE and medical supplies from Asia.
Bolloré is on a standing offer with the Government of Canada for freight and cargo services and was selected due to its previous experience providing logistics services to Canada and its significant footprint in China. The decision was based on minimizing risks and on the urgency of the requirement.
The Bolloré contract has a term to October 31, 2021.
The Bolloré contract has almost reached its limitation of expenditure and no new tasks for new services are planned to be issued to Bolloré. There is sufficient funding to complete the issued but uncompleted tasks.
Under this contract, Bolloré is currently storing 12 million gowns. The move of these gowns to other PHAC storage facilities has been initiated and is expected to be completed by the end of May 2021. The Bolloré contract does not provide committed warehouse space for a given period but rather provides transitional space, as-and-when required, and if available. The contract allows the flexibility for additional space to be provided, if needed.
Overseas Express Consolidators
In June 2020, PSPC issued a competitive contract to Overseas Express Consolidators (OEC) Montreal Inc. as our second third-party logistics provider. This contract provides for the same suite of services currently being provided by Bolloré Logistics Canada Inc.
The OEC contract has a term to March 31, 2022.
The OEC contract currently serves as the primary source for international transportation services for PPE. The contract has a sufficient limitation of expenditure to continue these services until March 31, 2022 at the current rate of usage.
OEC currently provides access to a dedicated 100,000-square-foot warehouse in Vancouver until July 2021. This warehouse is currently full. The OEC contract does not provide additional, committed warehouse space for a given period but can be used to acquire transitional space, as-and-when required, and if available. The contract allows the flexibility for additional space to be provided, if needed.
Warehousing and distribution services
Amazon
On April 1, 2020, PSPC signed, on behalf of PHAC, a 1-year contract with Amazon to use their online technology for provinces to order material directly. Canada Post and Purolator were delivering the equipment to provinces and territories as a subcontractor of Amazon.
This agreement was primarily put in place for Amazon’s easy-to-use online interface which allowed individual health establishments to order supplies directly from PHAC. As provinces and territories requested for PHAC to deliver the supplies directly, rather than awaiting orders from them, the requirement for getting PPE to the provinces and territories evolved beyond what was covered in the Amazon agreement.
Groupe Robert Inc.
On June 13, 2020, PSPC awarded a 6-month contract to Groupe Robert Inc. for inventorying, transportation and warehousing in the [Redacted] and the [Redacted]. Groupe Robert was identified as the best firm for this work based on their response to the letter of intent (LOI)/request for information (RFI) for a long-term multimodal logistics solution for PHAC.
In December 2020, the contract was extended to March 31, 2021, to allow additional time needed to transfer the PPE from the warehouses to provinces and territories or other PHAC storage facilities.
This contract provided 215,000 square feet of warehousing space in the [Redacted] and 150,000 square feet in the [Redacted] transportation capabilities and a warehouse management system capability. Transition of PPE product out of these warehouses to provinces or other PHAC facilities has been completed and the contract has come to its end.
On July 31, PSPC entered into a separate 2-year contract with Groupe Robert to provide PHAC with logistic services to manage and equip a 350,000 square feet warehouse that PHAC has separately leased.
The warehouse had previously reached its 20,000 pallet capacity but the completion of installation of additional racking, in March 2021, has increased the capacity to 35,000 pallets. Shipments to that location are now increasing.
Urban Valley Transport Ltd.
On July 28, 2020, PSPC awarded a 6-month contract to Urban Valley Transport Ltd. for short-term warehousing in various locations across Canada. In December 2020, PSPC exercised the option to extend the contract to January 28, 2022, to allow additional time needed to transfer the PPE from the temporary storage warehouses to provinces or other PHAC storage facilities.
The Urban Valley contract does not provide committed warehouse space for a given period but rather provides transitional space, as-and-when required, and if available. The contract allows the flexibility for additional space to be provided, if needed.
Metro Logistics Inc.
On September 11, PSPC awarded a 2-year competitive contract to Metro Logistics Inc. of Montreal, as a long-term, multimodal logistics solution for PHAC, to inventory, warehouse and distribute PPE [Redacted] and [Redacted], as well as preparing and delivering PPE to all provinces and territories.
Under this contract, PHAC is being provided with:
- 2 dedicated warehouses in the [Redacted] with 463,000 square feet
- 2 dedicated warehouses in the [Redacted] with 174,000 square feet
- 2 dedicated warehouses in [Redacted] with 322,000 square feet
Under this contract, hand sanitizer, which requires special handling procedures given it is a hazardous product, is being stored at subcontractors’ facilities in each region. In total, warehousing capacity of approximately 358,000 square feet is available at such subcontractors’ facilities. To date, the various warehouses are approximately 85% full. This contract also provides national distribution to all provinces and territories and a warehouse management system capability to facilitate the reporting and control of material.
Leases
PSPC initially entered into short-term leases for PHAC for 2 warehouses in [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. These warehouses are currently relatively full, but some further material continues being delivered to them.
An additional facility has been leased to supplement these leases with a start date of January 1, 2021, for a fixed period of 8 years. This warehouse offering 127,000 square feet of space is under renovation and has not yet started receiving material.
A 350,000-square-foot facility in [Redacted] Ontario was also leased for 3 years until July 2023, with an additional 1-year option until July 2024.
The warehouse had previously reached its 20,000 pallet capacity but the completion of installation of additional racking, in March 2021, has increased the capacity to 35,000 pallets. Shipments to that location are now increasing.
A warehouse in [Redacted] is being used by the [Redacted] to store surplus equipment and other response related materials that [Redacted] does not need to access frequently. This site provides a long-term solution for 73,000 square feet of warehousing space, which is available immediately. Current usage is at 25%.
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