Procurement: Standing Committee on Government Operations and Estimates—June 2, 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 procure COVID-19 vaccines and related supplies.

Note

All questions regarding the rolling regulatory review of vaccines would be directed to Health Canada.

Suggested response

If pressed on the details of advance purchase agreements:

If pressed on contract clauses and intellectual property

If pressed on spending on vaccines:

If pressed on the price of AstraZeneca’s vaccine:

If pressed on the executive order in the US:

If pressed on European Union (EU) export controls:

If pressed on new variants and boosters:

If pressed on contractual implications of off-label use:

If pressed on delivery of AstraZeneca doses:

If pressed on AstraZeneca doses offered by the United States:

If pressed on delivery of Johnson & Johnson:

If pressed on supply of contaminated vaccines from Emergent facility in US:

If pressed on accelerated delivery of doses:

If pressed on Pfizer supply:

If pressed on delay of Moderna shipment:

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

If pressed on India’s export ban on vaccines (Serum):

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

If pressed on impact of India’s export ban on AstraZeneca doses from COVAX:

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

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

If pressed on provincial and territorial collaboration:

Note

For all therapeutic solutions, questions about allocation and distribution should be directed to PHAC.

If pressed on the Remdesivir therapeutic:

If pressed on Roche’s Tocilizumab therapeutic:

If pressed on the purchase of Eli Lilly’s antibody treatment:

If pressed on critical drug shortages:

If pressed on national security exception (NSE) contracting:

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

If pressed on the purchase of dry ice:

If pressed on syringes:

Background

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

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:

Procuring vaccines for COVID-19

Public Services and Procurement Canada is working with the Public Health Agency of Canada, 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.

Table 1: Vaccine agreements with suppliers
Supplier Doses Authorized Anticipated delivery start
AstraZeneca 20 million AstraZeneca authorization March 2021
Verity Pharmaceuticals Canada Inc./Serum Institute of India (in collaboration with AstraZeneca Canada Inc.) 2 million AstraZeneca authorization March 2021
Moderna 44 million Moderna authorization December 2020
Pfizer Up to 76 million Pfizer authorization December 2020
Johnson & Johnsontable 1 note 1 Up to 38 million Johnson & Johnson authorization April 2021
Medicago Up to 76 million   Pending Health Canada authorization
Novavax Up to 76 million   Pending Health Canada authorization
Sanofi and GlaxoSmithKline Up to 72 million   Pending Health Canada authorization

Table 1 Note

Table 1 Note 1

All of the vaccine candidates for which Canada has agreements are a 2-dose vaccine, with the exception of the Johnson & Johnson candidate, which is currently expected to be a 1-dose vaccine.

Return to table 1 note 1 referrer

Future vaccine supply

The Government of Canada is securing access to safe and effective COVID-19 vaccines now and into the future. Canada has secured COVID-19 vaccines from Pfizer for 2022 and 2023, with options to extend into 2024.

In addition to providing booster vaccine doses, the agreement provides flexibility to procure Pfizer’s new COVID-19 vaccine adaptations, such as those to protect against mutations or variants of concern and vaccines developed for younger populations.

As part of the agreement with Pfizer:

These doses are in addition to the 48 million doses of Pfizer-BioNTech’s COVID-19 vaccine arriving before the end of September 2021 as part of Canada’s existing agreement.

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:

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:

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:

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 PHACPSPC 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:

News

Related links

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

At the outset of the COVID-19 pandemic, the Government of Canada took an aggressive procurement approach to fulfil immediate, emerging and long-term medical supply requirements. This included:

This was over and above efforts taken by provinces and territories to secure their own supply.

The Government of Canada has now secured over 2.7 billion pieces of PPE. The quantities ordered for PPE 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.

Thanks to this aggressive approach, orders have been fulfilled for all bulk purchases of:

For some commodities, quantities continue to be shipped. This information is tracked in the  Items ordered and received (information as of May 25, 2021).

Return to competitive procurement

The Government of Canada has returned to the use of competitive bidding processes to secure the goods and services required to meet Canada’s evolving needs in response to COVID-19, where circumstances permit and the needs are not urgent. This approach is in line with the commitment of Public Services and Procurement Canada to open, fair and transparent procurement processes.

In the early days of the pandemic, openly competed contracting tools, such as standing offer agreements, were used to acquire the much-needed PPE. In the fall of 2020, the federal government returned to the use of competitive bidding processes, where circumstances permit and the needs are not urgent. Competitions 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.

Overview of purchases and deliveries

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

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

The “quantities ordered” may fluctuate because of new contracts, contract amendments and cancellations based on the Public Health Agency of Canada’s requirements.

“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.

As the Government of Canada has received a majority of the PPE ordered to date, including all quantities ordered for face shields and hand sanitizer, this table will be updated on a monthly basis.

Table 2: Items ordered and received (information as of May 25, 2021)
Itemtable 2 note 1 Quantities ordered Quantities received
Gowns 153,087,049 133,653,361
Gloves (pairs) 1,585,784,378 916,190,905
Surgical masks 450,780,530 410,161,780
Non-medical masks: Face coverings 77,383,284 68,744,884
Non-medical masks: Cloth masks 10,520,600 10,224,200
N95 respiratorstable 2 note 2 190,640,900 123,276,536
Ventilators 40,547 27,708

Table 2 Notes

Table 2 Note 1

Items listed include selected personal protective equipment and supplies for the healthcare sector. Public Services and Procurement Canada is also purchasing non-medical items, such as coveralls, boot covers and latex gloves.

Return to table 2 note 1 referrer

Table 2 Note 2

This includes N95, 95PFE, KN95, and FFP2 respirators. N95 respirators are certified by the National Institute for Occupational Safety and Health (organization based in the United States), the 95PFE are the Canadian equivalent, the KN95 are the Chinese equivalent, and the FFP2 are the European equivalent.

Return to table 2 note 2 referrer

Notes

Additional 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 COVID-19 contracting information page.

COVID-19 contract information

Working with Canadian companies

Public Services and Procurement Canada, 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

Securing COVID-19 rapid tests

COVID-19 testing technologies are advancing as the pandemic continues. The Government of Canada continues to pursue additional agreements to secure access to the most promising candidates.

Rapid test agreements

Public Services and Procurement Canada, on behalf of the Public Health Agency of Canada, has purchased millions of point-of-care and antigen rapid tests. These agreements will help to increase COVID-19 testing capacity with authorized, proven and effective technologies.

Table 3: Rapid test agreements with suppliers
Supplier Tests secured Name of test
Abbott Rapid Diagnostics ULC Up to 7.9 million ID NOW rapid tests
Abbott Rapid Diagnostics ULC Up to 23 million Panbio COVID-19 antigen rapid tests
BD (Becton, Dickinson and Company) 11.6 million BD Veritor SARS-CoV-2 antigen tests
Biomérieux Canada Up to 699,750 RP2.1 Diagnostic test kits
Inter Medico 144,980 Cepheid's GeneXpert rapid tests
Quidel Sofia 850,000 COVID-19 rapid tests
Delivery schedules

Delivery schedules vary based on the specific agreements. All deliveries do not arrive at the same time. They continue to ship on a regular basis, on the schedule outlined in each contract.

Request for standing offer

To continue to increase national testing and screening capacity with authorized, proven and effective technologies, the Government of Canada has issued a request for standing offer (RFSO) for the supply of Health Canada-authorized COVID-19 rapid tests.

On behalf of Health Canada, PSPC will establish standing offers with qualified companies for the supply and delivery of rapid tests on an as-needed basis. These standing offers will help ensure a reliable supply chain and help the federal government respond to increased testing demands in the future. Rapid tests procured through this RFSO will be distributed to provinces and territories, as well as federal organizations with workplace screening requirements.

This RFSO is a way of ensuring the Government of Canada can secure rapid tests for immediate needs without delay. At this time, the RFSO includes antigen rapid tests. As needs for other types of rapid tests emerge, the RFSO can be expanded to procure other types of rapid tests for the Government of Canada as well.

Types of rapid tests

Rapid tests distributed in Canada

The Public Health Agency of Canada distributes rapid tests to the provinces and territories, other government departments and remote, northern and Indigenous communities. Additional tests are also distributed in response to “hotspots” to help the provinces and territories manage outbreaks.

Rapid tests distributed in Canada and shipped to provinces and territories

Related links

Rapid COVID-19 testing

Context

COVID-19 testing technologies have advanced quickly. On behalf of the Public Health Agency of Canada, Public Services and Procurement Canada continues to explore additional agreements to secure access to rapid tests.

Suggested response

If pressed on Dynacare:

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

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

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

If pressed on distribution:

If pressed on Spartan:

If pressed on Switch Health:

If pressed on Shoppers Drug Mart:

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 HC 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 HC 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 4M tests and 4572 analyzers.

On March 3, 2021, HC 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, 2020, PSPC 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 HC approval.

On October 29, HC 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. HC approval was pending results of this clinical trial.

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

On January 22, 2021, HC approved the Spartan COVID-19 System, a rapid, on-site molecular diagnostic test for the qualitative detection of SARS-CoV-2.

On March 12, 2021, a contract amendment was issued to update the test requirement and the delivery schedule allowing Spartan to begin delivery.

On March 31, 2021, PSPC sent a pre-notice of termination for default letter to the company following concerns with inconclusive results and contractual obligations not being met. On April 14, 2021, Spartan provided detailed corrective measures and an implementation plan to address these issues. Further discussions between Spartan, PHAC/HC, Science and Economic Development Canada (ISED) and PSPC are ongoing.

Delivery of the Spartan tests is currently on hold due to a type 3 recall in combination with a stop in production and sale of these products. Spartan is currently investigating a higher than expected rate of inconclusive test results. At present, the root cause of the issue is yet to be determined.

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 HC.

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 (144,980 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. A total of 37,375,030 swabs have been received so far and 26,296,298 have been deployed.

Automated systems have been procured and installed to increase testing capacity in surge labs located in Winnipeg, Guelph, Ottawa and Lethbridge. In addition, 4 mobile trucks have been purchased and received to increase testing capacity in hot spots and where there are outbreaks.

Distribution

PSPC is supporting HC in the provision of test kits to organizations leveraging the Essential Services Contingency Reserve (ESCR) electronic platform, warehousing and logistics.

Organizations are registered and approved by HC using the ESCR case management system and order intake tool.

After orders are placed, they are fulfilled by the SCI warehouse, with Day & Ross providing expedited ground transportation for deliveries.

As of May 7, 2021, PSPC has shipped approximately 965,875 Abbott Panbio antigen tests and 134,640 Becton-Dickinson Veritor antigen tests from the SCI warehouse to companies in critical sectors.

Ventilator procurement

Context

Recent questions have been raised about domestic contracting for ventilators.

Suggested response

If pressed on which companies will be affected:

If pressed on whether FTI was affected:

If pressed on FTI:

If pressed on pricing:

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

If pressed on the complaint by Ocalink before the Canadian International Trade Tribunal (CITT):

Background

The Canadian International Trade Tribunal has received a complaint from Ocalink Technologies Inc. (Vancouver, British Columbia) concerning procurement of medical ventilators by PSPC on behalf of PHAC. Ocalink alleges that the government applied undisclosed evaluation criteria and did not conduct the evaluation in accordance with the stated evaluation criteria. Ocalink also alleges that the evaluators were biased. On December 14, 2020, the tribunal made a decision to conduct an inquiry into the complaint. On February 24, 2021, CITT dismissed Ocalink’s complaint.

Note that through Access to Information and Privacy (ATIP) A-2020-00189, related to a briefing note on contracts for ventilators, the number of units purchased and the value of the contract with Vexos was released. Since PSPC is in discussion with multiple ventilator providers, the numbers of units and the value are both subject to change.

Essential Services Contingency Reserve

Context

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

Public Services and Procurement Canada is implementing changes to the eligibility criteria for the ESCR to increase the number of organizations that may apply and to support targeted groups by providing access to the PPE they need to help keep Canadians safe.

Suggested response

If pressed on logistics and distribution:

If pressed on contracts issued to operationalize the ESCR:

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

If pressed on eligibility for the ESCR:

If pressed on cost-recovery:

If pressed on inventory:

Background

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

As of May 5, 2021, the ESCR has received a total of 272 requests for registration from the following sectors:

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.

PSPC is implementing changes to the eligibility criteria for the ESCR to increase the number of organizations that may apply, and support targeted groups by providing access to the PPE they need to help keep Canadians safe.

Applications are assessed in 2 steps, including eligibility screening, and an assessment against the application requirements. During the application process, PSPC conducts initial screening to review the completeness, accuracy, and basic eligibility of applications, before either approving the application or sending it to lead departments to make a recommendation to endorse or reject the application.

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.

Integrity in federal procurement during the COVID-19 pandemic

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 equiptment from around the world. Questions may arise as to the measures that Public Services and Procurement Canada has in place to protect the integrity of the federal procurement system during this period.

Suggested response

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 ended in December 2020 in accordance with the terms of the agreement and the final disposition of criminal charges facing the supplier and relevant affiliates. On April 20, 2021, it was announced that the World Bank had granted an early lifting of all sanctions previously imposed on SNC-Lavalin Group and its affiliates. The debarment was imposed in 2013 for a period of 10 years but could be reduced to 8 years if the companies complied with all conditions of the agreement. The company and its affiliates will now be able to bid, win and carry out work on projects financed by the World Bank and the other multilateral development banks.

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

If pressed on the risk assessment:

If pressed on global supply chains:

If pressed on procurements linked to Xinjiang, China:

If pressed on lack of compliance monitoring for existing measures:

Background

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 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.

Measures to address the risk of forced labour from global supply chains include:

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 (national strategy), to ensure that federal suppliers comply with international labour and human rights. As part of the national strategy, PSPC is leading the following initiatives:

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

Note

All questions regarding the import prohibition of goods that are mined, manufactured or produced by forced labour should be directed to the Canada Border Services Agency.

On November 30, 2018, Canada, the United States and Mexico signed the new Canada-United States-Mexico Agreement (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 Canada Border Services Agency (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 has evolved over the course of the COVID-19 pandemic.

Suggested response

Background

Table 4: Items ordered and received (information as of April 26, 2021)
Item Quantities ordered Quantities received
Face shields 60,324,810 60,324,810
Gloves (pairs) 1,595,569,078 887,256,655
Gowns 153,087,049 131,713,926
Hand sanitizer (litres) 20,646,000 20,646,000
N95 respirators 190,640,900 121,387,776
Non-medical masks: Face coverings 77,383,284 68,476,084
Non-medical masks: Cloth masks 10,520,600 10,224,200
Surgical masks 450,780,530 404,455,030
Ventilators 40,547 27,388

Medical gowns

The surge in global demand for personal protective equipment and medical supplies due to the pandemic resulted in a highly-competitive marketplace and volatile supply chains. An urgent and accelerated timeline for contracting were required in many cases. During the period when solicitation documents were not being published on the Government of Canada’s buy and sell website, Public Services and Procurement Canada 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. PSPC has signed nearly 150 contracts with companies as a result of the call to action. The majority of these contracts were awarded to Canadian suppliers.

Following the call to action, PSPC awarded contracts to 23 suppliers for the supply of more than 133 million medical gowns of which more than 131 million have already been delivered.

Below are the suppliers that received at least one contract following the call to action (not domestically made):

At the beginning of the pandemic, the global demand was very high. For this reason, PSPC worked with Innovation, Science and Development Canada (ISED) and Canadian manufacturers to issue contracts for gowns made domestically to ramp up production.

Below are the suppliers that received at least 1 contract following the call to action (domestic manufacturers):

Request for Proposal for disposable medical isolation gowns: October 2020

PSPC has worked hard to ramp up procurement efforts domestically and abroad to diversify its supplier base. Now into 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.

In the fall of 2020, the Public Health Agency of Canada identified a requirement for medical isolation gowns (level 2, level 3 and level 3 emergency gowns).

On October 30, 2020, PSPC published a request for proposal for disposable medical isolation gowns, on behalf of PHAC, to identify potential domestic suppliers that could meet Canada's current and future public health and pandemic needs.

Although the RFP requested 50 million gowns at the time of publishing, following Public Health Agency of Canada evaluation of inventory and client requirements, it was determined that the revised requirement was for 20 million gowns only.

The RFP was only open to Canadian manufacturers that are required to do all the cutting, sewing and assembly in Canada. They are also required to identify sub-contractors, as well as all locations where goods would be manufactured.

PSPC received 71 bids which underwent a rigorous evaluation against a number of factors including the requirements identified by PHAC, as well as technical and delivery details and proposed price.

In February 2021, PSPC awarded contracts to 9 Canadian manufacturers:

These contractors must deliver a minimum of 24,000 gowns within 60 days of contract award to demonstrate guaranteed capacity. All gowns must be delivered before the end of September 2021.

In total, PSPC awarded 36 contracts to 27 suppliers for the supply of medical gowns, of which 26 contracts are with domestic manufacturers. To date, Canada has received over 85% of overall gown contracts that have been ordered on behalf of PHAC.

Procurement of N95 masks

Context

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

Suggested response

If pressed on fit testing (3M Canada):

If pressed on fit testing (Medicom):

If pressed on litigation with different companies:

Background

PSPC has procured 307,707,540 N95 masks on behalf of the Government of Canada. Of this total quantity, 281,635,540 were procured for the Public Health Agency of Canada, 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 118,559,016 masks.

PSPC awarded a 10-year contract to Medicom for domestic production and distribution of surgical masks and N95 masks for PHAC. Production ramp up for N95 masks began in August 2020. In addition to the 8,214,500 masks received to date, the Government of Canada anticipates receiving, on average approximately 3 million masks per month for the next year.

In November 2020, PSPC entered into a contract directly with 3M Canada to purchase domestically-produced N95 masks. Under the contract, 3M will provide 30 million N95 masks in year 1, with 25 million annually over contract years 2 to 5 (April 2021 to March 2026). Starting April 1, 2021, the Government of Canada will receive approximately 3 million masks per month for the next year.

3M confirmed that the Brockville plant is fully operational as of April 1, 2021.

Tango Communications

Context

Last spring, the Government of Canada awarded a procurement-related contract to Tango Communications for KN95 respirators. Upon delivery, it was determined that a significant percentage of the 11 million masks did not meet the quality assurance test standards.

Suggested response

If pressed on use of supplies:

Background

In March 2020, the company responded to the Government of Canada’s proactive call to action on buyandsell.gc.ca, which asked suppliers to come forward with products or services they could offer to support Canada’s response to COVID-19, and to expand the federal government’s supplier network for these life-saving goods in the face of a surge in global demand.

Subsequently, on behalf of the Public Health Agency of Canada, Public Services and Procurement Canada awarded the company 3 contracts totalling approximately $111 million for 37 million KN95 respirators, through emergency authorities within the department.

A significant percentage of the approximately 11 million KN95 respirators initially received in Canada from the supplier did not meet the requirements set out in the contracts.

As a result, in early May 2020, Canada took steps to suspend further shipments of KN95 respirators from the supplier. None of the KN95 respirators that failed testing were distributed for medical use.

Following the suspension of shipments, the government began working with the company to seek a resolution. Despite these efforts, the supplier has been unable to consistently provide respirators that met the requirements of the contracts.

As the company has been unable to do so, PSPC has terminated the 3 KN95 respirator contracts with the company for default, effective Monday, May 3, 2021.

Switch Health Holdings Inc.

Context

In January 2021, Public Services and Procurement Canada issued a notice of proposed procurement (increased testing capacity for COVID-19 (H1051-204342/A)), which closed on January 28, 2021, for additional capacity to collect and process samples from predominantly asymptomatic patients by polymerase chain reaction (PCR) test.

This additional capacity can be deployed for federal and provincial surge support, as well as testing at ports of entry and during quarantine periods. A qualification-based selection methodology was used for the selection process in order to evaluate suppliers based on technical qualifications. Under this approach, qualified suppliers work with the Public Health Agency of Canada to develop the specific scope of work. Once a specific scope of work is identified and fully defined, qualified suppliers would then be required to fully substantiate their price proposal.

A total of 19 proposals were received and following the technical evaluation, 8 suppliers were considered qualified, including Switch Health Holdings Inc.

As of February 22, 2021, travellers entering Canada are required to comply with the Emergency Order under the Quarantine Act, minimizing the risk of exposure to COVID-19 in Canada order (quarantine, isolation and other obligations). All travellers 5 years of age or older are required to undergo 2 COVID-19 molecular tests in Canada, 1 test upon arrival to Canada and a post-arrival test during the period of quarantine.

Switch Health Holding is responsible for:

Selection

Following the technical evaluation of the request for proposals (increased testing capacity for COVID-19 (H1051-204342/A)), Switch Health Holdings Inc. was selected for this requirement for the following reasons:

Switch Health Holdings Inc. had demonstrated experience and capacity, as the firm had collected over 100,000 specimens for COVID-19 testing from June 2020 to December 2020. In its proposal to support Canada’s testing and screening capacity, Switch Health Holdings Inc. demonstrated extensive experience and a robust supply chain for personal protective equipment and media, and identified at least 3 supplier networks they have access to, including international suppliers. Based on its proposal and its past partnership with Ontario Health, Switch Health Holdings Inc. was considered as the best qualified supplier to deliver testing of travellers entering Canada across the country.

Background

Switch Health Holdings Inc. is a Toronto-based healthcare company dedicated to providing better decentralized patient care. Formed in early 2017, it established itself as a leader in connected disease management such as working with leading pharmaceutical companies to assist in the development and distribution of modern connected diabetes management and diagnostic devices. More recently, it has broadened its scope of diagnostic services and expanded its deployment of broader diagnostic devices and the secure digital platforms that it requires.

Switch Health also provided PCR testing services for voluntary and mandatory programs implemented by Ontario at Greater Toronto Area Airport (GTAA). More than 50,000 PCR tests were performed as part of these 2 initiatives.

Contract

On February 20, 2021, a contract was awarded to Switch Health Holdings Inc. with a total possible value of up to $92,547,434.29 for the period of February through the end of April to provide COVID-19 testing services for international travellers entering Canada. The contract was later amended on March 27, 2021 to $95,444,410.68 to add testing support for defined populations in Ontario, such as temporary foreign workers and asylum seekers.

As the initial contract period from February through the end of April came to a close, on April 29, 2021, the Government of Canada extended its agreement with Switch Health until July 31, 2021, bringing the total possible value of the contract to $183,800,189.89. This latest amendment is a continuation of the COVID-19 testing services Switch Health has been providing for travellers entering Canada at designated borders, including dedicated testing support for defined populations in Ontario. PHAC has raised concerns and issues with Switch Health performance. PHAC, PSPC and Switch are all working together to address those issues.

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. The MHU at Sunnybrook Health Sciences Centre in Toronto was turned over to the hospital on April 5. The second MHU will be deployed to Hamilton Health Sciences in Hamilton.

Suggested response

If pressed on timing:

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 mobile health units. 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.

Cost

Two task authorization contracts for up to $150M were issued to each of the contractors. This type of contract establishes a maximum expenditure and requires one or more task authorizations in order to actually incur costs. To date, task authorizations with an amount totalling approximately $138.6M (including taxes) have been issued to Weatherhaven Global Solutions and approximately $80.9M (including taxes) to SNC-Lavalin PAE.

With these authorizations, both contractors have developed designs, organized project management offices, bought medical equipment and consumables and are maintaining readiness for operations which includes doing required maintenance to keep the equipment ready for operations, warehousing of the equipment and structures, etc.

Weatherhaven has 2 MHUs ready for deployment in addition to the one currently up at Sunnybrook. This model is completely self-sufficient and can be used within a host building or independently.

SNC-Lavalin PAE has 1 MHU solution available for deployment to a building of opportunity. SNC-Lavalin PAE also has procured and stored medical equipment and consumables to supply up to a total of 5 MHUs. Some equipment has already been transferred to PHAC for distribution to provinces.

Table 5: Approximate component costs
Equipment Cost
Structures/tents (emergency intake area, central corridor, 2 intensive care unit wards (total 20 patients), 8 regular wards (total 80 patients), staff corridor, staff washrooms, staff area, clinical area, administration area, water buildings) [Redacted]
Oxygen system for ICU [Redacted]
Utility infrastructure (3 month lease) [Redacted]
Medical devices and consumables [Redacted]
Total components (taxes extra) [Redacted]

The following costs relate to a deployment. Costs will vary based on location. For the example below, the approximate costs of the Sunnybrook deployment are used as an example.

Table 6: Approximate costs of the Sunnybrook deployment
Deployment Cost
Deployment from warehouse and set-up [Redacted]
Monthly operating costs [Redacted]
Decontamination, tear down and shipping back to warehouse [Redacted]

How the contractors were selected

With the COVID-19 pandemic affecting the world class medical infrastructure across the world (for example Italy and New York City), it became evident that Canada needed to prepare for the worst case scenario. It was apparent that waiting to start development of a MHU when a province or territory declared that they were overwhelmed and needed federal assistance would be too late. Immediate ordering of critical medical equipment and the development of a design for a workable MHU was required. Canada therefore went to 2 contractors known for their strong logistical capabilities and proven history to carry out this kind of work.

The joint venture SNC-Lavalin PAE Inc. was identified due to their existing and past contracts in providing logistical support for building and maintaining military camps during military deployments (for example Kandahar, Afghanistan).

Weatherhaven Global Resources Ltd. was selected because of its existing contract to provide similar types of structures to the Department of National Defence (DND) for mobile headquarters and Weatherhaven’s association with ATCO Ltd. and its strong logistics capability.

Although the 2 firms were competing against each other through a request for proposal process, it was decided to award a contract to each to allow different designs, greater capacity and back-up.

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 in bulk quantities to protect Canadians against COVID-19. These efforts have enabled us to ensure that Canadian frontline 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 in partnership with Innovation Science and Economic Development Canada, 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 frontline 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 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 $7.6 billion as of March 31, 2021, 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 40% 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 is delivering on government commitments to modernize and simplify procurement.

Suggested response

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

If pressed on the Policy on Social Procurement:

If pressed on Indigenous procurement:

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

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 Organisation 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 CanadaBuys, 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:

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 issued 2 National Master Standing Offers (NMSOs) for security screening equipment (x-ray machines and walk-through metal detectors) that did not include a security requirement. Global Affairs Canada (GAC) intended on using the established NMSOs to replace its existing fleet of security screening equipment for use in non-operational areas in Canadian missions abroad. The NMSOs were issued to Rapiscan Systems Inc. of California, USA for the walk-through metal detectors and to Nuctech Company Limited of Beijing, China, a Chinese state-owned company, for the x-ray machines.

It is the issuance of the NMSO to Nuctech Company Limited that created media attention.

Suggested response

If pressed on awarding the NMSO to Nuctech:

If pressed on the Integrity Regime:

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

Background

The requirement was to establish 2 NMSOs 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 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.

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.

Document navigation for "Standing Committee on Government Operations and Estimates: June 2, 2021"

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