Diversity in procurement: Standing Committee on Government Operations and Estimates—June 2, 2021
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Indigenous procurement process
Context
Public Services and Procurement Canada (PSPC) is delivering on government commitments to increase the participation of Indigenous businesses in federal procurement.
Suggested response
- Increasing the participation of Indigenous businesses in federal procurement is an important part of the government’s agenda to generate economic opportunity for Indigenous people
- We are working with Indigenous Services Canada and the Treasury Board of Canada Secretariat to create more opportunities for Indigenous businesses to succeed and grow, by creating a new target to have at least 5% of federal contracts awarded to Indigenous businesses
- As we move forward, we will continue to promote increased participation of Indigenous businesses in the federal procurement process
- Over the last 3 fiscal years and in its role as a common service provider, PSPC awarded an annual average of $442 million through 1,422 documents to Indigenous suppliers. This represents 2% of the value of PSPC’s Acquisitions Program total awarded documents
If pressed on Indigenous participation in federal procurement for COVID-19:
- to date, our focus has been on putting personal protective equipment in the hands of front line health employees as quickly as possible
- as part of these efforts, we have awarded a number of contracts to Indigenous businesses worth millions of dollars
- on June 4, 2020, my department launched a request for proposal (RFP) to solicit interest strictly from Indigenous businesses to provide disposable non-medical face coverings
- we continue to increase the use of Indigenous limited bidding in order to award more contracts to businesses managed and led by Indigenous People
- in August 2020, we signed contracts with 7 Indigenous firms that met the established criteria worth approximately $3 million for a total of 15 million non-medical disposable masks
- in October 2020, we amended one of the contracts to exercise the option to procure an additional 20 million non-medical disposable masks for an additional $2.94 million
- we have also completed another tender for non-surgical cloth face masks. The RFP was issued on June 26, 2020, and was open only to Indigenous businesses. We signed 2 contracts worth approximately $1.5 million with 2 Indigenous firms who will each provide 250,000 non-surgical cloth face masks
- as we move forward, my department will continue to work with other federal organizations and Indigenous businesses and organizations to increase the participation of Indigenous businesses in federal procurement
Background
In response to the COVID-19 pandemic, PSPC has awarded 38 contracts to 30 self-identified Indigenous businesses, collectively worth more than $126 million including for logistics and air charter services, accommodation and cleaning services, information technology (IT) professional services, medical and laboratory supplies, masks, hand sanitizer and thermometers.
PSPC is working actively with Indigenous groups to increase their participation in federal procurement more broadly. This includes ongoing work with the Indigenous Business COVID-19 Taskforce, which brings together numerous Indigenous groups, including the Canadian Council for Aboriginal Business (CCAB), National Aboriginal Capital Corporation Association (NACCA), Inuit Tapiriit Kanatami (ITK) and Pauktuutit Inuit Women of Canada. The taskforce seeks to identify and mobilize Indigenous businesses to provide medical equipment and supplies, including by creating a database of Indigenous businesses. Indigenous Services Canada is the lead department federally, with PSPC supporting the taskforce’s work. PSPC is leveraging the database to increase the participation of Indigenous businesses in federal procurement.
In addition, PSPC works in close collaboration with the Council for the Advancement of Native Development Officers (CANDO), a national Indigenous organization involved in community economic development. The partnership is focused on helping the council and its economic development officers support Indigenous businesses across Canada by providing information, focused access, and services from the Office of Small and Medium Enterprises.
The Minister’s Supply Council includes the CCAB. This council provides the Minister with ideas for strengthening and streamlining the government’s efforts to support essential services organizations in accessing supplies in the context of the COVID-19 pandemic.
In addition, the Minister’s Supplier Advisory Committee contributes to understanding and addressing barriers that smaller businesses face in federal procurement, including those faced by Indigenous-owned businesses. The Canadian Aboriginal and Minority Suppliers Council (CAMSC), represented by its President Cassandra Dorrington, has been an active and contributing member since the Supplier Advisory Committee’s first meeting in 2013.
Supplier diversity
Context
Public Services and Procurement Canada is delivering on government commitments to increase the diversity of bidders on government contracts.
Suggested response
- Increased supplier diversity is an important part of the government’s agenda to generate economic opportunity for under-represented, minority and Indigenous Peoples
- Budget 2021 proposes $87.4 million over 5 years starting in 2021 to 2022, and $18.6 million ongoing to modernize federal procurement and create opportunities for specific communities (for example, Indigenous Peoples, women, racialized Canadians, young people, lesbian, gay, bisexual, transgender, queer and two-spirit plus (LGBTQ2+) Canadians, etc). This includes:
- implementing a program focused on procuring from Black-owned businesses
- continuing to work to meet Canada’s target of 5% of federal contracts being awarded to businesses managed and led by Indigenous peoples
- improving data capture, analytics, and reporting
- incorporating accessibility considerations into federal procurement, ensuring goods and services are accessible by design
- PSPC is modernizing procurement practices to reduce barriers to the participation of under-represented groups in federal procurements and ensure that the federal procurement process remains accessible, including for persons with disabilities
- PSPC is working to create more opportunities for Indigenous businesses to succeed and grow, with a target to have at least 5% of federal contracts awarded to businesses managed and led by Indigenous Peoples. For example, the department has awarded 38 contracts to 30 self-identified Indigenous businesses, collectively worth more than $126 million including for logistics and air charter services, accommodation and cleaning services, IT professional services, medical and laboratory supplies, masks, hand sanitizer and thermometers
- PSPC has developed an action plan to increase the participation of women- owned businesses in procurement
- PSPC is developing a departmental policy and program on social procurement, which will enable the inclusion of socioeconomic outcomes into PSPC procurement
- The department will continue to examine greater opportunities, including the use of targeted approaches, to increase diversity in future procurements to support greater inclusion and representation in federal procurement
If pressed:
- As outlined in the 2020 Fall Economic Statement, Canada’s prosperity depends on ensuring all Canadians have access to the economic tools to build their businesses and access government procurement
- More recently, Budget 2021 proposed to leverage supplier diversity opportunities through domestic procurement, such as running competitions open to businesses run by Canadians from equity deserving groups
- In January 2021, PSPC launched the Black Businesses Pilot (BBP) to open bidding opportunities for small Black-owned or led businesses. The pilot consisted of 12 procurement opportunities, launched in the Quebec, Ontario, Western, Pacific and Atlantic regions, conditionally limited to small businesses owned or led by Black Canadians
- PSPC will assess these pilot procurements, and draw on success and lessons learned, to inform additional targeted initiatives to support opportunities and economic growth for Black Canadian businesses
- PSPC continues to work closely with Black-led organizations, entrepreneurs, and organizations from across Canada to obtain their feedback and learn about their expertise so that future programs will reflect the realities and needs of Black entrepreneurs
- PSPC, through the Office of Small and Medium Enterprises (OSME), provides education and assistance to under-represented groups across Canada, including businesses owned or led by women and Black Canadians, to support their participation to federal procurements. PSPC is designing a coaching service that will take the form of a hands-on curriculum on federal procurement for under-represented entrepreneurs who have previously unsuccessfully bid on government opportunities
If pressed about data collection on diversity in procurement:
- On May 3, 2021, a PSPC Policy on Social Procurement came into effect to enhance data collection with respect to under-represented groups
- The Policy on Social Procurement will provide PSPC with the policy basis to collect personal information on its suppliers (including race, gender, and other intersectional information)
- This will allow PSPC to establish a baseline on the participation of Black suppliers, and other under-represented groups, in federal procurement. It will also allow the department to monitor progress in this area over time
- to ensure PSPC’s data practices align with Treasury Board of Canada Secretariat (TBS) privacy guidelines, the department is in the process of amending the privacy impact assessment (PIA) for the electronic procurement solution to collect data on suppliers
- to further support these efforts, PSPC will complete the development and implementation of a procurement data strategy aimed at increasing the diversity of bidders in federal procurements by making evidence-based decisions
Background
As outlined in the 2020 Speech from the Throne, the 2020 Fall Economic Statement and PSPC mandate letters, the government is committed to increasing diversity in procurement, pursuing economic empowerment for specific communities, and supporting Black entrepreneurs.
Indigenous procurement
The department is working with Indigenous Services Canada and the Treasury Board of Canada Secretariat to create more opportunities for Indigenous businesses to succeed and grow by creating a new target to have at least 5% of federal contracts awarded to businesses managed and led by Indigenous Peoples.
In responding to the COVID-19 pandemic, PSPC, on behalf of the Public Health Agency of Canada and other federal departments and agencies, moved to urgently procure necessary personal protective equipment and other goods and services to protect frontline health care workers. Certain procurements, where possible, were directed to Indigenous suppliers. Specifically, PSPC has awarded 38 contracts to 30 self-identified Indigenous businesses, collectively worth more than $126 million including for logistics and air charter services, accommodation and cleaning services, IT professional services, medical and laboratory supplies, masks, hand sanitizer and thermometers. One of the contracts was amended to exercise the option to procure an additional 20 million non-medical disposable masks for an additional $2.94 million. In addition, PSPC awarded contracts to 2 Indigenous companies that will each provide 250,000 non-surgical face masks.
Black businesses pilot
To support Black businesses, PSPC launched the Black businesses pilot in January 2021 across Canada to expand bidding opportunities for small Black-owned or operated businesses. The pilot is also one of the initial tangible steps to respond to the June 2020 request from Canada’s Parliamentary Black Caucus for the Government of Canada to increase the number of procurement contracts for Black entrepreneurs. It also aligns with PSPC’s broader mandate to leverage procurement spending to generate socioeconomic benefits for Canadians.
The pilot also reflects the department’s continued support of the Black Entrepreneurship Program led by Innovation, Science and Economic Development Canada (ISED), by reducing barriers in procurement and helping Black-owned and led businesses in bidding on and receiving government contract opportunities.
PSPC has engaged with associations representing Black-owned and led businesses in the development of the pilot. The initiative was well-received and we heard clear messages that federal procurement is seen as a key element in generating economic opportunity—including to lessen the impact of COVID-19—for small businesses owned or led by Black Canadians.
The Black businesses pilot will provide an opportunity to draw on success and lessons learned to inform the expanded use of targeted approaches to increase diversity in future procurements.
Early findings from the pilot indicate that additional training for suppliers, to raise awareness of procurement and to build capacity on bid submissions, would be helpful for increasing inclusion in federal procurement. Findings also suggest that engagement with Black businesses and associations has the potential to increase bids by Black- owned and led businesses.
Outreach
OSME is developing a coaching service to assist diverse small-and-medium enterprises (SMEs) with understanding the procurement process. The coaching service pilot will target women-led and women-owned SMEs. The new service will specifically assist experienced, diverse bidders who have had limited success in bidding on tenders, offering personalized coaching to address specific areas of the bidding process where they require additional support.
The department has also established partnerships with associations representing businesses owned and led by Indigenous, LGBTQ2+, multicultural, women, and other socio-economically diverse groups to deliver seminars and presentations to their membership and other educational programs to help increase their participation in government procurement. For example, in fall 2020, OSME delivered a procurement module on doing business with the Government of Canada for the Black Business and Professional Association’s (BBPA) Boss Women Entrepreneur Program. Two similar sessions were held for the United Nations Decade for People of African Descent (UNDPAD) Push Coalition with more planned on a monthly basis. OSME also participated in the BBPA’s Rise UP Pitch competition in January.
Effective November 2020, the national Supplier Advisory Committee welcomed new committee association members including the BBPA, the Council for the Advancement of Native Development Officers, and the Canadian Gay & Lesbian Chamber of Commerce.
PSPC is working with other government departments and agencies—such as Statistics Canada, Employment and Social Development Canada and ISED—to explore the market capacity of the underrepresented groups in Canada.
Social procurement
On May 3, 2021, a PSPC Policy on Social Procurement came into effect, which will facilitate and support the inclusion of socio-economic considerations in PSPC Acquisitions Program (AP) procurements to enhance best value for the Crown, and advance PSPC’s commitment to diversity, accessibility, community development, inclusion, gender equality, and tackling systemic racism in Canada.
The policy provides a policy basis to develop social procurement programs, including social procurement small business set-aside programs, and to collect suppliers’ personal information, thus enabling the department to establish a baseline on the participation of underrepresented suppliers in federal procurements and monitor progress over time.
The policy aims to apply to the procurement of goods, services, and construction contracts for which PSPC’s Acquisition Program is responsible, including those on behalf of client departments, and operates within the current policy, regulatory, legal framework and trade agreements.
The program on social procurement is currently being developed and will outline how the policy will be applied. The program will describe how to incorporate socioeconomic objectives into procurement effectively; how and when to use the small and minority set-aside provisions in trade agreements, and address outstanding issues, such as definitions and certification, sub-contracting, expectations and risks.
Work is underway to enhance data collection with respect to under-represented groups. To further enhance our understanding of the businesses with which the government is contracting, PSPC will complete the development and implementation of a procurement data strategy. This will contribute to strengthening the department’s capacity for evidence-based program design and reporting, including supporting efforts to increase the diversity of bidders in federal procurements and federal socio-economic goals.
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