Procurement (including issues and policies): Standing Committee on Government Operations and Estimates—March 4, 2022
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- Rapid testing
- Supporting border testing
- Procurement of personal protective equipment (foreign and domestic procurement)
- Mobile health units
- Security and contracting
- Integrity in federal procurement
- Status of SNC-Lavalin
- Labour exploitation in procurement
- Shared Services Canada procurement
- Shared Services Canada: Procurement modernization and supplier diversity
- Increasing Indigenous involvement in procurement
- Diversity and inclusion in procurement
- As of February 28, 2022, Canada has received 118.5 million vaccine doses
- There is sufficient mRNA vaccine available in Canada to administer vaccines to the unvaccinated as well to offer a third dose (booster) to all eligible Canadians
- As well, Canada has secured future supply with Moderna and Pfizer that will provide access to a range of products as required, including the latest formulations
- Canada has also amended its contracts with Novavax and Medicago to secure supply in 2022
- Canada is also working with COVAX to donate any vaccine surplus
Key data points
- Pfizer will supply 35 million doses for 2022, 30 million doses for 2023, with options for an additional 30 million doses in each of these years
- Moderna will supply 20 million doses with options for up to 15 million additional doses for both 2022 and 2023
- Novavax will supply 26 million doses in 2022 and 2023 respectively
- Medicago will supply up to 20 million doses in 2022
- $9 billion has been allocated for vaccine procurement
Currently, Pfizer, Moderna, AstraZeneca, Johnson & Johnson, Novavax and Medicago have been approved to prevent COVID-19. Sanofi started the regulatory submission process for its primary COVID-19 vaccine. Through this process 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
The Government of Canada has signed agreements in principle with the following companies to obtain access to their vaccines and vaccine candidates:
- AstraZeneca agreement was for 20 million doses and, in 2021, Canada received 3.8 million doses of the vaccine for use in Canada. The remaining doses are being donated
- Sanofi and GSK have an agreement to supply up to 72 million doses of their vaccine candidate once approved. Deliveries are to be confirmed once approval is received
- Johnson & Johnson agreement was for up to 38 million doses and, in 2021, Canada received 188,000 doses of its vaccine. The remaining doses are being donated through COVAX
- Novavax, which will supply up to 76 million doses of its protein subunit vaccine candidate NVX-CoV2373 between 2022 and 2024
- Pfizer, supplied 51 million doses of its mRNA vaccine and 4 million pediatric doses in 2021. Agreement is in place for future supply of up to 185 million doses from 2022 to 2024
- Moderna supplied 34.9 million doses of its mRNA vaccine in 2021. While 10M have been deferred to early 2022, agreement is in place for future supply of up to 95 million doses from 2022 to 2024
- Medicago, which will supply up to 76 million doses of its vaccine candidate (CoVLP) between 2022 and 2024
- Serum Institute of India/Verity Pharmaceuticals, which supplied 500,000 doses of the Oxford-AstraZeneca
- Public Services and Procurement Canada (PSPC) is supporting Canada’s COVID-19 response by procuring testing supplies, test kits, testing services, and warehousing and logistics services
- Global demand, constrained supply chains and COVID-19 related production and distribution impacts mean that there are delivery risks. This is why we have pursued an aggressive procurement strategy and continue to engage regularly with our suppliers
- We continue to work aggressively with suppliers on planned deliveries and pursue actions to accelerate delivery schedules, such as reducing repackaging requirements, increasing warehousing as needed and facilitating border clearance process
Key data points
- As of February 28 2022, more than 530 million rapid tests have been procured from 15 suppliers
- 263 million have been shipped to provinces and territories, with more than 100 million delivered in February 2022
- 200 million tests were procured for March 2022
- The target is 200 million tests per month
Public Services and Procurement Canada supports testing strategies and initiatives by procuring testing supplies, test kits, testing services, and warehousing and logistics services on behalf of Health Canada (HC) and the Public Health Agency of Canada (PHAC). In support of HC’s role to provide test kits to provinces and territories, PSPC has procured over 530 million rapid tests. To date, over 263 million tests have been shipped to provinces and territories to enable the reopening of the economy, schools and other industries.
PSPC published a request for standing offer on March 16, 2021, for the purchase of additional antigen and molecular rapid tests, so that suppliers can submit an offer as soon as their test obtains approval from HC and allowed Canada to procure rapid tests through a competitive process.
PSPC has also been supporting provinces and territories and Indigenous Services Canada by procuring laboratory supplies for the general population testing programs: swabs, reagents, lab equipment as well as testing devices that can be used for northern remote and isolated communities. Examples of these devices are Cepheid tests used on GenXpert machine, bMx Biofire.
Supporting border testing
- Since February 2021, border testing for travellers entering Canada has been conducted and will continue to evolve based on public health requirements
- Notably, in response to the Omicron variant, Canada has imposed mandatory testing for an increased number of international travellers other than those arriving from US with the objective to test all international travellers
- We have put contracts in place to support efforts in managing travellers crossing Canadian borders, for services related to testing, accommodations, guards, humanitarian support, transportation, information technology (IT) applications, and a call centre
Key data points
- Over 50 contracts in place to support the Public Health Agency of Canada, Canada Border Services Agency, Immigration, Refugee and Citizenship Canada, Employment and Social Development Canada
- Of those 50 contracts, 4 border testing and supplemental testing services contracts and 10 airport service contracts were awarded for a combined value of $1.5 billion
To support the Border Testing Program requirements for COVID-19 of travellers entering Canada at international airports and land ports of entry, Public Services and Procurement Canada awarded 6 contracts with 4 suppliers since 2021 to collect, process and report polymerase chain reaction (PCR) test specimens.
Following a request for proposals (RFP), PSPC initially awarded 3 contracts in February 2021 to secure the services from testing providers to collect and process PCR test specimens from travellers entering Canada. On September 21, 2021, PSPC posted a new competitive RFP to meet the demand of the evolving Border Testing Program. From this competitive RFP, PSPC awarded 3 contracts (Dynacare, Lifelabs and Biron). An existing contract with Switch Health remains in place.
Switch Health Holdings Inc.
A contract was awarded to Switch Health Holdings Inc. on February 20, 2021, for dedicated support services in French and English on day 1 and day 8 testing for travellers arriving by air or land borders in Ontario, Alberta and the Atlantic region.
The contract was then amended in April 2021 to include additional testing in Ontario for temporary foreign workers, asylum seekers, those in isolation at designated quarantine facilities, and other individuals entering Canada for whom specimen self-collection may not be possible. Switch will provide mobile units as well as telehealth appointments to conduct on-site specimen collection, on-site observed specimen collection and virtual observed specimen collection. The contract was amended on October 30, 2021, to extend it to November 30, 2021. The contract was amended again from December 1, 2021, to extend it to May 31, 2022.
A contract was awarded to Dynacare on April 26, 2021, for day 8 testing for temporary foreign workers in Quebec. This included dedicated support services in French and English for appointment booking, test administration and results management, as well as mobile services for on-site specimen collection. The contract was amended on July 30, 2021, to extend the contract until August 15, 2021 and add additional testing services for land and air ports of entry for Manitoba and Quebec. The contract was amended again on August 14, 2021 to extend the contract until October 31, 2021 and add additional on-site testing for airports in Manitoba and Quebec. The contract was amended again on October 30, 2021, to extend it to December 31, 2021. Following the new RFP, Dynacare was awarded a new contract effective January 1, 2022, for day1 and day 8 testing of travellers entering Canada in the region of Manitoba and Quebec, at select airports and land border crossing, as well as temporary foreign workers. This includes dedicated support services in French and English for appointment booking, test administration and results management, as well as mobile services for on-site and virtual specimen collection. The new contract will expire on April 30, 2022.
A contract was awarded to LifeLabs on June 23, 2021, for day 1 testing of all travellers arriving at Vancouver Airport and day 1 and day 8 testing for all travellers crossing land borders in British Columbia, Saskatchewan and Yukon. The contract was amended on June 30, 2021, to add day 8 testing for travellers arriving at Vancouver Airport. The contract expired on January 31, 2022. Following the new RFP, LifeLabs was awarded a new contract effective February 1, 2022 for travellers crossing land borders in British Columbia, Saskatchewan and Yukon and select airports. This includes dedicated support services in French and English for appointment booking, test administration and results management, as well as mobile services for on-site and virtual specimen collection. The contract will expire on April 30, 2022.
Biron Laboratoires Santé
Following the new RFP, Biron was awarded a contract effective December 21, 2021, for the Quebec Region for day 1 and day 8 testing of travellers entering Canada at the airports and several land border crossings, including the testing of refugees and asylum seekers entering Canada at Roxham Road. This includes dedicated support services in French and English for appointment booking, test administration and results management, as well as mobile services for on-site and virtual specimen collection. Biron Groupe Santé will continue their ramp-up in the coming weeks and will become fully operational by mid-February 2022. The contract will expire on April 30, 2022.
- Given strong global demand for some of these therapeutics, Public Services and Procurement Canada has taken a very proactive approach, which has been successful in securing the products for use in Canada
- As of February 2022, PSPC has been able to secure orders for more than 1.7 million treatment courses for use in Canada of 9 different therapeutics
- We continue to work actively with suppliers on planned deliveries and pursue actions to accelerate delivery schedules, reducing repackaging requirements, offering to facilitate logistics both overseas increasing warehousing as needed and facilitating border clearance process
Key data points
As of February 21, 2022:
- Paxlovid—Pifzer: Contract for 1,500,000 treatment courses, 30,400 delivered
- Remdesivir—McKesson/Gilead: Original contract for 24,825 treatment courses, all delivered. Amendment for additional 16,667 treatments issued February 2022
- Bamlanivimab—Eli Lilly: Original contract for up to 26,000 treatments courses, 17,000 delivered
- Tocilizumab—Roche Canada: Contract awarded March, 2021 and subsequently amended, for a total potential order of up to 14,551 treatment courses (assuming 800mg per treatment), 8,955 (800mg) treatment courses delivered
- Regeneron—Roche Canada: Contract for 9,000 doses, all doses delivered
- Sotrovimab—GlaxoSmithKline: Original contract for 10,006 doses, and amendment for additional 20,064 doses, 21,013 delivered
- Molnupiravir—Merck: Original contract for 501,120 treatment courses, pending regulatory approval, 0 delivered
- Evusheld—AstraZeneca: Contract for 100,000 doses, pending regulatory approval, 0 delivered
- Sarilumab—Sanofi: Contract for 1,000 treatments, 0 delivered
Oral antiviral treatments
On January 7, 2022, Canada signed a contract with Pfizer for 1 million treatment courses of Pfizer’s COVID-19 oral antiviral therapeutic Paxlovid, for the treatment of COVID-19 symptoms. Canada is expecting an additional 120,000 treatment courses of Paxlovid to be delivered before the end of March 2022. Further delivery schedules are being confirmed, with the intent of bringing treatment courses into Canada as quickly as possible. A contract amendment was awarded on February 23, 2022 for 500,000 additional treatments. A total of 1.5 million treatment courses of Paxlovid have been ordered and will be made available as soon as possible to help protect the health of Canadians
On December 1, 2021, Canada awarded a contract to Merck for 501,120 courses of its Molnupiravir oral antiviral therapeutic for the treatment of COVID-19 symptoms, pending regulatory approval.
On October 20, 2020, Canada awarded a contract with McKesson/Gilead for the Remdesivir therapeutic drug for 24,825 treatments courses. An amendment was issued in February 2022 to procure an additional 16,667 treatment courses.
On November 22, 2020, Canada awarded a contract of up to 26,000 treatment courses of Eli Lilly’s antibody treatment, Bamlanivimab. The treatment was developed in partnership with Canadian company AbCellera, combining its advanced antibody therapy discovery platform with Eli Lilly’s manufacturing and distribution capability.
On March 12, 2021, Canada awarded a contract to Roche Canada for Tocilizumab for the treatment of COVID-19 symptoms, and the contract was subsequently amended to increase the potential for orders for up to 14,551 treatment courses (assuming 800mg per treatment). To date, 8,955 treatment courses (800mg) have been delivered.
On June 11, 2021, Canada awarded a contract with Roche for its Regeneron therapeutic drug for 9,000 treatments, and all deliveries have been received.
On October 1, 2021, Canada awarded a contract to GlaxoSmithKline which has later been amended to add additional quantities, for the purchase Sotrovimab for the treatment of COVID-19. Total orders are now for 30,070 doses, of which 21,013 have already been delivered.
On February 11, 2022, Canada awarded a contract to Sanofi for its Sarilumab drug for 1,000 treatments.
On February 14, 2022 Canada awarded a contract to AstraZeneca for its Evusheld drug for 100,000 treatments.
- Thanks to the efforts of our suppliers and their staff, the Government of Canada successfully secured 27,706 ventilators—enough to keep Canadians safe in any scenario
- As it became apparent that there would be an oversupply of ventilators, the Government of Canada worked with some of the manufacturers to identify opportunities to reduce the volumes ordered from suppliers that encountered delivery issues
- We are grateful for all Canadian companies that answered the Government of Canada’s call to action to support our pandemic response
Key data points
- Canada was able to secure 40,545 ventilators, of which at least 37,500 were to be produced in Canada
- Through contract terminations due to oversupply, PSPC reduced the total number of ventilators to 27,706 units
At the onset of the COVID-19 pandemic, Canada procured ventilators at a rate that would allow it to be oversupplied in the event there was a significant surge in COVID-19 cases and worst-case scenarios for disease infection were to occur. Canada’s initial approach was to secure contracts with manufacturers of commercial-off-the-shelf (COTS) ventilators. The Government of Canada procured approximately 3,000 COTS ventilators, which were deployed.
In March/April 2020, PSPC entered into 8 non-competitive contracts with 6 foreign suppliers using its emergency delegation. In May/June 2020, PSPC entered into 3 additional non-competitive contracts with foreign suppliers.
Public Services and Procurement Canada, the Public Health Agency of Canada and Innovation, Science and Economic Development Canada also undertook a process to identify viable proposals to manufacture ventilators in Canada. As a result, Canada awarded 4 contracts to domestic manufacturers (CAE Inc., Canadian Emergency Ventilators Inc., FTI Professional Grade Inc., and EPM Global Services Inc.) to produce 37,500 ventilators. In addition to this process, PSPC awarded a contract to Thornhill for the production of ventilators in Canada.
In the fall of 2020, it was becoming apparent that the quantities contracted by PSPC coupled with the quantities procured directly by provinces/territories would produce an oversupply of ventilators. In response to this, Canada proceeded to reduce the quantities required by terminating contracts for convenience with domestic manufacturers. Of the 5 domestic contracts, 1 completed the supply of its full contract; the others were terminated.
Procurement of personal protective equipment (foreign and domestic procurement)
- Our goal is to ensure Canada has supplies on hand to meet current and future needs as identified by the provinces and territories, through the Public Health Agency of Canada
- The Government of Canada took an aggressive procurement approach to fulfil immediate, emerging and long-term medical supply requirements
- Since the beginning of this pandemic the Government of Canada has looked to Canadian industry for pandemic-response supplies and the industry has responded. Moreover, our investments in Canadian industries have helped secure domestic capacity for the production of personal protective equipment (PPE), now and into the future
Key data points
- More than 2.7 billion articles of various PPE has been purchased
- Over 40%of expenditures are associated with products manufactured in Canada or services delivered by Canadian companies
- Canada now has 2 producers of NIOSH certified masks, who produce 4.2 million a month in Canada
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.
Since the beginning of the pandemic, PSPC awarded 191 contracts for PPE to 120 unique suppliers for a total of 2.7 billion articles of various PPE.
Excluding long term contracts (3M and AMD Medicom), 99% of the total quantity of PPE ordered has been delivered.
Domestic procurement of personal protective equipment
Of all contracting handled by PSPC to combat COVID-19 excluding vaccines, more than 40%of expenditures are associated with products manufactured in Canada or services delivered by Canadian companies.
PSPC awarded a 10-year contract to Medicom for domestic production and distribution of surgical masks and N95 respirators for PHAC.
Under the terms of its federal contract, Medicom is producing millions of N95 respirators and surgical masks annually at its new purpose-built Montréal manufacturing facility.
PSPC entered into a contract directly with 3M Canada to purchase domestically-produced N95 masks.
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. 3M had notified PSPC that they had an additional 5 million masks that they could supply in the first year, which PSPC then purchased, bringing the year one deliveries to 30 million masks total.
As of January 12, 2022, in response to the COVID-19 pandemic, Public Services and Procurement Canada, as a common service provider, has awarded 40 contracts on behalf of client departments to 31 self-identified Indigenous businesses, collectively worth approximately $131 million including for logistics and air charter services, accommodation and cleaning services, IT professional services, medical and laboratory supplies, masks, hand sanitizer and thermometers.
Request for proposal for non-medical face coverings
On June 4, 2020, PSPC launched a request for proposal to solicit interest strictly from Indigenous businesses to provide disposable non-medical face coverings.
As a results of this RFP in August 2020 PSPC 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, PSPC 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.
Mobile health units
- As part of its early response to the pandemic, the Government of Canada secured supplies and equipment to ensure Canada would be prepared for worst-case scenarios. To this end, PSPC proactively procured mobile health units (MHU) so that if hospital capacity became overwhelmed, we would be ready to immediately provide assistance
- To date, MHUs have been deployed to and returned from 2 locations in Ontario (Sunnybrook Health Sciences in Toronto and Hamilton Health Sciences) and the oxygen concentration system of 1 MHU has been deployed to Stanton Territorial Hospital in Yellowknife, where it continues to support the operations of the hospital
- Extra medical equipment and consumables procured for the MHUs have been given to PHAC for distribution to provinces as requested through the National Emergency Strategic Stockpile with some medical equipment and consumables also being given to Department of National Defence (DND)
Key data points
- Approximately $104.2M (including taxes) has been paid to Weatherhaven Global Solutions
- Approximately $79.5M (including taxes) has been paid to SNC-Lavalin PAE
What is a mobile hospital snit
An 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.
How were the contractors selected
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 for mobile headquarters and for Weatherhaven’s association with ATCO Ltd. and its strong logistics capabilities.
A limited tendering process between the 2 firms was initiated in order to move quickly during the initial stages of the pandemic. To ensure maximum flexibility, obtain different designs and guarantee back-up capacity, contracts were issued to both proponents.
Under the task-based contracts, the 2 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.
To date, invoices totalling approximately $104.2M (including taxes) have been paid to Weatherhaven Global Solutions and approximately $79.5M (including taxes) to SNC-Lavalin PAE.
Weatherhaven was originally requested to provide 2 MHUs. As these were being deployed to Ontario, Public Safety Canada asked PSPC to order a third Weatherhaven MHU. This MHU model is completely self-sufficient and can be used within a host building or independently. At the same time that Public Safety Canada asked PSPC to order a third Weatherhaven MHU, it also asked PSPC to order a SNC-Lavalin PAE MHU to be available for deployment inside of an existing building (for example convention centre, arena).
Now that the 2 MHUs have been returned from Ontario, Canada has 4 MHUs ready for deployment. The oxygen concentration system of one MHU has been deployed to Stanton Territorial Hospital in Yellowknife, where it continues to support the operations of the hospital. There was early interest from Quebec and Alberta in deploying the federal MHUs but these provinces were able to address their needs in other ways.
Medical equipment and consumables for additional MHUs were initially bought and warehoused, which have since been made available to the Public Health Agency of Canada and the Department of National Defence for use as needs have evolved.
Canada is currently working on a plan to consolidate the warehousing and management of the existing mobile health units infrastructure, equipment and consumables, from the current 2 contracts into 1, which will provide ongoing efficiencies.
Security and contracting
- Public Services and Procurement Canada’s Contract Security Program is committed to safeguarding protected and classified information assets, and securing sites associated with Government of Canada contracts
- Public Services and Procurement Canada provides guidance to departments when our department is the contracting authority and provides the appropriate security clauses to be included in each contract based on the information provided by the client department
- The Contract Security Program then ensures that contractors comply with the security requirements provided by the client department for safeguarding, transmitting, disclosing, destroying, removing and modifying government sensitive information/assets
Key data points
The Treasury Board Policy on Government Security provides the framework for departments to effectively manage government security controls in support of the delivery of Government of Canada programs and services and in support of the protection of information, individuals and assets. A key objective of the Policy on Government Security, as it pertains to contracting, is to ensure that sensitive information and assets of the government are properly protected when entrusted to industry.
Each federal department is responsible for protecting sensitive information and assets under its control not only in its own operations but also throughout the bidding, negotiating, awarding, carrying out, and terminating of any contracts it manages. Federal departments are also responsible for identifying security concerns associated with their procurements and determining if their suppliers will require access to protected and/or classified information and assets or to secure sites.
Before entering into a contractual agreement with a private sector organization, government departments must identify any contract security requirements (such as, determine whether the supplier will require access to protected or classified information, assets, or sites).
If the contract has security requirements and is being awarded by PSPC, the government department is required to make use of PSPC’s Contract Security Program to ensure that the supplier and their personnel receive the appropriate security clearances before accessing sensitive information/assets and/or secure sites.
In fall 2020 there was media attention over the security role of Public Services and Procurement Canada on Global Affairs Canada’s (GAC) procurement of security screening equipment for use in non-operational areas in Canadian missions abroad. PSPC issued 2 national master standing offers (NMSOs) for x-ray machines and walk-through metal detectors that did not include a security requirement. A NMSO for x-ray machines was initially issued to Nuctech Company Limited of Beijing, China.
Client departments are responsible for identifying security requirements that need to be considered as part of the definition for the good, service or construction procurement requirement. No call ups have been made against the NMSO to date, and the NMSO remains active until March 31, 2023. PSPC initiated new procurements for walk-through metal detectors and x-ray machines. An invitation to qualify was issued to solicit interested parties to pre-qualify. Companies are being assessed by the Contract Security Program and a supply chain integrity verification process has been included in the procurement.
Integrity in federal procurement
- To help ensure the Government of Canada does business with ethical suppliers, a government-wide Integrity Regime is in place. This regime holds suppliers accountable for their misconduct, and also encourages them to cooperate with law enforcement and take corrective action
- Under the regime, a supplier may be suspended or declared ineligible to do business with the government if it, members of its board of directors or its affiliates, have been charged with or convicted in the previous 3 years of one of the offences listed in the Ineligibility and Suspension Policy in Canada, or similar offences abroad
- Public Services and Procurement Canada consistently applies the Integrity Regime to procurements and no contracts have been awarded to suppliers ineligible or suspended under the Integrity Regime
Key data points
- 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)
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.
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.
Status of SNC-Lavalin
- Since 2015, the Government of Canada has applied the Integrity Regime to its dealings with SNC-Lavalin pursuant to the Ineligibility and Suspension Policy
- At this time, SNC-Lavalin’s status remains unchanged [Redacted]
- With regards to its earlier charges of misconduct in Libya, an administrative agreement was imposed on the supplier in 2015 in order to protect the integrity of our dealings with them. The administrative agreement concluded in 2020 following resolution of these charges
Key data points
2021 criminal charges against SNC-Lavalin
On September 23, 2021 SNC-Lavalin Inc., and SNC-Lavalin International Inc. were each charged with the following offences under the Criminal Code of Canada:
- forgery (366 C.C.)
- conspiracy to commit forgery (465/366 C.C.)
- fraud (380 C.C.)
- conspiracy to commit fraud (465/380 C.C.)
- fraud on the government (121 C.C.)
- conspiracy to commit fraud against the government (465/121 C.C.)
The charges related to s. 121, 366, and 380 are listed offences under the Integrity Regime that can lead to suspension and if convicted, a supplier would be ineligible to participate in the federal procurement system.
In response to the criminal charges, on September 23, 2021, the registrar of ineligibility and suspension issued a notice of intention to suspend pursuant to the Ineligibility and Suspension Policy.
The Quebec Directeur des poursuites criminelles et pénales invited SNC-Lavalin Inc. and SNC-Lavalin International Inc. to negotiate a remediation agreement to resolve the above identified charges.
2015 criminal charges against SNC-Lavalin
In 2015, SNC-Lavalin Group Inc., SNC-Lavalin Construction Inc., and SNC-Lavalin International Inc. were charged with one count of corruption and one count of fraud for alleged improper payments to officials in Libya.
On December 9, 2015, pursuant to the Ineligibility and Suspension Policy, PSPC entered into an administrative agreement with SNC-Lavalin with respect to the above noted charges. The agreement permitted SNC-Lavalin to contract with the government while criminal proceedings were underway and on condition that certain corporate compliance conditions were met.
On December 18, 2019, SNC-Lavalin Construction Inc. plead guilty in the Court of Quebec to one count of fraud contrary to paragraph 380(1)(a) of the Criminal Code, which is not a listed offence under the Ineligibility and Suspension Policy. The remaining charges were stayed against all three defendants as a result of the resolution. In accordance with its terms and conditions, the administrative agreement between PSPC and SNC-Lavalin concluded 12 months following the stay of the charges, on December 18, 2020.
Labour exploitation in procurement
- Public Services and Procurement Canada is addressing the risk of forced labour and human trafficking in federal procurement supply chains through a range of actions
- As of November 2021, all PSPC contracts include anti-forced labour clauses. This means that contracts can be terminated where there is credible information that goods have been produced using forced labour or human trafficking
- PSPC has updated the code of conduct for procurement to clearly outline Canada’s expectations for suppliers and their sub-contractors regarding human and labour rights
- We have also undertaken a risk assessment of forced labour in goods procured by Public Services and Procurement Canada, and are identifying next steps to further protect procurement supply chains from exposure to forced labour, human trafficking and child labour
- The Government of Canada recognizes that addressing the risks of human trafficking and forced labour in our supply chains requires sustained effort, and we are working on a number of additional measures to enhance the integrity of our procurement system
Key data points
- July 2020: clauses on ‘ethical procurement’ and ‘origin of work’ were added in new PPE contracts and in all newly issued request for proposals PPE
- November 2021: anti-forced labour clauses are included in all goods contracts issued on or after November 4, 2021
- In January 2022, contracts between Canada and Supermax Healthcare Canada were terminated by mutual consent
In September 2019, the Government of Canada announced a new National Strategy to Combat Human Trafficking. The national strategy includes a commitment that PSPC will enhance federal procurement supply chains with the goal of ensuring that they are free from human trafficking and labour exploitation.
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 personal protective equipment. 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 Policy on Ethical Procurement of Apparel.
In May 2021, Rights Lab provided its risk assessment report to Public Service and Procurement Canada. Rights Lab is a multidisciplinary group with expertise in human trafficking, based in the University of Nottingham, in the United Kingdom. The report contained recommendations that are informing the development of an evidence-based approach to addressing labour exploitation in federal procurement supply chains.
As part of planned actions under the National Strategy to Combat Human Trafficking, 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).
In November 2021, PSPC implemented new anti-forced labour contract clauses to ensure that it can terminate contracts where there is credible information that goods have been produced in whole or in part by forced labour or human trafficking. These clauses protect the department from financial liability if imported goods are not released at the border because their importation is prohibited under the forced labour prohibition in the Customs Tariff Act.
Supermax Healthcare Canada
In December 2020, it was brought to PSPC’s attention that there were possible forced labour issues with suppliers in Malaysia, including Supermax. In January 2021, after reminding the nitrile glove suppliers of their obligation with regard to ethical practices, PSPC issued a communication to contracted suppliers, including Supermax Healthcare Canada, to provide attestation of actions against forced labour. In the same month, Supermax Healthcare Canada provided their attestation confirming their commitment to ethical working conditions to PSPC.
On October 21, 2021, PSPC learned that the United States Customs and Border Protection had issued an order that prohibits imports from Supermax based on reasonable information that indicated the use of forced labour in the company's manufacturing operations in Malaysia. In light of this new allegation, PSPC requested Supermax Healthcare Canada to suspend all future deliveries until Canada was satisfied that its contracted gloves were produced without forced labor.
On December 16, 2021, Supermax Healthcare Canada provided Canada a summary response to the findings of the first of a series of 4 audit reports. This audit was conducted at the Malaysian sites by an independent firm. Canada reviewed the report and did not believe it had sufficient information to fully assess the matter. Rather than waiting for the full audit report, which is due in April 2022, Canada and Supermax Healthcare Canada mutually agreed to terminate their contracts, which were executed on January 17, 2022.
Shared Services Canada procurement
- In fulfilling its role to stabilize, maintain, and enhance digital capacity across government, Shared Services Canada (SSC) ensures that supplied goods are of high quality, procured at the best value and provided in a timely fashion
- SSC conducts fair, open and transparent procurement processes in compliance with domestic and international trade agreements and within the government’s procurement policy framework
- Whenever possible, SSC uses competition to get the best value for Canadians, and adheres to open government principles by proactively disclosing all contracts over $10,000
- As government information technology service delivery is modernized, the Government of Canada is making procurement more agile, collaborative and inclusive to promote social values, as well as environmental sustainability
If pressed on sole sourcing:
- occasionally it is necessary for SSC to issue a non-competitive contract where equipment must be compatible with existing IT infrastructure, but such contracts are avoided wherever possible
Key data points
- In fiscal year 2020 to 2021, SSC awarded 2,451 contracts, of these:
- 79% of contracts awarded (value), representing 1,376 contracts, were issued through the use of open, fair and transparent competitive processes, for a total spend of roughly $795 million
- in fiscal year 2020 to 2021, 73% of contracts awarded (volume), representing 1,796 contracts, by SSC went to small and medium enterprises
SSC is mandated with providing services related to email, data centres, networks, and end-user information technologies to its mandatory and optional clients.
In all instances where bids are not solicited, the legal authority to use an exception to soliciting bids must be fully justified with a reference to the applicable exception to competitive bidding which may apply under the Government Contracts Regulations.
With respect to procurements subject to 1 or more trade agreements, SSC may award a contract without soliciting bids only if 1 or more of the limited tendering reasons stated in each applicable trade agreement can be applied.
SSC also considers the provisions under comprehensive land claim agreements.
While work is already in motion to modernize procurement so that it is more agile, collaborative and inclusive, there are significant opportunities to continue to ‘buy better’ and transform how IT procurement and service delivery is done within Canada:
- diversity and Inclusion: establishing a model for IT procurements and service delivery to drive fair and inclusive business practices in Canada, level the playing field for small-and-medium enterprises (SME)s as well as Indigenous and underrepresented groups, and vendors operating across Canada, including in rural and remote communities, and broaden participation in IT service design and delivery
- Greening Government Strategy: sending strong market signals that government is serious about protecting the environment, incentivize an accelerated transition to greening and circularity for the IT sector and beyond by setting ambitious greening targets and requirements, and take action to ensure new private sector accountabilities
- innovation, growth and digital enablement: strategically establishing SSC as a convener of IT innovators and service providers, a first-in-class adopter of emerging technology and IT infrastructure, and a catalyst for the digital enablement of all Canadians
Shared Services Canada: Procurement modernization and supplier diversity
- SSC aims to do everything possible to unlock further value from federal procurement to drive innovation and economic growth, while reducing the barriers to entry for diverse suppliers, such as small and medium-sized enterprises and companies owned and operated by under-represented groups
- SSC is working to simplify its contracts and business processes to make it easier for departments and agencies to buy the goods and services they need to deliver their programs to Canadians
- SSC is working to further increase supplier diversity and enhance economic and social opportunities for under-represented groups, leveraging Public Services and Procurement Canada’s Policy on Social Procurement
- As government information technology service delivery is modernized, the Government of Canada (GC) is making procurement more agile, collaborative and inclusive to promote social values, as well as environmental sustainability
Key data points
- In fiscal year 2020 to 2021, 73% of contracts awarded by SSC went to small and medium enterprises (SME)
- During 2021, 2.5% (value) / 7.0% (volume) of SSC-funded contracts were awarded to Indigenous businesses. Dollar value: $44,747,608
Shared Services Canada is striving to establish an exemplary model for IT procurements and service delivery to drive fair and inclusive business practices in Canada. SSC seeks to level the playing field for small and medium enterprises and vendors operating across Canada, including in rural and remote communities. SSC’s practices broaden participation in IT service design and delivery. SSC is actively working on initiatives to increase the diversity of bidders, in particular businesses owned or led by Canadians from under-represented groups, such as Indigenous peoples and persons with disabilities. SCC is taking measures to increase the accessibility of the procurements to such groups, by considering, for example, the possibility of voluntary self-identification.
Indigenous businesses are under-represented in federal procurements. To advance reconciliation and improve socio-economic outcomes for Indigenous peoples, the Government of Canada has committed to award at least 5% of federal contracts to Indigenous Businesses.
Accessible information : Communications technology procurement
The GC envisions a public service that is a world leader in barrier-free, inclusive workplaces and services. To achieve this objective, all new major information communications technology (ICT) systems launched as of 2021 must meet accessibility requirements.
SSC is a leader in ICT accessibility and is piloting the adoption of accessibility requirements for IT products and services. The department developed an accessible procurement toolkit and training to support it, as well as the wider GC.SSC ensures that targeted accessibility requirements are included in enterprise IT procurements, and is incorporating accessibility EN301 548 standards across ICT procurement vehicles.
SSC is leading scale up, a social procurement pilot which simplifies the bidding process. The objective is to increase access to SSC procurements for micro and small enterprises, though not medium, which include indigenous and under-represented groups, and give a better chance to suppliers who have never dealt with the GC.
In 2019, SSC established the Centre of Expertise in Agile and Innovative Procurement, which is deploying pathfinder agile procurement processes to support simplification, efficiency, competition, openness, transparency, and produce better results. SSC has also piloted an Agile Procurement Framework (APP 3.0) that systematically includes mechanisms to increase accesses to SSC procurements to SMEs. The procurement processes are at various stages of completion. So far, 12 agile contracts have been awarded; 83% of those were awarded to SMEs, either as a single entity or as part of a joint venture.
APP 3.0 is a contracting framework that leverages the following cross-functional team:
- scrum applied to procurement
- integration of end-user perspectives
- solicitation that could react to changes and evolving and scalable contracts
- integration of the private sector
- demonstrations, proof of concept and prototypes leveraging open business intelligence platforms, such as “TECH2GOV” digital marketplace, to attract hundreds of Canadian SMEs to participate in agile procurements
The SSC procurement modernization—Strategic Engagement Committee provides a forum for industry associations, experts, and SSC representatives to propose, analyse and recommend means to improve and modernize procurement practices, including measures that promote the participation of SMEs.
- a membership-driven national industry association that represents the IT industry
- Canadian Information Technology Providers Association (CITPA):
- an affiliation of Canadian-owned vendor authorized solution providers that deliver IT solutions to the GC
- Canadian Business Information Technology Network (CABiNET):
- a member driven industry association for small and medium enterprises on federal government procurement initiatives. It is an association that consists of companies that provide IT resources and solutions to the GC
- Council of Canadian Innovators (CCI):
- non-profit organization focused on helping high growth Canadian technology firms to scale up globally. The council’s mandate is to optimize the growth of Canada’s innovation-based sector by ensuring Canadian technology and public policy leaders are working together to improve Canada’s innovation outputs
- Canadian Black Chamber of Commerce (CBCC):
- non-profit organization established as an initiative of the National African Canadian Association (NACA) to enhance commerce and economic development within the Black community. The CBCC platform promotes black business and creates a supportive network for its members and the Black diaspora in Canada
- Canadian Gay Lesbian Bisexual and Transgender plus (LGBT+) Chamber of Commerce (CGLCC):
- non-profit organization that works to foster economic growth by supporting and nurturing LGBT+ businesses, entrepreneurs, students, and allies by helping Canada’s corporate world connect with the LGBT+ community. CGLCC is a leader in supplier diversity and is the certifying body in Canada for LGBT+ businesses
- Canadian Aboriginal Minority Supplier Council (CAMSC):
- a nationally respected non-profit organization that advocates business relationships and economic growth of the Canadian supply chain through the inclusion of aboriginals and minority suppliers
- Women Business Enterprises Canada (WBE):
- a non-profit organization, led by corporate members that aims to open doors for Canadian women-owned businesses to supply chains across North America. WBE's mandate is to build connections between Canadian women-owned businesses and corporate/government buyers across North America
Increasing Indigenous involvement in procurement
- Increasing the participation of Indigenous businesses in federal procurement is an important part of my mandate and the government’s agenda to generate economic opportunities for Indigenous people
- We are working with Indigenous Services Canada and the Treasury Board of Canada Secretariat to have at least 5% of the value of federal contracts awarded to Indigenous businesses
- This includes establishing a government-wide policy framework and creating meaningful and immediate changes to the Procurement Strategy for Indigenous Business, for example:
- extensive engagement took place in 2020 to 2021 to ensure optimal Indigenous participation in requests for proposals for large contracts, such as the North Warning System sustainment
- As we move forward, my department will continue working with other stakeholders to increase the participation of Indigenous businesses in federal procurement as it relates to our COVID-19 response efforts
- Where possible, COVID-19 procurements have been directed to Indigenous suppliers, so for example, contracts include logistics and air charter services, accommodation and cleaning services, IT professional services, medical and laboratory supplies, masks, hand sanitizer and thermometers
- PSPC will continue to support departments and agencies in implementing strategies to increase the participation of Indigenous businesses in federal contracting
- While procuring goods and services on behalf of federal departments and agencies, PSPC continues its efforts towards advancing reconciliation and achieving the best value for Canadians
- One of those efforts is to better engage with local communities by translating documents into various local Indigenous languages
- for example, applicable procurement documents posted on the Inuit Firm Registry in Nunavut will be translated to encourage and increase the number of Government of Canada contracting and leasing opportunities for which they may be eligible
- another example occurred less than a year ago when PSPC translated the press release and social media content for the Canadian High Arctic Research Station contract award in Nunavut (Inuktitut and Inuinnaqtun) to better communicate with the local Indigenous community
Key data points
- Over the last 3 fiscal years, Public Services and Procurement Canada has awarded an annual average of $442 million through 1,422 contracts to Indigenous suppliers
- As of January 12, 2022, 40 pandemic response contracts were awarded to 31 self-identified Indigenous businesses, contracts collectively worth more than $131 million
- For example, Public Services and Procurement Canada signed contracts with 7 Indigenous firms worth approximately $6 million for a total of 35 million non-medical disposable masks
PSPC is working 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 (ISC) is the lead department federally, with PSPC supporting the taskforce’s work. PSPC is leveraging this database to increase the participation of Indigenous businesses in federal procurement.
PSPC also works in 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 Procurement Assistance Canada.
Furthermore, 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.
Diversity and inclusion in procurement
- We recently launched the Supplier Diversity Action Plan which outlines concrete steps to increase the participation of businesses from underrepresented groups in federal procurement
- It includes a Policy on Social Procurement, allowing the department to create targeted approaches to increase supplier diversity in procurement, and bring positive benefits to communities across Canada
- It also includes enhanced services, delivered through Procurement Assistance Canada, to help underrepresented groups successfully participate in federal procurement
Key data points
- January 2021, PSPC launched the Black businesses procurement pilot
- May 2021, Policy on Social Procurement came into effect
- Spring 2022, PSPC will engage with industry and equity-deserving groups to co-develop the program on social procurement and the Black entrepreneurship procurement program
PSPC has been working to address inequities since 2018, by modernizing its procurement practices and encouraging suppliers from diverse backgrounds to be a part of the federal supply chain. This included a 2-year socio-dconomic procurement experimentation cycle, from 2018 to 2020, which aimed to leverage the government’s significant purchasing power to pursue socio-economic outcomes through procurement. The department also undertook a Black businesses procurement pilot in 2021 to expand procurement opportunities for Black entrepreneurs.
Budget 2021 and the 2021 mandate letter reconfirmed the government’s commitment to social procurement, including supplier diversity, to support procurement opportunities for specific communities.
PSPC’s Policy on Social Procurement came into effect in May 2021, which allows the department to create targeted approaches to increase diversity and inclusion in PSPC procurement and leverage trade agreements that permit socio-economic procurement. More specifically, the policy will facilitate the inclusion of socio-economic measures in PSPC procurement to support the goal of achieving best value for the Crown and, in turn, for Canadians. A program on social procurement outlining how the policy will be implemented and applied is currently under development.
PSPC also recently released 2 requests for information to better understand the procurement experience of businesses owned or led by persons with disabilities and the lesbian, gay, bisexual, transgender, queer and two-spirit plus (LGBTQ2+) community.
Moving forward, a common federal approach to the definition and certification of underrepresented groups will be essential to mitigate the risk of fraud and ensure that contracts related to social procurement initiatives are awarded to the targeted groups. This will require collaboration across federal organizations. PSPC currently uses self-attestation to certify suppliers, however some stakeholders have been advocating for third-party certification.
In spring 2022, PSPC will be engaging with industry, including equity-deserving groups, to co-develop the program on social procurement and the Black entrepreneurship procurement program. PSPC will also seek their views on the best approach to definitions and certifications.
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