Government Operations Committee on Oct. 31st, 2017

[Desmond Gray]

Yes, we are.

[Kelly McCauley, Conservative, Edmonton West, AB]

Thanks very much.

[The Chair, Conservative, Tom Lukiwski]

Thank you.

We will now go to Monsieur Drouin, please, for five minutes.

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

Thank you, Mr. Chair.

I want to elaborate a little on PSAB and some of the issues that I've heard about. I'll go back to some of the barriers to entry for SMEs.

To put things in context, we know that indigenous companies are on the rise and are growing much faster than non-indigenous companies in Canada. In terms of some of the issues that we are hearing about from the SME communities, they say that while they want to bid on the bigger contracts, they're not allowed to bid on them, because for corporate references they need to have a minimum of five years. Even though they could partner with other SMEs and combined they would have that experience, they're not allowed to do that. Now I'm thinking about the indigenous companies, which in particular may not have been in business for a long time but can probably deliver the service.

I'm just trying to think of a way.... How could we ensure that we don't put those barriers in place for SMEs and allow them to bid on the bigger contract values of over $1 million? Are there questions that we could ask them when we do ITQs, RFQs, and RFPs? For instance, can we ask if they're going to have the workforce in place and if they're going to have the financing in place?

I understand the risk that you guys are facing as well. There is a risk factor. I get it. But has there been an analysis done by your departments to see how we can allow SMEs to bid on bigger contract values?

[Arianne Reza]

I'm not sure if there has been a formal report, but we have done a fair bit of work in terms of understanding the barriers.

We look at joint ventures as a way to provide opportunities for SMEs to come together, partner, and look at ways to get some of the bigger contracts. We have a fair bit of effort going on in that way to make sure that we don't set the criteria and the limits so far out of range that they can't contribute, understanding that our supplier base is predominantly SMEs.

[Desmond Gray]

Could I add something?

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

Sure.

[Desmond Gray]

In terms of the procurement strategies, of course, that form the base of the procurement action plan, if you can put it that way—they include the consideration of exactly this, so that we can understand what the options are. One of them is to ensure that SMEs have access, but we can also produce meaningful tools that help SMEs be part of a supply chain. They don't necessarily have to be a tier one supplier, but they can be a very effective tier two or tier three. The trick is to build the partnership.

For example, on our Buyandsell tendering website, we have a feature now where anyone who goes in and looks at a tender can self-declare and say: “Hi, I'm Bob. This is my company. This is what I do. I'm interested in working with somebody else who would like to put a proposal around this.” That is to actually facilitate this kind of matching of suppliers to other suppliers so they can start to consider options. This allows them to reach larger volumes and larger procurements that perhaps they themselves couldn't do but that in partnership with others they can.

The other thing we do through our Buyandsell website is give access to a huge amount of data that allows businesses to understand and analyze how the procurements were done previously and what the winning bids were. It gives them business intelligence that allows them to be more competitive and to be more effective when they go to bid.

We're trying to make all of these tools available to the supplier community.

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

Quickly, for Treasury Board, having worked with some of the U.S. companies, I've heard a lot of complaints about terms and conditions. We always used to tell them that they had to get a Canadian lawyer. Can you expand on that?

[Voices]

Oh, oh!

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

That's so they really understand the Canadian law. Are there issues with the terms and conditions in Canada that maybe some of the suppliers don't understand?

[Kathleen Owens]

I think it's very true when reading contracts that some of them can be very opaque, and there is a real legal industry around contracts. I think that's very true.

From a Treasury Board perspective, terms and conditions in contracts are only relevant to the government contract regs where we have deemed terms and conditions that apply to all contracts, but other than that, Treasury Board does not set the terms and conditions of contracts.

I don't know if Arianne has anything else.

[Arianne Reza]

I would just note that we have work under way on our terms and conditions in general. We are looking forward to seeing the contract clauses that we need as the Government of Canada, because some of them are from years ago and need to be updated and more aligned with a modern comptrollership policy.

[The Chair, Conservative, Tom Lukiwski]

Thank you.

Mr. Shipley, please. You're up for five minutes.

[Bev Shipley, Conservative, Lambton—Kent—Middlesex, ON]

Thank you.

I appreciate you taking the time to be a part of our study.

In terms of the aboriginal contracts that are out there for them to bid on and the opportunities that they have, I'm wondering, how is that publicized? In terms of small businesses, discussions always happen about how to access it, about they ever actually get in the queue. How do they do that?

For the aboriginal component of this, in terms of their businesses, is there a difference in how those contracts are looked at and opened in comparison to the general public? As we've heard, for the aboriginal ones there is very much a growing opportunity for them. Is it just part of that whole general public awareness for contracts? Or is there something specific put out for them? Are they treated differently?

[Arianne Reza]

There are several different streams in which we try to encourage aboriginal businesses to participate. The Office of Small and Medium Enterprises that Mr. Gray described has real key engagement in the local indigenous communities to demonstrate or show them how to apply where there are opportunities.

All of the PSPC's opportunities are on Buyandsell. The website clearly indicates whether there is a set-aside for indigenous businesses. Indigenous businesses are also competing for non-set-aside contracts and winning, so they do go to the same portal. We work hard to make sure that it's clear where the set-aside is invoked so they can see it, and they're also competing in general procurements.

[Bev Shipley, Conservative, Lambton—Kent—Middlesex, ON]

That is interesting. This was raised earlier in terms of being able to bring together a partnership with other businesses so that you can fulfill the opportunity to be part of a contract bid, correct? Is there much of that happening in terms of them forming partnerships with, one, other aboriginal businesses or, two, other businesses that are not aboriginal? Is that a growing partnership you're seeing so that they are able to access more contracts?

Mr. Gray?

[Desmond Gray]

Yes, I can answer that. In a sense, it's linked to the opportunity. There is a certain amount that goes through PSAB, which is mandatory, so that defines a certain opportunity.

I have to say that you're absolutely right: when the policy was first introduced, it became an incentive for a number of first nations entities to create economic businesses that could fall within the PSAB designation. Of course, that's managed by INAC. When you go to the website, you can find a list of all the companies on the web that are PSAB-designated. You have to be identified through INAC to be one of those companies so that you can actually be part of that set-aside.

I have to say that in my experience I'm seeing a further development beyond PSAB, because the opportunity is much greater than PSAB. We are seeing a maturation, I think, of first nations businesses, just as you were mentioning. They're developing greater capacity and a greater economic ability to actually succeed, to be competitive, to compete, and to win these contracts. They don't come in and say, “I'm coming in as an aboriginal business.” They come in and say, “I'm coming in as a business”. There are two streams they will access.

We have seen, in our engagement, a strengthening in many of the regional areas, where we are seeing more first nations developing businesses, and these businesses are becoming much more successful.

[Bev Shipley, Conservative, Lambton—Kent—Middlesex, ON]

Is that across the country or are there particular regional areas where...? I mean, we have first nations all across this country, but is it working across the country?

[Desmond Gray]

What I can say is that in terms of our engagement, we engage right across the country, but of course the size of aboriginal businesses and communities is relative to the demographics across the country. For example, 50%.... We have a huge number of businesses in western Canada, especially in the Pacific region, because that's where the largest number of first nations are in Canada.

[Bev Shipley, Conservative, Lambton—Kent—Middlesex, ON]

Thank you very much.

[Arianne Reza]

I will just add that we are coming back on November 3, and we'll provide more detailed responses on the PSAB piece.

[The Chair, Conservative, Tom Lukiwski]

Thank you. That's much appreciated.

[The Chair, Conservative, Tom Lukiwski]

Mr. Picard, five minutes, please.

[Michel Picard, Liberal, Montarville, QC]

Thank you, Mr. Chair.

Mr. Ieraci, you talked about the files you helped to settle. It seems that the number of files or complaints that have been presented to you is relatively low compared to all the files you have to manage.

I'm curious about the nature of the complaints that have come to your attention, and I'd like to know whether you've received complaints of collusion or unfair competition for access to certain markets. Has the nature of these complaints been brought to your attention?