Government Operations Committee on Oct. 31st, 2017

[Lorenzo Ieraci]

Thank you for your question.

We receive two types of cases at our office. The first one concerns complaints that are sent to us, and the second involves what we consider more as questions or issues that are raised and that we don't necessarily have the mandate to resolve.

On the competition side, we sometimes get questions from suppliers again. Most of the time, they are suppliers who have difficulty understanding or knowing what they need to do to do business with the federal government. In situations like this, we direct them to Mr. Gray's service.

The number of complaints and contacts we have are set out in our annual reports. Earlier, I mentioned that we are undertaking a number of activities to try to raise the profile of our office within the Canadian supplier community.

When I talk to suppliers, I first mention to them the number of contacts we receive each year. I tell them there are probably two reasons why this happens. The first is that the federal supply system is working perfectly and no improvement can be made. The second is probably because, if suppliers have a question or issue to raise, they don't necessarily know where to turn or don't know that our organization exists to give them a hand.

All this to tell you that, after a presentation, most of the providers I talk to tell me they weren't aware of our existence. That's why we hold a lot of activities to try to make our office better known.

[Michel Picard, Liberal, Montarville, QC]

Your commitment is virtually purely administrative or clerical with respect to the management of these requests. Is that right?

[Lorenzo Ieraci]

I'm sorry?

[Michel Picard, Liberal, Montarville, QC]

When you help a company that has problems, your commitment to managing these requests, in other words, all of your work, seems to be more administrative or clerical. It's not about fixing the problem of someone who notices, under a contract or a call for tenders, that something isn't working. In that case, it's not the person or the company that's going to turn to you, isn't that right?

[Lorenzo Ieraci]

Yes, the person or company can turn to us.

In a situation like that, we basically have two choices. It may be an issue that deals directly with awarding a contract in particular. If the complaint falls under the regulations, we can undertake a review of the complaint.

If someone raises a somewhat more systematic issue that demonstrates the possibility that one or more departments are in the process of undertaking a procurement practice that may be detrimental to fairness, openness or transparency, we take this into consideration when developing topics for review in our procurement practice reviews. We then review departmental practices more systematically to review their procurement processes and see if we can make recommendations to increase or improve fairness, openness and transparency.

[Michel Picard, Liberal, Montarville, QC]

I'd like to raise a point about fairness. According to the document, the strategy is to increase federal procurement among aboriginal-owned businesses.

I think there's a fundamental problem with that. In fact, aboriginal people were not organized to respond to offers. Is it because the offers did not give aboriginal businesses enough openness to respond, or was it because the market just did not exist?

The strategy isn't only a pleasant idea, it must meet a specific need.

[Arianne Reza]

Please allow me to answer in English.

I would just note on PSAB that the issues and the strategy are that the aboriginal business is designated as such by INAC. First is to get those indigenous businesses that are looking for the set-asides through the INAC door in terms of meeting the program requirements, such as the education, the outreach. That takes place across Canada.

We have added the work that's done through OSME and other efforts in PSPC to ensure that indigenous businesses know, as part of the strategy, that our outreach is there. For PSAB specifically, there are certain program criteria they have to meet.

[The Chair, Conservative, Tom Lukiwski]

Mr. Weir, we'll now have a three-minute intervention. Then we'll go back to where we started the hour for seven minutes.

Mr. Weir, you're on for three.

[Erin Weir, NDP, Regina—Lewvan, SK]

My impression is that much of the aboriginal set-aside comprises contracts to provide goods and services in first nations communities. Is that accurate?

[Arianne Reza]

The PSAB program has I think two key components. One is the set-aside where it's mandatory, where the good is being acquired or the service is being delivered in a predominantly indigenous population. Or there's the other stream, where there is, from a voluntary perspective, an interest by the department to use it. There are two different streams.

[Erin Weir, NDP, Regina—Lewvan, SK]

Yes, it would seem that in developing aboriginal businesses it would be very useful if they were able to compete successfully for the broader range of government contracts, not just for providing services limited to first nations communities.

[Arianne Reza]

I think that is actually happening. You will see that contracts are being awarded more and more outside of where that mandatory lens is, into departments using it as a voluntary lever across their procurements.

[Erin Weir, NDP, Regina—Lewvan, SK]

Outside of that mandatory set-aside, is there any other support for aboriginal businesses in bidding on the broader pool of federal contracts?

[Arianne Reza]

I think we've heard from my colleague Mr. Gray that there is a lot of outreach going on. When we're trying to work with indigenous SMEs, just like with any other SMEs, we encourage them to bid on the broader collective of procurement opportunities so that they're not limited, as you proposed earlier, to the mandatory piece.

[Erin Weir, NDP, Regina—Lewvan, SK]

Sure. In terms of how successfully that's happening, could you provide the committee with some figures? You've given us the sense that many of these non-set-aside contracts are going to aboriginal businesses. Is that something we can quantify?

[Arianne Reza]

I don't know about “many”, but certainly we're seeing an increase, and again I apologize. I understood that today's focus was on the landscape of procurement and that we would have the opportunity to come back and speak about PSAB with INAC officials and on the various stats that would be helpful for you to understand the context.

[Erin Weir, NDP, Regina—Lewvan, SK]

Absolutely, and if those stats are coming at a subsequent meeting, that will be much appreciated.

[The Chair, Conservative, Tom Lukiwski]

Thank you very much, Mr. Weir.

We'll now resume with our seven-minute interventions.

Mr. Drouin, you have seven minutes.

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

Thank you, Mr. Chair.

When I have two minutes, can you let me know? I will share my time with my good friend Vance Badawey.

I want to touch on the value proposition concept, which was introduced in the military procurement a few years ago—probably, Ms. Reza, you'd be the best person to talk about that—and also on the ITB policy we have and whether this is something that we could see being applied in other procurements. I'm curious to know if we would be limited by our trade agreements. Is that something your department would like to see?

For the benefit of this committee, can you explain the value proposition concept?

[Arianne Reza]

The value proposition concept, as well as the ITBs, which are I think the industrial and technological benefits, are two programs and policies that we see used often on the defence side, exactly for what you indicated in your narrative: they are most commonly restricted by the use of trade agreements. Trade agreements restrict our ability to use them on procurements from a government perspective where they have possibilities.

The value proposition and ITB look at investment in Canada and at regional investments and jobs and create that framework for investment in Canada through procurement. Notably, the national shipbuilding strategy will use ITBs and value propositions in their procurement strategy. They are exempt from trade agreements, so there's a bit more leeway in doing that. It's difficult for us to take these best practices and transcribe them into standard government and services procurements, which are not trade exempt.

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

If the committee would make a recommendation, the response would be “we'd love to, but we're bound by trade agreements.”

I'd like to touch on another topic. We've seen this—not to put blame anywhere—in the supplier and vendor performance, and whether we should take this into account when procurements follow up after we know, for instance, that company X failed to deliver on their promise to do x, y, and z. Is this something we should take into account? Also, can we take that into account in evaluating future bids when the same company makes an offer?

[Arianne Reza]

We're studying this issue in great detail at the moment. Vendor performance is a key issue for government as well as vendors. Vendors approach us as well. Nobody wants to see their supply chain impacted by a negative vendor performance.

How we take that into account in future bidding so that their vendor performance history is part of the future bid is something that we're currently examining and working on with our national supplier committee through our working group, in order to look at what would be the best possible set of policies and directives to guide this work.

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

If you failed to deliver on that particular contract, would you be looking at a scoring method or potentially completely refusing them to bid on the next contract or next bid offer or...?

[Arianne Reza]

There is a whole suite of possibilities that we are currently examining, including a scoring one, as you alluded to. That's what the Americans do. There is also debarment if the quality of the goods or the product and the services were delivered in such a way that it caused harm to the government and the citizens. There's a whole slate of possibilities.

Just as with vendor performance, there are also incentives to ensure strong vendor performance, and they're being examined as well.

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

That's great.

Vance, you have the floor, my friend.