I do. Thank you, Mr. Chair.
As the chair indicated, my name is Kathleen Owens. I'm the assistant comptroller general for assets and acquired services at the Treasury Board Secretariat. My colleague, Mark Schizkoske, is the director of procurement policy.
It's certainly a pleasure to be here today to provide you with an overview of Treasury Board policy and the regulatory framework for procurement in the Government of Canada.
As you know, the Treasury Board Secretariat is the administrative arm of the Treasury Board, a statutory committee of cabinet that acts as the government's management board, providing leadership to federal organizations through the approval of government-wide administrative policies and directives.
It's the administrative policy framework around the acquisition or procurement of goods and services that I'm here to talk to you about today.
Procurement is a key mechanism federal organizations use to meet their business needs and deliver results to Canadians. In 2015, the government entered into over 342,000 contracts totalling nearly $20 billion. As a government, we buy a very wide range of goods and services, including professional and construction services, with the majority of our contracts valued at less than $25,000.
In support of the government's commitments to open data, Canadians can find information on government contracts through a number of sources: the open government portal, as well as the purchasing activity report and the report on the proactive disclosure of contracts over $10,000.
I've provided the links in my opening remarks if you want to look at those sites.
When departments need to make purchases to address their operational needs, they have to apply a relatively complex web of procurement rules. Procurement is governed by a combination of legislative, regulatory, and policy requirements, including Canada's commitments under modern treaties with indigenous peoples and provincial and territorial governments, as well as 11 domestic and international trade agreements.
Accountabilities in procurement are also complex.
The Treasury Board sets the administrative policy for federal procurement across government and considers departmental proposals to enter into contracts for high-value and high-risk procurements. The secretariat monitors government-wide performance in the management of procurement and can make recommendations to the Treasury Board on policy changes and on specific departmental transactions.
Public Services and Procurement Canada and Shared Services Canada both act as common service providers that procure on behalf of departments and have exclusive mandates for goods and certain IT services. My colleague from PSPC will explain more about that in a few minutes.
Ultimately, it's deputy heads of departments who are accountable for complying with the requirements of the Treasury Board contracting policy. All departments have the ability to procure goods and services delegated to their minister within certain financial thresholds.
The principles of fairness, openness and transparency are the basis for government procurement, and they are set out in the Financial Administration Act. The Government Contracts Regulations support openness by requiring that bids be solicited before entering into a contract. There are four limited exceptions to this obligation: when a contract is below $25,000; when the contract is for a pressing emergency; when it is not in the public interest to solicit bids; and when there is only one supplier who can provide the good or service.
The Treasury Board contracting policy sets out the principles and the steps for how government procurement should be conducted. It applies to 98 federal organizations, listed in schedules I, I.1, and II of the Financial Administration Act. I would note that the policy does not cover crown corporations or the Canada Revenue Agency, which establish their own internal policies and procedures for procurement.
The objective of the TB contracting policy is to ensure that contracting is conducted in a manner that enhances access for all suppliers, competition, and fairness. The process should withstand public scrutiny for prudence and probity and should result in best value for the crown. By “best value”, we don't necessarily mean the lowest price, but the combination of price, technical merit, and quality, or, as appropriate, the optimal balance of overall benefits to the crown and the Canadian people.
The contract values above which TB approval is required are set out in the policy so that TB ministers can exercise their oversight role over certain transactions. TB can approve exceptions to these limits, which require departments to seek TB authority for emergencies or other department-specific contracting requirements, such as bulk fuel purchases or specialized provisions for construction.
The contracting policy also requires that departments ensure that operational requirements take pre-eminence, that competition is the norm wherever possible, that other national objectives, including aboriginal or socio-economic development priorities, can be supported, and, that departments comply with the government's trade agreement obligations.
In addition to the contracting policy, there are other related TB-approved policies relevant to procurement processes. For example, the policy on green procurement requires that environmental objectives are integrated into contracting decisions.
Now, I will say that the TB contracting policy was approved in the late 1980s and has not been fundamentally renewed in several decades. It has had periodic updates and additions that make it a combination of principles, legal requirements, and practical guidance. Over time, it has developed into a complex web of over 300 requirements, and some are very prescriptive, process-oriented rules. It can be very difficult to navigate for those who are not procurement specialists.
In terms of this committee's two areas of interest for your study on procurement, I can say that beyond encouraging fairness and openness for all participants in the procurement process, the contracting policy does not have specific provisions for small and medium enterprises. My colleagues at PSPC have programs to support small suppliers, which you will hear about.
The contracting policy does have several requirements for contracting with indigenous businesses, including contracting authorities related to modern treaties, as I've mentioned, and also that contracting authorities observe the requirements of the procurement strategy for aboriginal business, which is led by Indigenous and Northern Affairs Canada.
The effectiveness of TB Contracting Policy requirements is something that the Treasury Board Secretariat is currently examining as we undertake a policy reset exercise, in support of the direction given to the Treasury Board president in his mandate letter to review policies to reflect a more modern approach to comptrollership.
Over the past several months, we have held consultations with departments and are working to develop a policy that enables more flexible and innovative procurement strategies, and streamlines policy requirements. We also want to develop policy and guidance that enables better horizontal linkages between procurement, project management and asset management functions to improve project and procurement planning, and hopefully ensure better outcomes overall.
As you can see, this is a very technical policy area, further influenced by a complex legal environment and a number of different players with overlapping responsibilities. Ten minutes is not sufficient to give you the full picture of this, but I hope this gives you a general overview with which to begin your study.
I'm happy to answer any questions you have. Thank you.