Thank you for having me back.
Thank you, Mr. Chair and committee members. Accompanying me today is Carolyne Blain, director general of strategic policy for PSPC's acquisitions program. We will outline the work we do with client departments and indigenous suppliers with respect to federal procurement opportunities.
By way of a quick recap from last week's presentation to the committee, PSPC is the government's common service provider for the acquisition of goods and services for about 100 client departments. We deliver against a complex backdrop of legislative and regulatory requirements, Treasury Board policies, and trade agreement obligations.
Specific and legally binding procurement obligations arise out of the comprehensive land claim agreements, also known as modern treaties. Of the 25 modern treaties that Canada has signed with indigenous groups and territorial or provincial governments, 20 contain specific federal government contracting obligations. These obligations are not in effect across the whole country, but are applicable in large areas within the Yukon, British Columbia, the Northwest Territories, Nunavut, northern Quebec, and northern Labrador.
For each and every procurement, PSPC must first determine whether any such obligations apply, and if so, how they will affect the procurement strategy. The determination is applied by answering a series of questions—i.e., does the proposed procurement involve goods, services, real property, or construction in a geographic area subject to one or more treaties? Although the obligations are not identical in the various agreements, they are all aimed at enhancing economic opportunities of the indigenous groups benefiting from the agreement in their settlement areas. In 2016-17, a total of 365 federal contracts were awarded to indigenous firms in modern treaty areas, with a contracting value of approximately $31 million.
Ms. Murphy provided a detailed overview and a handout on the procurement strategy for aboriginal business, PSAB, so I do not propose to go through the material in detail. I would just like to highlight the following points and share some examples of procurements awarded through PSAB.
PSAB is intended to encourage aboriginal suppliers and the federal government to do business with each other. A contract that is set aside under PSAB means that only aboriginal businesses registered with INAC are acceptable bidders. The decision to use PSAB, where applicable, rests with the client departments. PSPC's role is to help its client departments identify and define indigenous opportunities in their business requirements or scope of work. Under PSAB, as in all our procurements, open competition is the default, both in regulation and in practice. Bids are prepared and submitted by aboriginal businesses, and are evaluated in keeping with the principles of federal government contracting, which are fairness, openness, integrity, and best value.
As a reference point, between 2009 and 2015, PSPC issued approximately $500 million in total contract value for 1,265 PSAB contracts. The highest-value contracts under PSAB are typically found in the following commodity groupings: health services, construction, accommodations, office supplies, IT equipment and software, and informatics professional services.
In circumstances where the prime contractor is not an aboriginal business, the PSAB allows for socio-economic benefit clauses, such as indigenous participation components to be incorporated into its procurements. For example, client departments may designate that a proportion of subcontracts on projects be reserved for aboriginal business, or that additional evaluation points be given to the bid to incentivize the hiring of aboriginal suppliers and subcontractors. However, the inclusion of aboriginal suppliers or subcontractors must be clearly identified in the solicitation as an evaluation criterion.
We are encouraging aboriginal firms to create joint ventures with other aboriginal or non-aboriginal firms in bidding for federal government contracts. If a firm is starting a joint venture, at least 51% of the joint venture must be owned and controlled by an aboriginal business or businesses. A firm must demonstrate a level of aboriginal content amounting to 33% of the value of the work performed by the aboriginal business.
I thought it would be helpful to quickly highlight some of the PSAB procurements underway.
In March 2016, as part of the Centre Block Rehabilitation Project, two professional services contracts were awarded to indigenous firms; one was awarded to the Mobile Resource Group Inc., for the provision of real property management support services valued at $750,000. A second contract was awarded to the Naut'sa mawt Resources Group for the provision of leadership development services, valued at $345,000 to date.
Public Services and Procurement Canada, or PSPC, has several air carrier agreements with indigenous owned airlines, including First Air, Canadian North, Wasaya Airways and Yukon Air North. In 2016-2017, federal spending for these air carriers totalled approximately $10 million.
The contract for the Canada Student Loans Program contains a voluntary set-aside in which the prime contractor selected under a competitive process entered into a relationship with Tribal Wi-Chi-Way-Win Capital Corporation to manage the customer contact centres for the administration of the program.
I spoke earlier of how we seek to encourage joint venture partnerships between indigenous and non-indigenous firms. One example of this was the recent Esquimalt graving dock remediation in BC, valued at approximately $28 million. The indigenous firm Malahat Nation and the non-indigenous firm Quantum Murray combined to do business. The Malahat nation derived economic benefits through this relationship and members of the Malahat nation were involved in the performance of the work. This enabled the indigenous firm to acquire training and experience in the field of marine sediment remediation. Indigenous Services worked closely with the PSPC regional office to provide a PSAB set-aside for the project.
Canada's national shipbuilding strategy provides economic benefits to communities across Canada, including for indigenous peoples. For example, the Canadian shipyards have trained approximately 1,500 indigenous people as ironworkers and sheet metal fabricators, which are highly skilled and marketable trades.
PSPC's office of small and medium enterprises, OSME, is instrumental in outreach efforts to build capacity in indigenous enterprises, and to provide information and tools on how to access federal procurement opportunities with the objective of bringing more indigenous enterprises into the supply chain.
Ongoing OSME activities include seminars, one-on-one meetings with indigenous suppliers to explain how government works, how to identify opportunities in the procurement process, and how to compete. We host indigenous-specific events during the course of the year to match businesses interested in partnering. OSME's MOU within INAC allows for the coordination of indigenous outreach at a national level, and for indigenous-specific events to take place.
Last year, OSME participated in over 120 indigenous events held locally in many Canadian communities, and reaching more than 2,300 individuals or SMEs. Over and above local and regional events, OSME networked at the annual Assembly of First Nations conference, partnered with the Canadian Aboriginal and Minority Supplier Council, and collaborated with the Canadian Council for Aboriginal Business to deliver a national webinar on doing business with the government, including how to obtain security clearances.
OSME's outreach helps identify, analyze, and reduce the barriers that can make doing business with the government unnecessarily difficult for indigenous suppliers. We share this feedback broadly for the awareness of relevant stakeholders.
Taken together and over time, these measures are intended to increase the capacity of indigenous firms to compete and participate in government contracts, and increase indigenous economic development.
Thank you.