Evidence of meeting #117 for Government Operations and Estimates in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was procurement.
A recording is available from Parliament.
12:20 p.m.
Liberal
Alexandra Mendes Liberal Brossard—Saint-Lambert, QC
Thank you all for being here.
To follow on Mr. Kendrick's comment on Britain, I've been reading Richard Bacon's book Conundrum.It's all about public accounts in the United Kingdom. He talks a lot about defence, so I do understand where you're coming from.
I'd like to ask you all, and you answer however you see fit, is the government's agile procurement initiative beginning to improve this process? Do you believe this would be a very innovative way to start addressing the procurement issue?
12:20 p.m.
Vice-President, Operations, Vard Marine Inc.
I will just say that we don't see any evidence of that yet.
12:20 p.m.
Director of Direct Sales, Business Solutions Division, Sharp Electronics of Canada Ltd.
My experience to date has been that the initiative is well described, well spoken, and understood at the most senior levels, but it's not translating down into the organizations that are actually doing the buying.
A clear example—just very briefly—would be this procurement that we're so concerned about is to be awarded for six to eight years. If size is a qualifier today, that means that our company and Canon are locked out in perpetuity because we'll never have the size in six to eight years.
12:20 p.m.
Director of Direct Sales, Business Solutions Division, Sharp Electronics of Canada Ltd.
The size of our business in Canada was on pass/fail in the procurement process.
The theory is terrific, but awarding on a six- to eight-year term is inconsistent with agile.
12:20 p.m.
Liberal
Alexandra Mendes Liberal Brossard—Saint-Lambert, QC
Okay, and does that then go against Shared Services procurement policy right now? Is that what you're saying, that this whole agile initiative goes against it?
12:20 p.m.
Director of Direct Sales, Business Solutions Division, Sharp Electronics of Canada Ltd.
Yes, it does not align to the overall direction, correct.
And it will, in our view, also preclude innovation from companies like ours because you've narrowed the organizations you can buy from.
12:20 p.m.
Liberal
Alexandra Mendes Liberal Brossard—Saint-Lambert, QC
The initiative does that, or the current situation does that?
12:20 p.m.
Director of Direct Sales, Business Solutions Division, Sharp Electronics of Canada Ltd.
The awarding to three vendors for a six-year to eight-year term will preclude innovation from the other organizations in the industry as we bring....
12:20 p.m.
National Sales Manager, Federal Government Accounts, Canon Canada Inc.
The initiative does that.
12:20 p.m.
Liberal
Alexandra Mendes Liberal Brossard—Saint-Lambert, QC
Okay, that's it.
But the initiative would do that, if I understand correctly. In your view it hasn't trickled down to the executives who should be implementing it.
12:20 p.m.
Director of Direct Sales, Business Solutions Division, Sharp Electronics of Canada Ltd.
Correct.
12:20 p.m.
Liberal
Alexandra Mendes Liberal Brossard—Saint-Lambert, QC
Looking at the other speakers this morning, how would we make sure that this then trickles down where it should go so that we continue to provide that? As you said, we need outcome-directed procurement, not necessarily just the funding or the money costs. If we want to go to outcome procurement, how do we ensure that the initiative is a trickle-down one, in your recommendations?
12:20 p.m.
National Sales Manager, Federal Government Accounts, Canon Canada Inc.
Yes, and I think aligned with our recommendation, you're doing that today. The model they're using today does just that. It opens up the business to large corporations like Canon and Sharp. The fallout of the business is with the small and medium-sized businesses. By bringing in this new initiative, you will eliminate that. You will go away from that completely. You will go to mostly two—they say three—multinational companies that will go out and bring their wares out on their own.
12:25 p.m.
Liberal
Alexandra Mendes Liberal Brossard—Saint-Lambert, QC
Basically you're telling me that the Shared Services policy is against the agile government procurement initiative.
12:25 p.m.
National Sales Manager, Federal Government Accounts, Canon Canada Inc.
If you look at what they're doing in their proposal, it does not align with agile procurement.
12:25 p.m.
President and Chief Executive Officer, Association of Consulting Engineering Companies – Canada
I certainly understand the attractiveness of Shared Services in terms of value for taxpayers, for consistency, and so forth.
In professional services, though, it could unintentionally become another layer between the service provider and the end-user. That's a little bit of a challenge because, particularly if you want outcome-based procurement, we need to understand the needs.
I'll use a past life in the provincial government. The judges drive what a courthouse looks like, but you don't get to spend face time with a judge. When they want a window changed so they can overlook Lake Ontario, it's going to happen whether at 90% of design or 10% of design.
Because we had to work through an intermediary every decision, every change, takes that much longer. As I alluded to, early in the design you can accommodate a lot, late in the design, very little. We like the notion of consistency, but if there is another agency—if there are more hands that paper has to pass through, or files have to pass through—then we just feel that both architects and we are that much more removed from the client or the end-user of our services.
12:25 p.m.
Conservative
12:25 p.m.
NDP
Brian Masse NDP Windsor West, ON
Thank you, Mr. Chair.
I'll continue with Mr. Montuoro and Mr. Ralph.
Some of your testimony is very important in terms of facilitating a fairness in the sense of it. The six to eight years seems very cumbersome, especially when corporations right now are doing massive acquisitions and changes, not just internally, but also with elimination of competition by purchasing...of competition.
What types of requirements are you familiar with? You may not be able to answer this, but in terms of the bidding contracts for the six to eight years, are there any requirements for those who are making the bids to either retain some type of corporate structure or independence, or is it basically if it's purchased later on or merged as a company, it just becomes their standard operating contractual grouping under the new entity?
12:25 p.m.
National Sales Manager, Federal Government Accounts, Canon Canada Inc.
It's a great question, and I think I know where you're going with this. I don't know the answer to that.
12:25 p.m.
Director of Direct Sales, Business Solutions Division, Sharp Electronics of Canada Ltd.
The Shared Services process has been such that after industry consultation and an invitation to qualify, those that were shortlisted are currently going through—as we understand it—a “review and refine requirements” phase. They've shortlisted down to successful proponents. Past that, when they down-select to as few as three, they'll issue the final RFP. Having been locked out of the process, both of us at earlier phases in this procurement were not aware of what the final arrangements will look like and have no visibility to it.
12:25 p.m.
National Sales Manager, Federal Government Accounts, Canon Canada Inc.
Within the document that they refer to as the ITQ, the invitation to qualify.... Within the current standing offer, if there is a name change—so if Canon Canada Inc. were to change its name to Canon Europe—we no longer have a standing offer. They would have to send out a request for amendment to all of the parties that are currently part of that standing offer, and have everybody agree to allow the name change.
Is that part of this new ITQ? There is nothing there that I saw. It was actually a question that I asked not too long ago.
12:25 p.m.
NDP
Brian Masse NDP Windsor West, ON
I see that as a strategic flaw in terms of the overall process. We're encouraging the elimination of competition, in many respects. We're also, in my view, facilitating a potential erosion of supporting SMEs to grow, and also domestic industries as well. I see this as a structural problem in the bidding contract that's being proposed. It's one of the reasons it should be immediately revisited, in my opinion, because six to eight years is a long time. It's a long time to eliminate competition and to discourage SMEs from participating in federal procurements of any type.
12:30 p.m.
Conservative
The Chair Conservative Tom Lukiwski
Colleagues, I think we'll have time for two more seven-minute interventions before we suspend to go into committee business.
We'll start with Madam Ratansi.
12:30 p.m.
Liberal
Yasmin Ratansi Liberal Don Valley East, ON
When it comes to three and a half minutes, I'll share it with Mr. Drouin.
Thank you all for being here. I am trying to come to grips with what you're saying from an industry perspective, from a business perspective, and looking at it from a government perspective. Government bureaucracy is always risk-adverse.
Mr. Gamble, you were saying that by using best price versus low price, we're losing out on innovation, and we're losing out on truthfulness. We saw it in Phoenix. It's a boondoggle. We were told there were life savings. No. There are no life savings. In fact, we have to wear it, as MPs.
How would you help the government—through your QBS system—to ensure that procurement is done, governance is proper, and that there is training? Mr. Kendrick was talking about there not being enough training. How do you marry the two?