Government Operations Committee on Feb. 23rd, 2017

[Erin Weir, NDP, Regina—Lewvan, SK]

Ms. Campbell, you've mentioned a couple of times the use of the exception for Syrian refugees. Is it fair to say that something like jackets for refugees isn't really about security, that it was more using the exception because the procurement had to be done quickly?

[Lisa Campbell]

Really, the focus for national security purposes is economic security, environmental security, human security, sovereignty, national defence and military threat, as well as the protection of intelligence. We look at all of those factors in considering whether to grant a national security exception.

[Erin Weir, NDP, Regina—Lewvan, SK]

Okay, but I mean the reason this exception was used in buying something like winter coats for refugees was mostly that it needed to be done on a rapid schedule.

[Lisa Campbell]

Again, schedule alone would not be enough to justify a national security exception. We look at all of the factors I described in deciding whether or not to grant a national security exception.

[Erin Weir, NDP, Regina—Lewvan, SK]

Based on the definition or framework of national security that you've laid out, do you believe it would be possible for provincial and municipal governments to invoke this exception?

[Lisa Campbell]

Again, I can't speak for my counterparts in provinces and territories. I can only speak to the federal experience. If you are interested in information about that, I'm sure they'd be happy to come and answer your questions.

[Erin Weir, NDP, Regina—Lewvan, SK]

Okay, but I think they probably don't have much experience with it, because they haven't been subject to trade agreements that cover procurement until now.

[Lisa Campbell]

We are working very closely with the provinces, territories, and municipalities, as CETA comes into force, to make sure they are equipped and ready, and ready to do business as well.

[Erin Weir, NDP, Regina—Lewvan, SK]

Right, so your department would have the expertise on the national security exception. Are you sharing that with the provinces and municipalities? Are you explaining to them how they might be able to invoke it?

[Lisa Campbell]

We are talking to the provinces and territories about a number of things, including procurement modernization, and all of our processes. So yes, we are very transparent with them about how we do our business and ways that they could either emulate or use our practices just to make sure that it is a standard way of doing business in Canada.

[Erin Weir, NDP, Regina—Lewvan, SK]

Okay. You described the process whereby an ADM would need to send a letter to your department requesting the use of the national security exception, so I'm wondering how often Public Services and Procurement Canada turns down those requests.

[Lisa Campbell]

At my level, I have not turned down one. However, there are a couple of cases where I have questioned whether it should have been applied. In other words, procurements came forward and in retrospect I've said to client departments that they might have wanted to think about a national security exception in a case where they didn't apply it.

It is challenged at several levels in my department before it gets to me, so there are many instances where government departments have been told it does not apply in this case for these reasons, or there is no need. There is a robust challenge function throughout, and by the time it gets to me, I do ask several questions and perform a challenge function, but in the two years I have been there, I have not said no to one, and there about 20 a year in total.

Can colleagues add to this, perhaps?

[Karen Robertson]

Mr. Chair, if I may speak, I recently wrote one of those letters to PSPC and we strongly justified in the case of infrastructure why the national security exception was so important, and we were heavily challenged. I would say the robust function that Ms. Campbell speaks about is very true. We were CSIS. We had been accustomed to.... This was just a refreshing of an authority we already had, because we have a number of infrastructure projects and PSPC is the procurement authority for our infrastructure projects. I can attest that it is a sound process.

[Erin Weir, NDP, Regina—Lewvan, SK]

It's good to hear that there's a robust challenge function happening, but can you quantify the number of requests that do actually get rejected? Maybe it's not at your level, but at any level within the department?

[The Chair, Conservative, Tom Lukiwski]

If you don't have that information at this point in time, Ms. Campbell, perhaps you could forward that to the clerk.

[Lisa Campbell]

Thank you, Mr. Chair. I would ask if it could be circumscribed in time, because it will require manually going back to government departments and asking when they made requests and when they didn't, unless you wanted a specific time period or sample.

[Erin Weir, NDP, Regina—Lewvan, SK]

Let's say the past year. One of the things that I think motivated this study was the report that Shared Services had invoked the national security exception 1,000 times in the last year, so if it's being used 1,000 times it would be surprising if it was approved every single time. That's why I ask how often it's rejected.

[The Chair, Conservative, Tom Lukiwski]

So the time frame would be one year. Thank you.

We will go now for our final intervention to Madam Shanahan.

Go ahead for seven minutes, please.

[Brenda Shanahan, Liberal, Châteauguay—Lacolle, QC]

Thank you, panel, for being here this morning. One of the virtues of being the last person to ask questions is that I can use the time to clarify my thoughts and learn something along the way. I thank Ms. Campbell for bringing us through the differences between invoking the national security exception and using sole-sourcing.

My question is this. Once the national security exception has been invoked, is there a way to know whether or not the competitive process has been used?

[Lisa Campbell]

As I described, we engage in industry discussions. I'll give you an example of one that we're doing right now. It's a request for information, which we usually put out. When we know a government department has a need, even before they've thought about the procurement strategy, we go to the market. We talk to industry. We'll have open engagement with industry, in both groups and one on one, and we'll find out who out there has a solution. We have one out right now for the Canadian Coast Guard as part of its fleet renewal. We'll talk to up to 50 companies. If the client department is thinking about invoking a national security exception, we'll tell those companies and we'll continue on with the competition, so it doesn't impact the competitive nature of the process. In fact, I offered a couple of examples this morning of many high-level, high-profile military procurements for which the national security exception has been invoked and we have proceeded competitively and awarded contracts in a competitive environment.

[Brenda Shanahan, Liberal, Châteauguay—Lacolle, QC]

That information, if not immediately, is public in some way.

[Lisa Campbell]

It is very public, yes.

[Brenda Shanahan, Liberal, Châteauguay—Lacolle, QC]

I pulled up the template letter that is used by a department that wants to request a national security exemption. It makes it very clear that it has to do with Canada's trade agreements, current and future, and that the letter is asking for the exception to be made on that basis. It has nothing to do with sole-sourcing as far as I could see.

I want to turn my attention now to Mr. Breton and follow up on my colleague's questions around the invoking of the national security exception by Shared Services. That's with reference to the cases that were brought to the Canadian International Trade Tribunal, the Dalian Enterprises and the Eclipsys Solutions case. The tribunal did find in Shared Services' favour but it had a big question regarding the integrity and fairness of SSC's procurement process. Is it common, as the tribunal said, to have “too wide an exclusion from the disciplines of the trade agreements for reasons seemingly unrelated to national security”?

I'd like to have your comments on that and on what your process has been since then to make sure that future procurements are more open, fair, and honest.

[Pat Breton]

If I may, I'll start with a clarification that we've invoked the NSE on two occasions, not 1,000 occasions. There have been two invocations, and in the last fiscal year there have been 725 contracts subject to that invocation. All of those have been declared publicly on Open Government. We do proactively disclose our contracts. Despite the national security exception being applied, they are open, public, and transparent, and they are, to a 92% degree, competitive. I think we do adhere to the rules of open, transparent, and competitive as we are obligated to through the government contracting rules and regulations, wherever and whenever possible.

As mentioned previously, the national security exception is a very important tool for SSC in order to ensure supply chain integrity and some of the other aspects that are required to ensure our national security from an IT infrastructure perspective. But those do not impact our sourcing strategy and whether we're competitive or whether we're sole-sourcing.

[Brenda Shanahan, Liberal, Châteauguay—Lacolle, QC]

Can you describe to the committee a bit more how you go about sourcing suppliers and the kinds of discussions that you have before awarding a contract?