Evidence of meeting #7 for Government Operations and Estimates in the 43rd Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was equipment.
A recording is available from Parliament.
5:20 p.m.
Liberal
Majid Jowhari Liberal Richmond Hill, ON
Thank you.
You mentioned that during the RFP there were 63 technical requirements, and then for whoever passed those technical requirement the second element came into it, which was the lowest price.
If my notes are correct, there were seven responses to the RFP and of those there were three that qualified, that met those 63, and then Nuctech was the lowest price.
Are you in a position to be able to share the gap between the price that Nuctech provided and the price that the other two provided?
5:20 p.m.
Acting Assistant Deputy Minister, Procurement Branch, Department of Public Works and Government Services
Thank you, Mr. Chair, for the question.
I actually don't have that information with me. If it's possible, we could provide that to the committee.
5:20 p.m.
Liberal
Majid Jowhari Liberal Richmond Hill, ON
I would appreciate that.
Are any of the other two that were short-listed Canadian companies? I'd really like to think that we have some Canadian companies that build conveyer-style X-ray and walk-through X-ray machines. Were any of the other two Canadian companies, by any chance?
5:20 p.m.
Acting Assistant Deputy Minister, Procurement Branch, Department of Public Works and Government Services
I don't know of the other two that met all 63. What I can say is that, of the seven companies that submitted bids—obviously one of them was Nuctech, which is from China—the remaining six companies were either from the U.K., Canada or the U.S.
5:20 p.m.
Liberal
Majid Jowhari Liberal Richmond Hill, ON
Okay, but you don't know whether the short-listed ones were Canadian.
5:20 p.m.
Acting Assistant Deputy Minister, Procurement Branch, Department of Public Works and Government Services
Not offhand, I don't.
5:20 p.m.
Liberal
Majid Jowhari Liberal Richmond Hill, ON
Okay.
I have a little bit of a technical question just for my clarification. When you put a standing offer, what is the typical dollar value that's attached to that standing offer?
5:20 p.m.
Acting Assistant Deputy Minister, Procurement Branch, Department of Public Works and Government Services
Technically, a standing offer has a dollar value of zero. In our systems, we actually need to put in a dollar amount, so our procurement officers will tend to put $1.
In request for standing offers, there are times when we will give an estimated value of what we anticipate could be the potential call-up value of all the call-ups that would be issued.
5:20 p.m.
Liberal
Majid Jowhari Liberal Richmond Hill, ON
So the $6.8 million is your estimated value of the contract, or was it actually what Nuctech's bid came in at?
5:20 p.m.
Acting Assistant Deputy Minister, Procurement Branch, Department of Public Works and Government Services
No, that was.... The standing offer has no dollar value associated with it, so the total cost would depend on what call-ups are issued and how much equipment, in this case, would have been procured or could have been procured.
The $6.8 million, I assume, would have been an estimate in terms of what a potential value would have been, because as I indicated there's no obligation on the part of the Government of Canada with regard to these.
5:20 p.m.
Conservative
The Chair Conservative Robert Gordon Kitchen
Thank you, Mr. Ieraci and thank you, Mr. Jowhari. We've come to the end of our first hour.
We are now going to enter our second hour.
We will start with six minutes with Mr. McCauley.
5:20 p.m.
Conservative
Kelly McCauley Conservative Edmonton West, AB
Thanks very much.
Mr. Ieraci, Nuctech was awarded the standing offer. There were two different items. Did they receive the standing offer for both the X-ray machine and the other item, or just the one?
5:20 p.m.
Acting Assistant Deputy Minister, Procurement Branch, Department of Public Works and Government Services
It was just the one.
5:20 p.m.
Conservative
Kelly McCauley Conservative Edmonton West, AB
Did anyone else receive the standing offer award, so to speak, for that specific item that Nuctech received for, or was it only for Nuctech?
5:20 p.m.
Acting Assistant Deputy Minister, Procurement Branch, Department of Public Works and Government Services
Do you mean the standing offer with regard to conveyor belt X-rays?
5:20 p.m.
Acting Assistant Deputy Minister, Procurement Branch, Department of Public Works and Government Services
There was only one standing offer that was awarded.
5:20 p.m.
Conservative
Kelly McCauley Conservative Edmonton West, AB
To Nuctech.
What would have happened if Global Affairs had come out and said, okay, we're going to go ahead and buy? Would it automatically go to the existing standing offer or would it go to another competitive bid?
5:20 p.m.
Acting Assistant Deputy Minister, Procurement Branch, Department of Public Works and Government Services
In a scenario where a standing offer is in place and the department wants to issue a call-up against that standing offer, they would issue the call-up to the company that—
5:20 p.m.
Conservative
Kelly McCauley Conservative Edmonton West, AB
So it would have gone to Nuctech. The process that PSPC ran would have led to Global Affairs buying from Nuctech and no one else.
5:20 p.m.
Acting Assistant Deputy Minister, Procurement Branch, Department of Public Works and Government Services
For X-ray conveyor belts.
5:20 p.m.
Conservative
Kelly McCauley Conservative Edmonton West, AB
Yes, exactly. A bit of the push-back seems to be that, oh, it's only a standing offer, so it's no big deal. They in fact basically won the right—the only one, the only company—to sell that to us. There wasn't a contract, but the narrative should be “They did not get the contract yet”, because if the media had not brought this up and this hadn't exploded, they would have received the contract. Am I correct?
5:25 p.m.
Acting Assistant Deputy Minister, Procurement Branch, Department of Public Works and Government Services
If call-ups had been issued against the standing offer, yes, those call-ups would have been given contracts.
5:25 p.m.
Conservative
Kelly McCauley Conservative Edmonton West, AB
There's a comment that was in the media. I'm going to read it out:
For Global Affairs to proceed when China has been implicated in a systemic campaign of cyber-espionage against Canada, while former diplomats are being held hostage and tortured in Chinese prisons, is unintelligible.
Do you agree with that? I'm sitting here and I'm dumbfounded that this could have possibly happened. I accept Ms. Mullen's point that technology has been changing, but a five-year-old would know that I'm not going to bring a piece of Chinese technology that's owned by the Chinese Communist Party into Canadian property where they could have a Wi-Fi signal sending out, collecting information and where their workers could come in and put in a USB drive.
Do you agree with the assessment that it's “unintelligible” that this could have happened? What do we need to change to ensure this never happens again so that we're not sitting here and saying that technology has changed or that we didn't think of putting an NSE on it?
I'm sorry for sounding so critical, but good Lord.