Government Operations Committee on Oct. 6th, 2022

[Mollie Royds]

Go ahead, Clinton. Do you want to take this one?

[Clinton Lawrence-Whyte]

No, that's okay.

[Mollie Royds]

Thank you very much for the question.

In terms of ensuring that we are targeting the right under-represented groups, there are various means of certification. One is self-certification. Another is some increased form of validation, and the third is having a third party certify the under-represented suppliers. As part of the supplier diversity action plan, we're currently evaluating our options in relation to that, and that will form part of the program as we move forward.

A big key component of this for us, obviously, is increasing our understanding of our supplier base, and my colleagues have already spoken about the e-procurement system we have launched and about CanadaBuys. One of the pieces of that is a supplier questionnaire, which collects disaggregated data in the way that we are asking for suppliers to identify themselves, and it will allow us to work in partnership with StatsCan to ensure that we have a good understanding of our supplier base. That also goes to the question of understanding it regionally as well as well as in terms of a specific under-represented supplier group.

The final point I would raise is in relation to the procurement strategy for indigenous businesses, for which our colleagues at Indigenous Services Canada have the lead. The criterion there is to be registered in the indigenous business directory, so that particular one has a specific process in place to support that policy.

I don't know if any of my colleagues have anything they want to add.

[The Chair, Conservative, Robert Gordon Kitchen]

Thank you, Ms. Royds.

We'll now go to Ms. Vignola for two and a half minutes.

[Julie Vignola, Bloc, Beauport—Limoilou, QC]

Thank you very much.

Ms. Royds, you spoke earlier of the barriers SMEs owned by members of under-represented groups face. Let's contrast two SMEs: one owned by a member of an under-represented group and one owned by a member of an overrepresented group. Let's say they both have the same features and the same number of employees. They both bid on the same contract. It could happen.

What barriers would the business owned by the member of the under-represented group face that the business owned by the member of the overrepresented group would not face?

[Mollie Royds]

As indicated, we are aware of the barriers faced by under-represented suppliers in procurement and we have engaged in extensive consultations with the groups. Some of the things we have heard are around an awareness of our procurement opportunities, so that's one of the important pieces of having CanadaBuys and its capabilities—

[Julie Vignola, Bloc, Beauport—Limoilou, QC]

Forgive me, but I have to cut you off again.

I realize that awareness of procurement opportunities can be a challenge for SMEs. What I want to know is how that particular problem would affect the SME owned by a member of an under-represented group, but not affect the SME owned by a member of an overrepresented group, when both businesses are similar in size.

In that specific scenario, how would the barrier of procurement opportunity awareness affect the businesses differently?

You seem to be saying that, if a business belongs to a member of an overrepresented group, even if that business is a SME, that business owner is aware of all procurement opportunities, whereas the SME belonging to a member of an under-represented group isn't aware.

How do you explain that? How does that barrier affect one business, but not the other?

Everyone should be affected by that barrier when you're talking about SMEs. How does it become a criterion that incorporates judgment, and if it is, why does it apply to only one group?

[Mollie Royds]

Thank you for the question.

In particular, in relation to under-represented groups, again, we have various supports. My colleague Clinton, who's at the table, can speak more on Procurement Assistance Canada supports available to those that do not have the same experience or success in our procurement processes. Some of these are about awareness of opportunities and some also relate to the complexity of our processes.

We have complex statements of work and requests for proposals that we put out into the market. Many of the companies that are more familiar with the procurement process and are broadly represented within it, as was already discussed, have bid-writing units as part of them, and a lot of—

[Julie Vignola, Bloc, Beauport—Limoilou, QC]

Sorry to cut you off, but I just want to point out that a SME is not a company. A SME with five employees is still a SME with five employees no matter who runs it. They should all run into the same barriers.

[The Chair, Conservative, Robert Gordon Kitchen]

Ms. Vignola—

[Julie Vignola, Bloc, Beauport—Limoilou, QC]

I wanted to know which barriers those businesses did not face. You can provide a written answer.

Thank you.

[The Chair, Conservative, Robert Gordon Kitchen]

Mr. Lawrence-Whyte, if there's something further you could add to that answer, if you would submit that to the clerk, it would be appreciated. Thank you.

Mr. Johns is next, for two and a half minutes.

[Gord Johns, NDP, Courtenay—Alberni, BC]

I'd like to hear which departments are furthest ahead in achieving diversity objectives in their procurement, especially indigenous procurement, and whether there any lessons that can be applied to departments that are lagging.

This would be for Mr. Mills.

[Michael Mills]

Thanks for the question.

I think we're waiting for the end of this reporting cycle to have clarity on who is the best, but from more anecdotal notes, recently Health Canada has had very strong results in terms of their indigenous procurement.

I believe what I heard was that they're in the teens in terms of their percentage of procurement from indigenous businesses. I was involved in some of their code procurements and I know that they took a strategy to try to ensure that if there were indigenous suppliers, they were included, and that helped contribute to it.

We have engaged with Indigenous Services Canada to bring in their chief financial officer, who's responsible for procurement for that department, to a committee of multiple departments to explain what their strategies have been in order to achieve those results and to try to replicate them in other departments.

[Gord Johns, NDP, Courtenay—Alberni, BC]

It would be good to learn where it's working, where it isn't working and what you're going to do about where it isn't working.

The 2021 annual report by the procurement ombudsman listed the top issue of federal procurement, identified by stakeholders, as evaluation criteria that were “unfair, overly restrictive or biased”. Stakeholders were concerned in these instances that only one bidder would be able to meet the criteria. Another top-ten issue was timelines that were so tight that only an incumbent contractor would be able to meet them.

Can you talk about what steps PSPC is taking in response to these issues to level the playing field so that new entrants, especially indigenous entrants, have a better chance of success?

[Michael Mills]

In terms of the evaluation criteria and the actual requirements, those are elements of the procurement package that are developed through the departments to define what their needs are. They define what they're putting priorities on in terms of the selection.

One thing we realized, having identified this, is that we need to do a higher level of due diligence with a lens that looks at how fair these are and some of the potential pitfalls, and then provide more guidance to departments on those aspects.

More generally, through contract simplification and simplification of procurement documentation, we are looking to try to simplify the process. We are looking to reduce the amount of work that is required of firms in responding to bids and we are trying to make sure that the evaluation criteria and what the departments are demanding is reasonable and approachable for a wider range of businesses.

[The Chair, Conservative, Robert Gordon Kitchen]

Thank you, Mr. Johns.

We'll now go to Mr. Lobb for five minutes.

[Ben Lobb, Conservative, Huron—Bruce, ON]

Thanks very much.

Thanks for being here in person for your appearance today. It's good to see.

First, in the last four years, let's say—I don't know how closely you track it—what is your estimate of when you've done business with indigenous businesses? Do you have a number?

[Michael Mills]

Internally to PSPC, we have been around 5%. It varies from year to year in terms of what we procure on behalf of ourselves. Overall, for the government as a whole, it's a little bit less. I'd have to get back to you with a precise number.

Part of it is that procurement, when we're serving the overall government, uses a number of different systems. Some of those systems do not have the markers for the contract and whether it's with an indigenous business. We have to do a calculation after the fact to identify which of the businesses we've done contracting with are indeed indigenous.

[Ben Lobb, Conservative, Huron—Bruce, ON]

That brings up an interesting question that I was thinking about as well, because I know the CanadaBuys system. It looks like it's an SAP platform—

[Michael Mills]

Yes.

[Ben Lobb, Conservative, Huron—Bruce, ON]

—and I'm pretty sure most of the government stuff is Microsoft, if I'm not mistaken. I could be wrong about that, so how many different systems have to communicate with one another for you to actually get your 5% target? How many different software systems are there?

[Michael Mills]

Right now, we would probably be at about half a dozen different systems, but with the full implementation of the electronic procurement solution, we will be moving to one system.

One of the things we are doing in parallel is looking at our data analytics as a whole and being able to remove the data from these systems, put them in the warehouse, and then use one data analytic tool to be able to analyze all of the data coming from the different systems.

[Ben Lobb, Conservative, Huron—Bruce, ON]

Okay. Have you been able to identify how many indigenous businesses there are out there that you could actually contract with?

[Michael Mills]

Thank you for the question, Mr.—