Mr. Speaker, on behalf of the Minister of Public Works and Government Services I would like to respond to the question raised by the hon. member for Joliette concerning the transparency and fairness of the procurement process, most specifically where the Department of National Defence is concerned.
I am therefore pleased to provide the House with a general overview of the procurement policies, processes and practices of the Department of Public Works and Government Services, as well as a brief historical background of the department.
A lengthy debate on every proposed procurement of goods and services by the Canadian Armed Forces over $100 million is not needed. Nor is it very efficient. The procurement policies presently in place demonstrate precisely what the hon. member is seeking: the assurance of an open and fair process to all concerned.
The Department of Public Works and Government Services is mandated to ensure that the procurement process is one of integrity and one which is conducted in an open and transparent manner. Wherever possible competition is the preferred approach.
To ensure businesses have equal access to contract opportunities the government has put in place an electronic tendering system called MERX. Accessible through the Internet all potential suppliers are informed about procurement opportunities at the same time. MERX reduces access costs, increases competition and provides businesses with a single point of access to information on contracting opportunities.
This system is also currently being used by seven provinces and a growing number of public institutions such as municipalities, academic institutions, school boards and hospitals. It is an excellent example of the kind of co-operation we can work on with all levels of government.
In addition, in 1997 the Government of Canada launched Contracts Canada. Through this initiative hundreds of seminars were conducted annually and are conducted annually today with businesses across the country on how to do business with the crown. Furthermore, virtually all contracts processed by the department are published on the Internet, again ensuring openness and equal access at the same time.
I would also like to take this opportunity to promote the Department of Public Works and Government Services benefits driven procurement initiative. In the past the traditional approach to procurement in a complex project was for an organization to spend months, possibly years, developing a detailed requirement to present to industry. Firms were invited to present bids based on a sometimes massive document and the lowest bid usually won.
This approach had many pitfalls. That is why a new approach has been introduced to deal with the complexities and risks of major procurement projects. Basically the benefits driven procurement asks the industry to deliver certain agreed upon results rather than follow a blueprint assigned by the government. The industry is also invited to submit ideas on what sort of project should be undertaken before a formal request is issued.
What distinguishes this approach is thorough and rigorous front end planning to remove or mitigate potential problems in a procurement process. Both the front end planning and the management of the entire acquisition life cycle are based on four basic elements: a solid business case, risk analysis, clear delineation of accountabilities, and a compensation structure closely tied to the contractor's performance.
The benefits driven procurement will help support the Canadian industry, boost confidence in the public sector and confirm the public works department as a world leader in government procurement.
Federal purchasing services are provided to more than 100 federal departments and agencies by the Department of Public Works and Government Services, the Department of National Defence being its biggest client. Its mandate is to ensure the integrity of the procurement process. It is committed to open, fair, transparent and competitive procurement policies and processes. This is fundamental to our ability to deliver excellent service to our clients through the Government of Canada.
In addition, the department is determined to harness innovative ideas and make the federal procurement process even more efficient as we move into the next millennium.
The Department of Public Works and Government Services is the nation's largest purchasing agent, providing an astounding range of services to support the daily operations of government to meet the needs of all Canadians.
Every year this department buys more than $8 billion in goods and services covering 17,000 categories of service and creates more than 60,000 contract opportunities for businesses in Canada. These opportunities stimulate Canada's economy and create or maintain jobs in every sector, particularly for small and medium size businesses which are the engines of economic growth for Canada.
As I previously mentioned, the Department of National Defence is the Department of Public Works and Government Services biggest client, accounting for approximately half the department's business every year. It includes much more than weapons, ships, aircraft and military vehicles.
The public works and government services department has a long history with the Department of National Defence going back to September 1939. On the eve of the second world war Prime Minister Mackenzie King asked for the preparation of an act to create a department of supply. On the prime minister's behalf C. D. Howe, the then minister of transport, defended the move in the House of Commons by declaring that “the best guarantee that profits on war material will be kept to a minimum is to place men of skill, experience and absolute integrity” in charge of purchasing and production. This led to the war supply board which became the department of munitions and supply and then the department of defence production.
For almost 60 years the Department of National Defence has identified its needs and the Department of Public Works and Government Services has been responsible and accountable for developing and implementing procurement strategies to fulfil those needs. Canada is one of the few countries in the world where this separation exists. It is crucial to ensure the process remains fair. In the end we want Canadians to receive the best value possible for the money spent on their behalf.
To conclude, let me reiterate the government's commitment to a fair, open, transparent and competitive procurement process, a process which ensures equal access for all businesses and is managed in a way that will pass the test of public scrutiny.