Supplier Advisory Committee Meetings

Record of Discussion
Supplier Advisory Committee
Shaping Procurement Together

November 26, 2014
1:00 – 4:30
Place du Portage, Phase III, 11A1-101

Attendees

Co-chairs:

• Claire Caloren, Associate Assistant Deputy Minister, Acquisitions
• Hicham Adra, President, Ardan Fitzroy Enterprises Inc.

Members:

• Desmond Gray, Director General (DG), Office of Small and Medium Enterprises and Strategic Engagement (OSME-SE)
• Cassandra Dorrington, President, Canadian Aboriginal and Minority Supplier Council (CAMSC)
• Susanna Cluff-Clyburne, Director, Parliamentary Affairs, Canadian Chamber of Commerce
• Louis-Martin Parent, Canadian Federation of Independent Business
• Eric Miller, Vice President, Policy, Innovation and Competitiveness, Chief Executive Officer (CEO) Council of Canada
• Mary Anderson, Executive Director, WBE Canada
• Ema Dantas, President and CEO, Language Marketplace Inc. (for WBE Canada)
• Jac Van Beek, CEO, Canadian Association of Management Consultants (CMC)
• Dorothy Milburn-Smith, CEO of Perfortics Consulting Inc. (for CMC)
• Iain Christie, Executive Vice President (VP), Aerospace Industries Association of Canada (AIAC)
• Jennifer Proulx, Director, Aerospace Industries Association of Canada (AIAC)
• Janet Thorsteinson, VP, Government Relations, Canadian Association of Defence and Security Industries (CADSI)
• David Stapley, former Chair of CADSI
• Cindy Baker, VP, Government Relations and Policy, Information Technology Association of Canada (ITAC)

Office of Small and Medium Enterprises and Strategic Engagement:

• Lori Kibbee, A/Director, Supplier Engagement and Regional Coordination
• Susan MacKenzie, Policy Advisor, Supplier Engagement
• Rachelle Dean (secretariat), Policy Advisor, Supplier Engagement

Welcome and Opening Remarks

Claire Caloren welcomed participants, stated she was pleased to be taking over as Co-Chair and with the work of the committee, led a discussion on the draft terms of reference. Members agreed to the proposal to meet three times per year (February, June and October) with shorter meetings, although suggested one in person meeting per year and the others by teleconference, and expressed confidence in Hicham Adra’s Co-Chairmanship. They stated that no term length should be applied to membership, as they felt the consistency was good since many issues before the committee are longer term and that associations do not have the level of resources to accommodate regular changes. Members also asked that the government explore putting in place a mechanism to provide feedback to members about how their advice is being acted upon. Among other options, an annual update was suggested and Claire agreed to look into it. A revised draft of the Terms of reference will be shared with members prior to the next meeting.

Industrial Security Sector

Presentation summary:

Jennifer Stewart presented an overview of the Industrial Security Program and its functions. She identified the challenges faced by the program, the top four supplier concerns that have been identified, as well as the actions being undertaken to address them, with additional investment, new systems and additional resources to deal with the backlog of requests. She explained that the program is working with OSME-SE to leverage existing outreach to assist suppliers. She also wanted to impart an important message to members, about how the Royal Canadian Mounted Police will be moving to fingerprint identification only (no more name checks) and 100% mandatory credit checks, both of which will be phased in over a couple of years.

Discussion summary:

Members had many questions about the types of requests included in the metrics presented (rejects, duplicates, etc.) and the service standards described in the presentation material. The presenter was also asked about the timelines for the actions but could only provide broad timelines, since some decisions were still pending. She also mentioned that a LEAN study was planned to look at streamlining the processes. A common irritant discussed by the group is the lack of portability of security clearances, although this is not within Public Works and Government Services Canada’s (PWGSC's) jurisdiction. Members reiterated the importance of addressing these challenges with the Industrial Security Program to ease some of the burden of doing business with the government.

Acquisitions Program Transformation

Presentation summary:

Vicki Ghadban presented an update on the Acquisitions Program Transformation, Digital Program, more specifically the new e-procurement solution. She explained that the new solution would first be implemented for PWGSC use, and that she would continue to engage suppliers through this committee, among other mechanisms.

Discussion summary:

The committee discussed the timelines and agreed that the government should take the time to do this process right, and that this was a lesson learned from previous projects of this nature both in government and the private sector, including the need to streamline as required before seeking a solution. Claire emphasized the government’s desire to engage all stakeholders fully before proceeding with procurement of the solution. Members cautioned that in the rush to streamline and automate, the need for real evaluation should not be lost. A member suggested an important step would be for government to engage with Original Equipment Manufacturers (OEM) for military procurement to see how their e-procurement systems work, particularly for sub-contracting, as harmonization and compatibility between systems would benefit all players. A member requested that PWGSC engage with suppliers on how future on-boarding and supplier risk management will be handled. As well, members asked about payment option in the new system, and the possibility of e-invoicing, as these remains irritants, especially for SMEs. It was suggested that some areas are not appropriate for automation, such as complex defence projects. Claire confirmed that the transformation would first target less complex commodities and then apply lessons learned to further transformation.

Industry Consultations on SMEs and Outreach

Presentation summary:

Desmond Gray updated the members on the 2015 SME Study. The study will contain approximately 35 questions and take about fifteen to twenty minutes to complete. Desmond also gave a high level outline of the findings of the recent supplier consultation initiative by the Minister of PWGSC. He explained that further information would be posted on buyandsell.gc.ca, as well as sent directly to the members of Supplier Advisory Committee (SAC). Claire explained that all of these sources of information feed into existing initiatives or plans for future improvements, helping to focus the department’s attention.

Discussion summary:

Members have agreed to assist in the development and delivery of the SME Study. OSME-SE will send them the draft questionnaire, along with the one from 2012 and the report, for comment. It was agreed that the study must hear from those who are not currently government suppliers because they have given up on the process. Members suggested OSME-SE outline what has changed in the procurement environment since the last study (tenders on buyandsell.gc.ca, loss of the Document Request List, etc.), as this would be useful to interpret the findings. Members mentioned other organizations doing studies (Industry Canada, Shared Services, etc.) and wondered whether OSME-SE was or could be working with them to combine our efforts, or ensure ability to cross reference data. This was especially true about tombstone data, as members expressed that portable tombstone data would make all these collections easier for those doing the questionnaires. Members also encouraged OSME-SE to break down the information about firm profile and size better, including micro, small, medium and large, and women owned, aboriginal owned etc.

Integrity Framework

Presentation summary:

Micheline Nehmé and Lynne Tomson presented a quick overview of the Framework and its evolution to the latest revisions in March 2014.

Discussion summary:

Most started by expressing that their organizations and members were all supportive of a strong integrity regime in contracting, however, felt that some of the new provisions went too far and that benefits would be greatly outweighed by the cost to government and industry. Members were strongly of the view that the Committee, as a whole, had not previously proposed, supported, or been consulted on the 2014 changes to the Integrity Framework. As a result, their concerns about the new provisions were discussed at length to ensure a full understanding of the issues around the implementation of these changes. Associations have sent letters and had meetings with the Minister and senior officials at PWGSC to raise these issues.

Among the issues, members expressed concern about equivalency of offenses in all places in the world. It was felt flexibility needed to be built in to the framework to allow the government to exercise judgement in the applicability of the foreign convictions. Members cautioned that a balance needed to be struck in the application of any such flexibility to ensure Canadian firms did not suffer disproportionally (fair treatment for all potential suppliers). Members expressed concerns with the definition being used for affiliates. They encouraged the government to do additional research on other jurisdictions, as most allow for some mitigation or redress for companies found in breach of the provisions. It was felt Canada should follow this example as this would act as an incentive for full disclosure from firms.

The perceived lack of clarity was discussed as it was felt that firms would not make the necessary investments to bid on government business if they were unsure of whether they would be rendered ineligible. It was felt that this issue affects firms of all sizes.

Members asked that PWGSC put the framework on hold until the department could work with industry to ensure proper revisions to strengthen the framework without unintended consequences at implementation. Claire and Micheline committed to bringing this feedback to senior management, and Barbara Glover of Departmental Oversight Branch, would be having bilateral meetings in the near future.

SAC Sub-Committees – Update on Progress

Presentation and discussion summary:

As the meeting was running late, it was agreed that presentations would be skipped and discussion would focus on the issue some members expressed with the Risk Management Sub-Committee. They felt the Professional Services group was working well. Members explained that the focus of the Risk Management Sub-Committee was too narrow, as the right people from government were not at the table at the time the scope was established. The original intent as described at the November 2013 SAC meeting was to bring in experts in risk management to develop a position paper, which frames the problem clearly, identifies where results do not meet original intent of policy, and proposes a balanced approach to risk management. Members stated they wished to work on larger risk issues than limitation of liability, including the impact on cost and profit. Some government projects had done well on this front, such as the National Shipbuilding Procurement Strategy, and members felt some good work has already been done to define this issue. There was some discussion whether work on limitation of liability and the commodities groupings, the current issues before the committee, should be put in abeyance or form a separate committee to deal with them. It was agreed that a draft definition of the scope and structure of this/these proposed sub-committee(s) would be developed and shared with the members prior to the next meeting.

Forward Agenda

The agenda for the next meeting will include the missed update from the Professional Services Sub-Committee, as well as a review of the proposed scope and structure of the sub-committee on risk. Members were reminded to communicate with Hicham Adra should they have additional items to propose.

Next Steps

According to the three times per year schedule discussed at the meeting (February, June and October), the next meeting will take place in February 2015.