Supplier Advisory Committee Meetings

Record of Discussion
Supplier Advisory Committee

October 28, 2015
1:00 pm – 3:30 pm
Teleconference

Attendees

Co-chairs:

• Randal Cripps, Associate Assistant Deputy Minister, Acquisitions
• Hicham Adra, President, Ardan Fitzroy Enterprises Inc.

Members:

• Cam Vidler, Canadian Chamber of Commerce
• Louis-Martin Parent, Canadian Federation of Independent Business (CFIB)
• Mary Anderson, Executive Director, WBE Canada
• Dorothy Milburn-Smith, CEO of Perfortics Consulting Inc. (for CMC)
• Janet Thorsteinson, VP, Government Relations, Canadian Association of Defence and Security Industries (CADSI)
• Kelly Hutchinson, VP, Government Relations and Policy, Information Technology Association of Canada (ITAC)
• Desmond Gray, Director General, Office of Small and Medium Enterprises and Strategic Engagement

Office of Small and Medium Enterprises and Strategic Engagement (OSME-SE):

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

Welcome and remarks

Randal opened the meeting noting he was looking forward to working with the group as the new Chair. He also provided background on the process underway to brief the new government. Hicham wished Claire Caloren, the former Chair, well in her new job, and welcomed Randal on behalf of the members.

DND delegation of authority and costing policy review

Sylvie Girard, on behalf of the Director General or Policy, Risk, Integrity & Strategic Management, provided an update to the group on the work to increase the Department of National Defence’s delegation of authority for procurement, which was a commitment under the Defence Procurement Strategy. She explained that it would be undertaken in increments over three phases ($400K, then $1M, and finally $5M by November 2016); once completed, the change would represent 10% of PWGSC‘s business volume by value. The two departments are working together to ensure capacity to respond to this change. Members sought clarification if the increase applied to goods only; Sylvie confirmed but specified that it did not include IT purchases already transferred to Shared Services Canada. As well, DND is working closely with PWGSC on the bid solicitation templates to ensure standardization.

Sylvie also updated members on the Costing Policy review underway. She stated that the existing governance for this initiative, which includes industry, would soon review recommendations developed by a consultant on the costing principles (expected at the end of November).  The working group would then make final recommendations to PWGSC, and changes could be undertaken rapidly as the policy is under PWGSC’s authority.

Supplier consultation initiative

Simplifying and standardizing contract and solicitation templates

Sylvie Girard updated the members on the work undertaken over the summer in anticipation of the first meeting of the Templates Working Group (WG) of SAC on December 10th. She explained extensive research had been undertaken, including other domestic and international jurisdictions. She also noted work to strengthen the internal governance required to streamline the templates, in collaboration with Legal Services. She committed that the results of that work would be made available to the SAC Templates WG for their December 10th meeting for review. She also stated that DND was invited to become a member of the WG to ensure the PWGSC client perspective is taken into account. Another initiative she presented was the sector’s new plain language guide to assist procurement officers in creating easily understood solicitations, which she also committed to sharing with the WG. Members agreed that eProcurement had the potential to resolve some of the issues with standard templates.

Flexible bid compliance

Sylvie Girard explained that this topic would be treated along with the templates at the December 10th SAC Flexible Bid Compliance Working Group. She spoke of a two-step bid evaluation process which was piloted a few years ago, and advised that PWGSC staff would update the WG. She explained the flexible bid initiative focused on classifying administrative versus substantive elements of a bid which are critical and, need to be received at the time of bid receipt. The WG will review these proposed classifications, and then discuss additional changes to be implemented at a later stage. Members sought clarification on the difference between the two-step bid evaluation process which was piloted a few years ago and this flexible bid initiative. Sylvie clarified the two-step pilot had a much broader scope, and explored a process to catch errors in bids without getting into bid repair and while ensuring fairness for all bidders. eProcurement was also discussed as a potential solution to many of these issues

Improving the effectiveness of standing offers and supply arrangements (SO/SA)

Sylvie Girard explained that a review of the SO/SA process and instruments had been underway internally for a few years, looking at effectiveness, rule complexity and consistency in application and use. A report of findings is expected shortly. She explained that the intent was to leverage the SO/SA Working Group meeting on December 11th to gain an external perspective. The first phase of the initiative deals with mandatory commodities, followed by the non-mandatory. Vicki Ghadban explained this work was key for the implementation of the new eProcurement Solution. Main pain points for discussion include the thresholds and the various models used to allocate business across different procurements. eProcurement staff would be participating in all SAC WGs.

Electronic Procurement System (EPS)

Vicki Ghadban, the Director General of the Acquisitions Program Transformation, presented an update to the committee, including an accelerated schedule for full implementation by the end of fiscal year 2017-18. She confirmed additional resources had been put on the project, which is a key enabler for government business. She confirmed that the first meeting of the SAC eProcurement Working Group would take place on December 1st.

Members discussed some of the benefits of EPS, including how the necessary business standardization would make things easier for suppliers and the expectation that increased use of purchasing cards would speed up payment to suppliers. They advised that PWGSC should ensure costing looked at direct and indirect costs and savings. They also advised against treating this as an IT project, and Vicki agreed that the aim was to treat it as a business transformation project, enabled by technology. She also explained that a great deal of engagement was underway and would be ramping up.  Members asked whether policy changes would be required and Vicki confirmed that these were already underway. Members also suggested focus groups of users be brought in prior to launch, including both regular and super users, to ensure the new environment did not cause unintentional difficulties from a user perspective. It was confirmed that the intent was to use the WG as a first step, but members were also encouraged to send in any lessons learned immediately so they could be incorporated at the RFP stage.

Sharing of PWGSC’s procurement instruments with the provinces and territories

Desmond Gray presented an update on the initiative to open PWGSC procurement tools for use by provinces and territories. The Order in Council (OIC) to permit this was approved in February 2015, and a consultant produced a report in April 2015 which identified twelve opportunity commodities. He explained that the necessary governance has been put in place, and that regular meetings have led to the identification of six commodities being considered by provinces (Office Supplies, Snowmobiles, ATVs, Motorcycles, Lab Supplies and Tires). He stated that Office Supplies were the current focus due to the timelines for the renewal of the Standing Offer, and three provinces were working closely with PWGSC. He explained that the experience would inform future collaborations, and that while Shared Services Canada had pursued their own OIC, they were participating. Members asked about the pharmaceuticals commodity, and it was confirmed that it could be explored under this initiative, but that other procurement opportunities between the jurisdictions/provinces and the sharing of experiences and lessons learned are being considered.

Update on SME study results

Lynn Ménard began by thanking the SAC members who assisted OSME-SE in reaching twice as many suppliers and non-suppliers than during the 2012 survey, for a total of 728 completed surveys, of which over 90% were small businesses (1-99 employees) and over 35% had not done business with the government in the last three years. Responses were also received from all provinces and territories except Nunavut. She explained that there were no major surprises in the feedback and identified barriers (challenges and restrictive requirements, volume of paperwork, contracts based on price rather than value, complexity of process, difficulty finds opportunities, security clearance processes, solicitation document requirements, etc.). The main areas for improvement suggested by respondents were: simplifying solicitations documents; improving stakeholder engagement; enhancing Buyandsell.gc.ca; implementing a new e-procurement system; awarding contracts based on overall value rather than on lowest price and reducing, and simplifying qualification criteria. Lynn explained that the findings support the work underway to improve procurement. She committed to sharing the report in November and offered members access to the raw data upon request. She also asked members to share the findings with their association memberships. Desmond Gray explained that this input was also being considered in the Acquisitions Program Supplier Action Plan. He asked members if they could identify supplier representatives for the buyandsell.gc.ca governance body. Lynn concluded by advising that her team had prepared a SME Guideline, based on previous discussions with supplier groups, to sensitize procurement officers to suppliers’ concerns with procurement processes.

PWGSC Integrity Regime

Lynne Tomson, the acting Director General responsible for Integrity with the Departmental Oversight Branch, gave an update on the new Integrity Regime for PWGSC which came into force on July 3, 3015. She presented the changes that have been added to supplier ineligibility following conviction (though the list of offences had not changed), as well as changes to the treatment of affiliates and foreign convictions. She also explained the new supplier rehabilitation process, the manner in which sub-contractors and existing contracts following convictions will be treated under the regime, and the circumstances and treatment of Public Interest Exceptions. Further, she explained the process for advance determination (proactive disclosure of conviction), bid certification, permanent eligibility, suspensions, and finally, administrative agreements and third party verification and compliance monitoring requirements. She concluded by stating that the regime applies to all new contracts, and that PWGSC is working with currently ineligible suppliers to re-assess under the new regime. As well, she confirmed that PWGSC was pursuing MOUs with other federal departments and agencies to ensure government-wide coverage.

Members sought a few clarifications, including individual versus company convictions, the manner in which the affiliate relationship is verified, and the similarity between convictions in various jurisdictions. Also, Lynne clarified the concept of primes “knowingly” sub-contracting with ineligible suppliers. She explained the process to verify non-eligibility by consulting the public list for companies and contacting PWGSC to consult the in-house list for individuals. Members raised a concern about situations where work is sub-contracted to independent consultants, suggesting this verification of first level sub-contractors could become unwieldy. They highlighted that an extra layer could be created between the prime and subs to avoid the verification. Lynne agreed to take the question back to the team and look into it. Members also asked how conflict of interest is avoided if the supplier provides and pays for the third party verification. Lynne explained that suppliers were required to certify the independence of the third party. Lynne was also asked about the timelines to meet with industry again; she responded that more would be known following the arrival of the new Minister.

Forward agenda & roundtable

The forward agenda for upcoming meeting will include contract bundling and updates from both the sub-committees and working groups of SAC, including bringing back the terms of reference or work plans developed by the WGs. It was agreed that the Working Groups would each present a joint industry/ PWGSC lead presentation on progress at the next meeting. Members were reminded to communicate with Hicham Adra should they have additional items to propose.

Next steps

Members are to provide any comments on the record from the previous meeting to the secretariat by November 4th. The next meeting will be in February and will be in person in the National Capital Region.