Supplier Advisory Committee Meetings

Record of Discussion
Supplier Advisory Committee

June 20, 2016
2:00 pm to 4:00 pm

Attendees

Co-chairs

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

Members

• Susanna Cluff-Clyburne, Director, Parliamentary Affairs, Canadian Chamber of Commerce
• Louis-Martin Parent, Director, Canadian Federation of Independent Business
• Lise Patry, Managing lawyer and founder of RIZEN Business Lawyers Alliance (for WBE Canada)
• Jac Van Beek, Chief Executive Officer (CEO), Canadian Association of Management Consultants
• Dorothy Milburn-Smith, CEO of Perfortics Consulting Inc.
• Iain Christie, Executive Vice President (EVP), Aerospace Industries Association of Canada
• Janet Thorsteinson, VP, Government Relations, Canadian Association of Defence and Security Industries
• Desmond Gray, Director General, Office of Small and Medium Enterprises and Strategic Engagement

Welcome and remarks

The co-chairs welcomed everyone and Randal explained that further to the last meeting’s request for updates to be provided via documentation and not during meetings, a new section on the agenda, called consent agenda, was added. It included updates from the Professional Services Sub-committee, on the trilateral meeting with the United States and the United Kingdom, and the federal/provincial/territorial (FPT) initiative. Documents were provided before the meeting and members had no questions, so the items were considered accepted by the committee. The record from the February 2016 meeting was also approved under the Consent Agenda and will be published on the committee’s website.

Procurement modernization initiatives

Carolyne Blain, the Director General of the Strategic Policy Sector, along with Brenda Constantine, Senior Director, Strategic Policy, and Matthew Sreter, Senior Director, Risk, Quality and Integrity Management,presented an overview of the department’s efforts to modernize procurement. Minister Foote and Minister Brison were briefed on procurement modernization in April. Randal explained that things were moving fast on these initiatives and that Ministers had aggressive goals.

Carolyne specified that they were hoping to discuss ways to engage SAC in procurement modernization initiatives. Carolyne presented the architecture of the modernization agenda, which has three elements: open and fair procurement, socio-economic procurement, and innovation.

Members asked whether the joint meeting with Treasury Board Secretariat had yielded any sense of whether there was an appetite for standardization across government, including making processes or systems mandatory for other government departments. Randal confirmed that there is preference for horizontality and gave the electronic procurement solution (EPS) as an example under consideration.

Members discussed the socio-economic component, and the trade-offs and considerations required to achieve them, including authority to spend more, as well as a whole-of-government assessment of the results, including the issue of capacity building prior to implementing socio-economic policy. Members suggested Public Works and Government Services Canada (PWGSC) might want to investigate the US experience with socio-economic policies and how the US has implemented conflicting socio-economic policy objectives. Randal confirmed that the government is in the early stages of thinking this through, and members strongly urged him to ensure open communication with industry throughout the process to allow them to move in the same direction as the government.

There was much discussion about metrics to measure our modernization efforts and about the availability of data to create baselines against which to assess progress, and the government’s focus on “deliverology”. Members cautioned against wasting too many resources on re-capturing data to satisfy baseline requirements and instead should focus on future capacity. All agreed that EPS would help, but an item will be added to the next agenda to inform SAC of current and planned business analytics capability. Members also suggested PWGSC find ways to articulate the desired outcomes to communicate them to industry.

Members sought clarification about the municipal/academic/school/hospital (MASH) sectors involvement in the FPT Initiative, and it was confirmed that that was within the purview of individual provinces. They also asked about the status of the costing policy review, which is still in departmental approval processes. Regarding the innovation component, members asked that PWGSC bear in mind that small and medium sized enterprises (SMEs) were not the only innovators in Canadian industry, and that there were other types of innovation than products. Members also highlighted the work on supplier relationship management, and advised that has been an important trend in the private sector for many years, with large firms focusing more on managing relations with their supply chains. Following agreement at the last meeting to form a sub-committee on the topic, an update will be added to the next agenda.

PWGSC risk management initiatives

Matthew Sreter, Senior Director, Risk, Quality and Integrity Management and Acquisitions Program Policy, provided an update on the risk management initiatives. He explained that Interis-- the consulting firm hired to conduct research and prepare a report that includes recommendations on (1) commodity groupings, and (2) re-balancing risk-- had completed the work.

Matthew informed that an invitation will be sent to all stakeholders (including SAC members) to participate in an open forum session to be held on July 5, 2016 (1 to 4 pm). In the first part of the session, Interis will present key elements of the reports. In the second part, PWGSC will invite stakeholders to comment on the reports (and enter into a dialogue) as well as present an overview of next steps.

Matthew explained that the next phase of the Initiatives will entail developing action plans in consultation with stakeholders to address recommendations of both reports through two separate working groups. An update on these initiatives will be provided to SAC in the Fall.

Electronic procurement solution

Vicki Ghadban, the Director General of the Acquisitions Program Transformation Sector, presented an update to the committee on efforts to ensure e-readiness in preparation for the new EPS, specifically the work on standing offers and supply arrangements (SO/SAs), which constitute about 25% of the government spend. She explained that she was not in a position to provide an update on the EPS itself, since the request for proposals (RFP) is currently open and available on BuyandSell.gc.ca. She gave an overview of the business changes for SO/SAs, and detailed the various changes made to modernize and simplify business processes and in preparation for e-procurement. They included such things as: use of standing offers by other jurisdictions (provincial - territorial); use of postal codes to define area of supply; supplier managed price refresh; volume discounts; acquisition card default standing offer ordering mechanism up to $10K; standard call up limits for e-catalogues; right size supplier base; selecting suppliers according to right fit; e-request for proposal and e-evaluation; and reducing number of standing offers.

Members commented that outstanding issues were: a way to identify modified clauses in RFPs to avoid costly/legal review of all clauses when only these modifications require that level of review; and that the new system allows full documents to be submitted for bids, not just limited spaces for text with character limits (concerns about junior staff cutting and pasting text for bids into text boxes in the system vs. a bid document which has been through the suppliers quality assurance process). Members also inquired about being involved in testing the new e-procurement system, and Vicki confirmed that both client departments and industry would be engaged for the e-catalogues, as they roll out, and the contract management system.

Forward agenda and roundtable

The issue of management of complex procurement and projects was raised by a member as an item for consideration for a future discussion, not only from the defence procurement perspective but also for technology and construction projects. It was mentioned that the Telfer School of Management had a program on the subject, and Vicki confirmed that PWGSC had put forward candidates to participate.

The forward agenda includes: procurement modernization (standing item), supplier performance management regime, e-procurement solution, business analytics (existing and future capability), risk management initiatives, complex procurement and project management, and an update on the supplier action plan. Members were reminded to communicate with Hicham Adra should they have additional items to propose.

Next steps

The draft record of the meeting will be circulated in July for member review. The next meeting will be in October and will be held in person.