Supplier Advisory Committee
Sub-Committee on Risk Management
Record of Discussion - June 26, 2014

Place du Portage, Phase III, 7C1-100

Attendees

• Janet Thorsteinson, VP, Government Relations, Canadian Association of Defence and Security Industries (by teleconference)
• Cindy Baker, VP, Government Relations and Policy, Information Technology Association of Canada
• Kai Olson, Student, Information Technology Association of Canada
• Dorothy Milburn-Smith, President, Perfortics Consulting Inc.
• Gail Bradshaw, Director General, Policy, Risk, Integrity and Strategic Management Sector
• Joëlle Paquette, A/Senior Director, Acquisition Program Integrity Secretariat
• Martin Demers, Manager, Acquisition Program Integrity Secretariat
• Ibrahim Diallo, Junior Analyst, Acquisition Program Integrity Secretariat
• Jill Abramczyk, Policy Analyst, Acquisition Program Integrity Secretariat
• Lori Kibbee, A/Senior Director, Supplier Engagement and Regional Coordination, Office of Small and Medium Enterprises (OSME)
• Rachelle Dean (secretariat), Policy Advisor, Supplier Engagement, Office of Small and Medium Enterprises (OSME)

Welcome and Opening Remarks

Joëlle Paquette opened the second meeting of the Sub-Committee by welcoming everyone and inviting participants to introduce themselves. Joëlle provided an update on Sub-Committee membership, including participation by Shared Services Canada, Treasury Board and the Department of National Defence (for commodity grouping work) at later dates if needed. Joëlle passed the meeting over to the Chair of the Sub-Committee, Martin Demers.

Issues Related to Contractor Limitation of Liabilities

Discussion summary:

The Chair shared information from Members about the three main issues they recommended for the focus of the sub-committee. Issues included

• That risk is analyzed differently by every department resulting in a lack of harmony
• That the limitation of liability clause is applied differently by every department despite the TB Policy on Decision Making in Limiting Contractor’s Liability that came into effect in 2003. PWGSC has authority, amongst other things, to create commodity groupings and associated wording. However, these are to be used by PWGSC and Shared Services Canada only. All other departments would need to get TB approval to use PWGSC’s commodity groupings.
• That the overall risk management framework is not matching the SMART process, especially sharing information about what the risks are, and how risk is quantified.

Commodity Groupings Review

Discussion summary:

Joëlle Paquette informed Sub-committee Members that a review of commodity groupings is due and asked about their preferred level of engagement. Members were provided with charts of the existing groupings and invited to submit their comments to Martin Demers, including what to include or exclude from the review. Industry Members noted that they would have to consult with their memberships before providing input and that this might take some time.

Information and Technology Association of Canada (ITAC) informed the Sub-committee that IT changes rapidly, that more services are being bundled and that these bundles do not fit the traditional mold of commodity groupings as they fit into more than one group. There was a suggestion about perhaps formalizing a formula when more than one grouping is used.

There was some discussion about professional services being excluded from the groupings and industry Members commented that many things were not included in the current commodity groupings. They suggested a more comprehensive list. Industry Members were invited to suggest groupings that their memberships want to include. Industry Members agreed to consult with their memberships. The committee was informed that limiting contractor’s liability was not always necessary and that many contracts continued to be silent on the subject, which means that a court would decide level of liability in the event of a loss.

Joëlle Paquette reported that a report is due to Treasury Board by March 2015, and suggested that Industry Members inform us about the reasonableness of timelines that will be put into the Action Plan.

Procurement Risk Assessment Tools

Discussion summary:

Martin Demers provided a presentation to the Sub-Committee about the risk management process and the different tools that are used, including

1. The Treasury Board Project Complexity and Risk Assessment Tool (PCRA) which is used first to determine if there is a risk. If so, the project moves into the Public Works process.
2. The Public Works Procurement Risk Assessment Tool (PRA), which is used by Procurement Officers in the Acquisitions Program to conduct a risk assessment and determine the appropriate level of oversight.
3. The Risk Management Matrix Tool (RMMT), which is an in-depth analysis that must be performed when a procurement requires TB Ministerial approval.

The Chair provided Members with a document explaining the Limitation of Liability Risk Assessment and requested that they provide feedback at a later date.

There was some discussion about the relationship between the limitation of liability and insurance and how the Acquisitions Branch (AB) deals with modern, complex insurance issues. Members were informed that AB has a Standings Offer with a firm that provides expert information about complex issues when needed.

The Sub-committee agreed to keep the focus on limitation of liability, leaving other issues such as costing to the Supplier Advisory Committee (SAC) and potential new sub-committee to be formed.

Office of Small and Medium Enterprises (OSME) representatives agreed to inform the SAC of the Sub-committee’s Action Plan and approach.

Next Steps

1. Martin Demers will amend the Action Plan to include timelines.
2. Members will consult with their memberships about the documentation.
3. The date of the next meeting is to be determined. Members requested that the meeting be in a different month than the SAC meeting.