Procurement: Standing Committee on Health—February 5, 2021

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Procurement of COVID-19 vaccines

Context

Public Services and Procurement Canada (PSPC) is working with the Public Health Agency of Canada (PHAC), Health Canada and Industry, Science and Economic Development Canada (ISED), along with the COVID-19 Vaccine Task Force to prepare for the procurement of COVID-19 vaccines and related supplies.

Note

All questions regarding the rolling regulatory review of vaccines (including changes to labelling and dosing size and the latest on AstraZeneca) would be directed to Health Canada.

Suggested response

If pressed on the details of advance purchase agreements:

If pressed on the executive order in the US:

If pressed on the purchase of options for Moderna’s or Pfizer’s vaccine:

If pressed on the January 15 announcement of a temporary reduction in the delivery to Canada of the Pfizer vaccine:

If pressed on delays to the delivery of the Moderna vaccine:

If pressed on European Union (EU) export controls:

If pressed on Novavax production in Canada (questions should be answered by ISED):

If pressed on Pfizer’s proposed changes from 5 to 6 doses per vial:

If pressed on Canada’s participation in the COVAX facility:

If pressed on provincial and territorial collaboration:

If pressed on the purchase of Eli Lilly’s antibody treatment:

If pressed on critical drug shortages:

If pressed on material shortages:

If pressed on national security exception (NSE) contracting:

If pressed on the purchase of ultra-low temperature freezers:

If pressed on the purchase of dry ice:

If pressed on low-dead volume syringes:

If pressed on vaccine logistics:

If pressed on potential delays to Sanofi/GSK:

If pressed on information technology (IT) solution for vaccines:

Background

The Government of Canada has signed agreements in principle with the following companies to obtain access to their vaccine candidates:

Currently, Pfizer and Moderna have been approved to prevent COVID-19. Many vaccines are in clinical trials or under development. When additional studies have been completed, Health Canada will review the evidence of safety, efficacy, and manufacturing quality for each vaccine to determine whether individual vaccines will be approved for use in Canada, before they are used to vaccinate Canadians.

COVID-19 Vaccine Task Force

The COVID-19 Vaccine Task Force, supported by a secretariat housed at the National Research Council of Canada, provides advice to the Government of Canada on COVID-19 vaccines, which can include the following:

Critical drug shortages

PSPC issued a RFP for 7 drugs on November 13, 2020. The RFP was issued directly to licensed pharmaceutical suppliers and not publically posted. The RFP closed on December 2, 2020, and 14 bids were received. Contracts were awarded for 6 drugs between December 12 and 14, 2020. Four drugs were awarded to a single supplier and 2 were split between 2 suppliers. One drug (norepinephrine) received no compliant bids and may be to subject to a new solicitation in late January.

PSPC issued a second RFP for 5 additional critical drugs on December 4, 2020. The RFP was issued directly to licensed pharmaceutical suppliers and closed on December 18, 2020, with 6 bids received. Contracts were awarded for 5 drugs on January 19, 2021. The contract for 1 drug was split between 4 suppliers and the other 4 drugs were split between 2 suppliers.

Procuring vaccines for COVID-19

Public Services and Procurement Canada (PSPC) is working with the Public Health Agency of Canada (PHAC), Health Canada and Innovation, Science and Economic Development Canada to identify and procure potential vaccine candidates and supplies.

COVID-19 vaccine agreements

On behalf of PHAC, and based on advice from the COVID-19 Vaccine Task Force, PSPC is leading negotiations and finalizing agreements with suppliers of COVID-19 vaccine candidates.

To date, the Government of Canada has invested over $1 billion to secure access to promising vaccine candidates.

This includes up-front payments that companies require to support vaccine development, testing and at-risk manufacturing. Subsequent payments are contingent on vaccines passing clinical trials and obtaining regulatory approval.

These investments ensure Canada’s earliest possible access to the production of an approved COVID-19 vaccine.

All vaccine candidates will require Health Canada authorization prior to being used to vaccinate anyone in Canada.

Table 1: Vaccine agreements with suppliers
Supplier Doses Authorized Anticipated delivery start
AstraZeneca 20 million No Pending Health Canada authorization
Moderna 40 million Moderna authorization December 2020
Pfizer Up to 76 million Pfizer authorization December 2020
Johnson & Johnsontable 1 note 1 Up to 38 million No Pending Health Canada authorization
Medicago Up to 76 million No Pending Health Canada authorization
Novavax Up to 76 million No Pending Health Canada authorization
Sanofi and GlaxoSmithKline Up to 72 million No Pending Health Canada authorization

Table 1 Notes

Table 1 Note 1

All of the vaccine candidates for which Canada has agreements are a 2-dose vaccine, with the exception of the Johnson & Johnson candidate, which is currently expected to be a 1-dose vaccine.

Return to table 1 note 1 referrer

COVID-19 Vaccine Global Access facility

The Government of Canada is also participating in the COVID-19 Vaccine Global Access (COVAX) facility, a global procurement mechanism that will help develop and deliver safe, equitable and accessible COVID-19 vaccines. Participation in the COVAX facility also provides Canadians potential to access to 6 additional vaccine candidates.

The Government of Canada is committing approximately $220 million to the facility to procure up to 15 million vaccine doses for everyone in Canada. An additional $220 million will be channelled through the COVAX advance market commitment to purchase doses for low- and middle-income countries, increasing their access to a safe and effective COVID-19 vaccine.

Vaccine-related supplies

The Government of Canada also continues to purchase the necessary supplies for the administration of different vaccines. Contracts are in place for personal protective equipment and ancillary supplies, such as:

We have put in place contracts for the supplies required to administer nearly over 75 million doses of COVID-19 vaccines, including syringes, needles and gauze. To date, we have received enough supplies to administer more than 35 million doses.

End-to-end logistics

The Government of Canada has awarded a contract to FedEx Express Canada and Innomar Strategies Inc., for an end-to-end COVID-19 logistics solution for COVID-19 vaccines.

Government of Canada awards contract to distribute COVID-19 vaccine from coast to coast to coast

The contract will support the distribution of vaccines across Canada. Specifically, working under the direction of PHAC’s National Operations Centre, led by Major-General Dany Fortin, FedEx Express Canada and Innomar Strategies Inc. will provide a variety of services that will assist in warehousing and transportation to provincial and territorial authorities and Indigenous partners to support timely and efficient vaccine administration across the country.

Freezers and dry ice

Given the complexity of vaccine distribution, including the need to transport and store vaccines at specific temperatures, PSPC is also procuring other goods and services required to support the eventual distribution of a vaccine to everyone in Canada.

Freezers

The Government of Canada has now purchased 459 freezers.

PSPC, on behalf of PHAC, has awarded contracts for the purchase of:

Dry ice

The Government of Canada has awarded standing offers for the national delivery of tens of thousands of kilograms of dry ice weekly, on an as-needed basis to 10 Canadian companies:

The provinces and territories are able to issue call-ups against these offers directly, to meet immediate needs without delay.

National vaccine management information technology platform

On behalf of PHAC, PSPC is contracting a service provider to build further functionality into PHAC’s current operational and well-developed surveillance and coverage information technology (IT) systems. This enhanced national vaccine management IT platform (NVMIP) will help manage vaccine rollout, administration and reporting on a go forward basis, as the volume of deliveries increases.

News

Related links

Supplying Canada’s response to COVID-19

January 21, 2021

The Government of Canada is taking a whole-of-government approach in response to the coronavirus disease (COVID-19), including major investments in equipment and supplies for the health sector, as well as research, science and innovation.

Coordinated response to purchasing equipment and supplies

The Government of Canada is collaborating with provinces and territories on an ongoing basis to identify their needs and purchase required equipment, supplies and services to combat COVID-19.

Canada is taking an aggressive approach to buying, especially when it comes to personal protective equipment for front-line healthcare workers. This includes:

This is over and above efforts provinces and territories are taking to secure their own supply.

The quantities ordered for personal protective equipment and medical supplies are intended to meet short-term needs and anticipate Canada’s long-term needs as we continue to respond to COVID-19 while preparing for any eventuality over the coming months.

The government is also coordinating shipments of supplies from other countries. Canada has established on-the-ground support in China for transportation, receiving, storage services and customs clearances. This will be an ongoing process as orders are ready to be shipped to Canada.

Overview of purchases and deliveries

This table provides an overview of the Government of Canada’s purchases of selected personal protective equipment and medical supplies to support 3 key areas:

“Quantities ordered” includes products scheduled for delivery by March 31, 2022.

Due to the current complex supply chain environment, “quantities ordered” may fluctuate because of new contracts, contract amendments and cancellations.

“Quantities received” includes the approximate number of products that have been shipped and are in transit or have arrived at a Government of Canada warehouse. These will require assessment prior to being accepted and inventoried.

While specific quantities change on a regular basis, the bulk of these supplies are directed to frontline healthcare workers.

Contract information

As part of our commitment to transparency and accountability, we are publicly disclosing contracting information to the fullest extent possible, supplier names and contract amounts can be found on our new COVID-19 contracting information page.

COVID-19 contract information

Table 2: Items ordered and received (information as of January 18, 2021)
Itemtable 2 note 1 Quantities ordered Quantities received
Gowns 132,842,460 129,056,860
Hand sanitizer (litres) 20,646,000 20,646,000
Gloves (pairs) 1,844,248,078 738,778,156
Surgical masks 419,990,550 336,440,700
Non-medical masks: Face coverings 77,383,284 62,424,484
Non-medical masks: Cloth masks 10,420,600 9,302,114
N95 respiratorstable 2 note 2 187,707,540 101,338,696
Ventilators 40,547 22,594
Face shields 60,324,810 59,024,310

Table 2 Notes

Table 2 Note 1

Items listed include selected personal protective equipment and supplies for the healthcare sector. PSPC is also purchasing non-medical items, such as coveralls, boot covers and latex gloves.

Return to table 2 note 1 referrer

Table 2 Note 2

This includes N95, 95PFE, KN95, and FFP2 respirators. N95 respirators are certified by the National Institute for Occupational Safety and Health (organization based in the United States), the 95PFE are the Canadian equivalent, the KN95 are the Chinese equivalent, and the FFP2 are the European equivalent.

Return to table 2 note 2 referrer

Notes

Supplies for the healthcare sector were ordered on behalf of the Public Health Agency of Canada for distribution to provinces and territories, as part of bulk and proactive purchases that began in January 2020. These are supplementary to the existing National Emergency Strategic Stockpile, as well as to the stocks of supplies that exist in, and are being procured directly by provinces and territories.

Given the high global demand for these goods, there is a possibility that not all contracts will be entirely fulfilled. This has been taken into consideration in the procurement approach, and additional steps are being taken to meet our goal of having sufficient supply to exceed demand.

Working with Canadian companies

Public Services and Procurement Canada (PSPC), in collaboration with the Public Health Agency of Canada and Innovation, Science and Economic Development Canada, is exploring all options for securing the necessary equipment and supplies to fight COVID-19, including new and existing sources of supply—both here at home and internationally.

Below are examples of how domestic suppliers are stepping up to support the effort.

Bauer (Blainville, Quebec)

Bauer has shifted its hockey skates production lines to make face shields for front-line medical staff. The Government of Canada has signed an agreement to receive hundreds of thousands of face shields from Bauer.

Fluid Energy Group (Calgary, Alberta)

The Government of Canada has signed a contract with Fluid Energy Group for millions of litres of hand sanitizer to support the COVID-19 response.

More information

Fluid Energy making 10 million litres of hand sanitizer for the Government of Canada

General Motors Canada (Oshawa, Ontario)

General Motors (GM) Canada is using its manufacturing capability and skilled workforce to domestically produce surgical masks and face coverings. The Government of Canada has signed a contract with GM Canada to receive millions of surgical masks and face coverings for front-line health care workers.

Hawktree Solutions (Ottawa, Ontario)

The Government of Canada has signed a contract with Hawktree Solutions, a health and safety product company, to provide millions of masks and thousands of goggles and bottles of Quebec-made hand sanitizer.

More information

Hawktree Solutions providing the federal government with goggles, masks and hand sanitizer

HP Canada (Mississauga, Ontario)

The Government of Canada has signed a contract with HP Canada, which will use its 3D printing technology to provide hundreds of thousands of face shields to protect healthcare workers.

Irving Oil (Saint John, New Brunswick)

Irving Oil has retooled its production line to produce much needed hand sanitizer. The Government of Canada has signed a contract with Irving to provide hundreds of thousands of litres of hand sanitizer, with delivery already underway.

Jacobs & Thompson (Toronto, Ontario)

The Government of Canada has signed a contract with Jacobs & Thompson, which has added production lines to provide millions of face shields to protect healthcare workers.

Joseph Ribkoff (Dorval, Quebec)

The Government of Canada has signed a contract with Joseph Ribkoff, a Canadian women’s clothing company, to manufacture and provide millions of gowns for healthcare workers.

Logistik Unicorp (Saint-Jean-sur-Richelieu, Quebec)

Logistik Unicorp has mobilized its domestic supply chain and retooled production to produce medical gowns. The Government of Canada has signed a contract with Logistik Unicorp to provide millions of gowns for front-line healthcare workers.

Medicom (Pointe-Claire, Quebec)

The Government of Canada has signed a long-term agreement with Medicom to ramp up domestic production to provide millions of N95 respirators and surgical masks per year for the next 10 years.

More information

Medicom Group supporting Canada’s efforts to combat COVID-19

PRI-MED (Edmonton, Alberta)

The Government of Canada has signed a contract with PRI-MED, a medical product manufacturing company, to provide thousands of coveralls and millions of gloves, gowns and surgical masks for healthcare workers.

More information

Edmonton’s PRI-MED: A COVID-19 story like no other

Samuelsohn (Montréal, Quebec)

The Government of Canada has signed a contract with Samuelsohn, a men’s luxury clothing company, which has retooled its production lines to provide millions of medical gowns for healthcare workers.

SpiritRx Services (Winnipeg, Manitoba)

SpiritRx Services is an Indigenous owned company that has ramped up delivery of personal protective equipment and medical supplies to respond to both provincial and federal needs. The Government of Canada has signed a contract with SpiritRx Services to provide thousands of digital thermometers. The company is also providing the federal First Nations Inuit Health Branch with surgical masks and infrared thermometers.

More information

Indigenous-owned company delivering essential goods to help all Canadians

Sterling Industries (Concord, Ontario)

Sterling Industries, affiliated with Honda, has created a face shield that is designed and manufactured in Canada. The Government of Canada has signed a contract with Sterling Industries to provide millions of face shields to protect healthcare workers.

Stryker (Waterdown, Ontario)

The Government of Canada has signed a contract with Stryker to provide Health Canada-approved sterilization units that will sterilize equipment like N95 respirators and allow it to be reused.

More information

How one Canadian company extended the life of disposable N-95 masks

The Canadian Shield (Kitchener, Ontario)

The Canadian Shield was founded by InkSmith to produce personal protective equipment. The Government of Canada has signed a contract with The Canadian Shield to provide millions of face shields to protect healthcare workers.

More information

The Canadian Shield playing a key role in supporting the Government of Canada

The Stevens Company (Brampton, Ontario)

The Government of Canada has signed contracts with The Stevens Company to provide hard surface cleaners made in Oakville, Ontario, and shoe covers made in Montréal, Quebec, as well as other items to help combat COVID-19.

More information

The Stevens Company is helping the Government of Canada in the fight against COVID-19

Toronto Stamp (Toronto, Ontario)

Toronto Stamp has retooled its usual production of signs, badges, stamps and tags to produce face shields. The Government of Canada has signed a contract with Toronto Stamp to provide millions of face shields for front-line healthcare workers.

More information

From a WhatsApp message to a contract with the Government of Canada

Windsor Mold Group (Windsor, Ontario)

The Government of Canada has signed a contract with Windsor Mold Group, which has retooled its production to provide millions of face shields and thousands of head bands to protect healthcare workers.

WUXLY (Toronto, Ontario)

The Government of Canada has signed a contract with WUXLY, an outerwear clothing company, to provide over 1 million gowns for front-line healthcare workers.

More information

WUXLY: Warming to the made-in-Canada personal protective equipment

Yoga Jeans (Montréal and Beauce region, Quebec)

The Government of Canada has signed a contract with Yoga Jeans, a family-owned denim company that has retooled its manufacturing facility in Saint-Côme-Linière, Quebec, to provide millions of gowns for front-line health care workers.

Related links

Summary of changes: Personal protective equipment ordered and received between January 4 and January 18, 2021

Face shields

Gloves (pairs)

Gowns

Hand sanitizer (litres)

N95 respirators

Non-medical masks: Face coverings

Non-medical mask: Cloth masks

Surgical masks

Ventilators

Rapid COVID-19 testing

Context

COVID-19 testing technologies are advancing quickly as the pandemic continues. On behalf of the Public Health Agency of Canada (PHAC), Public Services and Procurement Canada (PSPC) is actively exploring additional agreements to secure access to the most promising candidates, in advance of regulatory approval.

Suggested response

If pressed on overall quantity of rapid tests received so far:

If pressed on the delivery of Abbott Panbio and ID NOW tests:

If pressed on the delivery of Becton Dickinson (BD) Veritor tests and analyzers:

If pressed on distribution:

If pressed on purchasing before Health Canada authorization:

If pressed on the purchase of analyzers for the Abbott ID NOW:

If pressed on Precision Biomonitoring:

Background

Abbott Panbio antigen test

The Abbott Panbio COVID-19 antigen test is a rapid test that can detect SARS-CoV-2 directly from a nasopharyngeal or nasal swab in just over 15 minutes. It requires no instrumentation but must still be performed by a trained healthcare professional. This test is portable and lightweight and can easily be used in point of care in a variety of settings. The product does not require specialized storage temperatures.

While this contract is the first one put in place by Canada to procure antigen tests, more are expected. For this reason, we are not releasing the contract value at this time, in order to protect our negotiating position. In line with our commitment to transparency, the value of this agreement will be disclosed in due time.

On October 6, 2020, the Minister of Public Services and Procurement announced the purchase of up to 20.5 million Panbio COVID-19 Antigen rapid tests. The Panbio Antigen rapid test with nasopharyngeal swab, approved on October 5, 2020, was the first antigen test to be approved by Health Canada for use in Canada.

On November 20, an amendment was issued to procure an additional 2.5 million Panbio COVID-19 Antigen rapid tests.

The Panbio Antigen rapid test with nasal swab was approved by Health Canada on December 30, 2020.

In total, PSPC has purchased a total of up to 23 million Panbio tests to be delivered by March 31, 2021.

Becton-Dickinson Veritor antigen test

The BD Veritor SARS-CoV-2 antigen test is a rapid test that can detect SARSCoV-2 directly from a nasal swab in just over 15 minutes from patients that are within the first 5 days of the onset of symptoms. This testing requires a handheld analyzer and must be performed by a trained healthcare professional. This test is portable, lightweight and can easily be used in point of care in a variety of settings. It also does not require specialized storage temperatures.

On October 23, 2020, a contract was awarded to Becton Dickinson for the procurement of 7,599,990 Veritor antigen tests as well as 600 analyzers.

As of January 11, 2021, 2,102,150 BD Veritor tests have been delivered.

Abbott ID NOW point-of-care test

The Abbott ID NOW system is a rapid point-of-care test for COVID-19. The technology can detect the virus directly from a nasal swab, returning results in as little as 13 minutes. The testing device, or analyzer, is small and lightweight and can easily be transported to remote locations and operated with minimal training.

Abbott Rapid Diagnostics ULC is also supplying up to 7.9 million ID NOW rapid tests.

Spartan point-of-care test

The Spartan test involves inserting a cartridge containing a swab from a patient’s mouth into a test analyzer (cube) that analyzes deoxyribonucleic acid (DNA) for the presence of the coronavirus. The technology can detect the virus in as little as 30 minutes. The testing device, or analyzer, is small and lightweight and can easily be transported to remote locations.

On March 25, PSPC issued a contract to Spartan Bioscience Inc. for the purchase of 1,020,000 tests and 100 testing platforms (cubes).

On April 9, the original contract was amended to purchase an additional 900,000 tests and 600 testing platforms (cubes).

Execution of this contract is conditional of Spartan obtaining Health Canada approval.

On October 29, Health Canada issued an investigational testing authorization (ITA) to Spartan to conduct a clinical trial on their point-of-care test and generic swab, to obtain data to support its effectiveness. Health Canada approval was pending results of this clinical trial.

On December 11, Spartan submitted the results of the clinical trials to Health Canada.

On January 23, Health Canada approved the Spartan COVID-19 system, a rapid, on-site molecular diagnostic test for the qualitative detection of SARS-CoV-2. The National Microbiology Lab is currently validating the results to decide where best to use the Spartan tests.

Other point-of-care tests

Additional agreements have also been signed with Inter Medico (1.2 million GeneXpert tests) on April 7, and on June 22 with bioMérieux (up to 699,750 tests).

Delivery timelines

Under the current agreement of the Panbio antigen test, delivery of up to 23 million antigen tests, will be completed by March 31, 2021.

Standard lab testing

Since March 2020, PSPC has awarded more than 100 contracts to support conventional laboratory testing across Canada. That includes swabs, equipment, reagents, consumables and plastics required to help provinces and territories meet the objective of conducting 200,000 tests per day nationally.

Contracts with major suppliers like Roche, bioMérieux, Life Technologies, Qiagen and Abbott have been awarded to secure quantities of products that are in very high demand worldwide.

Contracts with 12 different suppliers have been awarded to procure a total of 38.5 million swabs.

Automated systems have been procured to increase testing capacity in surge labs located in Winnipeg, Guelph, Ottawa and Lethbridge.

Four mobiles trucks have been procured to increase testing capacity in hot spots and where there are outbreaks.

Procurement of serologic tests

Context

The Government of Canada launched the COVID-19 Immunity Task Force to measure the scope of coronavirus infection in Canada and provide information needed to manage the pandemic and safely get Canadians back to work.

Note

Questions regarding the mandate and activities of the COVID-19 Immunity Task Force will be responded to by the Minister of Innovation, Science and Industry.

Suggested response

If pressed on funding and funds spent:

If pressed on why there are only orders for the Abbott platform:

If pressed on delivery locations and quantities:

If pressed on outcomes and next steps:

Background

Serology testing (collecting and testing blood samples for antibodies to SARS-CoV-2) of large numbers of people will provide the data needed to understand the scale of infection in the Canadian population.

This approach will help capture data about symptomatic individuals, as well as asymptomatic or mildly symptomatic people not previously identified as they did not seek healthcare. The importance of coordinated, rapid and representative national surveys cannot be understated. They provide critical information on the current spread of COVID-19, and help to prepare for possible future waves of infection, both in the general population or vulnerable groups.

Knowledge of the level of immunity in the general population, and in at-risk populations such as the elderly and healthcare workers, will guide important public health decisions and immunization strategies. Serological testing is the key to developing this knowledge.

The COVID-19 Immunity Task Force aims to catalyze, support, and, where appropriate and feasible, harmonize the design and rapid implementation of population-based studies that will generate first estimates of COVID-19 immunity, overall and in priority populations across Canada. Public Services and Procurement Canada is working in close collaboration with the Immunity Task Force to identify any required procurement.

The task force will deliver a coordinated serologic survey agenda, and rapidly provide results to federal, provincial and territorial decision-makers as the basis for managing the COVID-19 pandemic in the near and medium term.

On May 12, 2020, Health Canada authorized the first of a number of anticipated commercial serological tests for COVID-19, which will allow the COVID-19 Immunity Task Force to focus on processes to initiate testing of samples in the serosurvey studies.

Ventilator procurement

Context

Recent questions have been raised about domestic contracting for ventilators.

Suggested response

[Redacted]

If pressed on FTI:

If pressed on pricing:

If pressed on for the process that led to contract awards:

[Redacted]

Essential Services Contingency Reserve

Context

The Government of Canada created the Essential Services Contingency Reserve (ESCR) to provide essential services workers with access to personal protective equipment (PPE), non-medical masks and disinfection products to meet urgent, short-term needs.

Suggested response

If pressed on contracts issued to operationalize the ESCR:

If pressed on supplier types for contracts issued to stock the ESCR:

If pressed on eligibility for the ESCR:

If pressed on cost-recovery:

If pressed on inventory:

Background

There is a 2-step process to access the ESCR:

As of January 7, 2021, the ESCR has received a total of 197 requests for registration from the following sectors:

Of the businesses registered, 24 have placed orders. Of those orders, 12 have been cancelled, 11 approved and 1 is under review. A portion of the cancelled orders have been redirected to supply available through provinces and territories.

To date, the ECSR has been mostly accessed by small- and medium-size enterprises rather than consolidated requests from critical sectors. As such, the approval process for orders valued at less than $5,000 has been streamlined to remain within PSPC to reduce processing times and ensure timely order fulfillment.

Supplementary Estimates B

PSPC sought access to $500 million (in both vote 1—Operating Expenditures and Statutory Authority) in 2020 to 2021 to establish the ESCR, to which essential service organizations can apply for temporary, urgent access to PPE and other critical supplies.

Public Services and Procurement Canada’s role in management of the National Emergency Strategic Stockpile

Context

Prior to COVID-19, the Public Health Agency of Canada’s (PHAC) National Emergency Strategic Stockpile (NESS) warehouse network was comprised of [Redacted] warehouses totalling approximately 167,000 square feet. This included [Redacted] warehouses (119,000 square feet) and [Redacted] warehouses (48,000 square feet). The amount and volume of personal protective equipment (PPE) ordered in response to the pandemic was well beyond PHAC’s capacity to receive and store. Public Services and Procurement Canada (PSPC) has supported PHAC by entering into service contracts and leases to provide them with additional warehousing capacity.

Suggested response

If pressed on PSPC’s role:

If pressed on PHAC’s role:

If pressed on request for proposal for national logistics and warehousing services:

If pressed on Metro’s role:

If pressed on Groupe Robert’s role:

If pressed on additional warehousing measures:

Background

Since the outset of the pandemic, the government has adapted to manage the volume of supplies. These measures have included service contracts and leases for additional warehouses, turning to the Canadian Armed Forces for assistance with logistics, and leveraging existing agreements.

A number of different suppliers, including Maritime Ontario, Groupe Robert Inc, Metro Logistics Inc, Urban Valley Transport Ltd., Overseas Express Consolidators and Bolloré Logistics Canada have been used to support inventory management, warehousing and distribution. Through such contracts, PPE is currently being warehoused in [Redacted].

PSPC also entered into short-term leases for PHAC for 2 additional warehouses [Redacted] in [Redacted] totalling approximately 187,000 square feet. These warehouses are expected to be vacated upon expiry of the leases in March 2021. A new lease at the [Redacted] has been secured to replace these expiring leases with a start date of January 1, 2021, for a fixed period of 8 years with a total of 127,000 square feet of warehouse.

On April 1, 2020, PSPC signed, on behalf of PHAC, a 1-year contract with Amazon to use their on-line technology for provinces to order material directly. Canada Post and Purolator were delivering the equipment to provinces and territories as a subcontractor of Amazon. The agreement had primarily been put in place to access Amazon’s easy-to-use online interface, which allowed individual health establishments to order supplies directly from PHAC. As provinces and territories requested that PHAC deliver the supplies directly rather than awaiting for orders from them, the requirement evolved beyond what was covered in the Amazon agreement. As a result, the contract with Amazon was suspended in mid-July 2020. Prior to the suspension, only $200,000 has been spent under this contract.

A separate agreement between PHAC and Canada Post allowed for the warehousing of the PPE at [Redacted], a key on-going subcontractor of Canada Post. This warehouse quickly ran out of space. PHAC subsequently awarded, on May 22, 2020, a contract to Groupe Robert as a temporary measure while a long-term solution was being developed.

On May 4, 2020, a letter of intent/request for information (LOI/RFI) was published on buy and sell to gather information in relation to a longer-term warehousing, inventory management and transportation solution. Further to the LOI / RFI process, on June 13, 2020, PSPC awarded a 6-month contract to Groupe Robert Inc. The contract has since been extended to the end of January 2021. This contract provided 215,000 square feet of warehousing space in the [Redacted] Area, and 150,000 square feet in the [Redacted] Area, transportation capabilities and a warehouse management system capability. These warehouses quickly filled as the volume of PPE being delivered at the time was significant. Of the warehouses, 1 in [Redacted] is in the final stages of being emptied with its content being shipped to provinces. Another adjacent warehouse in [Redacted] and 2 in the [Redacted] area are available until the end of January 2021. Transition of PPE product out of these warehouses to provinces or other PHAC facilities is underway and expected to be completed by the end of January 2021 at which point the contract will come to its end.

PSPC also proceeded with a request for proposal for national logistics and warehousing services on July 16, 2020, to provide for warehousing, inventory management and distributions services. As a result of this competitive process, PSPC awarded, on behalf of PHAC, a 2-year contract, with an option for an additional year to Metro Logistics Inc. The contract, awarded on September 11, 2020, ensures warehousing across the country to accommodate and best position supplies for distribution to the provinces and territories.

In August 2020, the Government of Canada announced the creation of the Essential Services Contingency Reserve (ESCR), an emergency backstop of PPE and other critical supplies, managed by PSPC. The ESCR includes a number of warehouses across Canada, managed under a separate contract by SCI Logistics, a subsidiary of Canada Post, with Purolator serving as the distribution and delivery agent.

Integrity in federal procurement during the COVID-19 pandemic

Context

In the fast-paced and constantly evolving marketplace to secure necessary products and supplies to support the Government of Canada’s response to the pandemic, there have been reports of wrongdoing and fraudulent activity associated with the procurement of personal protective equipment (PPE) from around the world. Questions may arise as to the measures that Public Services and Procurement Canada (PSPC) has in place to protect the integrity of the federal procurement system during this period.

Suggested response

Background

The Government of Canada has a framework of laws, regulations and policies in place to protect the integrity of the federal procurement system. PSPC administers several programs under this framework, including the government-wide Integrity Regime, the federal contracting fraud tip line, and increased oversight for the detection of bid-rigging.

The Integrity Regime is designed to help ensure that the government does business with ethical suppliers and incentivizes suppliers to ensure strong ethics and compliance frameworks. Under the Integrity Regime, a supplier may be suspended or declared ineligible to do business with the government if, in the previous 3 years, it, members of its board of directors or its affiliates, have been charged with or convicted of one of the offences listed in the Ineligibility and Suspension Policy in Canada or a similar offence abroad.

Under the current regime, 3 companies are ineligible to do business with the Government of Canada due to convictions for a listed offence (Les Entreprises Chatel Inc., R.M. Belanger Limited and Les Industries Garanties Limitée). One supplier has had their period of ineligibility reduced to 5 years pursuant to an administrative agreement which came into effect in December 2020 (Hickey Construction Ltd). The administrative agreement with SNC-Lavalin recently concluded in December 2020 in accordance with the terms of the agreement and the final disposition of criminal charges facing the supplier and relevant affiliates.

In 2018, the government announced its plans to enhance the Integrity Regime by increasing the number of triggers for debarment, broadening the scope of business ethics covered by the Integrity Regime, and integrating greater flexibility within the debarment process. Following this announcement, there was considerable public discourse around corporate wrongdoing as well as governments’ response to such misconduct. As a result, the government announced that it was taking additional time to reassess elements of the proposed Integrity Regime and potential next steps.

In the interim, the current Ineligibility and Suspension Policy remains in effect.

Labour exploitation in procurement

Context

The global nature of supply chains puts procurements at potential risk of having been produced using forced labour and human trafficking.

Suggested response

If pressed on personal protective equipment (PPE) procurements linked to Xinjiang, China, and Malaysia:

If pressed on lack of compliance monitoring for existing measures:

If pressed on the risk assessment:

Background

The complexity of global supply chains enhances the vulnerabilities of those in precarious work situations in Canada and around the world. According to a 2017 joint report by the International Labour Organization (ILO) and the Walk Free Foundation, forced labour is present throughout all regions of the globe and most prevalent in manufacturing, construction, mining, agriculture, and domestic work. In a 2016 report, World Vision Canada found that over 1,200 companies operating in Canada are importing goods that may have been produced by child or forced labour.

Supply chains for PPE are spread across numerous countries with varying business practices and government regulations. Compounded by the global urgency to acquire PPE, this context may enable an environment where workers’ conditions are overlooked.

The Government of Canada is taking action, under the National Strategy to Combat Human Trafficking (national strategy), to ensure that federal suppliers comply with international labour and human rights. As part of the national strategy, PSPC is leading the following initiatives:

As part of planned actions under the national strategy, PSPC will also create information resources for suppliers to become better aware of potential risks in their supply chains (2021 to 2022); and create requirements for suppliers of high-risk goods to address risks in their supply chain (2022 to 2023).

Moreover, in July 2020, clauses on ‘ethical procurement’ and ‘origin of work’ were added in new PPE contracts and in all newly issued request for proposals for PPE. The ‘origin of work’ clause requires bidders to provide the name, address and country of manufacturers of the item, including subcontractors. The ‘ethical procurement’ clause, requires bidders to certify that they and their first-tier subcontractors comply with the same human rights and labour standards set out in the Ethical Procurement of Apparel Policy.

Canada-United States-Mexico Agreement

On November 30, 2018, Canada, the United States and Mexico signed the new CUSMA, which includes a comprehensive and enforceable labour chapter. The comprehensive labour chapter (article 23.6 specifically) includes a new obligation for Canada and its 2 CUSMA partners to prohibit the importation of goods produced, in whole or in part, by forced or compulsory labour. Paragraphs 201(i.1) and 204(8) of the CUSMA Implementation Act (the act) amended the Customs Tariff and the Schedule to the Customs Tariff to include a prohibition on the importation of goods that are mined, manufactured or produced wholly or in part by forced labour. The amendments made under the act came into force in Canada on July 1, 2020.

Prior to this new commitment, Canada did not restrict the entry of goods manufactured, mined and produced by forced labour into the country. The labour chapter also commits Canada, the US, and Mexico to work together to identify the movements of goods produced by forced labour. In order to implement this obligation under the CUSMA, the Government of Canada amended the Customs Tariff and the Schedule to the Customs Tariff to include a prohibition on the importation of goods produced by forced labour.

CBSA plays a role in the interception of goods that are suspected of being produced by means of forced labour. Employment and Social Development Canada (ESDC) is the Government of Canada’s lead department for labour-related programs. CBSA has been working with ESDC to identify goods that have been produced by forced labour entering Canada. Specifically, ESDC conducts research and analysis on companies that are suspected to be using forced labour to produce goods and are importing them to Canada. CBSA may use this information to identify and intercept shipments containing goods produced that have been identified as suspected to have been produced by forced labour.

In this regard, it should be noted that CBSA and ESDC are the lead departments in implementing the measures required to ensure that the Government of Canada is compliant with this CUSMA requirement. PSPC does not have a role in implementing the CUSMA forced labour provisions but is following this work closely to identify potential implications on procurement as these measures are implemented.

Shipments containing goods that are suspected of being produced by forced labour will be detained at the border for inspection by a CBSA border services officer. If in the judgement of the officer the goods were produced by forced labour, the officer will apply the tariff classification under chapter 98, item 9897 and prohibit the goods from entering Canada. Determinations are made on a case-by-case basis, based on all available supporting evidence and analysis.

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Procurement of personal protective equipment

Context

The procurement environment for personal protective equipment (PPE) has evolved over the course of the pandemic.

Suggested response

If pressed on quality issues of medical supplies:

If pressed on hand sanitizer:

If pressed on the purchase of syringes:

Procurement modernization

Context

Public Services and Procurement Canada (PSPC) is delivering on government commitments to modernize and simplify procurement.

Suggested response

If pressed on diversifying procurement (Black-owned businesses):

If pressed on the social procurement policy and program:

If pressed on Indigenous procurement:

If pressed on the Procurement Ombudsman’s annual report citing the “unnecessarily complex nature of the federal procurement process”:

Background

A substantial part of public investment is managed through public sector acquisition of goods and services, representing 13% of Canada’s gross domestic product (GDP) according to the Organisation for Economic Co-operation and Development (OECD) data from 2015. This makes it a fundamental lever to achieving social and economic objectives.

The government has committed to modernize and simplify procurement, and to establish an electronic procurement solution. A key step towards this goal was the March 2020 soft launch of Canada Buys, our new electronic procurement system, as announced in Budget 2018, at a cost of $196.8 million over 5 years. Procurement processes will also be easier, faster and more accessible for suppliers and buyers through:

Notably, an Accessible Procurement Resource Centre (APRC) was established in June 2018 to support government buyers in integrating accessibility criteria into their procurement requirements for goods and services. Work includes examining how we can ensure that procurement is accessible to all so that suppliers with disabilities can become part of the government’s supply chain, and to ensure that persons with disabilities are able to work as government suppliers.

The government will also support other procurement commitments including better vendor management tools, clear data metrics, and increased opportunities for Indigenous businesses.

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