Procurement (including issues and policies): Standing Committee on Government Operations and Estimates—November 24, 2022

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E-procurement

Key messages

Key data points

Background

As part of the Government of Canada’s efforts to modernize procurement, in July 2018, following a competitive procurement process, Public Services and Procurement Canada awarded a contract to Infosys Public Services, Inc. to implement and manage an electronic procurement solution. Phase 1 of the EPS project will be completed in June 2023. The project has [Redacted] in funding through a special purpose allotment and capital funding.

The implementation of the EPS cloud-based service has followed a pragmatic and progressive approach. This approach has provided opportunities to take stock of progress and make adjustments to the delivery of an ecosystem that incorporates key enabling technologies such as:

Another important key enabler was the integration of the ecosystem with PSPC departmental financial management systems (known as SIGMA) to support the management of procurements by PSPC for PSPC (such as where the department is the client).

On September 19, 2022, CanadaBuys replaced Buyandsell as the official source for tender and award notices for the Government of Canada (federal, provincial, territorial) and the single point of access for broader Canadian public sector (municipal governments, crown corporations, administrative institutions, schools, and hospitals).

Based on lessons learned from other large scale information technology (IT) transformation initiatives, PSPC has ensured that legacy systems run in parallel to EPS until such time as EPS has reached full operating capacity and the adoption of the new way of doing business is well established.

Procurement of vaccines

Context

Public Services and Procurement Canada is working with the Public Health Agency of Canada (PHAC), Health Canada and Innovation, Science and Economic Development Canada, along with the COVID-19 Vaccine Task Force to procure COVID-19 vaccines, therapeutic drugs, and related supplies.

Note

Suggested response

If pressed on vaccine contracts and deliveries:

If pressed on additional pediatric vaccines:

If pressed on additional adolescent vaccines:

If pressed on delivery of pediatric doses:

If pressed on Pfizer supply:

If pressed on Moderna supply:

If pressed on future Novavax supply and domestic delivery:

If pressed on future Medicago supply:

If pressed on the release of vaccine contracts:

If pressed on the details of advance purchase agreements:

Background

Overall, the federal government has allocated over $9 billion for vaccine, therapeutic and prophylactic procurement. The Public Health Agency of Canada is responsible for managing this funding.

Pfizer, Moderna, Novavax, Medicago, AstraZeneca, and Johnson & Johnson (Janssen) vaccines have been approved to prevent COVID-19. Sanofi started the regulatory submission process for its primary COVID-19 vaccine.

The Government of Canada has signed agreements with the following companies to access their vaccines and vaccine candidates:

Donations

Canada’s 7 main agreements with vaccine suppliers allow for donations to be made when doses are deemed surplus in-country. PSPC supports Global Affairs Canada and Public Health Agency of Canada on the donation of surplus doses through its agreements with suppliers through direct donations and the COVAX Facility.

Canada signed an agreement on September 18, 2020, to participate in the COVAX Facility, which supports equitable global access to safe, effective, and affordable COVID-19 vaccines. Through this agreement Canada has committed to being a global leader in supporting equitable global access to safe, effective, and affordable COVID-19 vaccines. We have committed to donating the equivalent of at least 200 million doses to COVAX by the end of 2022, comprised of financial contributions and surplus doses. As of October 1, 2022, over 26.2 million surplus doses have been donated to COVAX for delivery to other countries, or have been donated through direct, bilateral agreements.

Domestic production

As part of the Government of Canada’s efforts to build domestic biomanufacturing capacity in Canada in the long-term, the government announced in 2022 that Canada established a memorandum of understanding with Novavax to pursue the production of its COVID-19 vaccine at the National Research Council of Canada’s Biologics Manufacturing Centre in Montréal. The vaccine supply agreement with Novavax will support the ability to produce vaccines at this facility once ready.

Intellectual property

The default position of the Government of Canada in all its procurement contracts is that title to intellectual property remains with the contractor, which is set out in the Treasury Board Policy on Title to Intellectual Property Arising Under Crown Procurement Contracts. In the advance purchase agreements that Canada negotiated with vaccine manufacturers, the manufacturers retain the title to intellectual property and do not grant a license for Canada to use the intellectual property nor give Canada a right to use the intellectual property.

Procurement of COVID-19 therapeutics

Context

Public Services and Procurement Canada is working with the Public Health Agency of Canada, Health Canada and Innovation, Science and Economic Development Canada, along with the COVID-19 Vaccine Task Force to procure COVID-19 vaccines, therapeutic drugs, and related supplies.

Note

Suggested response

Background

Oral antiviral treatments

On January 7, 2022, Canada signed a contract with Pfizer for 1 million treatment courses of Pfizer’s COVID-19 oral antiviral therapeutic Paxlovid, for the treatment of COVID-19 symptoms. Regulatory approval was obtained on January 17, 2022, and a contract amendment was issued on February 23, 2022, to exercise the option for 500,000 additional treatments.

On December 3, 2021, Canada awarded a contract to Merck for 501,120 courses of its Molnupiravir oral antiviral therapeutic for the treatment of COVID-19 symptoms, which is pending regulatory approval.

To date, Canada has distributed 757,472 treatment courses of Paxlovid to provinces and territories, and is expecting an additional 742,528 treatment courses to be delivered before the end of December. Further delivery schedules for Paxlovid are being confirmed, with the intent of bringing treatment courses into Canada as quickly as possible. A total of 1.5 million treatment courses of Paxlovid have been ordered and will be made available as soon as possible to help protect the health of Canadians.

Injection treatments

On October 14, 2020, Canada awarded a contract with McKesson/Gilead for the Remdesivir therapeutic drug for 24,825 treatment courses. An amendment for an additional 16,667 treatments was issued in February 2022 and a subsequent amendment for an additional 50,000 treatments was issued in April 2022. As of mid-October, 62,898 treatments have been delivered.

On November 22, 2020, Canada awarded a contract of up to 26,000 doses of Eli Lilly’s antibody treatment, Bamlanivimab. Of those, as of mid-August, 17,000 have been delivered. The treatment was developed in partnership with Canadian company AbCellera, combining its advanced antibody therapy discovery platform with Eli Lilly’s manufacturing and distribution capability.

On March 12, 2021, Canada finalized an agreement with Roche Canada for the supplemental supply of Tocilizumab for the treatment of COVID-19 symptoms for a total potential order of up to 14,551 treatment courses (assuming 800mg per treatment). As of mid-October, 12,943 (800mg) treatment courses have been delivered, with 1,608 additional treatments expected by end of December. Roche is managing supply to ensure that there is sufficient stock for both on-label and off-label use in Canada and other countries. Health Canada approved Tocilizumab on October 13, 2022, for the treatment of adult patients hospitalized due to COVID-19 who are receiving systemic corticosteroids and require supplemental oxygen or mechanical ventilation.

On June 11, 2021, Canada awarded a contract with Roche for its Regeneron therapeutic drug for 9,000 treatments, and all deliveries have been received.

In October 2021, the Government of Canada awarded a contract to GlaxoSmithKline which was later amended to add additional quantities, for the purchase of the monoclonal antibody, Sotrovimab, for the treatment of COVID-19. Total orders of 35,070 doses have been delivered.

On December 1, 2021, Canada awarded a contract to Merck for 501,120 courses of its Molnupiravir oral antiviral therapeutic for the treatment of COVID-19 symptoms, which is pending regulatory approval. The delivery and payment are contingent on first obtaining regulatory approval by Health Canada. As regulatory approval has not been granted, zero have been delivered.

On February 11, 2022, Canada awarded a contract to Sanofi for its Sarilumab drug for 1,000 treatments and all have been delivered.

On February 14, 2022, Canada awarded a contract to AstraZeneca to acquire 100,000 treatments of the Evusheld drug, which received regulatory approval on April 14, 2022, as a prophylaxis for the prevention of COVID-19. So far 68,517 treatment courses have been received in Canada with 33,272 delivered to provinces and territories and federal partners. An additional 11,483 treatments are expected later this year. On October 18, 2022, Health Canada approved Evusheld for the treatment of mild to moderate COVID-19 in adults and children (12 years of age and older, weighing at least 40 kg).

Integrity in federal procurement during the COVID-19 pandemic

Key messages

If pressed on Lafarge:

Key data points

Background

The Government of Canada has a framework of laws, regulations and policies in place to protect the integrity of the federal procurement system. Public Services and Procurement Canada 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 regime, a supplier may be suspended or declared ineligible to do business with the government if, in the previous 3 years, the supplier, 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.

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 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 regime and potential next steps.

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

Status of SNC-Lavalin

Key messages

Key data point

Nil.

Background

Integrity Regime

Under the Integrity Regime, a supplier may be suspended or declared ineligible to do business with the government if, in the previous 3 years, the supplier, 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 similar offences abroad. A supplier can be suspended for a period of 18 months and subject to extension pending final disposition of the charges.

Pursuant to the Ineligibility and Suspension Policy, an administrative agreement is an instrument that allows the federal government to seek greater assurances from a supplier to further mitigate the risk of doing business with them. Administrative agreements stipulate the terms and conditions that a supplier must meet in order to maintain its status to contract with the Government of Canada. The existence of an administrative agreement is made public and listed on the Integrity Regime’s website. Among other things, such agreements generally include requirements associated with necessary remedial measures, compliance programs, and regular reporting by an independent third party.

SNC-Lavalin

SNC-Lavalin provides various architecture and engineering services in support of Public Services and Procurement Canada’s real property projects. Contracts have been awaoded either through open requests for proposals or via call-ups using standing Offers on which the company is pre-qualified.

2021 criminal charges against SNC-Lavalin

On September 23, 2021, SNC-Lavalin Inc. and SNC-Lavalin International Inc. were each charged with the following offences under the Criminal Code of Canada:

The charges related to s. 121, 366, and 380 of the Criminal Code (when against His Majesty) are listed offences under the Integrity Regime that can lead to suspension and, if convicted, ineligibility to participate in the federal procurement system.

In response to the criminal charges, on September 23, 2021, the registrar of ineligibility and suspension entered into discussions with SNC Lavalin regarding its status under the Ineligibility and Suspension Policy. On May 11, 2022, the Quebec court approved a remediation agreement negotiated between the company and Quebec prosecutors, this effectively stayed all charges. The registrar of ineligibility and suspension subsequently signed an administrative agreement with the company under the Integrity Regime. This agreement maintains the supplier’s status to participate in the federal procurement system pursuant to the regime so long as its terms and conditions are met.

2015 criminal charges against SNC-Lavalin

In 2015, SNC-Lavalin Group Inc., SNC-Lavalin Construction Inc., and SNC-Lavalin International Inc. were charged with one count of corruption and one count of fraud for alleged improper payments to officials in Libya.

On December 9, 2015, pursuant to the Ineligibility and Suspension Policy, PSPC entered into an administrative agreement with SNC-Lavalin with respect to the above noted charges. The agreement permitted SNC-Lavalin to contract with the government while criminal proceedings were underway and on condition that certain corporate compliance conditions were met.

On December 18, 2019, SNC-Lavalin Construction Inc. pleaded guilty in the Court of Quebec to one count of fraud contrary to paragraph 380(1)(a) of the Criminal Code, which is not a listed offence under the Ineligibility and Suspension Policy. As the fraud was not against His Majesty, debarment under the Integrity Regime was not triggered. The remaining charges were stayed against all 3 defendants as a result of the resolution. In accordance with its terms and conditions, the administrative agreement between PSPC and SNC-Lavalin concluded 12 months following the stay of the charges, on December 18, 2020.

Contracts related to ArriveCan

Key messages

Key data points

Background

The budget included the following elements:

Cisco procurement

Key messages

If pressed on sole sourcing:

If pressed on The Logic article—Procurement officer conversation with Cisco:

Table 1: Non-competitive contracts awarded for networking equipment in fiscal year 2022 to 2023 (up to 31 August 2022)

Table 2: Competitive contracts awarded for networking equipment through generic open competitive processes on buyandsell.gc.ca - Buyandsell.gc.ca in fiscal year 2022 to 2023 (up to 31 August 2022)

Table 3: Competitive contracts awarded for networking equipment directed to original equipment manufacturers through limited tendering to resellers in fiscal year 2022 to 2023 (up to 31 August 2022)

Background

On February 15, 2021, SSC published the Network Modernization Way Forward document on Canada.ca to communicate our strategy and gather feedback from external parties. In the document, SSC stated that it would balance open and competitive procurements to standardize and simplify the Government of Canada network, which reduces the risk associated with maintaining, updating and building on overly complex systems.

Procurement activities undertaken where Cisco products were acquired are consistent with that strategy. SSC continues to limit tenders for Cisco products in specific instances, like growing the footprint in enterprise data centres where a common network fabric must be maintained. However, open and competitive procurements are also done for many networking categories including Local Area Networks (LAN) and Wide Area Networks (WAN).

Some open and competitive procurements are awarded to resellers who propose Cisco solutions, while others are not.

Looking forward, SSC plans to openly compete requirements in the following categories:

Additionally, SSC has established the information technology infrastructure review board, a review committee to improve oversight of all directed procurements. This committee reviews all brand-specific requirements over $1M to ensure alignment with departmental priorities and the network modernization way forward, and includes independent third-party consultation.

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