QUESTION PERIOD — Ministry of Public Services and Procurement
Awarding of Contracts
October 18, 2023
Thank you for joining us this afternoon, Mr. Duclos.
When bidders respond to tender requests, they respond to technical and other requirements as outlined in the tender and submit their cost for delivery of a service and a product. Our process is such that the lowest qualified bid wins the contract. However, far too often the qualified bid with the lowest price has been underbid to the point that “extras” or “work arisings” result in a final price that far exceeds the price submitted in the bid. What steps can the government take to reduce the risk associated with underbidding?
I will answer in two ways. First, the importance of making sure the parameters of these contracts are monitored and enforced following their adjudication, and the second piece is about the fact that more and more there are parameters in the procurement process that extend beyond the price. These parameters also include the importance of supporting a greater diversity of suppliers, such as Indigenous-owned or -led businesses, businesses owned or led by communities, by women, by younger entrepreneurs, and also, obviously, making sure that our procurement process is supportive of the importance of protecting the environment and the health of Canadians.
If I can go back briefly — because I know time is always too short — to your first question on the integrity of the process, I can assure you that it is my responsibility and the responsibility of my officials to make sure that when a contract is awarded, the requirements that the businesses signing those contracts accept are followed up on and enforced if it is necessary to enforce them.
Thank you, minister. As someone who has been involved in many contracts in government, I’ll come back to examples in other jurisdictions where the lowest bidder and highest bidder are put aside, they look at the average, and anybody that is qualified can be awarded the contract at the average or below.
Can the government not look at other jurisdictions to see how they reduced the risk of underbidding in order to win the contract and then catching up with extras and work arisings? It’s a very specific question.
That is a very important point and suggestion. In fact, it’s linked to a recent investment of about $87 million for the modernization of the procurement process to use tools, some of which you’re alluding to, that are now available through better access to information, better sharing of information and better use of that information to enforce contracts in a manner that needs to be done. This is, obviously, something that wasn’t possible just a few years ago without the technological and informational development that we’ve seen in the recent decades, but it’s more than that. It’s also making sure that those contracts are fulfilled and support other requirements that are now demanded for social and environmental reasons.
Welcome to the Senate, Minister Duclos.
Studies have shown that Black entrepreneurs have to overcome a large number of obstacles and face systemic discrimination when developing a business venture.
One of the main obstacles they face is access to the federal public procurement process. Having been an entrepreneur myself for two decades, I’ve seen how important it is to have access to the public market. In particular, we know that public procurement can make the difference between staying small and going multinational.
Minister, your department has put initiatives in place to diversify its suppliers. Can you tell us what has been done specifically to ensure that Black entrepreneurs have access to government contracts?
Thank you very much, Senator Gerba. This gives me the opportunity to complete my answer to the previous question posed by another senator.
To answer quickly, you seem to be familiar with the plan to increase the diversity of supply chains in Canada. This plan was launched about two years ago, and one of its sub-components focuses on support for businesses owned or managed by Black entrepreneurs in this country. The plan also includes a pilot project through which a dozen or so procurement opportunities have already been created.
As you correctly stated, this initiative is designed not only to help these entrepreneurs participate fully in growing the economy, in a dynamic perspective that prepares them for larger contracts down the road, but it also brings greater competition to the procurement process, which you alluded to earlier. The more competition there is, the more diversity we have among suppliers. The better the government’s terms of reference are, the higher the quality of the services offered to Canadians will be.
Thank you, minister.
The government set a mandatory minimum 5% Indigenous procurement target.
Are you considering a similar target for Black-owned businesses?
That is a very good question. You correctly referred to the 5% target for contracts offered to Indigenous-owned or -led businesses. We know that Indigenous Canadians make up about 5% of Canada’s population and that they are often underemployed. They also often live in areas where considerable investments are needed to improve the quality of life of the Canadians, both Indigenous and non-Indigenous, who live there. We are inching closer to that target. Official numbers will be out in early 2024, and we will see what they look like. We might extend these targets to other groups who are too often excluded from procurement processes.
