September 15, 2017
Strengthening Relationships between Hi-Tech SMEs and the Government of Canada & Improving Canada’s Procurement System: Educational & Advocacy Agenda Setting Workshop (Save the Date)
Please confirm your interest in participating in an Educational and Advocacy Agenda Setting Workshop (Save the Date: October 25th in Ottawa) that is part of an industry and community led initiative entitled, “Empowering Hi-Tech SMEs to strengthen our Knowledge-Based Economy (KBE).”
The Workshop, limited to 60 invited executives, features public and private sector leaders knowledgeable of selling to Canadian and U.S. governments.
Reserve your seat today by contacting CATA CEO, John Reid at firstname.lastname@example.org
The goal of the Workshop is to strengthen the relationship between Hi Tech SMEs and the Government of Canada and improving Canada’s procurement system as a marketplace and first market for goods and services.
Your advice and guidance will also be the basis for go forward advocacy activities designed to strengthen Canada’s SME Innovation sector. We are providing a first draft discussion paper below as part of starting the conversation and welcome your input. Confirm your interest, today!
“EMPOWERING OUR HIGH-TECH SMEs TO STRENGTHEN OUR KBE” (first draft discussion paper)
Workshop #1: Strengthening relationship between Hi-Tech SMEs and the Government of Canada & Improving our Procurement System
Improving Relationship between Government Departments & SMEs (Topics of Discussion)
This part of the Conference will deal with departmental operations and potential improvements to help hi-tech SMEs to grow ( e.g., less in-house development more contracting out, more collaboration between Government Departments and hi-tech SMEs, more efficient setup within the Government departments, strong encouragement for collaboration between Public/Private/University/NGO sectors and with other friendly nations, etc). It will lead to recommendations about what improvements are required within the government departments to help develop hi-tech SMEs capacities. We would like to engage in discussion on:
- Rationalizing Accountability Act: The experiences we have had with various Government departments over the past 10 years shows wasted resources in implementing the Accountability Act, ultimately unnecessary because, in the view of Justice Gomery, there were already sufficient checks and balances in the system that if used properly ensure the integrity of the system. In a recent Donald J. Savoie states, “”What does the Federal Accountability Act have to show for its 10 years? Rather than address fundamental questions confronting our parliamentary system and our public service, it turned to Band-Aid solutions by borrowing bits and pieces from the American political system – notably the Parliamentary Budget Officer and the obsession with private sector approaches. Accountability has not been strengthened, while the government has grown thicker, government operations more expensive trying to service an ever growing number of oversight bodies, and morale in the public service has plummeted. It has shifted the focus of control management from where the bulk of programs and services are delivered, at the regional level, to Ottawa, where the blame game is played out.” We must review the Accountability Act from the point of view of efficiency, cost and benefit and then determine its utility and how it should be improved or even repealed. This review must be done on a non-partisan basis.
- Departmental Reorganizational Issues: Government has done some departmental reorganization, but inefficiencies remain. For example, Environment and Climate Change Canada (ECCC) and the Meteorological Service of Canada (MSC) used to have R&D and IT as a part of MSC. It was consolidated as a part of the mother department ECCC’s overall IT and R&D Departments. This might be appropriate for real IT systems, such as Inventory Control andWeb Maintenance, however, for Technical Systems dealing with Meteorology and Hydrology, it has been observed both internally by the departmental staff as well as suppliers that the operation of MSC has made handling of projects very inefficient. The advantages and disadvantages of the above consolidation must be reviewed and corrective steps taken. A similar exercise is required for other departments.
- In-House development: In house development typically costs more, takes longer and causes a conflict of interest – same department is the client as well as the supplier. In addition, in-house provides no additional benefits such as leveraging the Intellectual Property (IP) and exporting the technology which can be done more effectively by the Private Sector. Government departments must have high quality staff for defining requirements, doing Project Management from the client’s side and performing acceptance of the developed systems.
- TBIPS: This is a “body shopping” Program which should minimized because it hinders IP development and in any case, applicable to only Ottawa-based companies because all requirements are generated by various departments in Ottawa. It starves companies outside Ottawa.
- Shared Services Canada (SSC) should only be involved in specific projects related to: Email transformation initiative, Data Centre consolidation, Telecommunications transformation program, Workplace technology devices, excluding computer hardware required for various projects necessary to Cyber and information technology security.
- Government Departments (GD) should be mandated to support Canadian hi-tech SMEs and be more open and transparent about departmental requirements. This is also important for the success of the BCIP Program. Currently, GDs feel that industry is their adversary.
- Departments need to define their procurement requirements at least 6 months (preferably one year) in advance and publish guidance to Suppliers to ensure optimum solutions.
- Hi-tech SMEs should be consulted for potential solutions through the RFI (Request for Information) process for any requirement over one million dollars and preferably smaller procurements.
- Departmental Budgets should strive for stability so that departments can plan on a long term basis.
- When Government gives loans to large corporations, it must stipulate that a portion is subcontracted to hi-tech SMEs.
- Finally, the previous government constituted a Red Tape Reduction Commission (RTRC) which made many recommendations; we need to discuss what measures, if any, are required to reduce the unnecessary burden on hi-tech SMEs so that they can concentrate on innovation rather than unnecessary reporting activities.
This part of the conference will deal with Procurement issues deserving of attention. Many of these issues are related to the internal operations of the government which minimize contracting opportunities; many opportunities come only in the form of Ottawa based “body-shopping” thus starving companies in the rest of Canada. “Body-shopping” does not create any IP – the bloodline of growth – for companies to leverage. Other examples include requirements for more Canadian content, PSPC to have a more vendor-friendly attitude, realistic requirements for insurances, and more attention for commercialization possibilities.
- Optimization of Procurement Process at the front-end. This means clear Requirements Documents and planned scheduling both from the Client Department and as PSPC.
- Giving sufficient time for Proposal and for Delivery of goods and services. Currently, Government departments take an inordinate amount of time to utilize budgets for a given FY, thus suppliers are squeezed creating many challenges for all.
- Not encumbering the Suppliers with unreasonable one sided clauses, (e.g., Exchange Rates, unnecessary Product Liability Insurance).
- Keeping in mind that the objective of the Procurement is to get the best product for the optimum price and to encourage competition, Bid Clarification and even the provision of any missing information must be allowed as long as there is no cost implication due to the change. Moderate Bid Repair ( i.e., provision of any missing information) must not be viewed as a taboo as long as there is no cost implication.
- If required, face-to-face meetings or teleconferences should be used for clarifying Bids, especially for larger Projects.
- The objective of Bid Evaluation – especially for larger projects -should be to try and qualify bidders and not to disqualify them. Every effort must be made to ensure that an otherwise qualified party is not disqualified for some missing information which could be easily obtained from the supplier. What might appear universally fair from the Government’s perspective could be in fact highly unfair and unjustified from the supplier’s point of view and public good point of view in the context of the specific bidding process. By rejecting bids unfairly, we could miss opportunity for an optimum solution.
- Canadian content must be mandated in any project of considerable magnitude, over say one million dollars.
- Although NAFTA is important, it must not be overemphasized in evaluating Proposals – the US Government’s first goal is to develop its own industry and not worry about NAFTA. 7.2.1
Powers of SME Department
The USA Government officially established SBA (Small Business Administration) Program in 1953, but its philosophy and mission began to take shape years earlier in a number of predecessor agencies, largely as a response to the pressures of the Great Depression and World War II.
Canada started its Small and Medium Enterprise (SME) Department approximately 10 years ago which was an interesting step forward. However, the SME Department of PSPC does not have the same powers as the SBA which is an independent Authority at the Cabinet level. It has presence in each Government Department involved in any contracting work. It mandates that 23 to 25%, and in some departments even more contracts, must be given to SMEs. Any large company getting a large contract must subcontract about the same amount (23 to 25%) to SMEs. This is rigorously enforced by SBA which levies penalties and fines for non-compliance.
In addition, the US Procurement system under SBA has an 8(a) Clause which is a Business Development Program to assist small disadvantaged businesses to succeed. The 8(a) Program offers a broad scope of assistance to firms that are owned and controlled at least 51% by socially and economically disadvantaged individuals. Canada should look into this Program and try to implement a similar program.
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