Smart Procurement and the Defence
Procurement Strategy

Information Technology Association of Canada
March 4, 2014
Present...
Smart Procurement
Early
Engagement

Effective
Governance

Benefits for
Canadians

Independent
Advice

Effective
Governance...
Early Engagement
Smart
Procurement
Early
Engagement

Effective
Governance

•

Early and ongoing consultation and dialogue ...
Effective Governance
Smart
Procurement
Early
Engagement

•
Effective
Governance

Independent
Advice

Senior management com...
Independent Advice
Smart
Procurement
Early
Engagement

Effective
Governance

•

•
•
•
•
•
•
•

Independent
Advice

Benefit...
Benefits for Canadians
Smart
Procurement
Early
Engagement

Effective
Governance

Independent
Advice

Benefits for
Canadian...
National
Shipbuilding
Procurement
Strategy
(NSPS)

National
Goods and
Services
Procurement
Strategies
(NGSPS)

Real
Proper...
The Defence Procurement Strategy
•

The Defence Procurement Strategy (DPS) fulfills the Government’s
commitment to ensure ...
Objectives
• Deliver the right equipment to the Canadian
Armed Forces (CAF) and Canadian Coast
Guard (CCG) in a timely man...
Delivering the right equipment to the
Canadian Armed Forces and the Canadian
Coast Guard in a timely manner
• Ensuring ear...
Leveraging our purchases of defence equipment
to create jobs and economic growth in Canada
• Using a weighted and rated Va...
Streamlining Defence Procurement
Processes
• Adopting a new regime to ensure streamlined and coordinated
decision-making f...
Early Engagement
• Establishes a two-way conversation between industry and
government to better understand needs and provi...
Defence Acquisition Guide
• To enable Canadian industry and potential bidders to make
informed R&D investments and strateg...
Defence Procurement Secretariat
• The DPS will include the establishment of a permanent Working Group
of Ministers chaired...
Key Industrial Capabilities
• Originally identified in the Jenkins report to serve as a
framework for analyzing Canadian d...
Market Segments for KICs
• Based on Industry Canada’s (IC) defence sector analysis
framework, 14 market segments identifie...
Value Proposition
• To assess the potential economic benefit to Canada in all
defence procurement with a weighted and rate...
Value Proposition
• Represents a shift from Industrial and Regional Benefits
(IRB) policy (scoring on pass/fail basis) to ...
Defence Analytics Institute
• 2013 Jenkins report noted insufficient data and analysis on
both defence economics-related i...
Implementation and Next Steps
• Implementation of the DPS will begin immediately
– Coming-into-effect date to be determine...
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Pablo sobrino smart-dps presentation to itac - march 4-2014 - english

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  • The Secretariat will undertake and/or support the following roles in this context:Ensuring early engagement in the procurement process; Developing and integrating Value Propositions into procurement processes; Developing options to support decision-making, based on consideration of trade-offs involving capabilities, as well as cost and benefit to Canada; Using independent advice to strengthen the integrity of the procurement process; Ensuring a coordinated approach to implementation of the Defence Procurement Strategy (DPS) across multiple departments, including PWGSC, National Defence, Industry Canada, Foreign Affairs, Trade and Development Canada, and Fisheries and Oceans Canada; Using an issue resolution approach to address problems quickly and effectively; and Assessing and evaluating the performance of the Defence Procurement Strategy (DPS).
  • Re: Policy Changes – Procurement Review Policy and Canadian Content Policy were approved February 6th by TBS1.) ‘Benefit to Canada’ commitments will no longer be assessed on a pass/fail basis but will be rated and weighted as part of a Value Proposition in the bid evaluation process.2.) The definition of “competition” now requires at least two bidders (formerly was three)
  • Pablo sobrino smart-dps presentation to itac - march 4-2014 - english

    1. 1. Smart Procurement and the Defence Procurement Strategy Information Technology Association of Canada March 4, 2014 Presented by Pablo Sobrino, PWGSC
    2. 2. Smart Procurement Early Engagement Effective Governance Benefits for Canadians Independent Advice Effective Governance 2
    3. 3. Early Engagement Smart Procurement Early Engagement Effective Governance • Early and ongoing consultation and dialogue with stakeholders • • On needs identification, requirements, potential solutions, Ts & Cs, evaluation/selection methods Using a variety of methods and tools • Industry days, focus groups, one-on-one meetings • Webinar, project website, feedback questionnaire Independent Advice Benefits for Canadians 3
    4. 4. Effective Governance Smart Procurement Early Engagement • Effective Governance Independent Advice Senior management commitment and oversight • • • DMGCs, ADM, or DG Steering Committees Robust dispute/conflict resolution process Roles and responsibilities • Established Rules of Engagement Benefits for Canadians 4
    5. 5. Independent Advice Smart Procurement Early Engagement Effective Governance • • • • • • • • Independent Advice Benefits for Canadians Use of Third Party Experts to provide: • Estimates Benchmarking Validation Advice Evaluations Oversight Fairness Monitor Industry associations, market experts Note: PWGSC responsibilities and obligations are not relinquished 5
    6. 6. Benefits for Canadians Smart Procurement Early Engagement Effective Governance Independent Advice Benefits for Canadians • • • • • Industrial and Technological Benefits Benefits for Aboriginal businesses Increase opportunities, reduce barriers for Small and Medium Enterprises Global Value Chain (OEMs use of Canadian Suppliers) Encourage Innovation 6
    7. 7. National Shipbuilding Procurement Strategy (NSPS) National Goods and Services Procurement Strategies (NGSPS) Real Property Translation Bureau – Linguistic Services Smart Procurement in Action Canadian Coast Guard Helicopters Build in Canada Innovation Program Contracted Airborne Training Services (CATS) 7
    8. 8. The Defence Procurement Strategy • The Defence Procurement Strategy (DPS) fulfills the Government’s commitment to ensure defence equipment procurement creates economic opportunities and jobs for Canadians. • Improving economic outcomes from defence procurement is not only good for Canadian industry and the defence industrial base; it’s a strategic choice that will enhance Canadian sovereignty and national security. • The DPS represents a fundamental change in the approach to defence procurement. • It is informed by the Government’s extensive engagement with the industry and by the recommendations found in the Jenkins and Emerson reports commissioned by the Government of Canada. 8
    9. 9. Objectives • Deliver the right equipment to the Canadian Armed Forces (CAF) and Canadian Coast Guard (CCG) in a timely manner • Leverage our purchases of defence equipment to create jobs and economic growth in Canada • Streamline the Defence Procurement Process 9
    10. 10. Delivering the right equipment to the Canadian Armed Forces and the Canadian Coast Guard in a timely manner • Ensuring early and continuous industry and client engagement in the procurement process; • Starting in June 2014, publishing an annual Defence Acquisitions Guide (DAG) that outlines National Defence (DND) procurement priorities; and • Establishing within DND an independent, third-party challenge function for military requirements. 10
    11. 11. Leveraging our purchases of defence equipment to create jobs and economic growth in Canada • Using a weighted and rated Value Proposition, to assess bids for defence and major Canadian Coast Guard procurements; • Implementing an Export Strategy to support international sales opportunities and participation in global value chains; • Identifying and applying Key Industrial Capabilities (KICs) to inform potential economic benefits of individual procurements so that they meet the CAF's needs and increase the competitiveness of Canadian firms in the global marketplace; and • Establishing an independent, third-party Defence Analytics Institute which will provide expert analysis to support the objectives of the Defence Procurement Strategy (DPS) and its evaluation. 11
    12. 12. Streamlining Defence Procurement Processes • Adopting a new regime to ensure streamlined and coordinated decision-making for defence and major Canadian Coast Guard procurements; • Establishing a Defence Procurement Secretariat in PWGSC; • Reviewing the current National Defence delegated authority to purchase goods with a view to increasing the level from the current $25,000 to achieve more efficient procurement practices. 12
    13. 13. Early Engagement • Establishes a two-way conversation between industry and government to better understand needs and provide solutions • Provides Industry with an early understanding of capability requirements and the desired outcomes of benefit to Canada • Helps GC understand what industry solutions are available • New approach to engagement and transparency will support the following activities: • Publication of a Defence Acquisitions Guide • Value Propositions and procurement-specific engagement • Regular review of KICs • Continual improvement of the DPS 13
    14. 14. Defence Acquisition Guide • To enable Canadian industry and potential bidders to make informed R&D investments and strategic partnering decisions • Ensures Canadian industry is better positioned to deliver equipment and services for the CAF, and for export opportunities in defence sector • Will identify list of procurement projects to be developed over 5, 10, 15, and 20 year timeframes • Include projects over $100M and those of lower value ($20100M) that have leveraging potential for Canadian industry • Initial version to be published by DND: June 2014 14
    15. 15. Defence Procurement Secretariat • The DPS will include the establishment of a permanent Working Group of Ministers chaired by the Minister of PWGSC, and will include the ministers of DND, IC, DFATD, and DFO (for CCG projects)  Will ensure shared accountability in defence procurements and to enable these to proceed faster and more efficient and coordinated manner. • Working Group of Ministers will be supported by a permanent Deputy Ministers Governance Committee (DMGC), which is the key decisionmaking body for the implementation of the DPS and chaired by PWGSC  Will provide guidance for defence and major CCG procurements and ensure timely and appropriate decisions among competing objectives associated with particular procurements. • A permanent Defence Procurement Secretariat will be established within PWGSC and report to the DMGC to ensure all DPS objective are met. 15
    16. 16. Key Industrial Capabilities • Originally identified in the Jenkins report to serve as a framework for analyzing Canadian defence industrial capabilities and their potential for growth • Six identified areas as KICs by Jenkins:  Arctic and Maritime Security  Protecting the Soldier  Training Systems  Cyber-Security  Command & Support  In-Service Support • KICs will be applied in identified market segments through the use of Value Proposition 16
    17. 17. Market Segments for KICs • Based on Industry Canada’s (IC) defence sector analysis framework, 14 market segments identified within KICs • Scorecard has been developed by IC to analyse market segments based on DND priority, economic impact, innovation, and export potential • When ranked based on Jenkins’ criteria, the following market segments could become priority KIC opportunities for Canadian Defence: • C4ISR across air, land, and marine domains • Combat Vehicles and Components • Simulation Systems and Components • Aircraft Fabrication, Structures, and Components • Missiles, Rockets, and Drones, • In-service Support 17
    18. 18. Value Proposition • To assess the potential economic benefit to Canada in all defence procurement with a weighted and rated criteria • Will be informed by KICs and industry consultations. • Will be identified on a procurement-by-procurement basis, as per the following:  $100M or more: All will require a Value Proposition as part of a comprehensive ITB plan  $20M - $100M: All will be reviewed for the application of a Value Proposition  $25K - $20M: All will be assessed for their economic potential, and the revised CCP will be applied to realize this potential • Reflects recent policy changes to PRP and CCP 18
    19. 19. Value Proposition • Represents a shift from Industrial and Regional Benefits (IRB) policy (scoring on pass/fail basis) to Industrial and Technological Benefits (ITB), with a Value Proposition • ITBs will focus on Value Proposition as a weighted, rated, and required element of bid proposals to be informed by KICs • Value proposition rating will favour actions that lead to improved economic outcomes through: • Investments that strengthen Canadian KICs • Investments that support enhanced productivity • Broader Industrial and Technological high-value activities, such as “technology transfer” • The timing of fulfilling Value Proposition commitments will also be considered 19
    20. 20. Defence Analytics Institute • 2013 Jenkins report noted insufficient data and analysis on both defence economics-related issues and Canadian defence industrial base • Recommended that an institute be establish to lead the required research and analysis to fill this gap • Strong recognition among industry stakeholders that research and analysis are critical to help guide and inform the Government’s objective of improved economic outcomes from defence procurement. • A study will be conducted by IC and recommendations will be 20 made later in 2014
    21. 21. Implementation and Next Steps • Implementation of the DPS will begin immediately – Coming-into-effect date to be determined following ongoing industry consultations • Important activities during this phasing-in period • Implementation of Policy Changes for the DPS (Completed) • Significant orientation and training of officials in key departments (Feb Ongoing) • Engagement and Information-sharing with Industry • Establishing a new Defence Procurement Secretariat (May) • Publishing of Defence Acquisition Guide (June) • Identify a series of procurement to which the DPS will apply • Develop evaluation framework to measure success of the DPS • Establish a new Defence Analytics Institute 21

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