Procurement Strategy for Aboriginal Business - Performance Report for 2002

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Table of Contents


Executive Summary

Gathering Strength, the Indian and Northern Affairs Canada (INAC) response to the Royal Commission on Aboriginal Peoples (RCAP), builds on the theme of partnerships among Aboriginal businesses, industry and government at all levels to open up existing and emerging market opportunities. This was reinforced in the February 2004 Speech From the Throne, where the Government was seeking to improve the effectiveness of Aboriginal economic development. More recently, the commitment made at the Canada-Aboriginal Peoples Roundtable, held in April 2004, focussed on partnerships, economic opportunities and greater Aboriginal economic self-reliance.

INAC, in partnership with other federal departments and agencies, continues to develop and implement policies and programs with the objective of creating an environment that supports business and market growth which leads to opportunities for employment and skills development for all Aboriginal people.

The Procurement Strategy for Aboriginal Business (PSAB) is one of the innovative and effective initiatives used by the Government of Canada to encourage Aboriginal suppliers to pursue federal government contracting opportunities. The PSAB applies to all federal departments and agencies with the exception of Crown corporations. It provides Aboriginal businesses with the potential for partnerships, joint ventures, strategic alliances, sub-contract opportunities and business network development.

Through the identification and use of the mandatory and voluntary set-asides, more Aboriginal suppliers are bidding for and winning federal contracts, thus increasing the economic benefits to Aboriginal business and their communities. The increase in successful bids on incidental opportunities (i.e. those not set-aside) by Aboriginal business is most encouraging, as it reflects the growth and competitiveness of the Aboriginal business sector due partly to the experience gained, and the support provided through the PSAB initiative.

This is the fifth Annual Performance Report for the PSAB, and covers the 2002 calendar year. Among other things, it details the progress departments, agencies and Aboriginal suppliers have achieved with the PSAB, the results of INAC's interventions and advocacy initiatives, and information on the first Evaluation of the Procurement Strategy for Aboriginal Business, covering the period from 1996 until 2001.

By providing enhanced access for Aboriginal businesses to federal government contract opportunities since its introduction in 1996, the PSAB has proven to be a driving force behind the growth of the Aboriginal business sector's dealings with the federal government. This has resulted in a stronger contribution by Aboriginal business to the Canadian economy.

Highlights of the Year

  1. 13,732 federal contracts worth $253.2 million were awarded to Aboriginally-owned firms.

  2. $151.4 million, or almost 60% of all contracts, was awarded to Aboriginal businesses under open competition (not set-aside).

  3. There was a 101% increase from the 2001 calendar year in the number of incidental contracts awarded for contracts greater than $25,000.

  4. $195 million, or 77% of the total contracted value, was awarded on a competitive basis.

  5. INAC interventions through the Procurement Review Committee (PRC) accounted for 5% of all requirements valued at greater than $2 million, and amounted to $14 million worth of contract opportunities that were set-aside for Aboriginal business.

  6. Nearly 8% of all PRC strategies had pre-identified Aboriginal components already included in the tender documents, amounting to over $65.1 million in business opportunities for Aboriginal businesses.

  7. PSAB activities in 2002 focussed on implementing an Action Plan in response to the observations and recommendations presented in the 2001 report, Evaluation of the Procurement Strategy for Aboriginal Business.

The INAC PSAB team, part of the Economic Development Branch, continues to be a strong advocate and a facilitator for the Aboriginal business community as it works with participating departments to achieve their annual performance objectives, and implement their PSAB advocacy activities. As part of its activities in 2002, INAC and the PSAB team were involved with government and government-industry committees to promote the PSAB and advocate on behalf of Aboriginal businesses. The PSAB team communicated to stakeholders by:

  • working closely with PSAB co-ordinators across government

  • maintaining a comprehensive Web site

  • publishing a bi-monthly newsletter

  • participating in trade shows, and

  • giving presentations to Industry, associations and government representatives.

With each passing year, there is greater acceptance and understanding of the PSAB concept and the ensuing benefits, not only for Aboriginal businesses, but for the Canadian economy.



Introduction

The PSAB encourages Aboriginal firms to pursue more contracting opportunities with the Government of Canada. Contracts worth more than $5,000 for goods and services that primarily benefit Aboriginal people are open only for competition (set-aside) among Aboriginal businesses. Departments are also encouraged to set-aside requirements on a voluntary basis for competition among Aboriginal suppliers. The Strategy aims to increase the number of Aboriginal suppliers bidding for, and winning, federal contracts. It also encourages sub-contracting to Aboriginal firms, and the formation of joint ventures with other Aboriginal and non-Aboriginal businesses.

Since its beginning in April 1996, the PSAB has helped federal departments and agencies increase contract opportunities for Aboriginal businesses. The Strategy supports Aboriginal business development by:

  • setting aside contracts for bidding only by Aboriginal suppliers, which is a mandatory requirement when the contract is for a good or service that primarily benefits Aboriginal people;

  • encouraging voluntary set-aside contracts, in which departments and agencies voluntarily decide to set aside opportunities for competition by Aboriginal businesses;

  • providing a framework for joint ventures and partnerships between Aboriginal or non-Aboriginal businesses and allowing these partnerships to bid on opportunities that have been set aside;

  • using Aboriginal criteria, such as the use of an Aboriginal sub-contractor, to evaluate bids on contracts for goods and services that are not subject to international trade agreements; and

  • undertaking activities to develop the capacity of Aboriginal suppliers to interact with the federal government purchasing community.

The PSAB is open to all Aboriginal businesses. A business can include a sole proprietorship, limited company, co-operative, partnership or not-for-profit organization. As the lead federal advocate, the PSAB team, located in INAC, promotes the initiative across government, and liaises with departmental PSAB co-ordinators situated in federal departments and agencies.

The information gathered for this 2002 Annual Report shows that, through the identification and use of the mandatory and voluntary set-asides, more Aboriginal suppliers are bidding for and winning federal contracts, thus increasing the economic benefits to Aboriginal business. The increase in successful bids by Aboriginal businesses on incidental opportunities (i.e. those not set-aside) is most encouraging. It reflects the growth and competitiveness of the Aboriginal business sector, due in part to the experience gained and the support provided through the PSAB initiative.



Departmental Performance Objectives

Federal government departments and agencies are responsible for establishing performance objectives that reflect their ability and intent to support the PSAB. In keeping with the federal government contracting process, departments and agencies are required to maintain the principles of prudence, probity and best value when expending Canadian tax dollars.

The key to the successful implementation of the PSAB lies in the commitment of federal departments and agencies. Each year, all major federal departments and agencies provide INAC with an estimated value of potential contracts to be awarded to Aboriginal suppliers. The estimates include contracts directly awarded by the departments and agencies, contracts awarded by Public Works and Government Services Canada (PWGSC) on their behalf, credit card purchases, standing offer call-ups, and contract amendments.

The Treasury Board Secretariat's (TBS) contracting policies provide a mandate for departments and agencies to act as advocates and facilitators to promote and enhance contracting activity with Aboriginal entrepreneurs, within an existing framework of good contract management practices. The success of the PSAB is demonstrated through government departments and agencies achieving, and in some cases exceeding, their yearly performance objectives.

As in previous PSAB annual reports, the data presented in this report are based on the TBS Annual Report on Contracting with Aboriginal Businesses using data captured by PWGSC. Unlike the data that the departments and agencies provide to INAC, the TBS Annual Report does not capture purchases acquired through departmental credit cards, call-ups against standing offers, or contract amendments.

PWGSC, as the central procurement arm of the federal government, is also responsible for capturing the relevant contracting statistics related to the PSAB for all federal departments and agencies. The 2001 Evaluation of the Procurement Strategy for Aboriginal Business Report (hereafter referred to as the Evaluation Report) recommended that a uniform reporting template be developed for capturing departmental performances (see “Evaluation of the PSAB” later in this report). Individual departmental performance reports are used by the INAC PSAB team to monitor the progress made in implementing the Strategy. Even though the data provided in departmental performance reports are not used as part of the official figures, we continue to encourage the departments and agencies to provide INAC with the desired information. Capturing complete statistics on all types of contract expenditures will not only give a true picture of the success of the PSAB, but will also give credit to those departments and agencies that are intent on fully implementing the Strategy.

Federal departments and agencies continue to demonstrate their support for the PSAB. In 2002, departmental and agency performance objectives estimated a total of $112.8 million in business volume for Aboriginal businesses. The TBS Annual Report indicates a total value of $253.2 million worth of contracts being awarded to Aboriginal firms for 2002. Table 1 demonstrates the commitment of the various departments participating in this initiative, and highlights their respective achievements during 2002.

Table 1: Government of Canada,
2002 Business Volume Directed to Aboriginal Businesses
Department Dept. Objective TBS Report*
Agriculture/Agri-Food Canada $171,367 $1,236,000
Canada Customs and Revenue Agency $2,000,000 $3,247,000
Correctional Service Canada $6,000,000 $8,500,000
Health Canada $8,555,000 $9,668,000
Indian and Northern Affairs Canada $41,662,860 $37,500,000
Department of National Defence $15,000,000 $34,996,000
Public Works and Government
Services Canada
$11,400,000 $9,100,000
Transport Canada $385,000 $3,386,000
Veterans Affairs Canada $200,000 $2,836,000
Other Departments $27,385,438 $142,773,000
TOTAL - All Departments/Agencies $112,759,665 $253,242,000


Contracts Awarded

In 2002, a total of 13,732 contracts were awarded to Aboriginal firms amounting to $253.2 million in revenue for Aboriginal businesses. (Figure 1 and Table 2).

Figure 1: Number of Contracts and Dollar Values Awarded to Aboriginal-owned Firms Between 1997 and 2002

Figure 1: Number of Contracts and Dollar Values Awarded to Aboriginal-owned Firms Between 1997 and 2002
Type of Contract Incidental & Set-Aside Less Than
$25,000
Incidental
Greater Than
$25,000
Set-Aside
Greater Than
$25,000
Total
Goods
number of
contracts
9,347 199 43 9,589
value of contract $13,820,000 $54,784,000 $22,179,000 $90,783,000
Services
number of contracts 3,484 389 155 4,028
value of contract $20,643,000 $80,205,000 $41,731,000 $142,579,000
Construction
number of contracts 72 37 6 115
value of contract $528,000 $16,436,000 $2,916,000 $19,880,000
Total # of Contracts 12,903 625 204 13,732
Total Value $34,991,000 $151,425,000 $66,826,000 $253,242,000

* Excludes credit card purchases, standing offer call-ups and amendments

Comparison of Incidental and Set-Aside Contract Awards.

Aboriginal businesses can, and do, compete with all businesses. The 2002 contract statistics clearly demonstrate this fact. For example, in 2002, $151.4 million or almost 60% of the total business awarded to Aboriginal businesses was from open, not restricted (set-aside), competition under the incidental category. This is very positive news. Figure 2 provides a comparison for incidental contracts greater than $25,000.

Figure 2: Incidental Contracts with Aboriginal Business
Valued at Greater Than $25,000

Figure 2: Incidental Contracts with Aboriginal Business Valued at Greater Than $25,000

The increase of incidental contracts awarded to Aboriginal businesses is reflected in the increase of service contracts greater than $25,000. The increase in awarding service contracts to Aboriginal suppliers is a testament to the keen competitiveness, and the technical and managerial skills that are offered to federal government purchasers. While not as dynamic in growth, the incidental contracts for goods and construction requirements have also shown significant growth of contracts greater than $25,000.

The total value of incidental contracts awarded increased from $86.3 million in 2001 to $151.4 million in 2002, an increase of over 75%. Figure 3 shows that the total number of incidental contracts awarded (greater than $25,000) increased significantly from 2001 from 311 to 625, an increase of 101%. These increases were achieved through open market competition.

Figure 3: Number of Set-Aside Contracts Versus Incidental Contracts Awarded Valued at Greater Than $25,000

Figure 3: Number of Set-Aside Contracts Versus Incidental Contracts Awarded Valued at Greater Than $25,000

Figure 4: Value of Set-Aside Contracts Versus Incidental Contracts Awarded Valued at Greater Than $25,000

Figure 4: Value of Set-Aside Contracts Versus Incidental Contracts Awarded Valued at Greater Than $25,000

Figures 3 and 4 further show that, especially for 2002, the number of incidental contracts awarded continues to form a large proportion of the total contracts greater than $25,000.

The decrease in the number of set-aside contracts awarded to Aboriginal firms during 2002 shows that departments created fewer “Aboriginal only” requirements than in previous years. However, the key is that contracts won by Aboriginal businesses on the open (competitive) market significantly increased. This is very encouraging and tells a positive story. Competitiveness not only creates a strong and dynamic supplier base, both Aboriginal and non-Aboriginal, but fuels the growth and confidence of an ever-growing Canadian economy. This should not be taken to mean that as an increasing number of Aboriginal companies develop the capacity and capability to compete on an open market, that set-asides are not required. On the contrary, the PSAB must continue to help Aboriginal businesses and provide new and small Aboriginal companies with a stimulus to grow. Set-asides provide such a stimulus. Given the decrease in set-asides, two approaches are needed:

  • a re-commitment to the PSAB by departments and agencies, especially for low-value opportunities; and

  • revitalizing of the PSAB within the federal government, which will ensure the continued growth of the Aboriginal business sector.

The number and value of contracts awarded to Aboriginal businesses under the PSAB depends on the ability to continue to identify mandatory set-asides and to advocate voluntary set-asides (as discussed later in this report). The growth in incidental contracts are indicative of the growth of the Aboriginal supplier base, which has been stimulated, in part, by PSAB set-asides. Such successes not only depend upon the ability and willingness of Aboriginal businesses to market their goods and services to federal government departments, but also on the willingness of federal departments to accept that Aboriginal businesses have the capacity and capability to effectively and efficiently meet federal government requirements. The increase of incidental contracts awarded to Aboriginal businesses is helping to increase confidence among government buyers and results in more contract opportunities for Aboriginal suppliers. As Aboriginal businesses win more contracts, their capacity and capability improves.

Advanced Contract Award Notices

An Advanced Contract Award Notice (ACAN) is issued on the federal government electronic tendering service (MERX), when a department or agency intends to award a sole source contract. Suppliers who feel that they can meet all the mandatory requirements of the specific opportunity may challenge the proposed procurement. If challenged successfully, the requirement is then tendered through the competitive process.

  Competitive ACANs Non-Competitive Total
  # $000 # $000 # $000 # $000
Total < $25K 1,987 12,060 3 63 10,913 22,870 12,903 34,993
Incidental >$25K 505 131,415 52 16,004 68 4,006 625 151,425
Set-Aside >$25K 132 51,528 36 12,710 36 2,588 204 218,249
Total >$25K 637 182,942 88 28,714 104 6,593 829 218,249
Total* 2,624 195,002 91 28,777 11,017 29,463 13,732 253,242

* Totals may not add-up due to rounding

Standing Offers

Whether through open competition or set-asides, standing offers continue to form a significant portion of the total value of contracts awarded to Aboriginal businesses.

The issuance of standing offers not only assists departments in meeting their PSAB contracted value objectives, but provides Aboriginal businesses with a marketing mechanism to emphasize their capacity and capabilities. As standing offers provide no guarantee to their usage and subsequent revenue generation, Aboriginal businesses must become more proactive and innovative in their marketing efforts toward departmental procurement representatives and end-users. Departments and agencies must continue to demonstrate their commitment to the PSAB by using standing offers issued to Aboriginal suppliers-that is, actually issuing call-ups to standing offers that have been won by Aboriginal businesses.

In this regard, previous studies and reports produced in collaboration with Aboriginal businesses suggest that departments and agencies may have used standing offers in their performance objective estimates as a means to elevate their annual forecasted contributions, without ever issuing call-ups. This further points to the need to revitalize the purpose of the PSAB among government departments and agencies.

The PSAB team is pursuing a strategy regarding the issuance and actual usage of standing offers. Once received, procedures can be developed, in conjunction with the departmental co-ordinators, to monitor the usage of the standing offers and develop new initiatives to complement the marketing activities of Aboriginal businesses.



Communication with Stakeholders

As part of our continuing efforts at promoting the Strategy within government and the Aboriginal community, the PSAB team organizes and participates in events such as conferences and trade shows, delivers presentations, and shares information and ideas to inform the various stakeholders about the Strategy and the progress achieved.

  1. The INAC PSAB team participated at trade shows, including the Eco-Ex Trade Show organized by Statistics Canada and the DND Reverse Trade Show in Edmonton. Advocacy events related to the Maritime Helicopter Project (MHP) in Ottawa and young Aboriginal Entrepreneurs in Saskatoon were also undertaken. It also participated at several Aboriginal Awareness Week events sponsored by various departments and Aboriginal non-government organizations (NGO).

  2. The PSAB Web site continues to be maintained; it contains information and publications, Business Tools, calendar of events and other relevant material. As well, all stakeholders can continue to contact the 1-800-400-7677 for assistance or information needs.

  3. Publication of the bi-monthly PSAB newsletter continues and is aimed at providing departmental PSAB co-ordinators with an opportunity, and a venue to share success stories, best practices, a bit of Aboriginal culture, and lessons learned in their dealings with implementing the PSAB within their respective departments. It also provides PSAB co-ordinators with information on upcoming workshops and conferences dealing with PSAB-related issues. Each issue highlights the success of an Aboriginal business. Current and past editions of the PSAB newsletters are available. We continue to encourage other departments to contribute to this publication.

  4. In 2002, the INAC PSAB team gave presentations to:

    • government departments, including Natural Resources Canada, Industry Canada, National Defence and Parks Canada;

    • Aboriginal stakeholders such as the Chippewas of Sarnia; and

    • various committees and interested organizations such as the interdepartmental Senior Procurement Advisory Committee (SPAC).

  5. INAC PSAB team representatives continue to work closely with departmental PSAB co-ordinators to assist them in achieving their departmental objectives through the exchange of information and ideas, and in promoting the Strategy within government.

The INAC PSAB team organized two Co-ordinators' Conferences in 2002. All co-ordinators were invited to a two-day conference in May with the objective of providing them with a better understanding of the intent and scope of the 2001 PSAB evaluation review and the findings and recommendations resulting from this evaluation. Departmental co-ordinators displayed their continued support for implementing the PSAB and assisted in developing an Action Plan with the INAC PSAB team in response to the findings and recommendations identified in the PSAB Evaluation Report.

In November 2002, the INAC PSAB team, in partnership with the Federation of Saskatchewan Indian Nations (FSIN), concurrently organized a conference in Saskatoon on behalf of young Aboriginal Entrepreneurs and a PSAB Co-ordinators Conference. This not only provided the co-ordinators with the feel of what was happening outside the National Capital Region, but provided an opportunity for participants to meet representatives of departmental procurement organizations and Saskatchewan Aboriginal businesses.



PSAB Advocacy Initiatives

The INAC PSAB team continues to provide the leadership necessary for the ongoing growth and acceptance of the Strategy in government and the Aboriginal community. During 2002, the INAC PSAB team identified and participated in the following initiatives to further the promotion of the Strategy not only in government, but also in all industry sectors.

Canadian Aboriginal and Visible Minorities Supplier Council

In 2002, the Canadian Aboriginal and Visible Minorities Supplier Council (CAVMSC) was created by interested industry organizations. The primary objective of this Council is to promote and facilitate procurement opportunities between Fortune 500 corporations and Canadian-owned businesses operated by Aboriginal people and visible minorities.

The CAVMSC is open to any major corporation operating in Canada that is committed to incorporating Canadian minority suppliers into its supply chain. As this provides Aboriginal business with the opportunity to do business with the major corporations, the INAC PSAB team has become a willing and active participant in the Council.

Senior Project Advisory Committee

A Senior Project Advisory Committee (SPAC) is organized for potential government contract opportunities with an estimated value exceeding $100 million. It consists of representatives from departments potentially affected by, or having an interest in the project. Committee representatives seek out industrial and regional benefits meeting their respective departmental mandates.

As a member of SPAC, INAC became involved in 2002 in the Maritime Helicopter Project (MHP), where it advocated the inclusion of various socio-economic benefits for Aboriginal businesses through secondary contract opportunities. To demonstrate the capabilities and capacities that exist in the rapidly growing and innovative Aboriginal business community, the INAC PSAB team organized a one-day MHP Aboriginal Advocacy event in Ottawa. This event provided potential MHP prime contractors and Aboriginal businesses with the opportunity to discuss potential business partnerships, not only for the MHP, but for other future requirements.

Procurement Review Committee

One of the main vehicles used by INAC to intervene on behalf of Aboriginal business is the Procurement Review Committee (PRC). Established by the Treasury Board, the PRC reviews all proposed procurements in excess of $2 million for potential regional and industrial benefits. It uses the procurement process to support industrial and regional development and other national objectives. This interdepartmental committee ensures that the procurement process, and all the diverse interests impacted, is carried out in an efficient and cost-effective manner that is fully consistent with the government's procurement principles.

As a member of this committee, INAC seeks out potential benefits for the Aboriginal business community. During 2002, INAC reviewed 314 cases. INAC intervened on 17 proposed procurements (5%), which resulted in an additional $14 million worth of set-aside contracts/standing offers negotiated on behalf of the Aboriginal business community. In addition to the INAC interventions, there were 26 cases (8%) of the 314 proposed procurements that already had an Aboriginal component included in the procurement Strategy. The value of these opportunities amounted to $65.1 million. This shows that departments support the PSAB and are committed to, and have confidence in, the Aboriginal business community to meet their requirements.

INAC representatives continue to review, on a daily basis, all procurement notices posted on MERX to ensure that the Strategy is being implemented and to identify potential opportunities that should be designated as mandatory set-asides for Aboriginal businesses.

In 2002, the PSAB team began taking a more proactive approach toward these potential tendering opportunities for Aboriginal businesses. This was accomplished through more direct interventions with procurement officials for possible voluntary (selective) set-asides, when Aboriginal business capability and capacity existed, and by providing Aboriginal businesses with notice of these potential opportunities.

The PSAB team was successful in intervening on 16 open competitive requirements that were posted on MERX, generating nearly $11.4 million for Aboriginal businesses during 2002. Of these 16 open requirements, 9 were changed to mandatory PSABset-asides and 7 were voluntarily changed to set-asides, where a portion of the requirement was open only to Aboriginal businesses. These interventions provided opportunities to Aboriginal companies, such as Donna Cona, Jefferson Holdings Inc., Circle of Eagles Lodge Society, Prince George Native Friendship Centre and many more, to bid and successfully win government contracts.



Compliance

On behalf of INAC, Consulting and Audit Canada (CAC) conducts compliancy audits of Aboriginal-owned firms to ensure that bidders meet the PSAB eligibility requirements for entering into a contract and meet requirements throughout the life of the contract. During 2002, CAC conducted 76 audits (70 pre-award audits and 6 post-award audits). Audits which determined non-compliancy were referred to the appropriate contracting authority.



Evaluation of the PSAB

Completed in 2001, an evaluation of the PSAB assessed the effectiveness and efficacy of the Strategy over a five-year period. This evaluation was completed by a working group led by INAC and the TBS. Prairie Research Associates (PRA) Inc. and Auguste Solutions and Associates (ASA), an Aboriginal-owned firm, conducted the evaluation. PRA and ASA collected data through:

  • a review of all pertinent files and documents,

  • surveys of Aboriginal businesses,

  • surveys of federal personnel,

  • key informant interviews, and

  • a facilitated workshop for Aboriginal business and community leaders.

Summary of Findings

Overall, the Evaluation Report found that the PSAB had been successful in meeting its stated objectives, and a sound rationale for the Strategy continues to exist. The report contained several observations and recommendations intended to facilitate the improved implementation of the Strategy.

Key Observations

  • Aboriginal business leaders and federal managers support the spirit and practical objectives of the PSAB. However, there is a widespread perception that the focus of the Strategy's objectives has shifted over the last five years. Specifically, many key informants see business development opportunities being unevenly distributed. Consequently, it is recommended that the PSAB should undergo a full review at the end of another five-year period.

  • After a strong start, PSAB implementation and communication activities have slowed since the launch of the Strategy. There is sufficient evidence to conclude that the implementation/communication of the Strategy needs revitalization.

  • Although the number and value of contracts with Aboriginal firms have consistently increased each year since the inception of the PSAB, there is a widely held belief that the benefits of the program are not equally distributed among Aboriginal firms. Large, established, urban firms are perceived as gaining the most from the Strategy. The PSAB is not about equitable distribution of contracts between urbanand community-based firms-it is about opportunities. Large urban Aboriginal firms receive more opportunities because they respond to both regional and national government requirements. Community-based firms tend to be smaller, primarily related to the resource sectors, and focus on the community. However, a renewed emphasis to encourage suppliers in rural and remote locations to consider federal contract opportunities is being pursued.

    This problem has been compounded by the lack of a standardized, consistent data collection strategy across departments and agencies. Implementing enhanced data collection practices, as well as improving the monitoring and enforcement of Aboriginal content criteria, will ensure that the operation of the PSAB is consistent with its stated objectives.

  • While PSAB is a useful tool for creating opportunity for Aboriginal firms, it is neither sufficient nor capable of significantly stimulating Aboriginal business development. The Strategy's aim is to encourage Aboriginal businesses to take advantage of the opportunities created by the PSAB.

  • There is widespread perception that accountability and transparency by federal departments and agencies with respect to their participation in the PSAB must be improved. More proactive efforts are necessary to encourage departments to comply with the requirements of the PSAB. This situation can be addressed by reaffirming the federal government's commitment to the Strategy and enforcing adherence to it. Additionally, the issue of differential access to communications technology among Aboriginal communities and firms should be pursued through the appropriate departments and agencies.

Recommendations

The following is a summary of the recommendations provided in the Evaluation Report.

  1. Make a presentation to the Deputy Ministers' Committee on Aboriginal Policy (DMCAP) to obtain a renewed Government of Canada commitment.

  2. Enhance the implementation and the internal and external communication of the Strategy.

  3. Strengthen and enhance an Aboriginal supplier database.

  4. Create capacity development tools to enable Aboriginal firms to take advantage of general contracting opportunities offered by the federal government.

  5. Develop a uniform reporting template for departments and agencies to report to INAC on all PSAB activities and statistics.

  6. Improve the monitoring and enforcement of Aboriginal content criteria to ensure that PSAB operations are consistent with its stated objectives.

  7. Initiate a full review of the PSAB at the end of another five-year period.

2002 Activities-Response to the Evaluation Report

In August 2002, the Action Plan in response to the Evaluation Report received final approval from INAC. The Action Plan outlined communication and implementation activities intended to revitalize the Strategy, thereby addressing the shortcomings of the PSAB as noted in the Recommendations section of the Evaluation Report. Most of these activities have been slated for a March 2003 completion date.

To ensure a high level of government-wide consultation, an interdepartmental working group was established under the auspices of a senior-level steering committee. The working group will carry out the majority of the revitalization activities. The interdepartmental working group and the senior-level steering committee is comprised of INAC and PWGSC representatives, and members of other departments who have demonstrated a strong commitment to the PSAB since its inception. The following departments have representatives on both groups:

  • Indian and Northern Affairs Canada

  • Public Works and Government Services Canada

  • Treasury Board Secretariat

  • Department of National Defence

  • Health Canada

  • Human Resources Development Canada

  • Correctional Service Canada

  • Royal Canadian Mounted Police

As stipulated in the Action Plan, the steering committee is to be the review mechanism for any changes proposed by the working group in the continued implementation and operation of the PSAB. The steering committee, chaired by INAC's Assistant Deputy Minister for Economic Development and Special Initiatives* (EDSI), will convene in February of 2003, to review the progress achieved and approve the work carried out by the working group.

* Due to an internal re-organization, EDSI no longer exists. Responsibility for the ADM Committee now rests with the ADM Socio-Ecionomic Policy and Programs (SEPP) Sector. Responsibility for the PSAB is with the Economic Development Branch, and falls under the auspices of the SEPP Sector.

Action Plan

The following is a summary of the comprehensive Action Plan, developed by the INAC PSAB team and departmental co-ordinators, to address the Evaluation recommendations. The Action Plan primarily consists of communication and implementation activities intended for the revitalization of the Strategy. Progress on the implementation of these actions will be presented in our 2003 Annual Report.

The Action Plan proposed the following:

  • As a follow-up to the DMCAP presentation, a letter will be sent from the Minister of INAC to his federal colleagues encouraging their continued support of PSAB.

  • A senior-level interdepartmental steering committee will be established from the signatory departments, plus other proactive departments, to:

    • review proposed actions and make decisions regarding the way ahead;

    • clarify roles, responsibilities and accountability governing the PSAB;

    • review options on securing management accountability for the PSAB;

    • review current PSAB reporting and monitoring requirements;

    • review current PSAB policy and determine revisions required to enhance effective implementation;

    • determine the broad issues or themes to be examined as part of the full review; and

    • develop key terms of reference for a high-level review of the PSAB.

  • Develop a communications strategy for the exchange of information with all stakeholders.

  • Expand and develop electronic access to information for stakeholders.

  • Improve the contribution of PSAB to Aboriginal business through the development and implementation of improved communication and marketing tools.

The Evaluation Report and the Action Plan can be found on the Library and Archives Canada   Web site.



Success Stories

Aboriginal suppliers are continuing to bid on and win more contracts based on their capacity, capabilities and competitive nature. They no longer depend solely on the mandatory PSAB set-asides for business. Aboriginal suppliers run their businesses in a professional manner. They deliver quality goods and professional services at competitive prices.

There are many success stories of established suppliers getting large multiple contracts or standing offers, and small firms receiving that first contract-a first step to their growth and development. These success stories are the result of the combined efforts of the PSAB initiative, the PSAB co-ordinators and of Aboriginal businesses. A few such successes are offered here to illustrate the diversity and level of business being undertaken by Aboriginal businesses.

Jefferson Holdings Inc. (operating as NMSOpricing)

Located in Ottawa, Ontario, Jefferson Holdings Inc., operating as NMSOpricing since its inception in 1999, is a supplier of information technology products to the federal government. NMSOpricing has grown to be a leader among Canadian Aboriginal firms. In 2002, NMSOpricing was successful in bidding for, and winning $2.2 million in PSAB set-aside contracts. With this growth in its business revenues, NMSOPricing was able to hire new Aboriginal employees and provide training to new and existing employees, keeping them current with today's technology.

EagleSpirit Marketing Inc.

EagleSpirit Marketing, a family-owned and operated Aboriginal business, is located in Wolfville, Nova Scotia. This company acts as a wholesaler and distributor for computer and related products, packaged software, and stationery and office supplies. Eagle Spirit Marketing is committed to providing its customers with technical expertise, exceptional service and high quality products. In 2002, it was the successful bidder on PSAB set-aside contracts. The contracts awarded through the federal government tendering service totalled $5.4 million in business.

Wolf Flat Ordnance Disposal Corporation

Located on the Tsuu T'ina (Sarcee) First Nation in Alberta, Wolf Flat Ordinance Disposal Corporation is the only Aboriginal-owned and operated explosive ordnance disposal company in the world and the largest clearance company in North America. Established in 1986 to clean up the land used by the Department of National Defence (DND), the company has continued to grow in size and recognition, with international opportunities in Panama and part of the United Nations Interim Mission Administration in Kosovo (UNMIK).

This business started with 16 employees, consisting of both Aboriginal and non-Aboriginal people. As a result of winning various government contracts over the years, it has 80 employees. In 2002, this company was awarded three contracts for different projects, totalling $5.4 million. These contracts provided the company with the opportunity to hire and train Aboriginal personnel for 64 new full-time positions. Over the last 13 years, this Aboriginal business has provided training to more than 150 full- and part-time employees, as well as to representatives from England, Panama and the United States.

Stó:Lõ Office Outfitters Inc.

Stó:Lõ Office Outfitters Inc. is an Aboriginal-owned and operated company located in Chilliwack, British Columbia. Stó:Lõ is a wholesaler and distributor for office furniture and equipment, stationery and office-related products/supplies. In 2002, Stó:Lõ was awarded, through the PSAB set-aside tendering process, a standing offer for cabinets totalling $5.0 million. This created new employment and training opportunities for Aboriginal people in line with their mission of providing quality office furniture, stationery, equipment and office design services, to exceed their clients' expectations.

CityPro Communications

Located in Kingston, Ontario, CityPro Communications is more than just a communications company; its expertise lies in leading-edge convergent technologies. CityPro has built a strong reputation for developing innovative telecommunications strategies and creative voice and data cabling solutions, while achieving the highest standards in service. Products include Ethernet-based communications, phone/voicemail systems and fibreoptic communication systems. In partnership with St. Lawrence College, it provides hands-on experience for its Electronics Engineering Technician Program, as well as part-time employment opportunities.

In 2002, CityPro won a $200,000 contract with INAC in Toronto.

Cougar Technical Services Ltd.

Located in Calgary, Alberta, Cougar Technical Services is a full-service company covering general, mechanical and electrical contracting. Services are provided by in-house staff and by joint-venturing with other mainstream and Aboriginal businesses. In 2002, Cougar Technical successfully bidded on two opportunities valued at more than $343,000, including a $275,000 contract to build an Aboriginal Culture Centre in Canada Place (Edmonton). Cougar's success was achieved through experience gained on previous contracts and standing offers and advice from the PWGSC procurement personnel in Calgary.

Adirondack Technologies Furniture Inc.

Adirondack Technologies Furniture Inc. is an Aboriginal-owned and operated company that offers complete furniture solutions, specializing in office systems design, re-configuration, installation and custom furniture design. Located on the Hiawatha First Nation near Peterborough, it provides extensive sales and service capabilities through its national sales office in Ottawa and an affiliated national dealer network. Adirondack Technologies Furniture Inc. bid through MERX and won six PSAB set-aside standing offers totalling $19.9 million in business. The company was able to hire four new Aboriginal employees and provide them with the necessary training to ensure the continued growth of the company.



Conclusion

The continued success of the PSAB hinges on the co-operation and commitment of all federal government departments and agencies, and the Aboriginal/non-Aboriginal business sectors. By working together, they can continue to enhance the development of strong communities, people and economies for the benefit of all Canadians.

There is a continuing need for the Strategy, particularly for new and small Aboriginal companies. As identified by the 2001 Evaluation Report, re-energizing the commitment of all stakeholders and implementing a revitalized PSAB is essential for the Strategy to continue its upward trend.

INAC would like to thank all departments and agencies and their PSAB co-ordinators for making the PSAB such a success. Based on the departmental reports provided to us (not the values reported in the TBS Report), INAC recognized and congratulated the following departments for having surpassed their departmental PSAB performance objectives in 2002:

  • Agriculture and Agri-Food Canada
  • Atlantic Canada Opportunity Agency
  • Canada Customs and Revenue Agency
  • Canadian Centre for Management Development
  • Canadian Heritage
  • Canadian International Development Agency
  • Canadian Security Intelligence Service
  • Transportation Safety Board
  • Correctional Service Canada
  • Citizenship and Immigration Canada
  • Department of Justice
  • Environment Canada
  • Health Canada
  • Human Resources Development Canada
  • Human Rights Commission
  • National Archives of Canada
  • Department of National Defence
  • National Energy Board
  • National Library of Canada
  • National Research Council of Canada
  • Natural Resources Canada
  • Office of the Auditor General
  • Public Service Commission
  • Public Works and Government Services Canada
  • Department of the Solicitor General
  • Transport Canada

The following departments received Recognition Awards for the first time. Congratulations and continued success to:

  • Department of Foreign Affairs and International Trade
  • Immigration and Refugee Board
  • Veterans Affairs Canada

Finally, INAC wishes to extend congratulations to the more than 35,000 Aboriginal entrepreneurs whose talents, skills and competitive desire to succeed will take the PSAB to the next level.