September 24, 2019 | Local, Aerospace, Naval, Land, C4ISR, Security
Governments may be open for business, but that doesn't mean doing business with a government is necessarily easy. Government procurement is complex - this is not by happenstance. The rules on public procurement stem from a number of sources including law (trade agreements, the common law and legislation) and policy. It can be a painful and costly learning curve for companies that want to sell goods and services to the country's largest buyers if they don't understand the rules.
Government decision-makers are answerable to a very wide range of stakeholders, including the Canadian voters who put them in office and the Canadian taxpayers who fund their operations. In a public procurement, it's not just about getting the best deal – it is also about meeting the broader public interest and achieving long-term policy objectives.
The Goal is to Promote Fairness
Competition is the rule in public procurement because it offers a fair, open and transparent environment, and meets the public objective that all potential suppliers get a fair kick at the can to sell to government. This is important when you consider that, for example, the Department of National Defence is the largest Canadian purchaser of goods and services from the Canadian defence industry.
Canada has implemented several trade agreements in the past few years, including the Canada-European Union Comprehensive Economic and Trade Agreement (CETA), the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), and the Canadian Free Trade Agreement (CFTA) (which replaced the Agreement on Internal Trade (AIT)). Understanding how these agreements impact procurement is even more important for suppliers and their federal, provincial and territorial government customers, as well as for the municipal, academic, school and hospital (MASH) sector which may now be subject to trade agreements for the first time or subject to additional or new rules brought about by these new trade agreements.
Prepare your RFP Response Team for a Long Haul
Businesses must understand the processes that come into play in public procurements, such as the need to resource their RFP response team for a long period of time or the impact of failing to meet mandatory RFP requirements (disqualification from the procurement process).
Learning to manage the length of time it takes to progress through a procurement cycle, and to navigate the processes, is a big challenge. In business, relationships matter, but developing a good working relationship with key decision makers in government departments or agencies can be difficult since government tends to have greater workforce mobility and people change in and out of roles frequently. Further, dealing with government means complying with lobbying law and conflict of interest rules. In many jurisdictions, discussions about procurement requirements outside of public solicitation processes is considered lobbying, as it is attempting to sell products or services to the government. Conflict of interest rules may also preclude certain people from doing business with government officials.
Approaching public procurement with a "commercial-centric" view often leads to frustration. The federal government does understand "how business works," but there are still many aspects of a public procurement that are not (and cannot be) commercially focused, including those related to complying with applicable trade agreements, protecting the public interest, and serving policy objectives such as regional development and economic diversification. Companies participating in a public sector procurement process face unique compliance requirements that don't come into play with a typical private commercial transaction.
Expect Heightened Security Requirements
With the increasing attention being paid to cybersecurity and data protection, companies will find they are now subject to more stringent security requirements, including an increased requirement for product functionality and security control disclosure in advance of their products or services being accepted by government buyers. This level of disclosure can extend through to greater access to the underlying technology used so that the customer itself can test for, and understand, cyber-threat vulnerabilities.
Whether this is your first foray into the world of government procurement – and you need to understand the rules of public procurement so that you can properly understand the RFP documents and the plethora of government policies – or you have a broader interest focused on influencing government policy and direction as it relates to your business or your industry, knowing how to best position your organization to take advantage of both possible routes is critical to a successful government procurement business. Waiting until you have lost a bid is too late to effect a change for your organization's benefit.
Be Proactive with the Right Advice
Regardless of your focus, knowing how the system works and how to best advocate for your interests is a crucial and part of any successful business plan. Working with a legal team that has knowledge and experience in all of these areas and can assist with strategic planning and approach from start to finish is critical to success.
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Murray Brewster Canada's new frigates are being designed with ballistic missile defence in mind, even though successive federal governments have avoided taking part in the U.S. program. When they slip into the water sometime in the mid- to late-2020s, the new warships probably won't have the direct capability to shoot down incoming intercontinental rockets. But the decisions made in their design allow them to be converted to that role, should the federal government ever change course. The warships are based upon the British Type 26 layout and are about to hit the drawing board. Their radar has been chosen and selected missile launchers have been configured to make them easy and cost-effective to upgrade. Vice-Admiral Art McDonald said the Lockheed Martin-built AN/SPY-7 radar system to be installed on the new frigates is cutting-edge. It's also being used on land now by the U.S. and Japan for detecting ballistic missiles. "It's a great piece, and that is what we were looking for in terms of specification," McDonald told CBC News in a year-end interview. Selecting the radar system for the new frigates was seen as one of the more important decisions facing naval planners because it has to stay operational and relevant for decades to come — even as new military threats and technologies emerge. McDonald said positive feedback from elsewhere in the defence industry convinced federal officials that they had made the right choice. "Even from those that weren't producing an advanced kind of radar, they said this is the capability you need," he said. The whole concept of ballistic missile defence (BMD) remains a politically touchy topic. BMD — "Star Wars," to its critics — lies at the centre of a policy debate the Liberal government has tried to avoid at all costs. In 2017, Canada chose not to join the BMD program. That reluctance to embrace BMD dates back to the political bruising Paul Martin's Liberal government suffered in 2004-05, when the administration of then-U.S. president George W. Bush leaned heavily on Ottawa to join the program. In the years since, both the House of Commons and Senate defence committees have recommended the federal government relent and sign on to BMD — mostly because of the emerging missile threat posed by rogue nations such as North Korea. Liberals reluctant to talk BMD The question of whether to join BMD is expected to form part of the deliberations surrounding the renewal of NORAD — an undertaking the Liberal government has acknowledged but not costed out as part of its 2017 defence policy. Missile defence continues to be a highly fraught concept within the federal government. Defence Minister Harjit Sajjan made a point of downplaying a CBC News story last summer that revealed how the Canadian and U.S. militaries had laid down markers for what the new NORAD could look like, pending sign-off by both Washington and Ottawa. Asked about Sajjan's response, a former senior official in the minister's office said it raised the spectre of "Star Wars" — not a topic the Liberal government was anxious to discuss ahead of last fall's election. The current government may not want to talk about it, but the Canadian navy and other NATO countries are grappling with the technology. Practice makes perfect Last spring, a Canadian patrol frigate, operating with 12 other alliance warships, tracked and shot down a supersonic target meant to simulate a ballistic missile. A French frigate also scored a separate hit. For the last two years, NATO warships have practiced linking up electronically in defensive exercises to shoot down both mock ballistic and cruise missiles. A Canadian frigate in the 2017 iteration of the exercise destroyed a simulated cruise missile. At the recent Halifax Security Forum, there was a lot of talk about the proliferation of missile technology. One defence expert told the forum Canadian military planners have been paying attention to the issue for a long time. The frigate design is an important example. "I think what they've tried to do is keep the door open by some of the decisions they've made, recognizing that missile proliferation is a significant concern," said Dave Perry, of the Canadian Global Affairs Institute. "They haven't shut the door on doing that and I think that is smart." Opponents of BMD, meanwhile, have long argued the fixation by the U.S. and NATO on ballistic missile defence is fuelling instability and giving Russia and China reasons to co-operate in air and missile defence. Speaking before a Commons committee in 2017, Peggy Mason, president of the foreign and defence policy think-tank Rideau Institute, said the United States's adversaries have concluded that building more offensive systems is cheaper than investing in defensive ones. "The American BMD system also acts as a catalyst to nuclear weapons modernization, as Russia and China seek not only increased numbers of nuclear weapons but also increased manoeuvrability," said Mason, Canada's ambassador for disarmament from 1989 to 1994, testifying on Sept. 14, 2017. She also warned that "there would be significant financial costs to Canadian participation" in the U.S. BMD program "given American demands" — even prior to Donald Trump's presidency — "that allies pay their 'fair share' of the collective defence burden." https://www.cbc.ca/news/politics/frigate-ballistic-missile-defence-canada-1.5407226