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Presented by:

Dolores CoelhoSenior Program OfficerAboriginal Procurement and BusinessPromotion Directorate (APBP)Aboriginal Affairs & Northern Development Canada(AANDC)

FNQLEDC / Québec

September 7, 2011

The Procurement Strategy for Aboriginal Business

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Overview

• Procurement Strategy for Aboriginal Business Policy (PSAB)

– Launched in 1996 to assist and support Aboriginal businesses to pursue and win federal procurement opportunities.

• A key element of the Federal Framework for Aboriginal Economic Development

• Places responsibility on Federal departments and agencies who are responsible to conduct contracting activities with Aboriginal businesses on behalf of the Government of Canada

• Federal government contracts approximately $20B goods and services annually

– AANDC coordinates the implementation of PSAB on behalf of the federal government

• In close collaboration with PWGSC and TBS

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Overview…

– Committed to working with Canada’s rapidly growing Aboriginal business sector:

• There are over 37 000 Aboriginal-owned businesses across Canada covering a variety of economic sectors, that are well established in construction (18%), primary sectors (13%), and service-based industries (28%)

• The 2006 census revealed an increase of 38 % since 2001 of Aboriginal Business owners – this exceeds that of self employed Canadians overall.

• Aboriginal businesses have created approximately 82,000 full time jobs and 18,000 part time jobs,

• A doorway to federal procurement opportunities.

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How PSAB Works

• 4 Main elements of PSAB

1. Mandatory Set Asides:

– Set Asides are mandatory if:

• An area, community or group in which Aboriginal people make up at least 80% of the population

• The Aboriginal population will be the recipient of the good, service or construction

• And the value of the contract is over $5000

2. Voluntary Set asides:

- Employed if:

• Aboriginal capacity exists

• The client department voluntarily decides to apply the PSAB set aside where operational requirements, best value prudence and probity and sound contracting management can be assured

• Departments are responsible for setting their own PSAB targets

• Reporting is done on an annual basis

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How PSAB Works…

• 4 Main elements of PSAB

3. Collaboration agreements and partnerships:

– Allows Aboriginal and non Aboriginal partnerships to bid on opportunities that have been set aside

4. Use of Aboriginal criteria:

– In awarding of prime contracts, departments are encouraged to:

• Request Aboriginal sub contracting plans either as a mandatory requirement or a rated evaluation criteria

– Can be applied only if International Trade Agreements are exempt

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How PSAB Works…

• An Aboriginal business may be:

– a sole proprietorship, limited company, cooperative, partnership, or not-for-profit organization in which

– Aboriginal persons have majority ownership and control meaning at least 51 percent, and

– In the case of a business enterprise with six or more fulltime employees, at least 33 percent of the full-time employees are Aboriginal persons, -OR-

– A collaboration agreement in which an Aboriginal business or Aboriginal businesses as defined above have at least 51 percent ownership and control.

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PSAB Tools

• Tools and Approaches

– Database with registered Aboriginal businesses demonstrating Aboriginal capacity;

– Outreach and training activities with Businesses, Federal, Provincial and Territorial Governments – approx 65 per year;

– Work closely with businesses and stakeholders to undertake Aboriginal supplier development activities;

– Lead a national interdepartmental PSAB Coordinator Network to help apply and support the policy; and

– Facilitate and intervene in the application of set-asides of government procurement for Aboriginal businesses.

• Ensuring Effectiveness

– Collect and analyse annually, qualitative and quantitative data from procuring Departments;

– Monitor and track the Merx to determine the number of set-asides.

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PSAB Tools…

• Role in advising federal departments, provincial/territorial governments and businesses in:

– Input in the procurement phase of projects by providing Aboriginal business capacity to federal departments and agencies;

– Advise on the application of International Trade Agreements as they apply to PSAB (i.e. WTO-Agreement on Government Procurement, NAFTA, AIT and any future Free Trade Agreements);

– Review proposed procurement strategies on Major Crown Projects (projects with a value over $100M) and participation on the Senior Project Advisory Committee;

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PSAB Tools…

– Review notifications in order to negotiate Aboriginal Set Aside opportunities under the Procurement Review Committee (contracts value between $2M – $100M)

– Advise via joint engagement on Comprehensive Land Claim Agreements and how it may apply to PSAB

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PSAB & the Federal Framework for Aboriginal Economic Development

• PSAB is a key element of the Federal Framework for Aboriginal Economic Development’s (FFAED) strategic priority of strengthening Aboriginal entrepreneurship, and increasing Aboriginal procurement.

• 2009 FFAED commitments:• Increase the number of supplier registered Aboriginal businesses• Increase in the number and total value of set-aside contracting• Increase and improve training for Aboriginal businesses and

federal procurement officers• Examine feasibility of Aboriginal Benefit Requirement (ABR)• Strengthen capacity of entrepreneurs to succeed in winning

contracts• Create better links between government and private sector that will

support access to procurement opportunities

• RESULTS:

• Increase the number of registered Aboriginal businesses: – 734 businesses have been PSAB registered– Continue to register Aboriginal businesses through MOU with

Industry Canada

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PSAB & the Federal Framework for Aboriginal Economic Development…

• Increase and improve training for Aboriginal businesses and federal procurement officers:

– Memorandum of Understanding/Partnerships– 964 Aboriginal businesses have been reached through PSAB

outreach since 2009– PSAB Awareness Sessions: 50 sessions provided to different

sectors– Outreach Sessions: 22 events

• Increase in number and total value of set-aside contracting: 53% increase in departmental reporting since 1996 (43 departments in Financial Administration Act required to report)

– 2009: 38 departments - 88%– 2008: 38 departments - 88%– 2007: 20 departments – 46%– 2006: 15 departments – 35%

• Building Partnership - MOU with 4 Provinces

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PSAB & the Federal Framework for Aboriginal Economic Development…

• Increase Aboriginal set-asides opportunities:– Aboriginal businesses were awarded: 5,227 contracts– Major Crown Project (contracts $100M and up): 4 of 21 MC projects

were successful negotiated to include Aboriginal Benefits Plans and voluntary set-asides.

– Project Review Committee (contracts from $2M to $100M): 414 procurement opportunities were reviewed - 19 already included set-aside and 39 were negotiated with contract authorities

– MERX opportunities: regular monitoring to review opportunities have been set under PSAB or to intervene on opportunities that are voluntary or mandatory set-asides.

• Aboriginal Benefit Requirement:– Pilot projects based on success stories

• Creating better Linkages: – Conferences– Follow-up activities

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Results - Number of Contracts Awarded Since 1997 - 102,174

0

2,0004,000

6,000

8,00010,000

12,000

14,00016,000

18,000

Year

# of incid more more than$25K

# of set-asides more than$25K

Incid & set-asides less than$25K

Total #

The largest number of contracts awarded to Aboriginal businesses are of a value less than $25K which make up the majority of the total number of contracts (blue and yellow lines). A marked increase in the number of contract awarded in 2002 is due to an increase in purchases of services valued at less than $25 k for that year.

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Results - Increasing Contract Value Since 1997 - $3.5B

0.00

100.00

200.00

300.00

400.00

500.00

600.00

Year

Millio

ns

$ incid more than $25K

$ set-asides more than$25K

$ incid & set-aside lessthan $25K

Total $ millions

Most of the high value contracts awarded to Aboriginal businesses are incidentals over $25K. Since its inception, PSAB has developed Aboriginal business capacity. Some of these businesses have matured and now bid on tenders that are open to all bidders. The peaks seen in 2004, 2007 and 2009 are due to standing offers being renewed, an increased awareness of Aboriginal business capacity and other factors. In 2009, $454 M worth of contracts were awarded.

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Results - Top Ten Departments 2009 - $423M

PWGSC greatly exceeds other departments since they undertake procurement on behalf of other departments.

PWGSC $175M or 41% RCMP $8M or 2%

AANDC $129M or 31% Parks $6M or 1%

DND $46M or 11% Corrections $3M or 0.7%

HC $32M or 8% Environment $1.9M or 0.47%

DFO $21M or 5% Transport $1.6M or 0.39%

$0.00

$20.00

$40.00

$60.00

$80.00

$100.00

$120.00

$140.00

$160.00

$180.00

Millions

PSAB Top Ten Departments for 2009

PWGSC

AANDC

DND

HC

DFO

RCMP

Parks

Corrections

Environment

Transport

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PSAB Success

• AFN Engineering Inc. • Ayshkum Engineering Incorporated • Beesum Communications• Columbia Environmental Consulting Ltd.• Cougar Technical Services Ltd.• Cree-Tech Inc. • Dalian Enterprises Inc. • Donna Cona Inc. • EagleSpirit Marketing Inc.• FirstWind Power, Inc.• FoxWise Technologies Inc. • Green Eagle Services Inc. • Gwaii Services • Hôtel-Musée Premières Nations• Inuvialuit Development Corporation • Jacknife Timber Ltd.• Kisik Marketing & Communications Ltd. • Membertou Development Corporation • Nan Engineering And Survey Services• Neegan Burnside Ltd. • Nunavik Rotors Inc.• Poirier Communications Ltd. • Qikiqtaaluk Corporation • SWIFT EAGLE INC

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PSAB Success

Business Associations

Productive partnerships nation-wide

• Aboriginal Human Resource Council (AHRC): collaborate in training businesses on Aboriginal Procurement;

• Canadian Council for Aboriginal Business (CCAB): APBP consults with CCAB regarding the success and challenges faced by Aboriginal businesses;

• Public Sector Aboriginal Business Association (PSABA): APBP collaborates with PSABA to increase awareness of government procurement strategies and developing new opportunities for Aboriginal companies; and

• Canadian Aboriginal and Minority Supplier Council (CAMSC): helps facilitate procurement opportunities between major corporations in Canada and Canadian Aboriginal suppliers.

• Seeking to expand and leverage other partnerships – Regional, ICAB

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PSAB Success

Federal Partners

• Interdepartmental Letter of Agreement (ILA) with Office of Small and Medium Enterprise (OSME) through PWGSC for outreach activities;

• ILA with Industry Canada for shared Aboriginal Business database.

Provincial Partners

• Memorandum of Understanding (MOU) with Ministry of Aboriginal Affairs (Ontario) to assist in developing a PSAB policy for the province;

• Worked with the Province of Manitoba to establish a PSAB policy for the province that mirrors the Federal policy.

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Be Part of PSAB Success

Aboriginal businesses are encouraged to register with PSAB in order to promote their business’ capacity to federal government departments and agencies.

– AANDC supports Aboriginal businesses promote supplier capabilities through means of various databases:

– Industry Canada’s Aboriginal Business Directory, and;

– Contracts Canada’s Supplier Registration Inventory.

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– contact AANDC by email to saea-psab@aadnc-aandc.gc.ca or by phone at 1-800-400-7677.

– Check departmental source lists.

– Industry Canada's Aboriginal Business Directory; and

– Contracts Canada's Supplier Registration Inventory

Be Part of PSAB Success…

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Be Part of PSAB Success…

• Participate in Supplier Development Activities

• Regularly monitor MERX

• Register with PSAB to start bidding on Set-Aside contracts

• Register in Industry Canada’s ABD to promote your business

• Contact a PSAB coordinator, materiel managers or the PSAB team for more information

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Contact

• The PSAB Team is pleased to answer your questions.

• Contact us through the PSAB Help Line at 1-800-400-7677 or by email to saea-psab@aadnc-aandc.gc.ca.

• The PSAB website can provide you with more information.