Question Period Note: Public Services and Procurement Canada’s role in management of the National Emergency Strategic Stockpile

Prior to COVID-19, the Public Health Agency of Canada’s (PHAC) National Emergency Strategic Stockpile (NESS) warehouse network was comprised of [redacted] warehouses totalling approximately 167,000 square feet. This included [redacted] warehouses (119,000 square feet) and [redacted] regional warehouses (48,000 square feet). The amount and volume of personal protective equipment (PPE) ordered in response to the pandemic was well beyond PHAC’s capacity to receive and store. Public Services and Procurement Canada (PSPC) has supported PHAC by entering into service contracts and leases to provide with additional warehousing capacity.

• The health and safety of Canadians is our top priority, and that means ensuring life-saving medical supplies reach our frontline healthcare providers as quickly as possible
  • To achieve this goal, multiple partnerships have been implemented to warehouse, inventory and distribute the PPE ordered by Canada
  • On September 11, 2020, PSPC awarded a competitive contract to Metro Logistics Inc. on behalf of PHAC to support warehousing and distribution of PPE to provinces and territories

If pressed on PSPC’s role:

• PSPC is providing procurement services to PHAC to support them with the various logistics activities required to inventory, warehouse and distribute PPE
• PSPC is working closely with PHAC in managing the contracts awarded to various logistics suppliers
• PSPC has entered into leases to provide PHAC with additional warehousing capacity

If pressed on PHAC’s role:

• PHAC is responsible for managing the NESS
• PHAC is maintaining oversight on the amounts of PPE and supplies available, including the monitoring of expiry dates and distribution to provinces and territories

If pressed on Request for Proposal for national logistics and warehousing services:

• To facilitate the intake and distribution of large volumes of PPE and medical supplies, a notice was posted on the PSPC Buy and Sell website to solicit interest from major logistics service providers
• This notice closed on May 7 and the review of the expressions of interest resulted in a short-term contract to Groupe Robert to support immediate warehousing needs
• A Request for Proposal was also published on the Buy and Sell web site and on September 11, 2020, PSPC awarded a competitive contract to Metro Logistics Inc. on behalf of PHAC
• This contract ensures warehousing across the country to accommodate and best position supplies for distribution to the provinces and territories

If pressed on Metro’s role:

• Metro Logistics Inc. was awarded a contract for a period of 2 years until August 2022, with an option for a further one-year extension
• This contract provides significant warehousing capacity in the [redacted] Area, [redacted] area, and in [redacted]
• This contract also provides national distribution to all provinces and territories
• The contract also includes a Warehouse Management System capability to facilitate the reporting and control of material

If pressed on Groupe Robert’s role:

• On May 22, PHAC awarded a contract to Groupe Robert as an immediate temporary measure to store PPE
• Subsequently, on June 13, after contacting several firms, we awarded a contract to Groupe Robert until end of December 2020 for warehousing, inventory management and transportation needs
• This contract provided 215,000 square feet of warehousing space in the [redacted] Area, and 150,000 square feet in the [redacted] Area, as well as a Warehouse Management System capability to facilitate the reporting and control of the materiel
• Additionally, a 2-year contract was awarded to Groupe Robert on July 31st, to operate a facility leased by the Government of Canada in [redacted]

If pressed on additional warehousing measures:

• A number of additional suppliers, including Urban Valley Transport Ltd., Overseas Express Consolidators and Bolloré Logistics Canada, have also been used to support inventory management, warehousing and distribution
• Through such contracts, PPE is currently being warehoused in [redacted] and [redacted]

Since the outset of the pandemic, the government has adapted to manage the volume of supplies. These measures have included service contracts and leases for additional warehouses, turning to the Canadian Armed Forces for assistance with logistics, and leveraging existing agreements.

A number of different suppliers, including Maritime Ontario, Groupe Robert Inc, Metro Logistics Inc, Urban Valley Transport Ltd., Overseas Express Consolidators and Bolloré Logistics Canada have been used to support inventory management, warehousing and distribution. Through such contracts, PPE is currently being warehoused in [redacted] and [redacted].

PSPC also entered into short-term leases for PHAC for 2 additional warehouses [redacted] in [redacted] totalling approximately 187,000 square feet. These warehouses are expected to be vacated upon expiry of the leases in March 2021. A new lease at the [redacted] has been secured to replace these expiring leases with a start date of January 1, 2021, for a fixed period of 8 years with a total of 127,000 square feet of warehouse.

On April 1, 2020, PSPC signed, on behalf of PHAC, a one-year contract with Amazon to use their on-line technology for provinces to order material directly. Canada Post and Purolator were delivering the equipment to provinces and territories as a subcontractor of Amazon. The agreement had primarily been put in place to access Amazon’s easy-to-use online interface, which allowed individual health establishments to order supplies directly from PHAC. As provinces and territories requested that PHAC deliver the supplies directly rather than awaiting for orders from them, the requirement evolved beyond what was covered in the Amazon agreement. As a result, the contract with Amazon was suspended in mid-July 2020. Prior to the suspension, only $200,000 has been spent under this contract.

A separate agreement between PHAC and Canada Post allowed for the warehousing of the PPE at [redacted], a key on-going subcontractor of Canada Post. This warehouse quickly ran out of space. PHAC subsequently awarded, on May 22, 2020, a contract to Groupe Robert as a temporary measure while a long-term solution was being developed.

On May 4, 2020, a Letter of Intent / Request for Information (LOI / RFI) was published on Buy and Sell to gather information in relation to a longer-term warehousing, inventory management and transportation solution. Further to the LOI / RFI process, on June 13, 2020, PSPC awarded a 6-month contract to Groupe Robert Inc. This contract provided 215,000 square feet of warehousing space in the [redacted] Area, and 150,000 square feet in the [redacted] Area, transportation capabilities and a Warehouse Management System capability. These warehouses quickly filled as the volume of PPE being delivered at the time was significant. Of the warehouses, one in [redacted] is in the final stages of being emptied with its content being shipped to provinces. Another adjacent warehouse in [redacted] and one in [redacted] are only available until the end of November 2020. Planning is already underway to ship most of the contents of these 2 warehouses to provinces. Finally, the last warehouse under this contract in [redacted] is only available until the end of December 2020. At that point, the contract will come to its end.

PSPC also proceeded with a Request for Proposal for National Logistics and Warehousing Services on July 16, 2020, to provide for warehousing, inventory management and distributions services. As a result of this competitive process, PSPC awarded, on behalf of PHAC, a 2-year contract, with an option for an additional year to Metro Logistics Inc. The contract, awarded on September 11, 2020, ensures warehousing across the country to accommodate and best position supplies for distribution to the provinces and territories.

In August 2020, the Government of Canada announced the creation of the Essential Services Contingency Reserve (ESCR), an emergency backstop of PPE and other critical supplies, managed by PSPC. The ESCR includes a number of warehouses across Canada, managed under a separate contract by SCI Logistics, a subsidiary of Canada Post, with Purolator serving as the distribution and delivery agent.

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