Bridging the Gap – Strategies for Increasing Indigenous Procurement
Ready to get serious about Indigenous procurement? The CCSP’s recent Peer Exchange explored several procurement measures the public sector can use to increase engagement and spend with Indigenous suppliers.
“If all levels of government in Canada were to procure five percent of their current $224 billion spend from Indigenous businesses, this would equate to an $11 billion influx to the Indigenous economy.”
This quote from JP Gladu, former CEO of the Canadian Council for Aboriginal Business (CCAB), demonstrates exactly why many organizations are now looking to their procurement activities in advancing reconciliation with and actively supporting the economic vibrancy of Indigenous peoples.
In honour of the National Day of Truth and Reconciliation, the CCSP convened a session in September on Indigenous procurement. The event hosted one of the largest audiences at a Peer Exchange ever, indicating a strong desire from the public sector to learn and enact meaningful change in their institutions.
The CCSP definition of Indigenous procurement references Canada’s Truth and Reconciliation Commission’s Call to Action #92, which calls for recognition of the rights of Indigenous peoples within corporate operations. In public procurement, this translates to adopting policies and practices that promote contracting with Indigenous businesses, employing and training Indigenous peoples, and otherwise engaging them in public spending.
If you’re just getting started with Indigenous procurement, keep these key practices in mind:
- Establish Policy and Procedures to demonstrate your organization’s commitment to Indigenous procurement, providing internal mandate and direction to staff.
- Engage with the Indigenous supplier community to find out what they are supplying and consider hosting information sessions to increase their capacity to respond to bids.
- Identify High Impact Procurement Opportunities (HIPO’s) to find commodity categories that fit with what Indigenous suppliers are providing and then follow through with bid opportunities.
The Peer Exchange featured two speakers; Edward Claringbold, Senior Procurement Advisor at the Government of Yukon and Philip Ducharme, VP of Entrepreneurship and Procurement at CCAB to dig deeper into these concepts.
Yukon First Nations Procurement
With 14 First Nations and about 26% of Yukon’s population being Indigenous, The Government of Yukon felt a responsibility to leverage its procurement activities to better serve this population and engaged them in a process to create a First Nations Procurement Policy. Edward reflected on their progress thus far and gave an overview of seven of the measures they use for increasing Yukon First Nations (YFN) participation:
- Bid Value Reductions. A BVR is a mathematical way to re-rank bids to increase the competitiveness of YFN submissions. The dollar value of the bid gets reduced based on the level of YFN involvement (ranging from YFN business ownership, location, and labour levels).
- Labour Levels. Allocating points (upwards of 20%) to bids that include hiring of new employees that are YFN peoples.
- Set Asides. Invitational procurements that are only open to YFN businesses (must be approved by the Deputy Minister).
- Direct Award and Invitational Tenders. Procurement staff check the YFN Business Registry for qualified businesses for Direct Award opportunities, while Invitational Tenders require at least one YFN business be invited to compete.
- Project Unbundling. Breaking one large project down into smaller bid opportunities better suited for small and medium sized YFN businesses.
- Capital Spending Plans. Meeting annually with YFN governments to review upcoming capital projects in their territories so they can plan and prepare for upcoming bid postings.
- Community Contract Forecast. Providing a list of all anticipated contracts each fiscal year within specific communities to YFN governments, businesses and people so they can effectively plan for upcoming local projects.
Not mentioned in the presentation, the YFN Procurement Policy also details measures around Workforce Development Initiatives and Community Development Agreements. Yukon has also established a Monitor and Review Committee (MCR) to assess the progress of the Policy in achieving its objectives and publicly releases an Annual Report.
Indigenous Perspectives from CCAB
Philip continued the discussion by sharing information about one of CCAB’s flagship programs, Supply Change, which helps connect buyers with Indigenous suppliers, and discussed the Federal landscape of Indigenous procurement and business capacity.
Supply Change is a program grounded on five pillars:
- Recruiting leaders from the business community to serve as Aboriginal Procurement Champions,
- Conducting a national Aboriginal Procurement Media Campaign,
- Creating Canada’s largest directory of Certified Aboriginal Businesses (CAB),
- Operating the Aboriginal Procurement Marketplace; an on-line portal between CAB companies and the Aboriginal Procurement Champions group, and
- Facilitating peer to peer sharing of Indigenous procurement best practices.
Philip went on to share support for the recent announcement of the new Federal Procurement Strategy for Indigenous Business (PSIB) which sets a government-wide mandatory target that at least 5% of the value of Federal contracts go toward Indigenous procurement. Other stand-out points from the PSIB included mandatory set-asides, opportunities for Indigenous sub-contractors, an improved reporting framework, and mandatory training for the Federal procurement community.
CCAB also conducted a study to better understand Indigenous capacity to meet demand in federal supply chains and found that Indigenous businesses have the capacity to supply 24.2% of the goods and services purchased by the Federal Government annually. Close to 50% of Indigenous businesses are urban businesses; meaning most public sector organizations should be able to find Indigenous suppliers to meet at least a small percentage of their supply chain needs!
A large barrier for Indigenous participation in procurement is the complex and high-effort RFP process. Philip recommends unbundling and simplifying the bid process for opportunities where Indigenous businesses are anticipated to respond, while also scaling the amount of effort needed to respond to higher vs lower value opportunities.
Philip reiterated the most important aspect of Indigenous procurement is relationship building – getting to know local Indigenous communities and businesses helps to build mutual trust and develop better understanding of procurement processes.
The CCSP encourages everyone to take these learnings back to your organizations and get in contact with Edward or Philip to learn more.
#1 Recommended Next Step: Find local Indigenous businesses and invite them to bid on opportunities that match their capacity and offering.
WRITTEN BY: AMANDA CHOUINARD, PROGRAM MANAGER AT THE CANADIAN COLLABORATION FOR SUSTAINABLE PROCUREMENT (CCSP)
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