Clean technologies will play a critical role in helping Canada meet its environmental and economic goals in the coming years. According to a new Smart Prosperity report, the federal government can use its buying power to seize this cleantech advantage by procuring products made in Canada.
To support the growth of clean technologies, and the companies that design or manufacture them, Canada must use every available tool in its toolbox, including leveraging the procurement capacity of the federal government. As the single largest buyer of goods and services in the country, the federal government is an important economic actor with the ability to send strong market signals.
Federal cleantech procurement can help companies find their first customer, can help validate cleantech, ease their diffusion in the market, and can eventually lead to the growth of innovative cleantech.
With the objective of understanding ways in which federal procurement practices can be adapted to increase cleantech procurement, this report evaluates the rules and regulations, policy actors, and processes that define Canada’s federal procurement ecosystem. This analysis reveals certain systems-level characteristics of the federal procurement system, and identifies specific practice-level, process-centric bottlenecks inhibiting federal cleantech procurement. Lastly, it offers recommendations to overcome the bottlenecks inhibiting federal cleantech procurement.
The five policy recommendations, which focus on cleantech, would also be useful in advancing procurement of environmentally preferable innovative products in general.
Recommendation 1 – Extend current government pilot support programs to offer commercialization assistance to cleantech companies. The federal government has some programs in place to help cleantech companies prototype and test their innovations. Innovative Solutions Canada (ISC), for example, currently buys pre-commercial goods and services and tests them in a real-world setting. However, even when a pilot has successfully been executed and the need is established, there is no direct or standard pathway to commercial contracting for these companies. ISC was explicitly meant to be modelled after the United States’ Small Business Innovation Research (SBIR) program. By incorporating commercialization support as standard practice and setting aside resources to the same, ISC will be better placed to replicate SBIR’s success.
Recommendation 2 – Create a buyers group open to adopting cleantech post pilot testing. A buyers group, akin to the Coordinated Access National (CAN) Health Network, can bridge the gap between piloting and commercialization that cleantech companies face. The buyers group should be composed of federal departments and agencies wanting to solve a problem with a cleantech solution, but also interested in testing the technology before committing to a commercial contract. This would create an integrated market of buyers who have the budget and the intention to procure innovative technologies, would allow individual departments share the risk of innovative procurement, and would expedite the procurement process. A potential starting point for the buyers group to identify problems that could be remedied with cleantech solutions would be the 23 line items Public Services and Procurement Canada (PSPC) has identified as accounting for close to 58 per cent of its total carbon footprint.
Recommendation 3 – Timely revision of bid language through feedback channels between federal departments that run cleantech piloting programs and procuring departments. A dedicated team which would act as the innovation knowledge center could assist in the timely revision of bid language. The innovation knowledge center would collaborate with ISC, Natural Resources Canada (NRCan), Sustainable Development Technology Canada (SDTC), and other federal actors to learn about cleantech that are available, with an emphasis on technologies with clear use cases that have already had a successful pilot phase with the government (this mandate could later be expanded). It would then translate these learnings into readily usable bid terms and technical specifications to attract innovative cleantech products.
Recommendation 4 – Help cleantech SMEs build capacity to participate in federal procurement. A range of supports including guidance materials, helpdesks, training, bootcamps, and facilitating participation in fairs and events will help provide practical and actionable information on procurement to cleantech companies. These could be delivered through different mediums including through mobile applications, videos, and could be modular, so that cleantech SMEs can pick and choose programs based on what is most relevant to them. Some of these services are currently being provided by Procurement Assistance Canada (PAC), which offers seminars to help SMEs find government procurement opportunities.
Recommendation 5 – Increase industry-focused educational efforts to help cleantech companies better understand government’s procurement needs and processes. There is a lack of training opportunities focused on understanding the complexities of federal procurement, especially for cleantech companies. Organizing formal or informal educational forums such as webinars, workshops, seminars, and cohort/contact/mentor-based learning will help cleantech companies understand the federal government as a customer. Industry organizations, start-up accelerators and incubators, who perceive government as an important buyer for their members, are well placed to help cleantech companies understand their buyer – i.e., the federal government – and think through how their technology and value proposition fits with the buyer’s needs.
Read the complete recommendations and report here.
Featured image credit: Smart Prosperity Institute.
