Skip to main content

Impact of COVID-19 on Technology Supply-chains and Year-end Deliveries

March 10, 2020

Attn: The Honourable Joyce Murray PC, Minister of Digital Government

Minister Murray,

In recent weeks, several technology manufacturing facilities in China have been negatively impacted and have been forced to close due to the COVID-19 outbreak. The economic impact is, as you are aware, expected to be severe across all sectors. We write today to express our concerns with reference to your Government’s recent directives and the potential damage to the procurement process due to the coronavirus.

Crucially, COVID-19 is causing a global disruption to manufacturing of hardware relevant to the technology sector. Most vendors have shifted to near “just-in-time” manufacturing, maintaining no more than 15 to 30 days’ worth of inventory in stock. This inventory strategy allows companies to match their supply with demand. The result; many companies are not able, under any circumstance, to produce their products for any market around the world. Further, companies providing services that require products to complete their work, are also severely impacted.

The Impact on Canadian Organizations

Many Canadian and multinational companies located in North America procure products essential to their businesses directly from China. With only approximately 30 per cent of small businesses having resumed production in China since the coronavirus outbreak, manufacturers in North America are scrambling to procure parts to avoid production disruptions. Limited supply and heavy demand have increased the costs of components; with domestic components being priced at 30 per cent higher than the Chinese components.

As such, and by no fault of their own, companies around the world – including here in Canada –- are not able to meet demand for their products and services.

Amid this crisis, it has come to TECHNATION’s attention that many of our Government of Canada suppliers have received the following notice from Shared Services Canada (SSC):

All the deliverables must be received on or before March 31, 2020.

If the Delivery Date is March 31, 2020, the Contractor must ensure it contacts the appropriate delivery authorities by no later than 48 hours before the delivery to arrange delivery for March 31.

 If delivery is not made by the Contractor on or before 11:59pm on March 31, 2020, Canada may, at its sole option:

  1. Refuse delivery (which may involve returning the shipment to the Contractor at the Contractor’s sole cost) and terminate the contract for default, without providing any opportunity to cure; or
  2. Accept delivery and reduce the price payable for all the goods delivered late by 20% before any Applicable Taxes.

If the Contractor misses more than one year-end delivery (i.e., if the Contractor fails to deliver the required goods by March 31, 2020 under more than one contract issued by SSC or issued pursuant to any SSC procurement instrument), SSC reserves the right not to accept bids from that Contractor during the period from January 15 to March 31, 2021.

If Canada terminates this Contract for default, the Contractor agrees that it will not be permitted to bid on any follow-on process to procure the required goods or services it did not provide under the terminated contract.

This policy notice from SSC is neither practical nor appropriate. It does not consider the reality of the global market based on the coronavirus outbreak.

All vendors of information technology, especially those who produce hardware, suffer from the stoppage in factory production and trade in China, and beyond. Because most companies have moved to just-in-time inventory management, few will be able to meet the Government of Canada’s year-end deadline.

Rather than imposing penalties on companies already severely impacted and suffering from a potential global health and supply-chain crisis, TECHNATION, on behalf of its membership, strongly believes that the Government of Canada must begin a process of working with vendors to come to a reasonable solution and to accept delayed delivery of manufactured items until such time as the coronavirus is no longer an issue here in Canada, and abroad. This also includes partnering with the private sector to provide teleworking solutions in the event of more severe quarantines to civil servants to assure the ongoing work of the Government of Canada.

Our organization and members look forward to continuing to work with the Government of Canada in growing the digital economy and investing in innovation in Canada. We invite you to meet with our members to hear from them directly about this ongoing crisis. We stand at the ready to help.

Regards,

Angela Mondou

President and CEO

TECHNATION

ATTN:

Hon. Bill Morneau PC

Hon. Navdeep Bains PC

Hon. Melanie Joly PC

Hon. Mary Ng PC

Hon. Mona Fortier PC

Rt. Hon. Justin Trudeau PC

Hon. Patty Hajdu PC

Hon. Anita Anand PC

The post Impact of COVID-19 on Technology Supply-chains and Year-end Deliveries appeared first on Information Technology Association of Canada.



Udimi - Buy Solo Ads from Information Technology Association of Canada https://ift.tt/2vH3fGC
via IFTTT
Labels:

Comments

Post a Comment

Popular posts from this blog

9 VCs in Madrid and Barcelona discuss the COVID-19 era and look to the future

Spain’s startup ecosystem has two main hubs: Madrid and Barcelona. Most observers place Barcelona first and Madrid second, but the gap appears to close every year. Barcelona has benefitted from attracting expats in search of sun, beach and lifestyle who tend to produce more internationally minded startups. Madrid’s startups have predominantly been Spain or Latin America-focused, but have become increasingly international in nature. Although not part of this survey, we expect Valencia to join next year, as city authorities have been going all-out to attract entrepreneurs and investors. The overall Spanish ecosystem is generally less mature than those in the U.K., France, Sweden and Germany, but it has been improving at a fast clip. More recently, entrepreneurs in Spain have moved away from emulating success in pursuit of innovative technologies. Following the financial crisis, the Spanish government supported the creation of startups with the launch of FOND-ICO GLOBAL, a €1.5 billi...
Post a Comment
Read more

How to Stay Creative and Keep SEO in Mind

Information Technology Blog - - How to Stay Creative and Keep SEO in Mind - Information Technology Blog Search engine optimization (SEO) refers to customizing your website’s content to ensure that web browsers give your website a high SEO score. The sites with the highest SEO scores are featured on the search engine’s first page of search results for relevant searches.  71%  of the click-throughs happen with articles listed on the first page of results on the search engine. This means that if your website’s article is the second (or third, or fourth page), it’s less likely the search user will even see your article. You want your article to be ranking as close to the top of the first page of results as possible. In order to have a good SEO score your site’s content needs to feature keywords and relevant phrases. It must be optimized for easy navigation between pages. It also needs to be referenced via external links that drive traffic to your site. Incorporating all of t...
Post a Comment
Read more

Everything we know about HHS Protect, a secretive government project with Peter Thiel's Palantir that helps brief Trump's coronavirus task force

A secretive project at the US Department of Health and Human Services is working with technology companies to collect and analyze data related to the novel coronavirus .  Dubbed "HHS Protect," the effort tracks information from around the country about coronavirus case numbers, hospital capacity, and even supply chain issues.  HHS uses Palantir Technologies , a data firm cofounded by Peter Thiel, to distill that information for the White House coronavirus task force. Visit Business Insider's homepage for more stories . A secretive project at the US Department of Health and Human Services is working with technology companies to collect and analyze data related to the novel coronavirus.  Dubbed "HHS Protect," the effort includes roughly 2.5 billion pieces of data from healthcare providers, government officials, and labs around the country about coronavirus case numbers, hospital capacity, and even supply chain issues.  The goal is learn about the progress...
Post a Comment
Read more