Innovation and procurement: the secret sauce

From: Innovation, Science and Economic Development Canada

It is not a secret that access to federal procurement opportunities has always been more challenging for smaller businesses. It is especially hard for companies that are offering an innovative product or a service that isn't available on the market. The irony is that the federal government does need to be a bit more innovative, which also isn't a secret. So, what is the solution?

Well, some believe that Innovative Solutions Canada (ISC) has created a great recipe to help both innovators get to market and federal departments access the latest Canadian technology.

I recently met with Robert Smith, former Executive Director for ISC and Greg Spence who was a manager for the Build in Canada Innovation Program (BCIP) that merged with ISC, to better understand the idea behind this innovation support program.

They both were very happy to reminisce about the old days. "When ISC was created in 2018, it was about driving innovation through procurement dollars," Robert explained. "The idea was to provide seed money to small and medium companies, help them develop innovations and eventually get them to market. Our first big dream was to be innovators' first buyer."

The ISC model was designed so that government departments would come up with real life challenges for innovators to tackle. Robert did acknowledge that the first years of the program were challenging: "At first it wasn't easy getting public servants to understand that they finally had a tool to go out and develop a technology that would actually respond to their needs. The positive spin is that with time, it helped drive the thinking of innovation within the public service."

While ISC was helping figure out solutions to problems, a similar innovation program called the BCIP, was encouraging innovators to submit their existing late-stage innovations for testing by a government department. When it was created in 2010 there weren't many programs, even internationally, that were similar in nature to BCIP. Greg explained how the program "was very innovative in its own right because it flipped the procurement model on its head!" What he meant by that is that the BCIP promoted the use of a supply push procurement model rather than the more traditional demand pull model. Greg explained that "rather than prescribing requirements for certain goods or services, we invited companies to propose innovations that weren't on the marketplace yet. We wanted the government to be a first purchaser of pre-commercial Canadian tech." He did confess, "at first, it was a bit challenging to get public servant buy-in and there was a lot of heavy-lifting work to match qualified innovators with willing testing departments, but the program eventually became known across the federal government and now demand has never been higher!"

A successful marriage

In 2018, the federal government conducted a review of all its innovation programs and that's when BCIP and ISC were merged together. BCIP became the Testing Stream and the original ISC model re-branded as the Challenge Stream. According to Robert, "it made a lot of sense for ISC and BCIP to join forces because it was part of an R&D procurement continuum. The combined program now intentionally links early-and late-stage R&D, which enables us to offer the full spectrum of R&D funding support to innovators."

I had the chance to meet one happy customer of the program. Lieutenant Commander John Faurbo from the Royal Canadian Navy's Naval Material Technology Management Team. He referred to his team as an ISC Testing Stream "superuser." "I am a fervent supporter of the program," he said. "Over the past two years, we have tested, or are in the middle of testing, about 13 different technologies. When the list of available innovations comes out, we get excited!"

Lieutenant Commander Faurbo shared that what he appreciates the most about the program is how it allows his team to work in collaboration with the innovators and directly tailor the original tools to their needs. He also welcomes the peace of mind the program offers. "When an innovation is pre-qualified through the program, we can assume without a doubt that it has been vetted by the National Research Council's Industrial Research Assistance Program (IRAP) and is truly innovative." Mr Faurbo even went as far as to say that ISC finally figured out the innovation secret sauce!

Continuously evolving

Much like any government program ISC did have its ups and downs. Both Greg and Robert agreed that the biggest challenge was the lack of direct buy options for departments to purchase innovations at the end of the process. Despite having had their innovation tested successfully through the program, companies had to start all over again and enter a lengthy procurement process to sell to their government clients. This issue was fixed when both programs merged and the Pathway to Commercialization was put in place under the Testing Stream. Now SMEs can receive commercial contracts up to $8M for each contract over three years following the successful testing of their pre-commercial prototype.

"Basically, we started with a vision," Robert recalls, "BCIP became part of that vision, then we created the Pathway to Commercialization–we have continuously evolved the program to help companies grow."

It was clear to me after speaking with Robert and Greg that they both took great pride in being part of the success of the program. To date, ISC awarded over 960 contracts for a value of over 446 million through both streams. Federal departments and Agencies have embraced the program with 22 of them publishing challenges and 48 testing innovations. Participation rate from innovators for both Streams is also continuously increasing. It does feel like ISC has found the secret sauce to innovation and that both innovators and government departments are drinking it!

"So many companies have told me how great the program is, and that without programs like this, some innovative Canadian companies wouldn't be able to make it," Greg shared. "It's very rewarding to be part of something like that, where you can make a real difference in the growth and scale-up of a Canadian company."