Macroeconomic Cumulative Impact Analysis (CIA) Model

ADVANCE CONTRACT AWARD NOTICE

1. Advance Contract Award Notice (ACAN)

An ACAN is a public notice indicating to the supplier community that a department or agency intends to award a contract for goods, services or construction to a pre-identified supplier, thereby allowing other suppliers to signal their interest in bidding, by submitting a statement of capabilities.

If no other supplier submits, on or before the closing date, a statement of capabilities that meets the requirements set out in the ACAN, the competitive requirements of the government’s contracting policy have been met. 

Following notification to suppliers not successful in demonstrating that their statement of capabilities meets the requirements set out in the ACAN, the contract may then be awarded using the Treasury Board electronic bidding authorities.

If other potential suppliers submit statements of capabilities during the fifteen calendar days posting period, and meet the requirements set out in the ACAN, the department or agency must proceed to a full tendering process on either the government’s electronic tendering service or through traditional means, in order to award the contract.

1. Definition of Requirements

The Economic Regulatory Analysis team (ERA), within the Cost-Benefit Analysis unit, at Transport Canada has a requirement for the development of a macroeconomic Cumulative Impact Analysis (CIA) model for use in the quantitative assessment of the impact of regulations. At present, Cost Benefit Analysis (CBA) of regulations is conducted on a per regulation basis and does not accurately measure the cumulative effects regulations have on an industry. Thus, there is a need to quantify the impact of federal regulations under Transport Canada on the economy and its different industries. The CIA model will be used in future consultations to inform stakeholders of the current level of impact of all enacted Transport Canada regulations on their industry. The CIA model will also inform regulatory and policy development with respect to industries in which regulations are deemed relatively burdensome and costly. 

The contactor will play an instrumental role in multiple stages of the development of the CIA. The stages and the role of the contactor are listed below.

1. Advisory role in the development of a North American Industry Classification System (NAICS) classification algorithm using machine learning. This algorithm will analyze regulatory text to assign NAICS codes that are most likely impacted. The contractor will play the role as an advisor to service provider(s) hired by Transport Canada. The contractor will assist in the development of this algorithm by providing their continuous guidance and expertise on how the algorithm should be built, the required data inputs and the required outputs of the algorithm which will be used in assessing the cumulative impact of regulations.
2. Advisory role in the development of an algorithm for restriction and impact counts. This algorithm will use the data generated in Task I to analyze the associated Regulatory Impact Analysis Statement in assessing the restrictions that a regulation imposes has on the NAICS by counting relevant restrictions. The contractor will have a similar role to Task I in that they will be an advisor in the development of this algorithm to service provider(s) hired by Transport Canada. They will provide their expertise and guide the service provider(s) with its development in producing an output that is deemed appropriate for use in the CIA model.
3. The development of the CIA model. This model will assess the cumulative burden that regulations have on a NAICS/industry. The contractor will be responsible for the development of this model in a manner that reflects the nature of the Canadian economy. The contractor will make use of the datasets generated in Tasks I and II alongside macroeconomic variables required for the analysis of the impact and cost of regulations on the Canadian economy and its different industries (classified by NAICS codes). The contractor will be responsible for the execution of the analysis and obtaining final results on the cumulative impact.

Other requirements of the contractor:

1. During the development of the entire project, the contractor will be also tasked in educating the ERA team on subject matters pertaining to the project. This involves:
   1. Workshops on previous research and analysis conducted, pertaining to the topic of the cumulative impact analysis of regulations.
   2. Workshops on machine learning training in the methodology used in the development of the NAICS classification algorithm and restrictions/impact scoring.
   3. Workshops on theoretical theory pertaining to the economics principles behind the macroeconomic CIA model.
   4. Workshops on practical application of the adapted theoretical model to applied analysis for obtaining results. This would involve lessons on how the model is adapted and a lesson on how the coding was developed.
2. Provide additional learning material to be used in presenting the models developed and inform stakeholders in plain-language of the impacts their industries face.

1. Criteria for Assessment of the Statement of Capabilities

Due to the nature of the project, each one of the requirements below must be met to ensure the project’s success.

These skills/qualifications include:

1. All experts from the contractor who are assigned to the project must hold a PhD degree in Economics or Data Science
2. Prior academic publication and working knowledge with assessing the cumulative impact of regulations
3. Prior academic publications in the field of applied economics
4. Previous experience in research on the North American transportation sector
5. Previous experience with using and developing artificial intelligence algorithms, including high level coding abilities in Python and R
6. Minimum of 5 years of teaching experience pertaining to the field of economics, regulatory economics and/or analytics from a reputable university 
7. Minimum of 10 years of experience within the field of regulatory studies
8. Prior experience conducting analysis on the basis of NAICS codes

1. Trade Agreements

   Canadian Free Trade Agreement (CFTA)

   Canada–Chile Free Trade Agreement

   Canada–Colombia Free Trade Agreement

   Canada–Honduras Free Trade Agreement

   Canada–Korea Free Trade Agreement

   Canada–Panama Free Trade Agreement

2. Justification for Pre-Identified Supplier

The proposed supplier is the only known contractor that meets all the above requirements.

The cumulative analysis project was presented to a service provider with an extensive history working with the government but the project was deemed beyond their capabilities/knowledge. Also, extensive research has been done in attempts to find a domestic source but due to the requirements as listed above and the limited research done in the field domestically pertaining to this project, only American sources were found. Moreover, due to the need for artificial intelligence as a requirement for this project and the fact that this is a new method of computation, the selected subject matter experts were deemed as the appropriate and most qualified source.

1. Exclusions and/or Limited Tendering Reasons

The contract is proposed under the Government Contracting Regulations, Section 6 (d) that states “only one person or firm is capable of performing the contract”

1. Ownership of Intellectual Property

Ownership of any Foreground Intellectual Property arising out of the proposed contract will vest in the Contractor.

1. Contract Period

The proposed contract period will be from the date of Contract Award to September 30, 2021.

1. Estimated Cost

The estimated maximum value of the proposed contract is $205,000.00 CAD including duties and no applicable taxes.

1.  Name and Address of the Proposed Contractor

   GPA LLC.

   522 W Riverside Ave Ste N

   Spokane, WA

   99201-0580, USA

2. Suppliers’ Right to Submit a Statement of Capabilities

Suppliers who consider themselves fully qualified and available to provide the services/goods described herein, may submit a Statement of Capabilities in writing, preferably by e-mail, to the contact person identified in this Notice on or before the closing date and time of this Notice. The Statement of Capabilities must clearly demonstrate how the supplier meets the advertised requirements.

Responses received on or before the closing date will be considered solely for the purpose of deciding whether or not to conduct a competitive procurement. Information provided will be used by the Crown for technical evaluation purposes only and is not to be construed as a competitive solicitation. Your written response must provide sufficient evidence (e.g. specifications, technical data, drawings, or any other proof) that clearly demonstrates that your product or service is capable of fulfilling this requirement.

Suppliers that have submitted a response will be notified in writing of TC’s decision to continue with the non-competitive procurement or to compete for the requirement

1. Closing Date

The closing date for a submission of a Statement of Capabilities is November 17, 2020 at 2 p.m. Eastern Standard Time (EST).

1. Contact

   Trevor Hardman

   Procurement Specialist

   Ph: 431 335-3874

   Email: trevor.hardman@tc.gc.ca