New program allows small companies to test products, services in the federal government

Small businesses once again will have a program that offers the opportunity to use the federal government to test and validate innovative new products and services. As announced in Budget 2010, the federal government is launching its pilot $40-million, two-year Canadian Innovation and Commercialization Program (CICP) to purchase and beta test products and services and provide smaller firms with their critical first customer.

"It's a new way of interacting with government on the procurement side as we begin to understand how innovation fits into our business," says Shereen Miller, DG of the Office of Small and Medium Enterprises at Public Works and Government Services Canada (PWGSC). "Government has been very good at investing in the early stages but at this point in time we have not invested at this last stage of R&D. We will use our competitive process to find out what we didn't know we needed."

CICP is targeted towards four broad areas: environment, health, safety and security and enabling technologies. Once a product or service is identified, it will be sent to the Industrial Research Assistance Program so that its specs and business plan can be evaluated. It will then be vetted by a committee populated mainly by people from the private sector which will prioritize projects for funding.

There will be four calls for proposals with the first call worth $3 million. To qualify, companies must meet certain criteria: products and services must be in the final stages of development; they must not have been produced in great quantity; they should only have been sold for testing and demonstration; and, they should not be readily available in the marketplace.

While foreign-based firms may participate, the product or services must come from their Canadian operations and all products and services must have at least 80% Canadian content.

While PWGSC is touting CICP as a first for government, a similar program — the Unsolicited Proposals Program ran from the 1970s to the early 1990s through the Department of Supply and Services (a precursor to PWGSC). The UPP was funded at $15 million annually and encouraged scientists and inventors to bring their ideas to government. A sponsoring department contributed some funding and UPP provided bridge funding where needed. Between 1974 and 1982, UPP funded 1,300 proposals from the private sector valued at $160 million.

Since its demise, calls to bring it back have come from many sources including high tech titan Terry Matthews, chairman of Mitel Corp.

"I have always urged the government to step up to the plate to help fill the pre-commercialization gap for our technology industry sector and here it is," says Matthews. "The government has developed a truly great program — one that addresses the need for innovative Canadian companies to move their products and services from development to market."

Matthews is a member of the Science, Technology and Innovation Council (STIC) which has also suggested that government procurement is an area which should be considered to stimulate business R&D and innovation.

"The program is the result of feedback we got including people like Terry Matthews (and) Mike Lazaridis (co-founder and co-CEO of Research In Motion Ltd). We looked at a lot of reports including the STIC report (State of the Nation) and picked up ideas in anecdotal conversation at conferences and even from angel investors," says Miller.

To facilitate the process, a new website has been developed (www.buyandsell.gc.ca/innovation) to help businesses learn more about selling to government.

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