The Ombud Strikes Back: Same 5 Recommendations, Different Year

Canada's Procurement Ombud just dropped a bombshell reform blueprint while the government restricted market access to non-allied countries. The message is clear: federal procurement is getting a complete overhaul, but only trusted partners get to participate. Meanwhile, $169M in counter-drone contracts and a potential $16B combat drone program show where the money is actually flowing. But don’t worry, The Terminator takes place in 2029, so we’ve still got a few years. 

The Ombud's Reform Ultimatum

Procurement Ombud Demands Foundational Changes Source: Office of the Procurement Ombud | Date: July 8, 2025

What's Happening: Canada's Procurement Ombud released a scathing report calling for five "foundational changes" to fix federal procurement's systemic failures. Alexander Jeglic didn't mince words: "Band-aid fixes are no longer enough." The sad, and funny part, is that these are the same recommendations he’s been making for the past four years.

The Top 5 Ombud Recommendations: 

• Chief Procurement Officer (CPO): Centralized federal procurement leadership position 

• Vendor Performance Management: Government-wide supplier tracking system 

• Unified procurement rules: Single set of federal procurement regulations 

• Artificial Intelligence integration: Modernized procurement tools and processes 

• Data transparency framework: Centralized procurement information portal

What It Means For You: 

• Centralized oversight coming: A CPO would unify the currently fragmented federal procurement system across all departments 

• Performance tracking gets serious: Your track record will follow you across all federal contracts, not just individual departments 

• Rules simplification: One unified rulebook replacing the current maze of conflicting departmental requirements 

• AI integration accelerating: Expect AI-evaluated proposals and automated compliance checking

Between Us: The Ombud is essentially saying the entire federal procurement system is broken beyond repair. Everyone knows this reality, there is political will to change it, but will that be enough to fix it? I have heard rumblings in PSPC about the implementation of a new “Lessons Learned” system that allows for reporting on experiences with vendors, the challenges, and how to mitigate them in the future. The data is there, it is just about making it AI-ready.

Military Spending Surge Continues

$169M Counter-Drone Systems for NATO Mission Source: National Defence | Date: July 9, 2025

What's Happening: CACI Inc. landed two contracts totaling $169.2 million to provide counter-drone systems for Canadian Armed Forces on Operation REASSURANCE in Europe. The vehicle-mounted systems will detect and defeat hostile drones, with first deliveries in autumn 2026 and full capability by early 2028.

What It Means For You: 

• Emerging threat focus: Counter-drone technology represents rapidly growing procurement category 

• ITB obligations enforced: $33M annual GDP contribution and 270 Canadian jobs required under Industrial and Technological Benefits policy 

• Long-term support: 10-year service commitment shows government preference for sustained contractor relationships

$16B Combat Drone Program Under Study Source: Global News | Date: July 12, 2025

What's Happening: DND is researching acquisition of "loyal wingman" combat drones to complement F-35 fighters. Internal documents suggest the program could cost $16 billion and require hundreds of staff to operate. No procurement decision made yet, but the scope indicates serious consideration of unmanned combat systems.

What It Means For You: 

• Massive program potential: $16B would rank among Canada's largest defence procurements ever 

• Unmanned systems trend: Clear shift toward mixing manned and unmanned military platforms 

• Early engagement critical: Companies should monitor requirements development and align R&D investments now

To be honest, I think this would be really cool - maybe one day we can compete with the Chinese Drone Mothership. Not much else to say on this. Hope we buy Canadian?

Market Access Restrictions Tighten

Reciprocal Procurement Policy Takes Effect Source: Treasury Board Secretariat | Date: July 10, 2025

What's Happening: Starting July 14, 2025, all federal procurement over $10,000 is limited to suppliers from Canada and countries with reciprocal trade agreements. Foreign suppliers from China, India, Brazil, UAE, Saudi Arabia, and South Africa are completely excluded from federal contracts.

What It Means For You: 

• Market disruption for non-treaty suppliers: Major procurement shift away from non-allied countries 

• Trade agreement advantage: US, Mexico, and EU suppliers retain access within treaty terms 

• Documentation requirements: Contractors must verify and document country of origin compliance

The real opportunity is identifying any contracts currently held by countries that are not Trade allies. While these may be few and far between, there are a few hidden gems folks should start targetting. Publicus is happy to help identify these !

Bid Challenge System Reformed Source: Treasury Board Secretariat | Date: July 10, 2025

What's Happening: Only Canadian suppliers and trade agreement country suppliers can now challenge federal procurement decisions. The Canadian International Trade Tribunal's authority to grant compensation is also restricted for non-awarded complainants.

What It Means For You: 

• Reduced legal risk: Fewer potential challengers means smoother procurement processes 

• Two-tier system: Your challenge rights depend on your country of origin 

• Government advantage: Strengthened position for procurement officials in dispute scenarios

I think this is good policy and worth including, but it doesn’t really affect anyone who reads this newsletter. It does mean, however, that there is a high likelihood of cancelled contracts for countries without a trade agreement.

The New Procurement Reality

The Ombud's reform blueprint arrives at a moment of unprecedented change in federal procurement. While calling for systemic fixes to chronic problems like complex processes and unclear accountability, the government is simultaneously restricting market access and investing billions in emerging military technologies.

The contractor implications are clear:

• Prepare for centralized oversight: A Chief Procurement Officer would fundamentally change how federal contracts are managed and evaluated. Performance tracking across all federal business becomes the norm.

• Geographic compliance matters more: With reciprocal procurement policies and restricted challenge rights, your corporate structure and country relationships determine market access.

• Emerging technologies drive spending: Counter-drone systems and combat drones represent the future of defence investment, with billions flowing to companies that can deliver cutting-edge capabilities.

• AI integration accelerates: The Ombud's call for AI tools in procurement means contractors should prepare for AI-evaluated proposals and automated compliance checking.

The Bottom Line

The era of treating government contracts as just another sales opportunity is ending. This is now about strategic partnerships with allied nations and proven performance across sustained relationships. The most important thing? Our allies are likely enacting the same policies. If you are a government contractor who used to sell south, it may be the opportunity to look West to Europe instead. 

Publicus helps government contractors find, qualify, and win more contracts with less effort. Our AI-powered platform monitors every opportunity across all government levels while tracking the complex regulatory changes reshaping the procurement landscape.